Managing with Ethics and Social Responsibility

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Managing with Ethics and Social Responsibility

• We Will
• Examine the issues of managerial ethics and
  corporate social responsibility
  
• Define the terms....look at the ways of thinking
  about ethical behavior and
  
• Asses the role of the organization as a member of
  the broader social community.

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What is Ethical Behavior?

• MORALS
• Doctrine of Conduct relating to, dealing with,
  or capable of making the distinction between
  right and wrong in conduct or character.
  
• ETHICS
• The system or Code of Morals of a particular
  person, religion, group, or profession.

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• Being Ethical is
• Conforming to Moral Standards conforming to
  the standards of conduct of a given group or
  profession.
  
• Ethical Behavior is
• Doing what is accepted as "good" and "right"
  as opposed to "bad" and "wrong" in the context of
  the governing Moral Code.
  
• Ethical BehaviorLegal Behavior "something
  else"

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Context of the Governing Moral Code

• Refers to the group, organization, or broader
  societal venue within which the prevailing norms
  and values underlying a governing moral code are
  established.

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Laws, Values, and Ethical Behavior

• Any behavior considered Ethical should also be
  legal in a just and fair society.
  
• However
• Legal behavior is not necessarily ethical
  behavior.

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Four Views of Ethical Behavior

• Utilitarian View
• Where moral behavior is that which delivers
  the greatest good to the greatest number of
  people.
  
• Individualism View
• Where moral behavior is that which is best for
  long-term self-interest.

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• Moral-Rights View
• Where moral behavior is that which respects
  fundamental rights shared by all human beings.
  
• Justice View
• Where moral behavior is that which is
  impartial, fair, and equitable in treating
  people. (Procedural and Distributive Justice)

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Managerial Ethics

• Principles that guide the actions and decisions
  of managers, and determine if they are good or
  bad, or right or wrong.

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Ethical Dilemmas

• An ethical dilemma occurs when someone must
  decide whether or not to pursue a course of
  action that, although offering the potential of
  personal or organizational benefit or both, may
  be considered potentially unethical.
• Most ethical dilemmas involve conflicts with
  superiors, customers, and subordinates.

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Most Common Unethical Requests From the Boss

• Supporting Incorrect Viewpoints
• Signing False Documents
• Overlooking Bosss Wrongdoing
• Doing Business with Bosss Friend

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Rationalizations for Unethical Behavior

• Convincing yourself that the behavior is not
  really illegal.
  
• Convincing yourself that the behavior is in
  everyone's best interest.
  
• Convincing yourself that nobody will ever know
  what youve done.
  
• Convincing yourself that the organization will
  protect you.

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Factors Affecting Managerial Ethics

• The Manager as a Person
• Family influences
• Religious values
• Personal standards, and needs
• The Employing Organization
• Policies, codes of conduct
• Behavior of supervisors
• Behavior of peers

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Factors Affecting Managerial Ethics

• The External Environment
• Government regulations
• Norms and values of society
• Ethical climate of the industry

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Maintaining High Ethical Standards

• ETHICAL TRAINING
• It is not about teaching people right from
  wrong...we assume they know that, and,
  
• It is not about giving people the moral courage
  to do what is right...they should be able to do
  that anyhow.
  
• Ethical Training
• is about dealing with dilemmas

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A Checklist for Making Ethical Decisions

• Recognize the ethical dilemma
• Get the facts
• Identify your options
• Test each option
• Is it legal? Is it right? Is it
  beneficial?
  
• Decide which option to follow
• Double-check your decision by asking"How will I
  feel if my family finds out about my decision?
  
• Take action

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Whistleblower Protection

• Laws vary from state to state, and federal laws
  protect mainly government workers.
  
• Where legal protection exists whistleblowers face
  a number of barriers that can make it hard for
  them to expose unethical behavior in the
  workplace.

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Top Management Support

• Top management set the Ethical Tone for
  the organization as a whole.
  
• Top managers have the power to shape an
  organization's policies and set its moral tone as
  well.
  
• Top managers can and should serve as models of
  appropriate ethical behavior for the entire
  workforce.

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Top Management Support

• Supervisors must be careful not to unwittingly
  encourage unethical behavior by exerting too much
  pressure for the accomplishment of difficult
  goals.

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Formal Code of Ethics

• Written and official guidelines on how to behave
  in situations prone to create ethical dilemmas.
  
• Areas often addressed in written codes of ethics
  
  
• Workforce Diversity
• Bribes and Kickbacks
• Conflicts of Interest
• Political Contributions
• Customer and Supplier Relations
• Misappropriation of Corporate Assets

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Corporate Social Responsibility

• An obligation of the organization to act in ways
  that serve both its own interests and the
  interests of its many external publics.
  
• These publics are considered STAKEHOLDERS, the
  persons and groups who are affected in one way or
  another by the behavior of an organization.

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Stakeholders

• Employees
• Stockholders
• Customers
• Suppliers
• Competitors
• Labor Unions

• Financial Institutions
• Political Parties
• Educational Institutions
• Courts and Legal Institutions

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Contrasting Views on Social Responsibility

• Classical View
• Holds that managements only responsibility is
  running a business to maximize profits.
  
• Socio-Economic View
• Holds that any organization must be concerned
  about the broader social welfare.

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The Classical View Against Social Responsibility

• Reduced business profits
• Higher business costs
• Dilution of business purpose
• Too much social power for businesses
• Lack of business accountability to the public

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The Socio-Economic View For Social
Responsibility

• Long-run profits for businesses.
• Public expectations support business social
  responsibility.
  
• Better public image for businesses.
• Businesses may avoid more regulation.
• Businesses have the resources.
• Businesses have the ethical obligation.
• The public wants it.

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Evaluation of Corporate Social Performance

• There are many action domains in which social
  responsibility can be pursued by business firms
  and other types of organizations. They include
  
• Concerns for Ecology and Environmental Quality.
• Truth-in-Lending and Consumer Protection

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Evaluation of Corporate Social Performance

• Aid-to-Education and Service to Community
• Employment Practices Affecting Minorities
• Progressive Labor Relations
• Employee Assistance
• General Corporate Philanthropy

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Criteria for Evaluating Corporate Social
Performance

• Economic Responsibility
• Is fulfilled when it earns a profit through
  the provision of goods and services desired by
  the public.
  
• Legal Responsibility
• Is fulfilled when an organization operates
  within the law and according to the
  requirements of various external regulations.

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• Ethical Responsibility
• Is met when its actions voluntarily conform
  not only to legal expectations, but also to the
  broader values and moral expectations of
  society.
• Discretionary Responsibility
• Is met when the organization voluntarily moves
  beyond basic economic, legal, and ethical
  expectations to provide leadership in advancing
  the well-being of individuals, communities, and
  society as a whole.

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A Continuum of Social Responsibility Strategies

• Obstruction
• Fight social demands
• Defensive
• Do the minimum legally required
• Accommodation
• Do the minimum ethically required
• Proactive
• Take leadership in social initiatives

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Government Regulation of Business

• Health and Safety
• Fair Labor Practices
• Consumer Protection
• Environmental Protection
• FAA EPA OSHA ICC FDA EEOC OFCCP NLRB SEC
• (To name a few)