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Chapter 3: Ethical Behavior and Social Responsibility

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Title: Chapter 3: Ethical Behavior and Social Responsibility Author: Michael K. McCuddy Last modified by: Booth, Laura (4732) Created Date: 8/10/1998 6:37:04 PM – PowerPoint PPT presentation

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Title: Chapter 3: Ethical Behavior and Social Responsibility


1
Chapter 3
Ethical Behaviours and Social Responsibilities
2
Planning Ahead Chapter 3 Study Questions
  • What is ethical behavior?
  • How do ethical dilemmas complicate the workplace?
  • How can high ethical standards be maintained?
  • What is corporate social responsibility?
  • How do organizations and governments work
    together in society?

3
Study Question 1
What is ethical behaviour?
4
  • Ethics
  • Code of moral principles.
  • Set standards of good and bad as opposed to
    right and wrong.
  • Ethical behavior
  • What is accepted as good and right in the context
    of the governing moral code.

5
Laws, values, and ethical behaviour
  • Legal behavior is not necessarily ethical
    behavior.
  • Personal values help determine individual ethical
    behavior.
  • Terminal values
  • Preferences about desired end states. Such as
    goals one strives to achieve in life. Ex.
    Self-respect, family security.
  • Instrumental values--preferences regarding the
    means for accomplishing desired ends,,,honesty,
    ambition, courage

6
  • Utilitarian view of ethics greatest good to the
    greatest number of people.
  • Individualism view of ethics primary commitment
    is to ones long-term self-interests.
  • Moral-rights view of ethics respects and
    protects the fundamental rights of all people.
  • Justice view of ethics fair and impartial
    treatment of people according to legal rules and
    standards.

7
Figure 3.1 Four views of ethical behavior.
8
Cultural issues in ethical behaviour
  • Cultural relativism
  • Ethical behavior is always determined by cultural
    context.
  • Cultural universalism
  • Behavior that is unacceptable in ones home
    environment should not be acceptable anywhere
    else.

9
Figure 3.2 The extremes of cultural relativism
and ethical imperialism in international business
ethics.
Source Developed from Thomas Donaldson, Values
in Tension Ethics Away from Home, Harvard
Business Review, vol. 74 (September-October
1996), pp. 48-62.
10
  • How international businesses can respect core or
    universal values
  • Respect for human dignity
  • Create culture that values employees, customers,
    and suppliers.
  • Keep a safe workplace.
  • Produce safe products and services.
  • Respect for basic rights
  • Protect rights of employees, customers, and
    communities.
  • Avoid anything that threatening safety, health,
    education, and living standards.
  • Be good citizens
  • Support social institutions, including economic
    and educational systems.
  • Work with local government and institutions to
    protect environment.

11
Study Question 2
How do ethical dilemmas complicate the workplace?
12
  • An ethical dilemma occurs when choices, although
    having potential for personal and/or
    organizational benefit, may be considered
    unethical.
  • Ethical dilemmas include
  • Discrimination
  • Sexual harassment
  • Conflicts of interest
  • Customer confidence
  • Organizational resources

13
  • Unethical behavior can be rationalized by
    convincing yourself that
  • Behavior is not really illegal.
  • Behavior is really in everyones best interests.
  • Nobody will ever find out.
  • The organization will protect you.

14
  • Factors influencing ethical behavior include
  • The person
  • Family influences, religious values, personal
    standards, and personal needs.
  • The organization
  • Supervisory behavior, peer group norms and
    behavior, and policy statements and written
    rules.
  • The environment
  • Government laws and regulations, societal norms
    and values, and competitive climate in an
    industry.

15
Figure 3.3 Factors influencing ethical managerial
behaviorthe person, organization, and
environment.
16
Study Question 3
How can high ethical standards be maintained?
17
Checklist for dealing with ethical dilemmas
  • Step 1. Recognize the ethical dilemma
  • Step 2 Get the facts
  • Step 3. Identify your options
  • Step 4. Test each option Is it legal? Is it
    right? Is it beneficial?
  • Step 5. Decide which option to follow
  • Step 6. Double-check decision by asking the
    spotlight questions How would I feel if my
    family found out about my decision? How would I
    feel about this if my decision were printed in
    the local newspaper?
  • Step 7. Take action.

