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2007 Prentice Hall, Inc. All rights reserved. 5*Current stories
about companies being socially irresponsible The Tainted Sanlu Baby
Milk Powder Incident
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2007 Prentice Hall, Inc. All rights reserved. 5*China starts
probe into baby powder milk contamination as more cases reported
(2008-09-12)Two babies with kidney stones receive medical treatment
at a military hospital in Lanzhou, capital of northwest China's
Gansu Province
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2007 Prentice Hall, Inc. All rights reserved. 5*China reports
432 infants with kidney stones, production of Sanlu halted; Stores
in China pull contaminated milk powder off shelves
(2008-09-12);Zhang Yujun, who produced and sold melamine-laced
"protein powder" in the China tainted milk scandal, was convicted
of endangering public security and sentenced to death by a local
court. (2009-01-22)
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2007 Prentice Hall, Inc. All rights reserved. 5*What Is Social
Responsibility?The Classical ViewManagements 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 unjustifiably increases costs that lower profits to the
owners and raises prices to consumers.
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2007 Prentice Hall, Inc. All rights reserved. 5*What Is Social
Responsibility? (contd)The Socioeconomic ViewManagements 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.To do the right thing
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2007 Prentice Hall, Inc. All rights reserved. 5*What are the
reasons for corporations taking (not taking) social responsibility
?
List at least five reasons
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2007 Prentice Hall, Inc. All rights reserved. 5*Exhibit
52Arguments For and Against Social ResponsibilityForPublic
expectationsLong-run profitsEthical obligationPublic imageBetter
environmentDiscouragement of further governmental regulationBalance
of responsibility and powerStockholder interestsPossession of
resourcesSuperiority of prevention over cureAgainstViolation of
profit maximizationDilution of purposeCostsToo much powerLack of
skillsLack of accountability
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2007 Prentice Hall, Inc. All rights reserved. 5*Does Social
Responsibility Pay?
Studies appear to show a positive relationship between social
involvement and the economic performance of firms.
A general conclusion is that a firms social actions do not harm
its long-term performance.
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2007 Prentice Hall, Inc. All rights reserved. 5*VALUES-BASED
MANAGEMENT
An approach to managing in which managers establish and uphold
an organizations shared values.
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2007 Prentice Hall, Inc. All rights reserved. 5*
The Purposes of Shared ValuesGuiding managerial decisionsShaping
employee behaviorInfluencing the direction of marketing
effortsBuilding team spirit
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2007 Prentice Hall, Inc. All rights reserved. 5*Exhibit 57Survey
of Stated Values of OrganizationsPercentage of Core
ValueRespondentsCustomer satisfaction 77% Ethics/integrity 76%
Accountability 61% Respect for others 59% Open communication 51%
Profitability 49% Teamwork 47% Innovation/change 47% Continuous
learning 43% Positive work environment 42% Diversity 41% Community
service 38% Trust 37% Social responsibility 33% Security/safety 33%
Empowerment 32% Employee job satisfaction 31% Have fun 24%Source:
AMA Corporate Values Survey, (www.amanet.org), October 30,
2002.
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2007 Prentice Hall, Inc. All rights reserved. 5*Managerial
Ethics
Ethics DefinedPrinciples, values, and beliefs that define what
is right and wrong behavior.
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2007 Prentice Hall, Inc. All rights reserved. 5*Three domains of
human actionHighLowAmount of Explicit ControlDomain of codified
law
(Legal standard)Domain of ethics
(Social standard)Domain of free choice
(Personal standard)
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2007 Prentice Hall, Inc. All rights reserved. 5*Small case I:
Management Ethics Dilemma A top employee at your small company
tells you he needs some time off because he has AIDS. You know the
employee needs the job as well as the health insurance benefits.
Providing health insurance has already stretched the companys
budget, and this will send premiums through the roof. You recently
read of a case in which federal courts upheld the right of an
employer to modify health plans by putting a cap on AIDS benefits.
Should you investigate whether this is a legal possibility for your
company?
