Chapter 3: The Ethical and Social Envirnoment

Ethics

An individual's personal beliefs/moral principles about whether a behavior, action, or decision is right or wrong

DoL

Department of Labor

NLRB

National Labor Relations Board

Arguments FOR Social Responsibility

Socioeconomic View: 1.) Business creates problems and should therefore help solve them 2.) Corporations are citizens in our society 3.) Business often has the resources necessary to solve problems 4.) Business is a partner in our society along with the government and the general population.

Socioeconomic view

the view that management's social responsibility goes beyond making profits to include protecting and improving society's welfare

Areas of Social Responsibility

1.) CUSTOMERS who use its products 2.) EMPLOYEES and their jobs 3.) INVESTORS with funds at risk 4.) The physical ENVIRONMENT 5.) The general SOCIAL WELFARE

The government influences business through DIRECT and INDIRECT regulation:

1.) Environmental protection legislation (EPA) 2.) Consumer protection legislation (FDA, FTC) 3.) Employee protection legislation (EEOC, NLRB, DoL) 4.) Securities legislation ( 5.) The tax codes

Video: Rosa's Pizza

1.) Have to differentiate 2.) Have to be ethical to not abuse the 'free pizza' sticky notes

Factors that Influence Ethical Behavior at WorkEthical Behavior at Work

1.) Individual 2.) Organization A.) Leadership B.) Culture C.) Incentive Plan D.) Compensation Plan

Video: The Greyston Bakery

1.) Mission: Do good and do well 2.) Socioeconomic method 3.) Provides housing, daycare, healthcare, and scholarships 4.)

How to Foster Ethics at Work

1.) Must begin with Top Management ... immoral manager ... amoral manager (doesn't realize it's wrong) ... moral manager 2.) Code of Ethics 3.) Hiring 4.) Training 5.) Organizational Culture (reward system, protect whistle blowers) 6.) Individual Behavior (Publicity test)

Managing Social Responsibility

1.) Organizational Leadership and Culture 2.) Whistle Blowing 3.) Corporate Social Audit

Business influences the government through:

1.) Personal contacts and networks 2.) Lobbying 3.) Political action committees (PACs) 4.) Favors and other influence tactics

Degree of Social Responsibility

1.) Proactive (Highest) 2.) Accommodative 3.) Defensive 4.) Obstructionist (Lowest)

Arguments AGAINST Social Responsibility

1.) The purpose of business in American society is to generate profit for owners 2.) Involvement in social programs gives business too much power 3.) There is potential for conflicts of interest 4.) Business lacks the expertise to manage social programs.

Views of Ethics

1.) Utilitarian: useful/practical 2.) Individualism: individual rights 3.) Moral Rights: protect people's rights 4.) Justice: treating impartially/fairly

Corporate Social Responsibility

The set of obligations an organization has to protect and enhance the society in which it functions

TEST QUESTION: Which of the following is an example of an ethical dilemma?

Vince, a government employee, knows that he should not accept brides, but is tempted to take the money to save a sick kid

Code of Ethics

a formal, written statement of the values and ethical standards that guides a firm's actions (compliance mechanisms + signatures)

Classical view

says that management's only social responsibility is to maximize profits