BUS 418
Business Ethics
Belhaven University
Unit 5
Applying Principles to Employer-Employee
Relations
1
Unit 5 Topics
 Biblical foundations and principles for business ethics
 Challenges in living out principles
 Applying principles to employer-employee relationships.
 Set up an ethics program
2
Unit Objectives
 Describe biblical foundations and principles for business
ethics.
 Discern challenges in living out principles.
 Apply principles to employer-employee relationships
 Discover how to set up an ethics program to prevent
ethical problems
3
Context of Business Ethics – Organization
REVIEW
Drawing credits: This Drawing by L. Ruddell (drawing).
Definitions REVIEW
 What is Ethics?
 Ethics means: Standards of what we should do;
what is right and wrong
 Two Key Ethics Questions: What and Where?
 What is your standard for right and wrong?
 Where does it come from?
 Alignment (see Ephesian 4:1)
(Ruddell, 2014)
Definitions, cont. REVIEW
 Morals are standards we adopt from a particular
group at a particular time.
 Notice standards come from the group (and adopted
by the individual as their own)
 At a particular time so relative to the situation and
individual preference
 Values are whatever you think is important.
(Ruddell, 2014)
Hall and Management
 Theory X and Theory Y, from McGregor
 Two views about human nature:
 Theory X, which subsumes Taylor’s scientific management,
assumes that people generally are lazy, dislike work, avoid
responsibility and require external stimulus (usually
compensation) to perform tasks adequately.
 Theory Y, on the other hand, incorporates the Mayo/Herzberg
human-resource viewpoint and presumes that humans are
creative, seek responsibility and can be self-directed.
 What about biblical view?
Hill and Management, cont.
 Covenantal Management (Nehemiah 5:15 and
Matthew 20:26)
 Four components particularly characterize
covenantal management, or “Theory C”:
 Dignity
 Reciprocity
 Servant leadership
 Gift recognition
Hill and Management, cont.
 Covenantal Management, cont.
 Dignity: Regard workers not as inanimate objects or
variable costs but as unique bearers of God’s image who
have the right to be treated honorably and fairly.
 Reciprocity: A relationship that acknowledges mutual
duties and accepts mutual accountability; two-way, rather
than one-way, streets.
Hill and Management, cont.
 Covenantal Management, cont.
 Servant leadership. Focus on mission and others
versus power and self-interest.
 Gift recognition. Develop people. Identify gifts and
foster their development. See Romans 12:1-3 and
Ephesians 4
Leadership Principles
 Review:
 Leviticus 19:9-17; consideration, productivity, honesty,
justice, good will
 1 Peter 5:1-4. All of the following describe leadership:
 Take care of the people under you
 Lead people willingly
 Don’t be domineering, but set the example.
Leadership Principles, cont.
 Ephesians 6:5-9. The key point here is:
 Leaders are to treat employees with respect and dignity
because the leader is under God’s authority and there is no
partiality with God (v. 9)
 Colossians 4:1, 6; justice and fairness, wise words
 Romans 12:1-3
 Have an accurate view of yourself!
What about Money?
Money and Business Ethics;
1 Timothy 6:6-10, 17-19
 Employees and Employers
 Contentment and Wealth
 The Business Goal:
13
Do the right thing AND Make money!
This Photo by Unknown Author is licensed under CC BY-ND
Hill and Discrimination
 When going through the employee selection process,
ethical managers must be certain that the decision to
reject any candidate is based only on that candidate’s
inability to meet the job qualifications.
Why Set up an Ethics Program?
 Allows you to act proactively in your organization rather
than just reacting to problems.
 There IS going to be an organizational culture at work;
as an ethical leader, you should influence it.
15
(Ruddell, 2014)
Why Set up an Ethics Program? (cont.)
 Ethical leadership (strategy) involves not only
accomplishing the mission but also building an effective
organization.
 The goal of an ethics program is to reap the benefits
of having an ethical culture.
 Reduces risk (ethics program as compliance which
means keeping the law)
16
(Ruddell, 2014)
Ethics and Organizational Culture
 Organizations can use formal and informal
socialization to develop ethics in their organizations.
 Formal: Using specific events to communicate the mission
and organizational standards including (for example)
orientation, planned meetings, organizational
communication.
 Informal: Communicating the mission and organizational
standards in conversations, during interviews and during
social activities
17
(Ruddell, 2014)
Ethics and Organizational Culture (cont.)
 However, what Key Leaders DO in informal
situations is the most influential.
