Management 12e richard draft chapter 05

Chapter 5Managing Ethics and Social Responsibility... Managerial Ethics Ethics – code of moral principles and values that govern the behaviors of right or wrong  Standards about good/

Chapter 5

Managing Ethics and Social Responsibility

Managerial Ethics

 Ethics – code of moral principles and values

that govern the behaviors of right or wrong

 Standards about good/bad

 Ethical issues can be complex

 People in organizations have divergent

views about right/wrong

5.1 Three Domains of

Human Action

Ethical Management Today

 Ethical lapses during the last decade have

been pervasive

 Corporations and people have become

associated with greed, deceit, irresponsibility, and lack of moral conscience

 Managers carry a big responsibility for setting

an ethical climate

 Ethical crises have brought ethical

management to the forefront

Ethical Management Today

 Ethical managers

 Display honesty and integrity

 Communicate and enforce ethical standards through their behavior

 Are fair in their decisions and the distribution of rewards

 Show kindness and concern for others

5.2 Four Types of Ethical

Manager Behavior

The Business Case for Ethics

and Social Responsibility

 Ethics and social responsibility are important  business issues

 The connection between ethics and financial 

performance has been widely debated

 Customers would switch brands to do 

business with a company that is ethical and 

socially responsible

Ethical Dilemmas

You are the moral agent–what would you do?

Your company requires a terrorist watch list that screens all new customers and takes approximately 24 hours from the time an order is placed You can close a lucrative deal with

a potential long-term customer overnight, even though that means the required watch list screening will have to be

done after the fact.

Criteria for Ethical

Decision Making

 Utilitarian approach – moral behavior

produces the greatest good for the greatest

number

 Individualism approach – acts are moral if

they promote the individual’s long-term interest

 Moral-rights approach – humans have

fundamental rights and liberties that cannot be

taken away by an individual’s decision

Criteria for Ethical

Decision Making (cont’d)

 Justice approach – moral decisions must be

based on standards of equity, fairness, and

impartiality

 Distributive justice

 Procedural justice

 Compensatory justice

 Practical approach – bases decisions on

prevailing standards, society, and all stakeholders

A Manager’s Ethical Choices

 Individuals bring their own personality and traits

to organizations

 Personal needs, family influence, and religious

background shape individuals

 Personality characteristics such as ego,

confidence, and independence may enable

managers to make ethical choices

5.3 Three Levels of Personal

Moral Development

What Is Corporate Social

Responsibility (CSR)?

 Distinguishing right from wrong; doing right

 Good corporate citizenship

 Make choices that contribute to society and

stakeholders

 Stakeholders – any group within or outside

 Stakeholder mapping identifies needs,

importance and power of stakeholders

5.4 Major Stakeholders Relevant to

Gap Inc.

The Green Movement

 Going GREEN is a new business imperative

 Change in social attitudes

 New governmental policies

 Climate change

 Information technology immediately spreads the negative decisions of corporations

 More organizations are embracing

sustainability

The Ethic of Sustainability

Sustainability – economic development that

generates wealth and meets the needs of

current generation while preserving the

environment for the needs of future

generations

Evaluating Corporate Social

Responsibility

 Legal Responsibility

 Discretionary Responsibility

 Organizational Virtuousness

5.5 Criteria of Corporate

Social Performance

5.6 Building an Ethical

Organization

Managing Company Ethics and Social Responsibility

 Code of ethics – a formal statement of the

company’s values regarding ethics and

social issues

 Ethical structures – systems, positions, and

programs like ethics training

 Whistle-blowing – employee disclosure of

illegal, immoral, or illegitimate practices