Title: Management Conflict and Ethics

Netpanna Yavirach,
Asst,prof.,
Department of management, Faculty of
Business Administration, Rajamangala
Institute of Technology

In what sense can it be said that an

organization can, as a whole, be ethical of
unethical? What characteristics (e.g. structures,
policies, powers, responsibilities, codes, cultures,
procedures) would mark out an ethical organization?

Business ethics is an applied ethics. It is the

application of our understanding of what is good and
right to do. A discussion of business ethics must begin
by providing a framework of basic principles for
understanding what is meant by the terms “good” and
“right”. In popular usage the term “ethics” has a

1
variety of different meanings. One of the meanings
often given to it is: the principles of conduct governing
an individual or a group. We use the term “personal
ethics” to refer to the rules by which an individual lives
his or her personal life, and use the term “accounting
ethics” to refer to the code that guides the professional
conduct of accountants (Velasquez (1988).,p.11).
Ethics is concerned with the moral judgments involved
in moral decisions. Ethics does not study all
normative judgment, only those that are concerned with
what is morally right and wrong, or morally good and
bad. When something is judged to be morally right or
wrong, or morally good or bad, the underlying
standards on which the judgment is based are moral
standards. Moral standards include both specific moral
norms and more general moral principles. Moral norms
are standards of behavior that require, prohibit, or allow
certain specific kinds of behavior. Prohibitions against
lying, stealing, injuring, and so on, are all moral norms.
Moral principles are much more general standards that

2
are used to evaluate the adequacy of our social policies
and institutions as well as of individual behavior.
For profit organization, business ethics is a
specialized study of moral right and wrong. It
concentrates on how moral standards apply particularly
to business policies, institutions, and behavior.
Business enterprises are the primary economic
institutions through which people in modern societies
carry on the tasks of producing and distributing goods
and services. They provide the fundamental structures
within which the members of society combine there
scarce resources, land, labor, capital and technology.
They provide the channels through which these goods
are distributed in the form of consumer products,
employee salaries, investors’ return, and government
taxes. Mining, manufacturing, retailing, banking,
marketing, transporting, insuring, constructing, and
advertising are all different facets of the productive and
distributive processes of modern business.
When organization operation is harmful to the
society in general such as an act that puts 1,000 people

3
out of work is more harmful than one affecting only 10
people. It is a great harm to victims of the ethical act.
More American agree that it is wrong to bribe a
customs official in Texas than agree it is wrong to
bribe a customs official in Mexico. Sometimes it is
probability of harm that the act will actually take place
and will actually cause the harm predicted. For
example, selling a gun to a known armed robber has
greater probability of harm than selling a gun to a law-
abiding citizen. To reduce the retirement benefits of
current retirees has greater immediate consequences than
reducing the retirement benefits of current employees
who are between the ages of 40-50. Sometimes
organization close to feel to the victims of the evil such
as layoffs in one’s own work unit hit closer to home
than do layoffs in a remote city. The large effect to
the ethical act on the involved people such as
unfaithfully commercial for services and product that
effect to customer waste for their benefits. These are
the larger harm for people that consensus to an evil act.
Therefore, it is a solution of how important an ethical

4
issue is. It is an example of good managers to behave
more ethically when a moral issue is important to them
than when it is not. In addition, when it doing
something that break social moral in particular society.
On the contrary, when
organization do something that support society and
under morals it present ethical matter.

structures, Policies, Powers, and

Responsibilities
In determining organizational objective,
different organizational may have different objective.
Each organizations is distinguished by its structures,
policies, power and responsibilities. However, the
organizational grouping that always founds profit
organization, non-profit organization and global
organization in current business environment.
1. Non profit organizations represent a major
source of management talent and innovation. Many non
profit organizations have been leader in creating a sense
of purpose and mission that motivates employees,
encouraging workers to innovate and try new ideas,
5
using boards and committees drawn from community
members, and trimming long vertical hierarchies
(Robbin, 1997). These are closely concerned with
ethics because non profit organization objectives are
response to all of people. In contrast, profit
organizations going beyond maximize profit making.
While non profit organization are more social
responsibility than profit organization. while, profit
organization managers should be responsibility beyond
making profit to include protecting and improving
society’s welfare.
Social responsibility is a relatively new
concern with all of organization. Most businesses
understand that their responsibility is making maximize
profits to pursue higher values. On the contrary,
corporate social responsibility indicates that business
should have social obligations above and beyond
making a profit. The corporate social responsibility
must have an obligation to constituent groups in society
other than stockholders and beyond that prescribed by
law or union contract (Jones, 1980). A central feature

