MGMT 363 - Chapter 7 - Trust, Justice, And Ethics

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-reflects the prominence of its brand in the minds of the public and the perceived quality of its goods and services
-an intangible asset that can take a long time to build and can break quickly
-the willingness to be vulnerable to a trustee based on positive expectations about the trustee's actions and intentions
-reflects a willingness to take a risk and "put yourself out there" even though doing so may be met with disappointment
-the perceived fairness of an authority's decision making
-when employees perceive high levels of justice, they believe that decision outcomes are fair and that decision making processes are designed in a fair manner
-the degree to which the bahaviors of an authority are in accordance with generally accepted moral norms
-when employees perceive high levels of ethics, they believe that things are being done the way the "should" or "ought to be" done
3 different factors in trust
1) disposition based
2) cognition based
3) affect based
disposition based trust
-your personality traits include a general propensity to trust others
-trust has less to do with a particular authority and more to do with the trustor
-people with high trust propensity
trust propensity
-a general expectation that the words, promises, and statements of individuals and groups can be relied upon
-"faith in human nature"
-trust propensity is a product of both nature and nurture, and also what country we grew up in (U.S. has a relatively high trust propensity)
cognition based trust
-trust that is rooted in a rational assessment of the authority's trustworthiness
-after getting to know a figure, we have enough knowledge to gauge the authority's trustworthiness, or the characteristics of a trustee that inspire trust, which helps us develop cognition-based trust
-this trust is driven by the authority's "track record"
3 ways that we gauge an authority's "track record"
1) ability
2) benevolence
3) integrity
the skills, competencies, and areas of expertise that enable an authority to be successful in some specific area
-the belief that the authority wants to do good for the trustor
-when authorities are perceived as benevolent, it means that they care for employees, are concerned about their will-being, and feel a sense of loyalty to them
-the perception that the authority adheres to a set of values and principles that the trustor finds acceptable
-when authorities have integrity, they are of sound character
-integrity conveys an alignment between words and deeds-a sense that authorities keep their promises, "walk the talk", and "do what they say they will do"
Affect-based trust
-trust that depends on feelings toward the authority that go beyond any rational assessment
-more emotional than rational - not rooted in reason
-we trust because we have feelings for the person in question; we really like them and have a fondness for them
-these relationships are characterized by a mutual investment of time and energy, a sense of deep attachment, and the realization that both parties would feel a sense of loss if the relationship were dissolved
Justice rules provide observable behavioral data that the authority might be trustworthy
4 dimensions of justice:
1) distributive justice
2) procedural justice
3) interpersonal justice
4) informal justice
distributive justice
-reflects the perceived fairness of decision making outcomes
-employees gauge distributive justice by asking whether decision outcomes such as pay, rewards, evaluations, promotions, and work assignments are allocated using proper norms
procedural justice
-reflects the perceived fairness of the decision making process
-procedural justice is fostered when authorities adhere to rules of fair process (voice, correctability, consistency, bias suppression, representativeness, and accuracy rules that help ensure that procedures are neutral, objective, and more fair)
-procedural justice tends to be a stronger driver of reactions to authorities than distributive justice
interpersonal justice
-reflects the perceived fairness of the treatment received by employees from authorities
-fostered when authorities adhere to two particular rules (the respect rule and the proprietary rule)
the respect rule
pertains to whether authorities treat employees in a dignified and sincere manner
the proprietary rule
reflects whether authorities refrain from making improper or offensive remarks
abusive supervision
-the sustained display of hostile verbal and nonverbal behaviors, excluding physical contact
-created by interpersonally UNjust actions
-angry outbursts, public ridiculing, or being used as scapegoats for negative events
informational justice
-reflects the perceived fairness of the communications provided to employees from authorities
-fostered when authorities adhere to two particular rules (the justification rule and the truthfulness rule)
justification rule
mandates that authorities explain decision making procedures and outcomes in a comprehensive and reasonable manner
truthfulness rule
requires that a company's communications be honest and candid
-why people do or don't behave in a manner consistent with generally accepted norms of morality
-two primary parts to it (prescriptive and descriptive)
prescriptive nature of ethics
-shows how people ought to act using various codes and principles
descriptive nature of ethics
-scholars rely on scientific studies to observe how people tend to act based on certain individual and situational characteristics
3 ways to look at ethics:
1) in terms of unethical behaviors
2) in terms of "merely ethical" behaviors
3) in terms of "especially ethical" behaviors
unethical behavior
-behavior that clearly violates accepted norms of morality
-can be directed at employees (discrimination, harassment, etc.), customers (invading privacy, violating contract terms, fabricating test results), financiers (falsifying financial information, misusing confidential information, etc.), or society as a whole (violating environmental regulations, exposing public to safety risks, etc.)
