Download CHAPTER FIVE

Managing with Ethics and Social
Responsibility
We Will
• Examine the issues of managerial
ethics and corporate social
responsibility;
• Define the terms....look at the ways
of thinking about ethical behavior;
and
• Asses the role of the organization as
a member of the broader social
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What is Ethical Behavior?
• MORALS
Doctrine of Conduct relating to, dealing
with, or capable of making the distinction
between right and wrong in conduct or
character.
• ETHICS
The system or Code of Morals of a
particular person, religion, group, or
profession.
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• Being Ethical is:
Conforming to Moral Standards;
conforming to the standards of conduct of
a given group or profession.
• Ethical Behavior is:
Doing what is accepted as "good" and
"right" as opposed to "bad" and "wrong"
in the context of the governing Moral
Code.
Ethical Behavior=Legal Behavior
+"something
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Context of the Governing
Moral Code
• Refers to the group,
organization, or broader societal
venue within which the
prevailing norms and values
underlying a governing moral
code are established.
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Laws, Values, and Ethical
Behavior
Any behavior considered Ethical
should also be legal in a just and fair
society.
However
Legal behavior is not necessarily
ethical behavior.
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Four Views of Ethical Behavior
• Utilitarian View
Where moral behavior is that which
delivers the greatest good to the
greatest number of people.
• Individualism View
Where moral behavior is that which
is best for long-term self-interest.
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• Moral-Rights View
Where moral behavior is that which
respects fundamental rights shared
by all human beings.
• Justice View
Where moral behavior is that which
is impartial, fair, and equitable in
treating people. (Procedural and
Distributive Justice)
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Managerial Ethics
• Principles that guide the actions
and decisions of managers, and
determine if they are good or bad,
or right or wrong.
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Ethical Dilemmas
• An ethical dilemma occurs when
someone must decide whether or not
to pursue a course of action that,
although offering the potential of
personal or organizational benefit or
both, may be considered potentially
unethical.
• Most ethical dilemmas involve
conflicts with superiors, customers,
and subordinates.
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Most Common Unethical
Requests From the Boss
• Supporting Incorrect Viewpoints
• Signing False Documents
• Overlooking Boss’s Wrongdoing
• Doing Business with Boss’s
Friend
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Rationalizations for Unethical
Behavior
• Convincing yourself that the behavior is
not really illegal.
• Convincing yourself that the behavior is
in everyone's best interest.
• Convincing yourself that nobody will
ever know what you’ve done.
• Convincing yourself that the
organization will protect you.
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Factors Affecting Managerial
Ethics
• The Manager as a Person
Family influences
Religious values
Personal standards, and needs
• The Employing Organization
Policies, codes of conduct
Behavior of supervisors
Behavior of peers
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Factors Affecting Managerial
Ethics
• The External Environment
Government regulations
Norms and values of society
Ethical climate of the industry
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Maintaining High Ethical
Standards
• ETHICAL TRAINING
It is not about teaching people right
from wrong...we assume they know that,
and,
It is not about giving people the moral
courage to do what is right...they should
be able to do that anyhow.
Ethical Training
is about dealing with dilemmas
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A Checklist for Making Ethical
Decisions
• Recognize the ethical dilemma
• Get the facts
• Identify your options
• Test each option
Is it legal?
beneficial?
Is it right?
Is it
• Decide which option to follow
• Double-check your decision by
•
asking:"How will I feel if my family
finds out about my decision?”
Take action
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Whistleblower Protection
• Laws vary from state to state, and federal
laws protect mainly government workers.
• Where legal protection exists
whistleblowers face a number of barriers
that can make it hard for them to expose
unethical behavior in the workplace.
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Top Management Support
• Top management set the Ethical Tone
for the organization as a whole.
• Top managers have the power to
shape an organization's policies and
set its moral tone as well.
• Top managers can and should serve
as models of appropriate ethical
behavior for the entire
workforce.
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Top Management Support
• Supervisors must be careful not
to unwittingly encourage
unethical behavior by exerting
too much pressure for the
accomplishment of difficult
goals.
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Formal Code of Ethics
•
•
Written and official guidelines on how to
behave in situations prone to create
ethical dilemmas.
Areas often addressed in written codes
of ethics:
Workforce Diversity
Bribes and Kickbacks
Conflicts of Interest
Political Contributions
Customer and Supplier Relations
Misappropriation of Corporate Assets19
Corporate Social
Responsibility
• An obligation of the organization to
act in ways that serve both its own
interests and the interests of its
many external publics.
• These publics are considered
STAKEHOLDERS, the persons and
groups who are affected in one way
or another by the behavior of an
organization.
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Stakeholders
• Employees
• Stockholders
• Customers
• Suppliers
• Competitors
• Labor Unions
• Financial Institutions
• Political Parties
• Educational
Institutions
• Courts and Legal
Institutions
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Contrasting Views on Social
Responsibility
• Classical View
Holds that management’s only
responsibility is running a business to
maximize profits.
• Socio-Economic View
Holds that any organization must be
concerned about the broader social
welfare.
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The Classical View Against
Social Responsibility
• Reduced business profits
• Higher business costs
• Dilution of business purpose
• Too much social power for
•
businesses
Lack of business accountability to
the public
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The Socio-Economic View “For”
Social Responsibility
• Long-run profits for businesses.
• Public expectations support business
social responsibility.
Better public image for businesses.
•
• Businesses may avoid more regulation.
• Businesses have the resources.
• Businesses have the ethical obligation.
• The public wants it.
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Evaluation of Corporate Social
Performance
There are many action domains in
which social responsibility can be
pursued by business firms and other
types of organizations. They include:
Concerns for Ecology and
Environmental Quality.
Truth-in-Lending and Consumer
Protection
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Evaluation of Corporate Social
Performance
Aid-to-Education and Service to
Community
Employment Practices Affecting
Minorities
Progressive Labor Relations
Employee Assistance
General Corporate Philanthropy
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Criteria for Evaluating
Corporate Social Performance
• Economic Responsibility
Is fulfilled when it earns a profit through
the
provision of goods and services
desired by the public.
• Legal Responsibility
Is fulfilled when an organization operates
within the law and according to the
requirements of various external
regulations.
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• Ethical Responsibility
Is met when its actions voluntarily
conform not only to legal expectations,
but also to the
broader values and
moral expectations of
society.
• Discretionary Responsibility
Is met when the organization voluntarily
moves beyond basic economic, legal, and
ethical expectations to provide
leadership in advancing the well-being of
individuals, communities, and society as a
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whole.
A Continuum of Social
Responsibility Strategies
• Obstruction
Fight social demands
• Defensive
Do the minimum legally required
• Accommodation
Do the minimum ethically required
• Proactive
Take leadership in social initiatives
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Government Regulation of
Business
• Health and Safety
• Fair Labor Practices
• Consumer Protection
• Environmental Protection
FAA EPA OSHA ICC FDA EEOC
OFCCP NLRB SEC
(To name a few)
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