6
of this definition is that an action must be voluntary to
qualify as a socially responsible action. Corporate
behavior should not be judged by the decisions actually
reached, but by the process by which they were
reached. Broadly
stated, corporations need to analyze the social
consequences of their decisions before they make them
and take steps to minimize the social costs of these
decision when appropriate. The appropriate demand to
be made of those who govern large corporations is that
they incorporate into their decision-making process
means by which broader social concerns are given full
consideration. This is corporate social responsibility as
a means, not as a set of ends (Jones, 1988).
2. Profit organization provide effectiveness
and efficiency operating for more profit and
organizational growth. Decision making is considered
to be the most important task to every manager.
However, decision making do not depend on the mental
ability of each manager alone. The factors that effect
to the best quality of decision making may depend on

7
internal and external environment. External
environment refers to competitors, social environment,
political environment, economic environment,
technological environment. These factors are elements
existing outside the boundary of the organization that
have the potential to affect the organization and
uncertainly (Daft, 1992). An organizational structure
should enable it to effectively respond to external shifts.
Flexible structure can respond to uncertain environment
and a tight structure is most effective in a certain
environment (Burns and Stalker, 1961). The
organization also has an internal environment, which
includes the elements within the organization’s
boundaries. The internal environment is composed of
current employees, management, and especially
corporate culture. Organizational culture represents the
values and understandings that employees share these
values are signified by symbols, stories, heroes, slogans,
and ceremonies. Adaptive corporate cultures concerned
about managers care deeply about customers,
stockholders, and employees. They also strongly value

8
people and processes that can create useful change.
Furthermore, managers pay close attention to all the
constituencies, especially customers, and initiate change
when needed to serve their legitimate interests.
Both profit organization and non profit
organization faced theirs environment that

closely relationship with business ethics. This is

because social responsibility is a response to flexibility
of changing environment and that ethical
consideration should be an important criterion in
managerial decision making.
This is because ethics deals with internal values
that are a part of corporate culture and shaped decisions
concerning social responsibility with respect to the
external environment. An ethical issue is presented in
a situation when the actions of a person or organization
may harm or benefit others (Jones, 1991). Ethical
responsibility includes behaviors that are not necessarily
codified into law and may not serve the corporation’s
direct economic interests. In addition, ethical structures

9
represent the various systems, positions, and programs a
company can undertake to implement ethical behavior.
The socioeconomic model point out that many
groups in society besides stockholders have a stake in
corporate affairs. For example, creditors, current and
retired employees, customers, suppliers, competitors, all
levels of government. The community, and society in
general, these groups have different expectations which
occur often conflicting. Some companies go so far as
to conduct a stakeholder audit (Robert and king, 1989).
This growing practice involves systematically
identifying all parties that could possibly be impacted
by the company’s performance. According to the
socioeconomic view, business has an obligation to
respond to the needs of all stakeholders while pursuing
a profit (Seligman, 1995). All the purpose may be
different and make conflict to the management and
make them do unethical matter. The debate about the
role of business has spawned many specific arguments
on each side reveals the principal issues. Business
should be more than simply a profit machine,

10
proponents of social responsibility have offered these
arguments:
1. Business is
unavoidably involved
in social issues.
Business is either part
of the solution or part
of the problem. There
is no doubt that
private business shares
responsibility for such
societal problems as
unemployment,
inflation, and pollution.

