Management

ninth editionninth edition

STEPHEN P. ROBBINSSTEPHEN P. ROBBINS

© 2007 Prentice Hall, Inc. © 2007 Prentice Hall, Inc. All rights reserved.All rights reserved.

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookThe University of West AlabamaThe University of West Alabama

MARY COULTERMARY COULTER

Social Responsibility Social Responsibility and Managerial Ethicsand Managerial Ethics

ChapterChapter

55Instructor: Zhengxin

Lingnan College, Sun Yat-Sen University

© 2007 Prentice Hall, Inc. All rights reserved. 5–2

Current stories about companies being Current stories about companies being socially irresponsible socially irresponsible

The Tainted Sanlu Baby Milk Powder Incident


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


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)


What Is Social Responsibility?What Is Social Responsibility?

• The Classical ViewThe Classical View

Management’s only social responsibility is to Management’s only social responsibility is to maximize profits (create a financial return) by maximize profits (create a financial return) by operating the business in the best interests of the operating the business in the best interests of the stockholders (owners of the corporation).stockholders (owners of the corporation).

Expending the firm’s resources on doing “social good” Expending the firm’s resources on doing “social good” unjustifiably increases costs that lower profits to the unjustifiably increases costs that lower profits to the owners and raises prices to consumers.owners and raises prices to consumers.


What Is Social Responsibility? (cont’d)What Is Social Responsibility? (cont’d)

• The Socioeconomic ViewThe Socioeconomic View

Management’s social responsibility goes beyond Management’s social responsibility goes beyond making profits to include protecting and improving making profits to include protecting and improving society’s welfare.society’s welfare.

Corporations are not independent entities responsible Corporations are not independent entities responsible only to stockholders.only to stockholders.

Firms have a moral responsibility to larger society to Firms have a moral responsibility to larger society to become involved in social, legal, and political issues.become involved in social, legal, and political issues.

““To do the right thing”To do the right thing”


• What are the reasons for corporations taking What are the reasons for corporations taking (not taking) social responsibility ? (not taking) social responsibility ?

• List at least five reasons List at least five reasons


Exhibit 5–2Exhibit 5–2 Arguments For and Against Social ResponsibilityArguments For and Against Social Responsibility

• ForFor Public expectationsPublic expectations Long-run profitsLong-run profits Ethical obligationEthical obligation Public imagePublic image Better environmentBetter environment Discouragement of further Discouragement of further

governmental regulationgovernmental regulation Balance of responsibility Balance of responsibility

and powerand power Stockholder interestsStockholder interests Possession of resourcesPossession of resources Superiority of prevention Superiority of prevention

over cureover cure

• AgainstAgainst Violation of profit Violation of profit

maximizationmaximization Dilution of purposeDilution of purpose CostsCosts Too much powerToo much power Lack of skillsLack of skills Lack of accountabilityLack of accountability


Does Social Responsibility Pay?Does Social Responsibility Pay?

• Studies appear to show a positive relationship Studies appear to show a positive relationship between social involvement and the economic between social involvement and the economic performance of firms.performance of firms.

• A general conclusion is that a firm’s social A general conclusion is that a firm’s social actions do not harm its long-term performance.actions do not harm its long-term performance.


• VALUES-BASED MANAGEMENTVALUES-BASED MANAGEMENT

An approach to managing in which managers An approach to managing in which managers establish and uphold an organization’s shared establish and uphold an organization’s shared

values. values.


• The Purposes of Shared ValuesThe Purposes of Shared Values Guiding managerial decisionsGuiding managerial decisions Shaping employee behaviorShaping employee behavior Influencing the direction of marketing effortsInfluencing the direction of marketing efforts Building team spiritBuilding team spirit


Exhibit 5–7Exhibit 5–7 Survey of Stated Survey of Stated Values of Values of OrganizationsOrganizations

Percentage ofCore Value Respondents

Customer 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.


