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STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITIONTHOMAS L. WHEELEN J. DAVID HUNGERCHAPTER 3 Ethics & Social Responsibility
Ethics & Social Responsibility
Corporate GovernanceBroader responsibility --
Private corporations have responsibility to society that extend beyond making a profit
Social ResponsibilityThere is one and only one social responsibility of businessto use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.Milton Friedman
Corporate GovernanceCarrolls 4 Responsibilities
EconomicLegalEthicalDiscretionary
Carrolls 4 Responsibilities
Corporate StakeholdersAffect or are affected by the achievement of the corporations objectives
Corporate StakeholdersStakeholder Analysis
Primary stakeholderSufficient bargaining power to affect outcomes
Secondary stakeholderIndirect stake but are affected by corporations actions
Stakeholder InputDetermine whether input is necessary
Ethical Behaviorbusiness ethics
Argument that there is no such thing it is an oxymoron
Ethical Decision MakingCorporate practices --
Massive write-downs and restatements of profitMisclassification of expenses as capital expendituresPirating corporate assets for personal gain
Ethical Decision MakingRecent Survey Results --
70% distrust business executivesEnronWorldCom
Reasons for Unethical BehaviorProvocative Question --
Why are businesspeople perceived to be acting unethically?
Reasons for Unethical BehaviorPerceptions caused by --
Not aware of improprietyCultural norms and values varyGovernance systems based on rule or relationshipsDifferences in values between businesspeople and key stakeholders
Reasons for Unethical BehaviorAllport-Vernon-Lindzey Study of Values --
AestheticEconomicPoliticalReligiousSocialTheoretical
Reasons for Unethical BehaviorMost common reasons for bending rules --
Organizational performance required itAmbiguous or out of date rulesPressure from others everyone else does it
Moral RelativismMorality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another.
Kohlbergs Levels of Moral Development1. Preconventional level
Characterized by a concern for selfPersonal interestAvoidance of punishment
Kohlbergs Levels of Moral Development2. Conventional level
Characterized consideration of societys valuesExternal code of conduct
Kohlbergs Levels of Moral Development3. Principled level
Characterized by adherence to internal moral codeUniversal values or principles
Encouraging Ethical BehaviorCodes of Ethics
Specifies how an organization expects its employees to behave on the job.
Encouraging Ethical BehaviorGuidelines for Ethical Behavior
Ethics
Morality
Law
Encouraging Ethical BehaviorApproaches to Ethical Behavior
UtilitarianJudged by consequences
Individual RightsFundamental rights in all decisions
JusticeDistribution in equitable fashion
Encouraging Ethical BehaviorApproaches to Ethical Behavior
Categorical imperativegolden ruleMeans - Ends
Strategy Bits192 U.S. companies surveyed --
92% monitored employees use of e-mail/Internet
26% monitored employees electronic activities all the time
Almost none had checks in place to protect employees privacy
Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006Prentice Hall 2006
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