2. Business has the

resources to tackle
today’s complex
societal problems.
With technical,
financial, and

11
 managerial resources,
the private business
sector can play a
decisive role in solving
society’s more
troublesome problems.
Without society’s
support, business could
not have built its
resource base in the
first place.
3. A better society means
a better environment
for doing business.
Business can enhance
its long-run
profitability by making
an investment in
society today.
4. Corporate social action
will prevent

12
 government
intervention. As
evidenced by waves of
antitrust, equal
employment
opportunity, and
pollution-control
legislation, government
will force business to
do what it fails to do
voluntarily.
The following arguments have been voiced
by those who think business is already too big and
powerful.
1. Profit maximization
ensures the efficient
use of society’s
resources. By buying
goods and services,
consumers collectively
dictate where assets

13
 should be deployed.
Social expenditures
amount to theft of
stockholders’ equity.
2. As an economic
institution, business
lacks the ability to
pursue social goals.
Gross inefficiencies
can be expected if
managers are forced to
divert their attention
from their pursuit of
economic goals.
3. Business already has
enough power.
4. Because managers are
not elected, they are
not directly
accountable to the
people.

14
 These arguments are based on the
assumption that business should stick to what it does
best. Social goals should be handled by other
institutions such as the family, school, religious
organizations, or government.
Business is bound by an iron law of
responsibility, which states that in long run, those
who do not use power in a way that society considers
responsible will tend to lost it (Davis and Frederick,
1990). This is an important idea to support that
cynicism about business runs deep today, despite a
more probusiness political climate worldwide.

The general ethical principles as following

are the guideline for organization characteristic.
(Kreitner, 1998)
1. self-interest. “never take
any action that is not in
the long-term self-interests

15
 of yourself and/or of the
organization to which you
belong.”
2. Personal virtues. Never
take any action that is not
honest, open, and truthful
and that you would not be
proud to see reported
widely in national
newspaper and on
television.”
3. Religious injunctions.
Never take any action that
is not kind and that does
not build a sense of
community, a sense of all
of us working together for
a commonly accepted
goal.”
4. Government requirements
“Never take any action

16
 that violates the law, for
the law represents the
minimal moral standards
of our society.”
5. Utilitarian benefits. “Never
take any action that does
not result in greater good
than harm for the society
of which you are a part.”
6. Universal rules. “Never
take any action that you
would not be willing to
see others, faced with the
same or closely similar
situation, also be free to
take.”
7. Individual rights “Never
take any action that
abridges the agreed-upon
and accepted rights of
others.”

17
 8. Economic efficiency.
“Always act to maximize
profits subject to legal and
market constraints, for
maximum profits are the
sign of the most efficient
production.”
9. Distributive justice. “Never
take any action in which
the least among us are
harmed in some way.”
10. Contributive liberty.
“Never take any action
that will interfere with the
right of all of us for self-
development and self-
fulfillment.”

These ethical principles serving as a

guide for making important decisions in business.

18
 All of organization must be set theirs
career ethics. A code of ethics is a formal
statement of the company values concerning
ethics and social issues. It makes employees
understand what the company stands for. Codes
of ethics tend to exist into two types; principle
based statements and policy-based statements.
Principle-based statements are designed to affect
corporate culture, define fundamental values, and
contain general language about company
responsibilities, quality of products, and treatment
of employees. General statement of principle are
often called corporate credos. For example,
corporate credos of Johnson & Johnson’s present
as following.
We believe out first responsibility is to the
doctors, nurses and patients, to mothers and
fathers and all others who use our products and
services. In meeting their needs everything we do
must be of high quality. We must constantly
strive to reduce our costs in order to maintain

19
reasonable prices. Customers’ orders must be
serviced promptly and accurately. Our suppliers
and distributors must have an opportunity to make
a fair profit. We are responsible to our
employees, the men and women who work with
us throughout the world. Everyone must be
considered as an individual. We must respect
their dignity and recognize their merit. They
must have a sense of security in their jobs.
Compensation must be fair and adequate, and
working conditions clean, orderly and safe. We
must be mindful of ways to help our employees
fulfill their family responsibilities. Employees
must feel free to make suggestions and
complaints. There must be equal opportunity for
employment, development and advancement for
those qualified. We must provide competent
management, and their actions must be just and
ethical. We are responsible to the communities in
which we live and work and to the world

20
community as well. We must be good citizens
support good works and

charities and bear our fair share of taxes. We

must encourage civic improvements and better
health and education. We must maintain in good
order the property we are previlleged to use,
protecting the environment and natural resources.
Our final responsibility is to our stockholders.
Business must make a sound profit. We must
experiment with new ideas. Research must be
carried on, innovative programs developed and
mistakes paid for. New equipment must be
purchased, new facilities provided and new
products launched. Reserves must be created to
provide for adverse times. When we operate
according to these principles, The stockholders
should realize a fair return.
These are excellence corporate credos
that cover all of dimension for business ethics.