Managerial EthicsManagerial Ethics

• Ethics DefinedEthics Defined

Principles, values, and beliefs that define what is right Principles, values, and beliefs that define what is right and wrong behavior.and wrong behavior.


Three domains of human actionThree domains of human action

High LowAmount of Explicit Control

Domain of codified law

(Legal standard)

Domain of ethics

(Social standard)

Domain of free choice

(Personal standard)


Small case I: Management Ethics Dilemma Small case I: Management Ethics Dilemma

• A top employee at your small company tells you he A top employee at your small company tells you he needs some time off because he has AIDS. You know needs some time off because he has AIDS. You know the employee needs the job as well as the health the employee needs the job as well as the health insurance benefits. Providing health insurance has insurance benefits. Providing health insurance has already stretched the company’s budget, and this will already stretched the company’s budget, and this will send premiums through the roof. send premiums through the roof.

You recently read of a case in which federal courts You recently read of a case in which federal courts upheld the right of an employer to modify health upheld the right of an employer to modify health plans by putting a cap on AIDS benefits. Should you plans by putting a cap on AIDS benefits. Should you investigate whether this is a legal possibility for your investigate whether this is a legal possibility for your company? company?


Small case II: Management Ethics Dilemma Small case II: Management Ethics Dilemma

• As a sales manager for a major pharmaceuticals As a sales manager for a major pharmaceuticals company, you’ve been asked to promote a new drug company, you’ve been asked to promote a new drug that costs $2500 per dose. You’ve read the reports that costs $2500 per dose. You’ve read the reports saying the drug is only 1 percent more effective than saying the drug is only 1 percent more effective than an alternate drug that costs less than one-fourth as an alternate drug that costs less than one-fourth as much. Can you in good conscience aggressively much. Can you in good conscience aggressively promote the $2500-per-dose drug? It you don’t, could promote the $2500-per-dose drug? It you don’t, could lives be lost that might have been saved with that 1 lives be lost that might have been saved with that 1 percent increase in effectiveness? percent increase in effectiveness?


Exhibit 5–8Exhibit 5–8 Factors That Affect Ethical and Unethical BehaviorFactors That Affect Ethical and Unethical Behavior


Ethics in an International ContextEthics in an International Context

• Ethical standards are not universal.Ethical standards are not universal. Social and cultural differences determine acceptable Social and cultural differences determine acceptable

behaviors.behaviors.

• Foreign Corrupt Practices ActForeign Corrupt Practices Act Makes it illegal to corrupt a foreign official yet “token” Makes it illegal to corrupt a foreign official yet “token”

payments to officials are permissible when doing so is payments to officials are permissible when doing so is an accepted practice in that country.an accepted practice in that country.

• The Global CompactThe Global Compact


How Managers Can Improve Ethical How Managers Can Improve Ethical Behavior in An OrganizationBehavior in An Organization

1.1. Hire individuals with high ethical standards.Hire individuals with high ethical standards.

2.2. Establish codes of ethics and decision rules.Establish codes of ethics and decision rules.

3.3. Lead by example.Lead by example.

4.4. Set realistic job goals and include ethics in Set realistic job goals and include ethics in performance appraisals.performance appraisals.

5.5. Provide ethics training.Provide ethics training.

6.6. Conduct independent social audits.Conduct independent social audits.

7.7. Provide support for individuals facing ethical Provide support for individuals facing ethical dilemmas.dilemmas.


An Sample:

Code of Ethics


Awareness of Social IssuesAwareness of Social Issues

• Social EntrepreneursSocial Entrepreneurs

Are individuals or organizations who seek out Are individuals or organizations who seek out opportunities to improve society by using practical, opportunities to improve society by using practical, innovative, and sustainable approaches.innovative, and sustainable approaches.

Want to make the world a better place and have a Want to make the world a better place and have a driving passion to make that happen. driving passion to make that happen.


