A s i f J a m a l
V i s i t in g L ec t u r e r
Un i ve r s i t y O f S in d h , M i r p u r k ha s c a m p u s
MANAGING SOCIAL
RESPONSIBILITIES AND
ETHICS
Social responsibilities is a
business obligation to pursue
policies, make decisions and
take actions that benefit
society
INTRODUCTION
Management - Chapter 33
Ethics
Code of moral principles.
Set standards of “good” and “bad” as opposed to “right” and “wrong.”
Ethical behavior
What is accepted as good and right in the context of the governing moral
code.
STUDY QUESTION 1: WHAT IS
ETHICAL BEHAVIOR?
Management - Chapter 34
Law, values, and ethical behavior:
Legal behavior is not necessarily ethical behavior.
Personal values help determine individual ethical behavior.
Terminal values
Instrumental values
STUDY QUESTION 1: WHAT IS
ETHICAL BEHAVIOR?
Management - Chapter 35
STUDY QUESTION 1: WHAT IS
ETHICAL BEHAVIOR?
Utilitarian view of ethics — greatest good to the greatest number of people.
Individualism view of ethics — primary commitment is to one’s long-term self-interests.
Moral-rights view of ethics — respects and protects the fundamental rights of all people.
Justice view of ethics — fair and impartial treatment of people according to legal rules and standards.
Management - Chapter 36
FIGURE 3.1 FOUR VIEWS OF ETHICAL
BEHAVIOR.
Management - Chapter 37
Cultural issues in ethical behavior:
Cultural relativism
Ethical behavior is always determined by cultural context.
Cultural universalism
Behavior that is unacceptable in one ’s home environment should not be
acceptable anywhere else.
STUDY QUESTION 1: WHAT IS
ETHICAL BEHAVIOR?
Management - Chapter 38
FIGURE 3.2 THE EXTREMES OF CULTURAL
RELATIVISM AND ETHICAL IMPERIALISM IN
INTERNATIONAL BUSINESS ETHICS.
Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,”Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.
Management - Chapter 39
STUDY QUESTION 1: WHAT IS
ETHICAL BEHAVIOR?
How international businesses can respect core or universal values:
Respect for human dignity
• Create culture that values employees, customers, and suppliers.
• Keep a safe workplace.
• Produce safe products and services.
Respect for basic rights
• Protect rights of employees, customers, and communities.
• Avoid anything that threatening safety, health, education, and living standards.
Be good citizens
• Support social institutions, including economic and educational systems.
• Work with local government and institutions to protect environment.
Management - Chapter 310
An ethical dilemma occurs when choices, although having potential for personal and/or organizational benefit, may be considered unethical.
Ethical dilemmas include:
Discrimination
Sexual harassment
Conflicts of interest
Customer confidence
Organizational resources
STUDY QUESTION 2: HOW DO ETHICAL DILEMMAS COMPLICATE
THE WORKPLACE?
Management - Chapter 311
STUDY QUESTION 2: HOW DO ETHICAL DILEMMAS COMPLICATE
THE WORKPLACE?
Ethical behavior can be rationalized by
convincing yourself that:
Behavior is not really illegal.
Behavior is really in everyone ’s best interests.
Nobody will ever find out.
The organization will “protect” you.
Management - Chapter 312
Factors influencing ethical behavior include:
The person
Family influences, religious values, personal standards, and
personal needs.
The organization
Supervisory behavior, peer group norms and behavior, and
policy statements and written rules.
The environment
Government laws and regulations, societal norms and values,
and competitive climate in an industry.
STUDY QUESTION 2: HOW DO ETHICAL DILEMMAS COMPLICATE
THE WORKPLACE?
Management - Chapter 313
FACTORS INFLUENCING ETHICAL MANAGERIAL
BEHAVIOR—THE PERSON, ORGANIZATION, AND
ENVIRONMENT.
Management - Chapter 314
Ethics training:
Structured programs that help participants to understand ethical aspects of decision making.
Helps people incorporate high ethical standards into daily life.
Helps people deal with ethical issues under pressure.
HOW CAN HIGH ETHICAL STANDARDS BE MAINTAINED?
Management - Chapter 315
Whistleblowers
Expose misdeeds of others to:
Preserve ethical standards
Protect against wasteful, harmful, or illegal acts
Laws protecting whistleblowers vary
STUDY QUESTION 3: HOW CAN HIGH ETHICAL STANDARDS BE
MAINTAINED?
Management - Chapter 316
STUDY QUESTION 3: HOW CAN HIGH
ETHICAL STANDARDS BE
MAINTAINED?Barriers to whistleblowing include:
Strict chain of command
Strong work group identities
Ambiguous priorities
Organizational methods for overcoming whistleblowing barriers:
Ethics staff units who serve as ethics advocates
Moral quality circles
Management - Chapter 317
STUDY QUESTION 3: HOW CAN HIGH
ETHICAL STANDARDS BE
MAINTAINED?