21
How would conflict be prevented or
resolved?
Many conflicts may be occurred when
manager perceived incompatible differences
resulting in some form of interference or
opposition. Whether the differences are real or
not is irrelevant. If people perceive that
differences exist then, a conflict state exists.
Although most of us have the ability to response
conflict vary according to the situation, each of us
has a preferred style for handling conflicts
(Kilmann and Thomas, 1997). Each conflict can
be solved when manager determine the real
cause of each conflict that deal with person,
interest, values, personality, feelings and other
factors. There are three kinds of different
conflict cause. These three kinds of conflict are
communication differences, structural differences
and personal differences. The resolution
techniques that managers provide to reduce
conflict are considered into five methods.

22
Conflict resolution options are avoidance,
accommodation, forcing, compromise, and
collaboration (Thomas, 1976). Sometimes
avoidance is the best solution. Avoidance is the
most appropriate when the conflict is trivial, when
emotions are running high and time is needed for
the conflicting parties

to cool down. In addition, avoidance is also

appropriate when the potential disruption from a
more assertive action outweighs the benefits of
resolution. The goal of accommodation is to
maintain harmony relationships by placing
another’s needs. This option is most viable when
the issue under dispute isn’t that important or
when want managers to build up credits for later
issues. Forcing is the suitable when managers
want to satisfy their needs by using formal
authority to resolve conflict issue. Forcing works
well when manager need a quick resolution on
important issues, when unpopular actions must be

23
taken, and when commitment by others is not
crucial.
Compromise requires each party to give
up something of value or interest. Negotiation is
a smooth way for conflict resolution.
Compromise can be an optimum strategy when
conflicting parties are about equal in power.
Furthermore, it appropriate when desire to achieve
a temporary solution to a complex issue, and
when time pressures demand solution. Finally,
Collaboration is the ultimate win-win solution.
All member of the group concerning conflict seek
to satisfy their interests. All parties are open
their mind and discuss to the group with honesty.
Understanding and listening together can make
group find the conclusion fit all their need. be
find a solution that advantage to all parties. The
situation that practical for using collaboration
methods are limitation of time and, when the
issue is too important to be compromised and all
parties seriously want a win-win solution.

24
 Furthermore, the way to prevent or
resolve conflict are negotiation skills and
distributive bargaining. Negotiation is a tool for
managers to process bargaining in which two or
more people have different preferences. To make
decision which lead to agreement, managers
should have negotiation skills. The negotiation
process called distributive bargaining make zero
sum conditions. When one party wins, the other
party loses. Sometime this method make more
conflict situation. In contrast, integrative
bargaining is a strategy of

solving problem under the assumption that there

is at least one settlement can create a win-win
situation. In general, integrative bargaining is
preferable to distributive bargaining, since it
builds long-term relationships and facilitates
working together toward a solution. While
distributive bargaining leaves one party a loser.
The condition to success to integrative negotiation

25
method should be openness with information and
frankness between parties, a sensitivity by each
party to the other’s needs, the ability to trust one
another, and a willingness by both parties to
maintain flexibility(Thomas, 1992).
Would such a company go beyond the legal
minimum to show charity to local
communities ?
Company should be follow legal
minimum to show charity to local communication
such as social responsibility, support social
policies and legitimate government policies,
accustomed to legal, and political environment
systems.
Many companies face a myriad of
different laws and regulations in their countries.
They operate in deciding how to deal with the
laws and regulations that present managers with
some sticky ethical problems. For instance,
warning and suggestion using label for medicine
products, pollution control standard, decreasing

