Lec4 chp5

Managing Ethics and Social Responsibility

CHAPTER 5

chapter5

Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

2

Learning Outcomes

• Define ethics and explain how ethical behavior relates to behavior governed by law and free choice.

• Explain the utilitarian, individualism, moral-rights, and justice approaches for evaluating ethical behavior.

• Describe the factors that shape a manager’s ethical decision making.

• Identify important stakeholders for an organization and discuss how managers balance the interests of various stakeholders.

• Explain the bottom-of –the pyramid concept and some of the innovative strategies companies are using.

• Explain the philosophy of sustainability and why organizations are embracing it.

• Define corporate social responsibility and how to evaluate it along economic, legal, ethical, and discretionary criteria.

• Discuss how ethical organizations are created through ethical leadership and organizational structures and systems.

chapter5


3

Ethics

The code of moral principles and values that

govern the behaviors of a person or group with

respect to what is right or wrong.

chapter5


4

Managerial Ethics

• Ethics can be difficult to define

• Ethical issues are exceedingly complex

• Managers face a variety of difficult situations

• Ethics fall between law and free choice

chapter5


5

Ethical Dilemmas: What Would You Do?

• An ethical dilemma arises in a situation concerning right or wrong when values are in conflict

• Managers and employees are the moral agents who must make ethical choices

• Decisions about advertising, operations, and Internet usage are all dilemmas YOU might face

chapter5


6

Criteria for EthicalDecision Making

• Utilitarian approach – moral behaviors should produce the greatest good for the greatest number

• Individualism approach – acts are moral when they promote the individual’s best long-term interests

• Moral Rights Approach – moral decisions are those that best maintains the rights of those affected

• Justice Approach – decisions must be based on standards of equity, fairness, and impartiality

• Distributive Approach – different treatment of people should not be based on arbitrary characteristics

chapter5


7

Defining Justice

Distributive Justice – different treatment of people should not be based on arbitrary characteristics.

Compensatory Justice – individuals should be compensated for the cost of their injuries by the party responsible.

chapter5


8

Manager Ethical Choices

An important personal trait that mangers poses is their stage of moral development

chapter5


9

Globalization and Ethics

• Globalization makes ethical issues more complex

• Bribes are common practice in many countries

• Transparency International ranks countries based on Bribe Payers Index

chapter5


10

What is Corporate Responsibility?

Corporate Social Responsibility (CSR) is the obligation of organization

management to make decisions and take actions

that will enhance the welfare and interests of society as well as the

organization

chapter5


11

Organizational Stakeholders

Stakeholders are any group within or outside the organization that has a stake in the organization’s performance.

chapter5


12

The Bottom of the Pyramid (BOP)

• Sometimes called base of the pyramid

• Alleviate poverty and social ills while making profits

• Selling to the world’s poorest people

• 4 Billion people make up the lowest level of the world’s economic pyramid

• These people have traditionally been underserved

• Companies can make money while addressing global poverty, environmental destruction, social decay and political instability

chapter5


13

The Ethic of Sustainability

• Sustainable Development

– Economic Development that generates wealth

– Meets the needs of current generation

– Saving the environment for future generations

• Managers are weaving sustainability into strategic decisions

chapter5


14

Evaluating Corporate Responsibility

chapter5


15

Managing Company Ethics and Social

ResponsibilityCode of Ethics – formal statement of the organization’s values regarding ethics and social issues

Ethical Structures – systems, positions and programs to implement ethical behavior

Whistle-Blowing – employee disclosure of illegal, immoral, or illegitimate practices

chapter5


16

The Ethical Organization

chapter5


17

The Business Case for Ethics and Social

Responsibility• Paying attention to ethics and social

responsibility is as important as profits and costs

• Ethical and social actions impact financial performance

• Companies are beginning to measure nonfinancial factors that create value

• Customers pay attention to a company’s ethics and social responsibility

Lec4 chp5

Business

division ofcengage learning

organization copyright

ethical issues

learning outcomes

strategic decisions

ethical dilemmas

ethical choices decisions

managerial ethics ethics