Chapter 4: Managing ethics and social responsibility

Three Domains of Human Action

- Domain of codified law (legal standard) - Domain of ethics (social standard) -Domain of free choice (personal standard)

Ethical management Today

- Ethical lapses during the last decade have been pervasive. - Corporations and people have become associated with greed, deceit, irresponsibility, and lack of moral conscience. - Managers carry a big responsibility for setting an ethical climate. - Ethical crises have brought ethical management to the forefront.

The Business Case for Ethics and Social Respnsibility

- Ethics and social responsibility are important business issues. -Integrity and trust are elements in sustaining successful and profitable business relationships.

Four Types of Ethical Manager Behavior

1. Displays honesty and integrity. 2. Communicate and enforce ethical standards through behavior. 3. Be fair in decisions and distribution of rewards. 4. Show kindness, compassion, and concern for needs and feelings of others

Corporate Social Responsibility (CSR)

A self-regulating business model that helps a company be socially accountable - to itself, its stakeholders, and the public.

Individualism approach

Acts are moral if they promote the individual's long term interest. - Good for you and the customer

Stakeholders

Any group within or outside □ Primary stake holders are the people from the task environment

Ethics

Code of moral principles and values that govern the behaviors of right or wrong - People in organizations have divergent views about right/wrong

Moral-rights approach

Humans have fundamenttal rights and liberties that cannot be taken away by an individual's decision

Sustainability

Economic development that generates wealth and meets the needs of current generation while preserving the environment for the needs of future generations.

Utilitarian approach

Moral behavior produces the greatest good for the greatest nunmber. - Good for the company as a whole

Justice approach

Moral decisions must be based on standards of equity, fairness, and impartiality. □ Distributive justice □ Procedural justice □ Compensatory justice - Following the company rules

Ethical stuctures

Systems, positions, and programs like ethics training

code of ethics

a formal statement of the company's values regarding ethics and social issues

whistle-blowing

employee disclosure of illegal, immoral, or illegitimate practices

Managing company ethics and social responsibility

□ Code of ethics □ Ethical structures □ Whistle-blowing

Criteria of Corporate Social Performance (DELE)

□ Discretionary Responsibility □ Ethical Responsibility □ Legal Responsibility □ Economic Responsibility

What is Corporate Social Responsibility(CSR) ?

□ Distinguishing right from wrong. □ Make choices that contribute to society and stakeholders.

A Managers Ethical Choices

□ Individuals bring their own personality & traits to organizations. □ Personal needs, family influence, & religious background shape individuals. □ Personality characteristics such as ego, confidence, and independence may enable managers to make ethical choices.

Frameworks for Ethical Decision Making (Methods of ethical reasoning)

□ Utilitarian approach □ Individualism approach □ Moral-rights approach □ Justice approach □ Practical approach

Three Levels of Personal Moral Development

▪ Level 1: Preconventional ▪ Level 2: Conventional ▪ Level 3: Postconventional

Level 1: Self-Interest

▪Follow rules to avoid punishment. ▪Acts in own interest. ▪Obedience for its own sake.

Level 3: Internal Values

▪Follows self-chosen principles of justice and right. ▪Aware that people hold different values and seeks creative solutions to ethical dilemmass. ▪Balances concerns for individuals with concern for common good.

Level 2: Social Expectations

▪Lives up to expectations of others. ▪Fulfills duties and obligations of social system. ▪Upholds laws.