"merely ethical" behavior
-behavior that adheres to some minimally accepted standard of morality
-include obeying labor laws and complying with formal rules and contracts
"especially ethical" behaviors
-behaviors that exceed some minimally accepted standard of morality
-may include charitable giving or whistle blowing
whistle blowing
-occurs when former or current employees expose illegal or immoral actions by their organization
-viewed as ethical because whistle blowers risk retaliation by other company members
four-component model of ethical decision making
-argues that ethical behaviors result from a multistage sequence beginning with moral awareness, then moral judgment, then moral intent, and finally ethical behavior
moral awareness
-first step needed to explain why an authority acts ethically
-moral awareness occurs when an authority recognizes that a moral issue exists
-sometimes authorities act unethically simply because they don't perceive that moral issues are relevant
-moral awareness is based on: moral intensity and moral attentiveness
moral intensity
-the degree to which an issue has ethical urgency

-driven by two general concerns:
1) an issue is high in moral intensity if the potential for harm is high
2) an issue is high in moral intensity if there is social pressure surrounding it (if it violates clear social norms it will be more morally intense than an issue that doesn't)
moral attentiveness
-the degree to which people chronically perceive and consider issues of morality during their experiences
-morally attentive people will say that they face several ethical dilemmas per day, and that they regularly think about issues of morality
moral judgment
-the second step needed to explain why an authority acts ethically
-moral judgment reflects the process people use to determine whether a particular course of action is ethical or unethical
-described in the theory of cognitive moral development
theory of cognitive moral development
-developed by Kohlberg
-argues that as people age and mature, they move through stages of moral development- each more mature and sophisticated than the prior one
-authorities who operate at more mature ages should demonstrate better moral judgment
3 stages of cognitive moral development:
1) preconventional stage
2) conventional stage
3) principled (or postconventional stage)
preconventional stage
-right versus wrong is viewed in terms of the consequences of various actions for the individual
-ex: children seek to avoid punishment for its own sake
conventional stage
-right versus wrong is referenced to the expectations of one's family and one's society
-most adults find themselves in this stage
-this is relevant to organizations because it shows that moral judgment can be influenced by organizational policies, practices, and norms
principles (or postconventional) stage
-most sophisticated moral thinkers are in this stage, less than 20% of Americans reach this stage
-at this stage, right versus wrong is referenced to a set of defined, established moral principles (prescriptive guides for making moral judgments)
-they judge the morality of an action according to its goals, aims, or outcomes
moral intent
-the third step in ethical decision making
-moral intent reflects an authority's degree of commitment to want to act ethically
moral identity
-the degree to which a person self-identifies as a moral person
-people with strong moral identities define themselves as compassionate, generous, honest, kind, fair, and hardworking
-people with strong moral identities volunteer more for charitable work and donate more to charity
ability to focus
-reflects the degree to which employees can devote their attention to work, as opposed to "covering their backside", "playing politics", and "keeping an eye on the boss"
-ability to focus is vital to task performance
economic exchange
-relationships that are based on narrowly defined obligations that are specified in advance and have an explicit repayment schedule
-(ex: employees agree to fulfill their duties in exchange for financial compensation)
-employees that don't trust their authority have this relationship
social exchange
-happens as trust increases
-relationships that are based on vaguely defined obligations that are long term in their repayment schedule
-characterized by mutual investment, such that employees agree to go above and beyond in exchange for fair and proper treatment by their authorities
-employees are willing to engage in these behaviors because they trust that those efforts will eventually be rewarded
effects of trust on job performance
-trust has a moderate, positive effect on job performance
-employees who trust their authority are more likely to engage in citizenship behavior and less likely to engage in counterproductive behavior
effects of trust on organizational commitment
-trust has a strong, positive effect on Commitment
-employees who are willing to be vulnerable have higher levels of affective and normative commitment, but there is no effect on continuance commitment
corporate social responsibility
a perspective that acknowledges that the responsibilities of a business encompass 4 parts: economic, legal, ethical, and citizenship expectations of society
economic component of social responsibility
companies have a social responsibility to their employees and their shareholders
legal component of social responsibility
argues that the law represents society's codification of right and wrong and must therefore be followed
ethical component of social responsibility
argues that the organizations have an obligation to do what is right, just, and fair and to avoid harm
citizenship component of social responsibility
argues that organizations should contribute resources to improve the quality of life in the communities in which they work