26
carbonmonoxide effect for motors products, and
labor-management relations obligation. Managers
should be making decision by assessing what is
a good for society in the long term.
The way of corporate actions that
provide many codes of ethics are concern with
employee, product safety, product quality,
environmental affairs or civic and community
affairs. Many problem obstacle are defined as
relations with government, political, customer,
supplier relations and conflicts of interest. The
concept of law is a norm that prescribes what is
assumed to be a proper mode of behavior. It
attempts to regulate the behavior of the subjects
according to certain standards established by the
society or by official person

who have responsibility for law and regulation

control.
Furthermore, law not only prescribes a
certain pattern of behavior but also requires that

27
the prescribed mode be followed. Managers are
bound to obay the law because it is the official
desire of the society. In addition, law includes a
process approved by society for applying coercive
sanctions against person who do not obey and
illegal act (Pratak, 1997). There are several
factors determine the effectiveness of a legal
system. First, the people in the society must
clearly understand and have knowledge of what
the society prescribes as legal behavior. Without
this knowledge one could not expect the law to
be obeyed. Second, the members of any society
must agreed that the laws deserve to be obeyed.
Finally, an effective system for punishing illegal
behavior must be place. The government which is
duly elected by the people provides the machinery
for an effective legal system. The legislative
branch of the government makes the laws, and the
judicial and executive branches together perform
the task of identifying illegal behavior and for
applying sanctions on the lawbreaker. In

28
addition, the function of law is to communicates
individuals in a society their rights and duties of
daily activities with other people in society. To
provide a basis for settlement and prevent
conflicts among person, laws helps controlling
and preventing undesirable behavior.
Governments use law to create the social and
economic welfare of society such as child labor,
social security, workmen’s compensation,
minimum wage, health care, food and drugs etc.

How would accountability/responsibility be

assessed for negligence?
When organization ignore social
responsibility, It may be affect to positive
reputation and organizational image. This may
have the greatest significance for managerial
decision making.

The evidence support the ignorant of

manager to business ethic are bribery and

29
corruption. Bribery is defined as the payment
voluntarily offered for the purpose of inducing a
public official to do or to omit to do something
in violation of his or her lawful duty, or to
exercise official discretion in favor of the payor’s
request for a contract, concession, or privilege on
some basis other than merit (Pratak, 1998, p412).
The phenomenon of bribery exists in organization
that avoid legal system and regulations.
Government should set up intensive punishment
to illegal activities. Then, the neglect of
responsibility for business ethic are impact to
social benefit and moral. Some socially
responsive companies found that they can manage
for the common good and for profit. Doing good
is no longer viewed as incompatible with earning
a profit. These companies have pioneered a way
of doing good by doing well through the use of
ethics (Martin, 1994 p.15-16)
Conclusion

30
 Ethic is a conception of right and wrong
conduct. Ethics tell us when our behavior is
moral and when it is immoral. Ethics deals with
fundament human relationship how we think and
behave toward others and how we want them to
think and behave toward others and how we want
them to think and behave toward us. Ethical
principles are guides to moral behavior. Many
companies are concerned about issues and many
are trying to develop approaches for improving
their ethics. Business have adopted a written
code of ethics, which defines the values and
principles that should be used to guide decisions.
For example, in most society lying, stealing,
deceiving and harming others are considered to be
unethical and immoral. Honesty keeping
promises, helping others, and respecting the right
of others are considered to be ethically and
morally desirable behavior. Such basic rules of
behavior are essential for the preservation and
continuation of organized life everywhere.

31
 -----------------
-----------------

References
Clarence C. Walton (1988), The moral Manager,
Ballinger Publishing
Company, Cambridge, Mass.
Joann S. Lubin (1993), Managing Your Career,
The Wall Street Journal,
August 25, p. B1.
Arvind V. Phatak (1997) International
Management concept and cases, South
Western College Publishing.
S.E.Jackson and R.S. Schuler, Preventing
Employee Burnout, “ Perrsonnel
(March-April 1983) .
S. E. Jackson and R. S. Schuler (1996), Human
Resource Management, sixth
edition, West Publishing Company.
B. Cohen (1992) Corporate Responsibility for
Social Change, Personal Journal