18
Ethics training
  • Structured programs that help participants to
    understand ethical aspects of decision making.
  • Helps people incorporate high ethical standards
    into daily life.
  • Helps people deal with ethical issues under
    pressure.

19
Whistleblowers
  • Expose misdeeds of others to
  • Preserve ethical standards
  • Protect against wasteful, harmful, or illegal
    acts
  • Laws protecting whistleblowers vary

20
  • Barriers to whistleblowing include
  • Strict chain of command
  • Strong work group identities
  • Ambiguous priorities
  • Organizational methods for overcoming
    whistleblowing barriers
  • Ethics staff units who serve as ethics advocates
  • Moral quality circles

21
Ethical Role Models
  • Top managers serve as ethical role models.
  • All managers can influence the ethical behavior
    of people who work for and with them.
  • Excessive pressure can foster unethical behavior.
  • Managers should be realistic in setting
    performance goals for others.

22
  • Codes of ethics
  • Formal statement of an organizations values and
    ethical principles regarding how to behave in
    situations susceptible to the creation of ethical
    dilemmas.
  • Areas often covered by codes of ethics
  • Bribes and kickbacks
  • Political contributions
  • Honesty of books or records
  • Customer/supplier relationships
  • Confidentiality of corporate information

23
Study Question 4
What is corporate social responsibility?
24
Corporate social responsibility
  • Looks at ethical issues on the organization
    level.
  • Obligates organizations to act in ways that serve
    both its own interests and the interests of
    society at large.

25
  • Organizational stakeholders
  • Those persons, groups, and other organizations
    directly affected by the behavior of the
    organization and holding a stake in its
    performance.
  • Typical organizational stakeholders
  • Employees
  • Customers
  • Suppliers
  • Owners
  • Competitors
  • Regulators
  • Interest groups

26
Figure 3.4 Multiple stakeholders in the
environment of an organization.
27
Beliefs that guide socially responsible business
practices
  • People do their best with a balance of work and
    family life.
  • Organizations perform best in healthy
    communities.
  • Organizations gain by respecting the natural
    environment.
  • Organizations must be managed and led for
    long-term success.
  • Organizations must protect their reputations.

28
Perspectives on social responsibility
  • Classical view
  • Managements only responsibility is to maximize
    profits.
  • Socioeconomic view
  • Management must be concerned for the broader
    social welfare, not just profits.

29
  • Arguments against social responsibility
  • Reduced business profits
  • Higher business costs
  • Dilution of business purpose
  • Too much social power for business
  • Lack of public accountability
  • Arguments in favor of social responsibility
  • Adds long-run profits
  • Improved public image
  • Avoids more government regulation
  • Businesses have resources and ethical obligation

30
Criteria for evaluating corporate social
performance
  • Is the organizations
  • Economic responsibility met?
  • Legal responsibility met?
  • Ethical responsibility met?
  • Discretionary responsibility met?

31
Figure 3.5 Criteria for evaluating corporate
social performance.
32
Strategies for pursuing social responsibility
  • Obstructionist meets economic responsibilities.
  • Defensive meets economic and legal
    responsibilities.
  • Accommodative meets economic, legal, and
    ethical responsibilities.
  • Proactive meets economic, legal, ethical, and
    discretionary responsibilities.

33
Figure 3.6 Four strategies of corporate social
responsibilityfrom obstructionist to proactive
behavior.
34
Study Question 5
How do organizations and governments work
together in society?
35
How government influences organizations
  • Common areas of government regulation of business
    affairs
  • Occupational safety and health
  • Fair labor practices
  • Consumer protection
  • Environmental protection

36
How organizations influence governments
  • Personal contacts and networks
  • Public relations campaigns
  • Lobbying
  • Political action committees
  • Sometimes by illegal acts, such as bribery or
    illegal financial contributions to political
    campaigns

37
Figure 3.7 Centrality of ethics and social
responsibility in leadership and the managerial
role.
38
  • Corporate governance
  • The oversight of the top management of an
    organization by a board of directors.
  • Corporate governance involves
  • Hiring, firing, and compensating the CEO.
  • Assessing strategy.
  • Verifying financial records.
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