8e Daft Chapter 05

8/8/2019 8e Daft Chapter 05

1/24

Ethics and Social ResponsibilityEthics and Social Responsibility

CHAPTER 5CHAPTER 5


2/24

Copyright 2008 by South-Western, a division of Thomson Learning. All rights reserved.2

Learning ObjectivesLearning Objectives

Define ethics and explain how ethical behaviorrelates to behavior governed by law and freechoice.

Explain the utilitarian, individualism, moral-rights, and justice approaches for evaluatingethical behavior.

Describe how both individual and organizationalfactors shape ethical decision making.

Define corporate social responsibility and howto evaluate it along economic, legal, ethical,and discretionary criteria.


3/24


Learning Objectives (contd.)Learning Objectives (contd.)

Describe four organizational approaches to

environmental responsibility, and explain the

philosophy of sustainability.

Discuss how ethical organizations are created

through ethical leadership and organizational

structures and systems.

Identify important stakeholders for an

organization and discuss how managersbalance the interests of various stakeholders.


4/24


EthicsEthics

The code of moral principles and

values that govern the behaviors of a

person or group with respect to what

is right or wrong.


5/24


Three Domains of Human ActionThree Domains of Human Action

Amount of

Explicit ControlHigh Low

Domain of Codified Law

(Legal Standard)

Domain of Ethics

(Social Standard)

Domain of Free Choice

(Personal Standard)

Exhibit 5.1


6/24


Ethical DilemmaEthical Dilemma

A situation that arises when all

alternative choices or behaviors have

been deemed undesirable because...

Of potentially negative ethical

consequences, making it difficult to

distinguish right from wrong


7/24


Criteria ForEthical Decision Making

Criteria ForEthical Decision Making

Most ethical dilemmas involve

Conflict between needs of the part &

whole

- Individual versus the organization

- Organization versus society as a whole

Managers benefit from a normative

strategy to guide their decisionmaking - norms and values


8/24


Ethical Decision Making ApproachesEthical Decision Making Approaches

Utilitarian Approach

Individualism Approach

Moral-Rights Approach

Justice Approach


9/24


Utilitarian ApproachUtilitarian Approach

Moral behavior produces the greatest

good for the greatest number

Example recent trend amongcompanies to monitor employee use

of the Internet


10/24


Individualism ApproachIndividualism Approach

Acts are moral when they promote the

individual's best long-term interests, which

ultimately leads to the greater good

Individual self-direction paramount Individualism is believed to lead to honesty

& integrity since that works best in the long

run

However, top executives from WorldCom,Enron, Tyco demonstrate flaws of approach


11/24


Moral-Rights ApproachMoral-Rights Approach

Moral decisions are those that best

maintain the rights of those people

affected by them.

An ethical decision is one that avoids

interfering with the fundamental rights

of others.


12/24


Six Moral RightsSix Moral Rights

1. The right of free consent

2. The right to privacy

3. The right of freedom of conscience

4. The right of free speech

5.T

he right to due process6. The right to life and safety


13/24


Justice ApproachJustice Approach

Moral Decisions must be based on

standards of equity, fairness,

impartiality

Three types of Justice Approaches:

Distributive Justice

Procedural Justice

Compensatory Justice


14/24


Distributive JusticeDistributive Justice

Different treatment of people should not

be based on arbitrary characteristics

In case of substantive differences,

people should be treated differently in

proportion to the differences amongthem


15/24


Procedural JusticeProcedural Justice

Rules should be clearly stated

Rules should be consistently andimpartially enforced


16/24


Compensatory JusticeCompensatory Justice

Individuals should be compensated for the

cost of their injuries by the partyresponsible

Individuals should not be held responsible

for matters they have no control over


17/24


Factors Affecting Ethical ChoicesFactors Affecting Ethical Choices

The Manager

Levels or stages of moral

development Pre-conventional

Conventional

Post-conventional

The Organization


18/24


Levels of Personal Moral DevelopmentLevels of Personal Moral Development

Exhibit 5.2


19/24


The OrganizationThe Organization

Rarely can ethical or unethical corporate

actions be attributed solely to the

personal values of a single manager Values adopted within the organization

are highly important

Most people believe their duty is to fulfillobligations and expectations of others


20/24


Corporate Social ResponsibilityCorporate Social Responsibility

Organizations obligation to make

decisions and take actions that will

enhance the welfare and interests

of society and organization Being a good corporate citizen

Difficulty in understanding issues

can be ambiguous with respect toright and wrong


21/24


Organizational StakeholdersOrganizational Stakeholders

Any group within or outside the

organization that has a stake in the

organizations performance Each stakeholder

Has a different criterion of responsiveness

Has a different interest in the company

Monsanto


22/24


Environmental Responsibility CommitmentEnvironmental Responsibility Commitment

Activist

Approach

Stakeholder

Approach

MarketApproach

LegalApproach

The Shades of

Corporate Green

Adapted from Exhibit 5.6


23/24


Total Corporate Social ResponsibilityTotal Corporate Social Responsibility

Total Corporate Social Responsibility

Exhibit 5.7


24/24


The Ethical OrganizationThe Ethical Organization

Exhibit 5.9

The Three Pillars of an Ethical Organization

Documents

8e Daft Chapter 05