32
 (November 1992).
John R. Schermerhorn, James G. Hunt, Richard
N. Osborn (1991) Managing
Organizational Behavior, Fifth
edition John Wiley & Sons, Inc.
John P. Fernandez (1991), Managing a Diverse
Workforce (Lexington,
MA:D.C. Health) and Julie O’Mara
(1991), Managing Workplace
2000, San Francisco.
Otto Johnson (1991) Information Please
Almanac Boston, The Wall Street
Journal, Vol. 31, August 1990.
Ron Winslow (1990) Safety Group Cites
Fatalities Linked to Work. The Wall
Street Journal, Vol. 31, August 1990.
Milo Geyelin (1989) Study Faults Federal
Effort to Enforce Worker Safety,
The Wall Street Journal, April 1989.
L. Johnson (1994) Preventing Injuries, Personnel
Journal (november 1992).

33
Saul W. Gellerman, (1986) Why Good Manager,
Harvard Business Review,
Vol.64 (July 1986).

Bovee L. Courtland, Thrill V. John, Wood Buck

Marian and
Devel P. George (1993)
Management International Edition,
McGraw-Hill Inc.
Certo C. Samuel (1997) Modern Management,
Prentice Hall Inc.
Danial Seligman (1995) A Wooden
Stake, Fortune (June 12, 1995)
The Stakeholder concept is
critiqued in Daniel Seligman.
Daft Richard (1995) Management, The dryden
press harcouty brace
College publisher.
Davis and Frederick (1995) Business and Society
Excerpted from Hosmer,

34
 Moral Leadership in Business.
David J. Rachman, Michall H.Mescon,
Courtland L. Bovee, John V. Thill
(1993) Business Today,
seventh edition, McGraw-Hill Inc. London.
Dean G. Pruitt, Jeffrey Z. Rubin (1996)
Social Conflict Escalation, Stalemate
And settlement.
Geert Hofstede, (1989) The Culture
Relativity of the Quality of life Concept,
Academy of management.
Gun Olivier Faure, Jeffrey Z. Rubin (1993)
Culture and Negotiation, Sage
Publication Inc.
Huezynski A. Andrqej, Buchanon A. David
(1991) Organizational
Behavior, second edition,
Prentice-Hall Inc. ,London.
Jones (1992), Corporate Social Responsibility
Revisited.

35
 Moore, W. Christopher (1996) The Mediation
Process Practical Strategies
For Resolving Conflict, Jossey –
Bass Publisher, San Francisco.
Nancy C.Roberts and Paula J. King (1989) The
Stakeholder Audit Goes
Public, Organizational Dynamics,
17 (Winter 1989).
Nelson A. Carl (1999) International
Business International Thomson
business press, London.

Kreiner Robert (1998) Management,

Houghton Miffin Company,
Seventh Edition. U.S.A.
Ken Smith and Phil Johnson (1996)
Business Ethics and Business
Behavior, International
Thompson business press. U.S.A.

36
 Richard L. Daft (1995) Management,
International Edition, The Dryden
Press Harcourt brace College
Publishers.
Richard L. Daft (1992) Organization Theory
and Design, 4 ed.
th

(St.Paul,Minn West, 1992)

Schuler S. Randall and Jackson E.
Susan(1996) Human Resource Management
West Publishing Company New
York.
Stephen P. Robbins and Mary Coultar
(1997) Management, Prentice Hall,
International editions, London.
Tom L. Beauchamp and Norman E. Bowie
(1997) Ethical Theory and Business
Prentice – hall.
Velasquez G. Manuel (1988), Business
Ethics, concepts and cases, second
edition, Prentice Hall, Englewood
Cliffs, New Jersey, U.S.A.

37
 Weber James, James E. Post, William C.
Frederick, Anne T. Lawrence
(1996) Business and Society,
Corporate Strategy, Public Policy,
Ethics, International Edition, eighth
edition.
Karen Paul (1992). Business Environment
And Business Ethics,
The Social, Moral, and Political
Dimensions of Management,
Ballinger Publishing Company,
Cambridge, Masschusetts.
A Subsidiary of Harper & Row,
Publishers, Inc.
Braybrooke David (1991) Ethics in the
world of business,
Rowman & Littlefield Publishers,
Inc.

######################

38
39