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2007 Prentice Hall, Inc. All rights reserved. 5*Small case II:
Management Ethics Dilemma As a sales manager for a major
pharmaceuticals company, youve been asked to promote a new drug
that costs $2500 per dose. Youve read the reports saying the drug
is only 1 percent more effective than an alternate drug that costs
less than one-fourth as much. Can you in good conscience
aggressively promote the $2500-per-dose drug? It you dont, could
lives be lost that might have been saved with that 1 percent
increase in effectiveness?
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2007 Prentice Hall, Inc. All rights reserved. 5*Exhibit
58Factors That Affect Ethical and Unethical Behavior
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2007 Prentice Hall, Inc. All rights reserved. 5*Ethics in an
International ContextEthical standards are not universal.Social and
cultural differences determine acceptable behaviors.Foreign Corrupt
Practices ActMakes it illegal to corrupt a foreign official yet
token payments to officials are permissible when doing so is an
accepted practice in that country.The Global Compact
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2007 Prentice Hall, Inc. All rights reserved. 5*How Managers Can
Improve Ethical Behavior in An OrganizationHire individuals with
high ethical standards.Establish codes of ethics and decision
rules.Lead by example.Set realistic job goals and include ethics in
performance appraisals.Provide ethics training.Conduct independent
social audits.Provide support for individuals facing ethical
dilemmas.
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2007 Prentice Hall, Inc. All rights reserved. 5*
An Sample:
Code of Ethics
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2007 Prentice Hall, Inc. All rights reserved. 5*Awareness of
Social IssuesSocial EntrepreneursAre individuals or organizations
who seek out opportunities to improve society by using practical,
innovative, and sustainable approaches.Want to make the world a
better place and have a driving passion to make that happen.
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2007 Prentice Hall, Inc. All rights reserved. 5*Terms to
Knowclassical viewsocioeconomic view
social obligationsocial responsivenesssocial responsibility
social screeninggreening of managementvalues-based
managementethicsvaluesego strengthlocus of control
code of ethicswhistle-blowersocial entrepreneursocial impact
management
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2007 Prentice Hall, Inc. All rights reserved. 5*L E A R N I N G
O U T L I N E Follow this Learning Outline as you read and study
this chapter.What is Social Responsibility?Contrast the classical
and socioeconomic views of social responsibility.Discuss the role
that stakeholders play in the four stages of social
responsibility.Differentiate between social obligation, social
responsiveness, and social responsibility.
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2007 Prentice Hall, Inc. All rights reserved. 5*L E A R N I N G
O U T L I N E Follow this Learning Outline as you read and study
this chapter.Social Responsibility and Economic PerformanceExplain
what research studies have shown about the relationship between an
organizations social involvement and its economic
performance.Define social screening.Explain what conclusion can be
reached regarding social responsibility and economic
performance.
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2007 Prentice Hall, Inc. All rights reserved. 5*L E A R N I N G
O U T L I N E (contd) Follow this Learning Outline as you read and
study this chapter.The Greening of ManagementDescribe how
organizations can go green.Relate the approaches to being green to
the concepts of social obligation, social responsiveness, and
social responsibility.Values-Based ManagementDiscuss what purposes
shared values serve.Describe the relationship of values-based
management to ethics.
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2007 Prentice Hall, Inc. All rights reserved. 5*L E A R N I N G
O U T L I N E (contd) Follow this Learning Outline as you read and
study this chapter.Managerial EthicsDiscuss the factors that affect
ethical and unethical behavior.Describe the important roles
managers play in encouraging ethical behavior.
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2007 Prentice Hall, Inc. All rights reserved. 5*L E A R N I N G
O U T L I N E (contd) Follow this Learning Outline as you read and
study this chapter.Social Responsibility and Ethics in Todays
WorldExplain why ethical leadership is important.Discuss how
managers and organizations can protect employees who raise ethical
issues or concerns.Explain what role social entrepreneurs
play.Describe social impact management.
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2007 Prentice Hall, Inc. All rights reserved. 5*Homework1.
Reading: Book chapter 51 paper essay covering the key points of
social responsibility and managerial ethics.
2. Movie watch http://v.youku.com/v_playlist/f2364608o1p0.html1
paper essay talking about the global outsourcing and management
issues in the movie.
Due time: 30th, Oct., Friday before class.
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