Ethical role models:
Top managers serve as ethical role models.
All managers can influence the ethical behavior of
people who work for and with them.
Excessive pressure can foster unethical behavior.
Managers should be realistic in setting performance
goals for others.
Management - Chapter 318
Codes of ethics:
Formal statement of an organization ’s values and ethical principles regarding how to behave in situations susceptible to the creation of ethical dilemmas.
Areas often covered by codes of ethics:
Bribes and kickbacks
Political contributions
Honesty of books or records
Customer/supplier relationships
Confidentiality of corporate information
STUDY QUESTION 3: HOW CAN HIGH ETHICAL STANDARDS BE
MAINTAINED?
Management - Chapter 319
STUDY QUESTION 4: WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Corporate social responsibility:
Looks at ethical issues on the organization level.
Obligates organizations to act in ways that serve both its own interests
and the interests of society at large.
Management - Chapter 320
STUDY QUESTION 4: WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Organizational stakeholders Those persons, groups, and other organizations directly
affected by the behavior of the organization and holding a stake in its performance.
Typical organizational stakeholders Employees
Customers
Suppliers
Owners
Competitors
Regulators
Interest groups
Management - Chapter 321
FIGURE 3.4 MULTIPLE
STAKEHOLDERS IN THE
ENVIRONMENT OF AN
ORGANIZATION.
Management - Chapter 322
STUDY QUESTION 4: WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Beliefs that guide socially responsible business practices:
People do their best with a balance of work and family life.
Organizations perform best in healthy communities.
Organizations gain by respecting the natural environment.
Organizations must be managed and led for long-term success.
Organizations must protect their reputations.
Management - Chapter 323
STUDY QUESTION 4: WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Perspectives on corporate social responsibility:
Classical view—
Management’s only responsibility is to maximize profits.
Socioeconomic view—
Management must be concerned for the broader social welfare,
not just profits.
Management - Chapter 324
STUDY QUESTION 4: WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Arguments against social responsibility:
Reduced business profits
Higher business costs
Dilution of business purpose
Too much social power for business
Lack of public accountability
Arguments in favor
of social
responsibility:
Adds long-run profits
Improved public image
Avoids more
government regulation
Businesses have
resources and ethical
obligation
Management - Chapter 325
STUDY QUESTION 4: WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Criteria for evaluating corporate social performance:
Is the organization ’s …
Economic responsibility met?
Legal responsibility met?
Ethical responsibility met?
Discretionary responsibility met?
Management - Chapter 326
FIGURE 3.5 CRITERIA FOR
EVALUATING CORPORATE SOCIAL
PERFORMANCE.
Management - Chapter 327
FIGURE 3.6 FOUR STRATEGIES OF
CORPORATE SOCIAL RESPONSIBILITY—FROM
OBSTRUCTIONIST TO PROACTIVE BEHAVIOR.
Management - Chapter 328
STUDY QUESTION 5: HOW DO ORGANIZATIONS AND GOVERNMENTS
WORK TOGETHER IN SOCIETY?
How government influences organizations:
Common areas of government regulation of business affairs:
Occupational safety and health
Fair labor practices
Consumer protection
Environmental protection
Management - Chapter 329
STUDY QUESTION 5: HOW DO
ORGANIZATIONS AND GOVERNMENTS
WORK TOGETHER IN SOCIETY?
How organizations influence governments:
Personal contacts and networks
Public relations campaigns
Lobbying
Political action committees
Sometimes by illegal acts, such as bribery or illegal
financial contributions to political campaigns
Management - Chapter 330
FIGURE 3.7 CENTRALITY OF ETHICS AND
SOCIAL RESPONSIBILITY IN LEADERSHIP
AND THE MANAGERIAL ROLE.
THE 10 COMMANDMENTS OF CORPORATE
SOCIAL RESPONSIBILITY
1. Take corrective action before it is required.
2. Work with affected constituents to resolve mutual problems.
3. Work to establish industry-wide standards and self-regulation.
4. Publicly admit your mistakes.
5. Get involved in appropriate social programs.
6. Help correct environmental problems.
7. Monitor the changing social environment.
8. Establish and enforce a corporate code of conduct.
9. Take needed public stands on social issues.
10.Strive to make profits on an ongoing basis.
SOURCES OF ETHICS
religion
Legal systemBUSINESS
ETHICSculture
MANAGING ETHICS
Ethical
behaviors
Code of ethicsTop
management
Ethics
committees
Ethics auditTraining
programsEthics hotline
SOCIAL AUDIT
is an identification and examination of the
activities of the firm in order to assess, evaluate,
measure and report their impact on the immediate
social environment
It helps to determine the areas where the firm
could be vulnerable to public criticism.
Organizations can inform the public regarding
their activities for society.
The true picture of corporate accountability can be
given to the society.