Management 11e John Schermerhorn Chapter 3 Ethics and Social Responsibility.

Management 11e John Schermerhorn

Chapter 3Chapter 3

Ethics and Ethics and Social ResponsibilitySocial Responsibility

Planning Ahead — Chapter 3 Study Questions

1. What is ethical behavior?

2. How do ethical dilemmas complicate the workplace?

3. How can high ethical standards be maintained?

4. What is social responsibility and governance?

Study Question 1: What is ethical behavior?

Ethics Code of moral principles. Set standards of “good” or “bad” or “right” or

“wrong” in one’s conduct.

Ethical behavior What is accepted as good and right in the

context of the governing moral code.

Study Question 1: What is ethical behavior?Study Question 1: What is ethical behavior?

Law, values, and ethical behavior: Legal behavior is not necessarily ethical

behavior.

Personal values help determine

individual ethical behavior.

Study Question 1: What is ethical behavior?Study Question 1: What is ethical behavior?

Law, values, and ethical behavior:

Values - underlying beliefs and attitudes that

help determine individual behavior Terminal values - preferences about desired ends

Instrumental values – preferences regarding the

means to desired ends

Study Question 1: What is ethical behavior?

Alternative ethical views Utilitarian

Delivers the greatest good to the most people

Individualism Advances long-term self-interests

Moral rights Maintains fundamental rights of all human beings

Study Question 1: What is ethical behavior?

Justice view of ethics fair and impartial treatment of people according to

legal rules and standards Procedural justice – policies and rules fairly applied Distributive justice – equal treatment for all people Interactional justice – people treated with dignity and

respect Commutative justice – fairness to all involved

Four views of ethical behavior

Management 11e/ Chapter 3 8

Study Question 1: What is ethical behavior?

Cultural issues in ethical behavior: Cultural relativism

Ethical behavior is always determined by cultural context.

Universalism Behavior unacceptable in one’s home

environment should not be acceptable anywhere else.

Ethical imperialism Imposing one’s ethical standards on others.

Management 11e/ Chapter 3 9

The extremes of cultural relativism and ethical imperialism in international business ethics.

Management 11e/ Chapter 3 10

Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,” Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.

Study Question 1: What is ethical behavior?

Sources of information on ethical behavior: Institute for Global Ethics at www.globalethics.org

and on Facebook at http://www.facebook.com/pages/Rockland-ME/Institute-for-Global-Ethics/51585783748?ref=ts

Ethics Resource Center at www.ethics.org

Management 11e/ Chapter 3 11

Study Question 2: How do ethical dilemmas complicate the workplace?

An ethical dilemma occurs when choices, although having

potential for personal and/or organizational benefit, may be considered unethical.

Management 11e/ Chapter 3 12

Study Question 2: How do ethical dilemmas complicate the workplace?

Ethical dilemmas include:

Management 11e/ Chapter 3 13

Checklist for ethical dilemmas

Management 11e/ Chapter 3 14

Study Question 2: How do ethical dilemmas complicate the workplace?

Influences on Ethical Decision Making Ethical framework

Provides personal rules or strategies for ethical decision making

Includes personal values Honesty Fairness Integrity Self-respect

Management 11e/ Chapter 3 15

Kohlberg’s stages of individual moral development

Management 11e/ Chapter 3 16

Study Question 2: How do ethical dilemmas complicate the workplace?

Situational Context and Ethics Intensity Will the situation pose an important ethic

challenge? Magnitude of the situation Risk of immediate harm Proximity and concentration of harm Social consensus

Management 11e/ Chapter 3 17

Study Question 2: How do ethical dilemmas complicate the workplace?

Organizational Culture Influence What is considered ethical behavior within

the organizational context? What are the expectations of management? What are the expectations of co-workers? Is there a code of ethics?

Management 11e/ Chapter 3 18

Study Question 2: How do ethical dilemmas complicate the workplace? Study Question 2: How do ethical dilemmas complicate the workplace?

External environment

Management 11e/ Chapter 3 19

Study Question 2: How do ethical dilemmas complicate the workplace?

Ethical behavior can be rationalized by convincing yourself that:

20Management 11e – Management 11e/ Chapter 3

Study Question 3: How can high ethical standards be maintained?

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.

Management 11e/ Chapter 3 21

Study Question 3: How can high ethical standards be maintained?

Codes of Ethical Conduct Formal statement of an organization’s values

and ethical principles regarding how to behave in situations susceptible to the creation of ethical dilemmas

Management 11e/ Chapter 3 22

Study Question 3: How can high ethical standards be maintained?

Moral Management Managers behave in one of three ways

Management 11e/ Chapter 3 23

How can high ethical standards be maintained?

24

Study Question 3: How can high ethical standards be maintained?

Areas often covered by codes of ethics:

Management 11e/ Chapter 3 25

Study Question 3: How can high ethical standards be maintained?

Whistleblowers Expose misdeeds of others to:

Preserve ethical standards Protect against wasteful, harmful, or illegal acts

Laws protecting whistleblowers vary

Management 11e/ Chapter 3 26

Study Question 3: How can high ethical standards be maintained?

Barriers to whistleblowing include: Strict chain of command Strong work group identities Ambiguous priorities

Management 11e/ Chapter 3 27

Study Question 3: How can high ethical standards be maintained?

Organizational methods for overcoming whistleblowing barriers: Ethics staff units who serve as ethics

advocates Moral quality circles

Management 11e/ Chapter 3 28

Study Question 3: How can high ethical standards be maintained?

Social entrepreneurship: a unique form of entrepreneurship that seeks

novel ways to solve pressing social problems at home and abroad Housing and job training for homeless Bringing technology to poor families Improving literacy among

disadvantaged youth Offering small loans to start

minority-owned businesses

Management 11e/ Chapter 3 29

Study Question 4: What is social responsibility and corporate governance?

Corporate social responsibility and governance: 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.

Management 11e/ Chapter 3 30

Study Question 4: What is social responsibility and corporate governance?

Stakeholder Management Stakeholders

persons, groups, and other organizations directly affected by the behavior of the organization and holding a stake in its performance.

Management 11e/ Chapter 3 31

Study Question 4: What is social responsibility and corporate governance?

Typical organizational stakeholders

Management 11e/ Chapter 3 32

Study Question 4: What is social responsibility and corporate governance?

Perspectives on social responsibility: Classical view

Management’s only responsibility is to maximize profits.

Socioeconomic view Management must be concerned

for the broader social welfare, not just profits.

Management 11e/ Chapter 3 33

Study Question 4: What is social responsibility and governance?

Management 11e/ Chapter 3 34

Criteria for evaluating corporate social performance.

Management 11e/ Chapter 3 35

Study Question 4: What is social responsibility and corporate governance?

Strategies for pursuing social responsibility:

Management 11e/ Chapter 3 36

Four strategies of corporate social responsibility—from obstructionist to proactive behavior.

Management 11e/ Chapter 3 37

Study Question 4: What is social responsibility and governance?

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.

Management 11e/ Chapter 3 38

Study Question 4: What is social responsibility and governance?

How government influences organizations: Common areas of government regulation of

business affairs: Occupational safety and health Fair labor practices Consumer protection Environmental protection

Management 11e/ Chapter 3 39

Chapter 3 Case

Patagonia: Turning a profit without losing your soul

Management 11e/ Chapter 3 40

For activities and assessments, please visit…

www.wiley.com/college/schermerhorn