Chapter 4 - Managing Ethics and Corporate Social Responsibility
Conventional Level
People learn to conform to the expectations of good behavior as defined by colleagues, family, friends, and society
Stakeholder Mapping
Provides a systematic way to identify the expectations, needs, importance, and relative power of various stakeholders, which may change over time
Sustainability
Refers to economic development that generates wealth and meets the needs of the current generation while preserving the environment and society so future generations can meet their needs as well
Green Movement
Relates to the growing concern with protection and preservation of the environment
Distributive Justice
Requires that different treatment of people not be based on arbitrary characteristics Example - Men and women should not receive different salaries if they have the same qualifications and are performing the same job
Procedural Justice
Requires that rules be administered fairly. Rules should be clearly stated and consistently and impartially enforced
The Practical Approach
Sidesteps debates about what is right, good, or just and bases decisions on prevailing standards of the profession and the larger society, taking the interests of all stakeholders into account
Ethics
The code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong
Code of Ethics
A formal statement of the company's values concerning ethics and social issues it communicates to employees what the company stands for Codes of ethics tend to exist in two types: principle-based statements and policy-based statements
Ethics Committee
A group of executives (and sometimes lower-level employees as well) appointed to oversee company ethics
Chief Ethics Officer
A manager who oversees all aspects of ethics and legal compliance
Managerial Ethics
A set of standards that dictate the conduct of a manager operating within a workplace
Individualism Approach
Acts are moral if they promote the individual's long-term interest
Stakeholder
Any group or person within or outside the organization that has some type of investment or interest in the organization's performance and is affected by the organization's actions (employees, customers, shareholders, and so forth)
Compensatory Justice
Argues that individuals should be compensated for the cost of their injuries by the party responsible
The Moral-Rights Approach
Asserts that human beings have fundamental rights and liberties that cannot be taken away by an individual's decision. Thus, an ethically correct decision is one that best maintains the rights of those affected by it
Practical Approach
Bases decisions on prevailing standards, society, and all stakeholders
Ethical Responsibilty
Behaviors that are not necessarily codified into law and may not serve the corporation's direct economic interests
The Individualism Approach
Contends that acts are moral when they promote the individual's best long-term interests
Legal Responsibility
Defines what society deems as important with respect to appropriate corporate behavior
Principle-Based Statements
Designed to affect corporate culture; they define fundamental values and contain general language about company responsibilities, quality of products, and treatment of employees
Profit-Maximizing View
Economic responsibility, carried to the extreme
Whistle-Blowing
Employee disclosure of illegal, unethical, or illegitimate practices on the employer's part
Corporate Credos
General statements of principle
The Utilitarian Approach
Holds that moral behavior produces the greatest good for the greatest number Espoused by the nineteenth-century philosophers Jeremy Bentham and John Stuart Mil
The Justice Approach
Holds that moral decisions must be based on standards of equity, fairness, and impartiality
Moral-Rights Approach
Humans have fundamental rights and liberties that cannot be taken away by an individual's decision
Ethical Dilemma
Includes the technological, economic, political/legal, and socio-cultural dimensions that affect a firm's external environment
Pre-Conventional Level
Individuals are concerned with external rewards and punishments and obey authority to avoid detrimental personal consequences. This level may be associated with managers who use an autocratic or coercive leadership style, with employees oriented toward dependable accomplishment of specific tasks
Post-conventional (or Principled Level)
Individuals are guided by an internal set of values based on universal principles of justice and right and will even disobey rules or laws that violate these principles
Economic Responsibility
Its responsibility is to produce the goods and services that society wants and to maximize profits for its owners and shareholders
Corporate Social Responsibility (CSR)
Management's obligation to make choices and take actions that will contribute to the welfare and interests of society, not just the organization
Policy-Based Statements
Outline the procedures to be used in specific ethical situation These situations include marketing practices, conflicts of interest, observance of laws, proprietary information, political gifts, and equal opportunities