Principles of Management - Module 3: Social Responsibility and Managerial Ethics

What are the two ways businesses can promote social change?

1) Corporate philanthropy and 2) Employee volunteering efforts.

What are the six characteristics that determine how important an ethical issue is to an individual? (Issue Intensity)

1) Greatness of harm 2) Consensus of wrong 3) Probability of harm 4) Immediacy of consequences 5) Proximity to victim(c) 6) Concentration of effect.

What are the three levels of moral development?

1) Preconventional - Ethical decisions are based on personal consequences from outside sources. 3) Conventional - Ethical decisions are based on fulfilling standards and expectations. 3) Principled - Ethical decisions are reached apart from the authority of groups or society. (The different levels represent measures of independence from outside sources. The higher the stage of development, the more likely an employee will behave ethically.)

What is the "shades of green" model to how organizations go green?

1) The legal (or light green) approach and it is simply doing what is legally required. -Social Obligation. 2) The market approach where organizations respond to environmental preferences of customers. -Social Responsiveness. 3) The stakeholder approach where organizations respond to the environmental demands of multiple stakeholders and suppliers. -Social Responsiveness. 4) The activist (or dark green) approach which is an organization looking for ways to protect the earths natural resources. - Social Responsibility.

What are the four views on ethics?

1) Utilitarian View 2) Rights View 3) Theory of Justice View 4) Theory of Integrative Social Contracts

What is social responsibility?

A business's intention, beyond it's legal and economic obligations, to do the right things and act in the right ways that are good for society. A socially responsible organization does what is right because it feels it has an ethical responsibility to do so. (Also socioeconomic view.)

What is a code of ethics?

A formal statement of an organization's primary values and the ethical rules it expects its employees to follow. Specific guidelines tend to fall into three clusters: Be a dependable organizational citizen, Do not do anything unlawful or improper that will harm the organization, and Be good to customers. Establishing a code can potentially improve an organization's ethical climate but not necessarily.

What is the Theory of Justice View of Ethics?

A view of ethics in which managers enforce organizational rules fairly and impartially and follow all legal rules and regulations. This approach protects the interests of underrepresented stakeholders and the rights of the employee.

What is the Utilitarian View of Ethics?

A view of ethics that says ethical decisions are made solely on the basis of their outcomes or consequences such that the greatest good is provided for the greatest number. This view also encourages efficiency and productivity and is consistent with the goal of profit maximization.

What is the Theory of Integrative Social Contracts View of Ethics?

A view proposing that ethical decisions should be based on existing ethical norms in industries and communities in order to determine what constitutes right and wrong. This theory is based on integration of the general social contract and the specific contract between community members.

What is the Rights View of Ethics?

A view which is concerned with respecting and protecting individual liberties and privacy. This view seeks to protect individual rights of conscience, free speech, life and safety, and due process.

What is social entrepreneurship?

An individual or organization who seek out opportunities to improve society by using practical, innovative, and sustainable approaches. i.e. PATH -Program for Appropriate Technology in Health. (What business entrepreneurs are to the economy, social entrepreneurs are to social change.)

What is the United Nations Global Compact?

An initiative created by the UN outlining principles for doing business internationally. Their compact includes a set of core values in the areas of Human Rights, Labor Standards, Environment, and Anti-Corruption.

What is social screening?

Applying social criteria (screens) to investment decisions. SRI - Socially responsible investing funds will usually not invest in companies involved in unethical behaviors and who have poor environmental track records.

What factors determine if someone will behave ethically or unethically in any given ethical dilemma?

His/her stage of moral development moderated by individual characteristics, the organizational structural design, the organization's culture, and the intensity of the ethical issue.

What are the values of ethics training?

It can make a difference in the ethical behaviors of employees, increase employee awareness of ethical issues in business decisions, clarify and reinforce the organization's standards of conduct, and give employees confidence that the organization will support ethically correct stances. The primary concern with these types of programs is whether or not ethics can actually be taught.

What is the Foreign Corrupt Practices Act?

It defines what managers can or cannot do legally. With the passage of the FCPA the United States became the first country to outlaw bribery in international business.

Should an organization be socially involved?

One should be cautions in interpretation but a summary of more than a dozen studies seams to indicate that there is a small positive relationship between corporate social involvement and economic performance.

What are some actions managers can take to encourage ethical behavior?

The behavior of managers is the single most important influence on an individual's decision to act ethically or unethically. First, they can hire employees with high ethical standards, establish codes of ethics , *lead by example*, *protect those who report wrongdoing*, set realistic job goals and appraise performances both by the End as well as the Means, and use ethics training, conduct comprehensive social audits, and provide support for individuals facing ethical dilemmas.

What is ethics?

The principles, values, and beliefs that define right and wrong decisions and behavior.

What is the socioeconomic view of social responsibility?

The view that a manager has a greater responsibility to society than just profit—that he/she should be concerned with improving and protecting society's welfare. These types of firms engage in social actions in response to some popular social need. (Social Responsiveness)

What is the classical view of social responsibility?

The view that a manager's only responsibility to society is to capitalize on profits. A firm will only engage in social actions because of its obligation to meet certain economic and legal responsibilities. (Social Obligation)

How does organizational structure design affect an employee's ethical or unethical decisions?

Through structural variables such as: use of goals, the existence of formal rules and regulations, job descriptions, written codes of ethics, performance appraisal systems, and reward systems.

How does an organization's culture affect ethical decisions?

Through values-based management, which is where the organization's values guide employees in the way they do their job. Managers are responsible for creating an environment that encourages employees to embrace the culture and the desired values. When an organization has shared values, it builds team spirit.

What two characteristics play a role in determining whether or not a person behaves ethically?

Values: basic convictions about what is right and wrong. and Personality: particularly ego strength - measures of the strength of a person's convictions. (Individuals with high ego strength are more likely to behave ethically.) and locus of control - an attribute that measures the degree to which people believe they control their own fate. (Internal loc = people believe they control their own fate while External loc = people believe in luck or chance.)

What is green management?

When managers consider the impact of their organization on the natural environment.