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WEEK 7 ETHICS

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WEEK 7 ETHICS & SOCIAL RESPONSIBILITY zge Can 07.11.2012 * They can directly benefit or be harmed by company s actions They all have different claims/rigths ... – PowerPoint PPT presentation

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Title: WEEK 7 ETHICS


1
WEEK 7 ETHICS SOCIAL RESPONSIBILITY
  • Özge Can 07.11.2012

2
Article on Ethics
  • In China, Human Costs Are Built Into an iPad
  • http//www.nytimes.com/2012/01/26/business/ieconom
    y-apples-ipad-and-the-human-costs-for-workers-in-c
    hina.html?pagewantedall

3
Stakeholders
  • Stakeholders
  • The people and groups affected by how a company
    and its managers behave.
  • They supply a company with its productive
    resources and so have a claim on and stake in the
    company

4
Stakeholders
5
Stockholders
  • They have a claim on company as they buy its
    stock or shares and become its owners. They
  • Want to maximize their return on investment
  • Want to ensure that managers are behaving
    ethically and not risking investors capital by
    engaging in actions that could hurt the companys
    reputation

6
Managers
  • Responsible for using a companys financial,
    capital and human resources to increase its
    performance
  • Bear the responsibility to decide which goals an
    organization should pursue
  • Frequently try to balance multiple interests
  • These interest may be in conflict some decisions
    that benefit certain stakeholder groups can harm
    others

7
Employees
  • They expect to receive rewards consistent with
    their performance
  • Fair treatment expected from managers
  • Recruitment and training
  • Performance appraisal
  • Reward system

8
Suppliers and Distributors
  • Suppliers expect to be paid fairly and promptly
    for their inputs
  • Distributors expect to receive quality products
    at agreed-upon prices
  • How companies contract and interact with them?
  • How and when payments are made
  • Product quality and safety specifications

9
Customers
  • Most critical stakeholder
  • Company must work to increase efficiency and
    effectiveness in order to create loyal customers
    and attract new ones

10
Community and Society
  • Community
  • Refers to locations like towns or cities or to
    social milieus in which companies are located
  • Provides a company with the physical and social
    infrastructure that allows it to operate

11
Ethics
  • Ethics
  • Inner guiding moral principles, values that
    people use to analyze and interpret a situation
    and then decide what is the right or appropriate
    way to behave
  • Ethical dilemma
  • Business Ethics
  • The moral principles and standards that guide
    behavior in the world of business

12
Rules of Ethical Decision Making
13
Why Should Managers Behave Ethically?
  • The relentless pursuit of self-interest can lead
    to a collective disaster when a few people
    start to profit from being unethical because this
    encourages other people to act in the same way
  • Pursuing of self interest with no consideration
    of societal interests harm both the individual
    and the society
  • gt Scarce resources are destroyed

14
Some Effects of Ethical/ Unethical Behavior
15
The Business Costs of Ethical Failure
16
Sources of Business Ethics
17
Sources of Business Ethics
  • Societal Ethics
  • Standards that govern how members of a society
    should deal with each other on issues such as
    fairness, justice, poverty, and the rights of the
    individual
  • Occupational (Professional) Ethics
  • Standards that govern how members of a
    profession, trade or craft should conduct
    themselves when performing work-related activities

18
Sources of Business Ethics
  • Individual Ethics
  • Personal standards and values that determine how
    people view their responsibilities to others and
    how they should act in ethical situations
  • Organizational Ethics
  • Guiding practices and beliefs through which a
    particular company and its managers view their
    responsibility towards their stakeholders

19
Major Issues of Business Ethics
  • Unfair wages and violation of employee rights
  • Safety and health violations and poor working
    conditions
  • Discriminatory practices
  • Failure of providing safe products
  • Dishonest commonication, lack of transparency
  • Damaging community, society and the environment
  • Financial frauds, bribery

20
Organizational Ethics
  • Code of Ethics A formal statement of an
    organizations primary values and the ethical
    rules it expects its employees to follow.
  • Organizational characteristics, mechanisms and
    culture guide and influence ethics
  • Organiational structural design
  • Organization culture
  • Ethics programs and training

21
Becoming an Ethical Leader
  • 1. Hire individuals with high ethical standards
  • 2. Establish codes of ethics, decision rules and
    shared values in the organization
  • 3. Lead by example Be a good role model by
    being ethical and honest yourself
  • 4. Include ethics in performance appraisals and
    the reward system
  • 5. Provide ethics training
  • 6. Conduct independent social audits
  • 7. Provide support for individuals facing
    ethical dilemmas

22
Workforce Diversity Ethics
  • Workforce Diversity
  • The ways in which people in an organization are
    different from and similar to one another.
  • Unethical treatment (discrimination) towards
    diverse employees
  • Prejudice (false schemas, perceptions)
  • Stereotyping
  • Biases
  • Overt discrimination, glass ceiling

23
Social Responsibility
  • Social Responsibility
  • The way a companys managers and employees view
    their duty or obligation to make decisions that
    protect, enhance, and promote the welfare and
    well-being of society as a whole
  • Corporate Social Responsibility (CSR) The idea
    that businesses have obligations to society
    beyond the pursuit of profits

24
I. The Classical View
  • Managements only social responsibility is to
    maximize profits (create a financial return) by
    operating the business in the best interests of
    the stockholders (owners of the corporation).
  • Expending the firms resources on doing social
    good is not preferable

25
II. The Socioeconomic View
  • Managements social responsibility goes beyond
    making profits to include protecting and
    improving societys welfare.
  • Corporations are not independent entities
    responsible only to stockholders. Firms have a
    moral responsibility to larger society to become
    involved in social, legal, and political issues.

26
Why Be Socially Responsible?
  • Building good image and reputation
  • Responsibility for bearing the costs of
    protecting stakeholders, providing health care
    and income, paying taxes and etc
  • Promoting a climate of caring in general
  • Better environment and better society
  • Superiority of prevention over cures

27
Practice Take The Test ?
  • Assessing your ethical decision-making skills
  • http//www.mhhe.com/business/management/buildyourm
    anagementskills/updated_flash/topic2a/quiz.html
  • Corporate social responsibility
  • http//www.mhhe.com/business/management/buildyourm
    anagementskills/updatedexercises/quiz_1b.html

28
Next Week
  • Read from your textbook
  • Chapter 6 Managing the Global Environment
  • Submit your written assignment (2)
  • 2-pages at most
  • Individual or up to 3 persons

29
Assignment -2 (Due 14.11.2012)
  • You are an entrepreneuer who has decided to go
    into business and open an Egean cuisine
    restaurant. Your business plan requires that you
    hire people as chefs, waiters and so on.
  • As the manager, you are drawing up a list of
    ethical principles that all of you must agree to.
    These principles outline your view of what is
    right or acceptable behavior in your business and
    will be expected both from you and your employees.

30
Assignment -2
  • 1. Create a list of the five main ethical rules
    or principles you will use to govern how the
    business operates (Please identify them in
    relation with your restaurant business)
  • 2. Give three specific examples how these
    principles might relate to your stakeholders. How
    will you follow them in dealing with particular
    stakeholders? What will be the benefits for
    following these rules?
  • 3. Give an example of one ethical dilemma that
    you might face with while running your business.
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