(see James 1:22-25)
18
Manager as Ethical Implementer
 Unethical goals
 Implementing unethical
operational goal produces
faulty reward systems
 Alignment needed
between strategic statements
and operations!
 Why lower-level managers
need ethics training
This Photo by Unknown Author is licensed under CC BY-SA
Manager as Ethical Organizer
 Organization structure is
important and needs to
support ethical operations
(Batson & Neff, 2007)
 The absence of
organizational design can
result in inefficient,
ineffective or unethical
decision making This Photo by Unknown Author is licensed under CC BY-SA
Manager as Ethical Organizer, cont.
 Where to place the
business ethics function
in organization:
 Place the ethics function
close to board
 Make sure they are
independent
 Coordinate with audit
function
21
This Photo by Unknown Author is licensed under CC BY-SA
Elements of Ethics Program
 Code of Conduct
 Steps for solving ethical problems
 Clear guidelines for how to report a problem, including
group to carry out investigation when required
 Ongoing communication about standards, issues and
program
 Ongoing mentoring at all levels
 Making ethics part of job review
22
Set Up a Code of Conduct
 Also called Ethics Statement or Core Values but should
be distinct
 Involve key stakeholders
 Determine basic standards for right and wrong for your
organization and where they come from
 Determine ethical issues that each part of organization
faces based on business
 See Koch industries example
23
Set Up a Code of Conduct (cont.)
 Determine ethical issues that each part of organization
faces based on business
 Articulate how core values apply in each situation, giving
guidance on what you want personnel TO DO or NOT
TO DO in that situation
 That is your Code of Conduct
24
Set Up an Ethics Program
 An effective ethics programs
should directly address all the
following key areas:
 Recruitment
 Orientation
 On-going discussion with
employees about ethics
 Key Leader ethical
development
25
(Ruddell, 2014)
This Photo by Unknown Author is licensed under CC BY
Set Up an Ethics Program, cont.
 Recruitment
 Make sure you will have “a common
ground for doing business”
 One of the best things you can do to
determine if a recruit will fit with your
organizational culture is ask them
about their personal view of business
ethics and how that influences their
work
26
(Ruddell, 2014)
This Photo by Unknown Author is licensed under CC BY
Set Up an Ethics Program, cont.
 Orientation. All of the following
are parts of an effective
orientation;
 Have the CEO speak and emphasize
the importance of ethics to the
organization
 Give ethical scenarios and solutions
 Take time to explain how ethics are a
proactive part of your organization
27
(Ruddell, 2014)
This Photo by Unknown Author is licensed under CC BY
Set Up an Ethics Program, cont.
 On-going. All of the following are
ways to promote organizational
ethics on an on-going basis;
 Posters
 Special meetings
 Telling employees how to report
ethical problems
28
(Ruddell, 2014)
This Photo by Unknown Author is licensed under CC BY
Set Up an Ethics Program, cont.
 Key leaders
 It is always critical that ethics be
considered in the Assessment process
 Leaders need to be rewarded not
just on financial performance
 Can result in cutting corners for
personal gain
 Creates unnecessary risk of conflict
of interest
 Enron example and “Mark-to-market
accounting”
This Photo by Unknown Author is licensed under CC BY
 Described biblical foundations and principles for
business ethics
 Discerned challenges in living out principles
 Learned how to apply principles to employer-employee
relationships
 Discovered how to set up an ethics program to prevent
ethical problems
30
Unit Recap
What’s next?
 Complete reading assignments
 Complete unit quiz
 Answer discussion questions
 Complete writing assignments
31
References
Batson. T., & Blake, J. N. (2007). Business ethics: Sunday ethics –
Monday world. Triangle Publishing.
Hill, A. (2017). Just business (3rd Edition). InterVarsity Press.
Koch Industries. (n.d.). Code of conduct. Retrieved June 6, 2021, from
https://codeofconduct.kochind.com/en-US/Front-cover
Ruddell, L. (2014). Business ethics – Faith that works (2nd Edition.
WestBow Press.
32
Image References
https://3.bp.blogspot.com/-NsaR4zsCoko/UyjrJ iHzqI/AAAAAAAACz4/2wjHUMewcdg/s1600/Screen+Shot+201
4-03-18+at+8.55.18+PM.jpg
https://www.quoteinspector.com/media/money/money-qi58-wo.jpg
https://www.tutorialspoint.com/professional_ethics/images/profession_e
thics.jpg

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