Ethics and Stake Holders Responsbiltys in Organizations 162

8/8/2019 Ethics and Stake Holders Responsbiltys in Organizations 162

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Ethics and

Stakeholder Social Responsibility





Learning Objectives

State the importance of ethics for individual

employees and organizations.

Describe four forces that influence the ethical

behavior of individuals and organizations.

Describe three approaches that people use

when making ethical judgments. Explain stakeholder social responsibility and

how it influences managers¶ ethical decisions.





Shaping Ethical Conduct(adapted from Figure 6.1)

Cultural Forces

Fundamental American personal values include:

honesty

integrity trustworthiness

respect for other people

self-respect

family

achievement

reliability fairness

loyalty






Laws are society¶s values and standards that

are enforceable in the courts.

Cultural Forces

Legal and Regulatory Forces








A code of ethics states the principles that

employees are expected to follow when

acting on behalf of the organization.

Cultural Forces


Organizational Forces

Some recommended actions include

Create a formal ethics system

Communicate ethical expectations

Include ethical conduct as a measure of performance evaluations

Make it acceptable to talk about ethics






Moral Development

Whistle Blowing

Cultural Forces



Individual Forces





Whistle-Blowing

Anyone considering whistle-blowing should

consider the following

± Is this the only way?

± Do I have the evidence?

± Why am I doing this?

± Am I ready?






Ethical Conduct

Individual

Organization

Cultural Forces



Individual Forces







Making Ethical Judgments

The moral rights approach holds that decisions

should be consistent with fundamental rights

and privileges. ± Life and safety

± Truthfulness

± Privacy ± Freedom of conscience and speech





Making Ethical Judgments

The justice approach involves evaluating

decisions and behavior with regard to how

equitably they distribute the benefits and costsamong individuals and groups.

± Distributive Justice Principle

± Fairness Principle ± Natural Duty Principle





Stakeholder Social Responsibility

Stakeholder social responsibility holds that

managers and other employees have

obligations to identifiable groups that areaffected by, or can affect the achievement of

an organizations goals.

Stakeholders are individuals or groups thathave interests, rights, or ownership in an

organization and its activities.





Common Stakeholders of Organizations(adapted from Figure 6.2)

MediaGovernments

(Regulatory Agencies)

Secondary Stakeholders

Political

Action

Groups/

Activists

Unions

Nongovernmental

Organizations

Primary Stakeholders

Suppliers

Customers

Shareholders

EmployeesThe

Organization





Examples of Types of Pressures from Primary

Stakeholders

(adapted from Table 6.3)

Employees ± Pay and benefits

± Safety and health

± Rights at work/global labor standards

± Fair/ethical treatment in hiring, reviews, promotion, and relatedareas

Shareholders

± Demands for efficiency/profitability

± Viability (sustainability)

± Growth of investment

± Ethical disclosure of financial information





Examples of Types of Pressures from Primary

Stakeholders (cont.)

(adapted from Table 6.3)

Customers

± Competitive prices

± Quality and safe products ± Respect for customers¶ privacy

± Concern for environment

± Truthful/ethical advertising and sales practices

Suppliers

± Meet commitments

± Repeat business

± Fair trade practices/ethical treatment





Evaluating Social Performance

Proactive Responsibility

± Broad performance criteria

± Ethical norms

± Operation strategy

± Response to social pressures

± Legislative and political activities Social Audits

Documents

Ethics and Stake Holders Responsbiltys in Organizations 162