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Chapter 1 Organizational Behavior and Management 23 No longer will seniority be the main determinant of pay, as it is in some unionized workplaces. 29 Deere’s new policy of empowering its workforce has benefits for workers and for the organization as a whole. Workers recognize the connection between these changes and their job security. The increases in efficiency and quality enable Deere to regain control of its share of the agricultural machinery market. And the satisfaction that workers feel when they have the opportunity to utilize new skills and develop new capabilities increases their commitment to the company and to helping it succeed. ■ ■ ■ ■ CHALLENGE 3: DEVELOPING ORGANIZATIONAL ETHICS AND WELL-BEING Ethics Rules, beliefs, and values that outline the ways in which managers and workers should behave. Well-being The condition of being happy, healthy, and prosperous. An organization’s ethics are rules, beliefs, and values that outline the ways managers and workers should behave when confronted with a situation in which their actions may help or harm other people inside or outside an organization. 30 Ethical behavior enhances the well-being (the happiness, health, and prosperity) of individuals, groups, and the organization, and sometimes the environment in which they operate. 31 Ethical behavior can enhance well-being in several ways. Ethics establish the goals that organizations should pursue and the way in which people inside organizations should behave to achieve them. 32 For example, one goal of an organization is to make a profit so that it can pay the managers, workers, suppliers, shareholders, and others who have contributed their skills and resources to the company. Ethics specify what actions an organization should engage in to make a profit. Should an organization be allowed to harm its competitors by stealing away their skilled employees or by preventing them from obtaining access to vital inputs? Should an organization be allowed to produce inferior goods that may endanger the safety of customers? Should an organization be allowed to take away the jobs of U.S. workers and transfer them overseas to workers in countries where wages are $5 per day? What limits should be put on organizations’ and their managers’ attempt to make a profit? And who should determine those limits? The devastating effects of a lack of ethics is illustrated by the way an airline crash occurred when managers and workers acted unethically and put profit before safety. The Ethics Insights in this and other <strong>chapter</strong>s show how managers respond to the ethical challenge. (See Insight 1.5.) INSIGHT E T H I C S 1.5 THE VALUJET AIRLINE CRASH DISASTER In On May 11, 1996, a cargo fire broke out on a ValuJet flight from Miami to Atlanta and the plane crashed into the Florida Everglades, killing all 105 passengers and five crew members. This crash was not an accident, however; it occurred as the direct result of unethical behavior of a company’s employees’ putting profit over public safety.
24 Chapter 1 Organizational Behavior and Management Gregory Feith, senior air safety investigator, looks at wreckage from the crash of ValuJet Flight 592 being collected in a hanger at Miami Airport. Investigators discovered that the cause of the crash was that oxygen canisters had not been fitted with the required safety caps that would have prevented the canisters from opening. The oxygen canisters ignited, causing the fire that brought down the plane. Why were the safety caps not fitted? Because managers of the Sabretech aircraft company had pressured two mechanics to save money by not installing the caps and then falsely labeling them as empty. The cost of the caps? $9.16.33 The cost of this unethical behavior? The deaths of 110 people. In 1999, Sabretech’s managers and workers were indicted on criminal charges for their part in the disaster. Sabretech is no longer in business, and ValuJet also was grounded because investigators believed its lax safety procedures were partly responsible for the incident. No party gains when organizations or their managers act unethically or illegally. Managers are directly responsible for developing and maintaining ethical work practices that ensure the well-being and safety of people both inside and outside the organization. ■ Social responsibility An organization’s moral responsibility toward individuals or groups outside the organization that are affected by its actions. In addition to defining right and wrong behavior for employees, ethics also define an organization’s social responsibility, or moral responsibility toward individuals or groups outside the organization that are directly affected by its actions. 34 Organizations and their managers must establish an ethical code that describes acceptable behaviors and must create a system of rewards and punishments to enforce ethical codes. Different organizations have different views about social responsibility. To some organizations, being socially responsible means performing any action as long as it is legal. Other organizations do more than the law requires and work to advance the well-being of their employees, customers, and society in general. 35 Ben & Jerry’s Homemade, Inc., for example, contributes a significant percentage of its profits to support charities and community needs and expects its employees to be socially active and responsible. Green Mountain Coffee Roasters seeks out coffee-growing farmers and cooperatives that do not use herbicides and pesticides on their crops, that control soil erosion, and that treat their workers fairly and with respect in terms of safety and benefits. Green Mountain also contributes a share of its profits for health and education in Costa Rica and other countries from which it buys coffee beans. Many Subway sandwich shops have specified hours when they give free sandwiches to customers who bring in canned goods to be given to food banks. Levi Strauss discovered that two of its suppliers in Bangladesh were employing children under the age of 14 in violation of International Labor Organization standards. Rather than requiring the contractors to fire the children, many of whom were the sole breadwinners in their families, Levi Strauss chose to pay for their education. They persuaded the suppliers to continue to pay the children’s wages while they were in school and to guarantee that their jobs would be waiting for them when they became of age. Not all organizations are willing or able to undertake such programs, but all organizations need codes of conduct that spell out fair and equitable behavior, if they
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