1. Explain why ethics are an integral component of the manager’s toolbox in the 21st century. (5 Points)

Ethics are integral in the 21st century due to the evolution of business, technology, and government oversight. There is a legal responsibility to do what is right by the customer – if you produce a product knowing that there is a high risk of harm to the consumer, you will be eventually be found out, prosecuted, and held liable.

Organizations have put a high priority on ethics, which can be hard to balance in the highly competitive business world. But with the advancements in technology and social media, consumers are highly aware of how an organization behaves – and this information travels the world quickly. There is little tolerance in most companies for unethical behavior that threatens the mission, vision, values, strategy and goals of the company, not to mention the consumer base.

2 Describe how and why ethics can and do guide managers’ decision making process (10 Points)

Individual ethics, and the organizational ethical climate, do a great deal to guide the decision making process. If a company has the climate of utilitarianism, the manager will base their decision on what will do the most people the most good. For example, if there was a choice between two options as outlined below:

Option A – has defect rate of 50%, can suspend production for 1 month to fix defect costing $350,000 to reduce defects to <5%

Option B – has defect rate of 50%, can release product and expect liabilities to reach $200,000

A utilitarianism company manager would pick Option A – fix the defect to keep happy consumers and take the short term hit on cost for the long-term gains. However, a manager in an egoism climate organization would pick Option B, expecting liabilities to not reach the amount to fix the problem for the short-term gain of the