BA_242_Chapter_Eight_-_Post-1

BA_242_Chapter_Eight_-_Post-1 - BA 242 Business Ethics...

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BA 242 – Business Ethics Chapter Eight: The Individual in the Organization
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Traditional Organizational Model The traditional, “rational” model of the business organization defines it as a structure of formal relationships, which are designed to achieve a goal efficiently. At the bottom of the organization is the operational layer of workers who directly produce the good or provide the services. Above this are middle managers who direct those below them and are, in turn, directed by those above. At the top of the pyramid are top management: the CEO, board of directors, and their staff.
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Traditional Organizational Model This model presupposes that information will be gathered from the lower levels and rise to the top, which collects it and uses it to make policy decisions. The glue that holds these layers together is contracts : each employee freely and knowingly agrees to accept the organization’s formal authority. Employees have a moral responsibility to obey the employer in pursuing the organization’s goals, and the employer has a moral responsibility to provide the employee with the pay and benefits they have promised (including fair working conditions).
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Employee Obligations The employee’s main moral duty is to pursue the firm’s goals and do nothing that conflicts with them while working for the firm. Fiduciary Responsibility : He/she/it must avoid "self- dealing" or "conflicts of interests" in which the potential benefit to the fiduciary is in conflict with what is best for the person who trusts him/her/it. – Law.com
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Conflicts of Interest Conflicts of interest arise when employees have a private interest in the outcome of a task in which they are engaged that is possibly antagonistic to the firm’s interests and substantial enough that it might affect the employee’s independent judgment on the firm’s behalf. The result is that self-interest induces employees to act in ways that are not in the best interests of the firm. Conflicts of interest can also arise when employees of a company hold another job or consultancy outside the firm. Conflicts may be either actual or potential.
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This note was uploaded on 04/24/2008 for the course B A 242 taught by Professor Mr.scheib during the Fall '08 term at Penn State.

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BA_242_Chapter_Eight_-_Post-1 - BA 242 Business Ethics...

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