Terms to KnowTerms to Know

• classical viewclassical view

• socioeconomic viewsocioeconomic view

• social obligationsocial obligation

• social responsivenesssocial responsiveness

• social responsibilitysocial responsibility

• social screeningsocial screening

• greening of managementgreening of management

• values-based values-based managementmanagement

• ethicsethics

• valuesvalues

• ego strengthego strength

• locus of controllocus of control

• code of ethicscode of ethics

• whistle-blowerwhistle-blower

• social entrepreneursocial entrepreneur

• social impact social impact managementmanagement


L E A R N I N G O U T L I N E 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 chapterFollow this Learning Outline as you read and study this chapter..

What is Social Responsibility?What is Social Responsibility?

• Contrast the classical and socioeconomic views of social Contrast the classical and socioeconomic views of social responsibility.responsibility.

• Discuss the role that stakeholders play in the four stages Discuss the role that stakeholders play in the four stages of social responsibility.of social responsibility.

• Differentiate between social obligation, social Differentiate between social obligation, social responsiveness, and social responsibility.responsiveness, and social responsibility.


L E A R N I N G O U T L I N E 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 chapterFollow this Learning Outline as you read and study this chapter..

Social Responsibility and Economic PerformanceSocial Responsibility and Economic Performance

• Explain what research studies have shown about the Explain what research studies have shown about the relationship between an organization’s social involvement relationship between an organization’s social involvement and its economic performance.and its economic performance.

• Define social screening.Define social screening.

• Explain what conclusion can be reached regarding social Explain what conclusion can be reached regarding social responsibility and economic performance.responsibility and economic performance.


L E A R N I N G O U T L I N E (cont’d) L E A R N I N G O U T L I N E (cont’d) Follow this Learning Outline as you read and study this chapter.Follow this Learning Outline as you read and study this chapter.

The Greening of ManagementThe Greening of Management

• Describe how organizations can go green.Describe how organizations can go green.

• Relate the approaches to being green to the concepts of Relate the approaches to being green to the concepts of social obligation, social responsiveness, and social social obligation, social responsiveness, and social responsibility.responsibility.

Values-Based ManagementValues-Based Management

• Discuss what purposes shared values serve.Discuss what purposes shared values serve.

• Describe the relationship of values-based management to Describe the relationship of values-based management to ethics.ethics.



Managerial EthicsManagerial Ethics

• Discuss the factors that affect ethical and unethical Discuss the factors that affect ethical and unethical behavior.behavior.

• Describe the important roles managers play in Describe the important roles managers play in encouraging ethical behavior.encouraging ethical behavior.



Social Responsibility and Ethics in Today’s WorldSocial Responsibility and Ethics in Today’s World

• Explain why ethical leadership is important.Explain why ethical leadership is important.

• Discuss how managers and organizations can protect Discuss how managers and organizations can protect employees who raise ethical issues or concerns.employees who raise ethical issues or concerns.

• Explain what role social entrepreneurs play.Explain what role social entrepreneurs play.

• Describe social impact management.Describe social impact management.


HomeworkHomework

1. Reading: Book chapter 51. Reading: Book chapter 51 paper essay covering the key points of social 1 paper essay covering the key points of social

responsibility and managerial ethics. responsibility and managerial ethics.

2. Movie watch <Outsourced>2. Movie watch <Outsourced>http://v.youku.com/v_playlist/f2364608o1p0.htmlhttp://v.youku.com/v_playlist/f2364608o1p0.html1 paper essay talking about the global 1 paper essay talking about the global

outsourcing and management issues in the outsourcing and management issues in the movie. movie.

Due time: 30th, Oct., Friday before class. Due time: 30th, Oct., Friday before class.

http://v.youku.com/v_playlist/f2364608o1p0.html

Management

Education

economic performance

affect ethical

2007 prentice

social responsibility

social responsiveness

social obligation

learning outlinefollow

learning outline