Lecture Exploring management - Chapter 3: Ethics and social responsibility

After reading this chapter, you should be able to answer the following questions: How do ethics and ethical behavior play out in the workplace? How can we maintain high standards of ethical conduct? What should we know about the social responsibilities of organizations?

Ethics and 

Social Responsibility

• How do ethics and ethical behavior play out in the workplace?

• How can we maintain high standards of ethical conduct?

• What should we know about the social responsibilities of organizations?

Ethics in the workplace

• Ethical behavior is values driven.

• What is considered ethical varies among moral reasoning approaches.

• What is considered ethical can vary

across cultures.

• Ethical dilemmas arise as tests of

personal ethics and values.

• People have tendencies to rationalize

unethical behaviors.

Ethical Behavior

• Ethics

– A code of moral principles that sets standards

of good or bad, or right or wrong, in our

• Moral Reasoning

– Reasons for various ethical practices

Moral Reasoning

• Utilitarian View

– Which action delivers the most good to the largest amount of people?

Moral Reasoning

• Justice View

Moral Reasoning

Moral Reasoning

• Moral Rights View

– Fundamental rights of all people are respected

Moral Reasoning

Excerpt From Universal Declaration of Human Rights

United Nations

dignity and right

conscience, and religion

and expression

of employment, to just and favorable conditions of work

Ethics and Culture

• Cultural Relativism

– Suggest that there is no one right way to behave; cultural context determines ethical behavior

personal ethics.

Ethics and Work

The Wall Street Journal reports:

• 36% of workers calling in sick are lying

• 35% keep quiet about co-worker misconduct

• 12% of job resumes contain falsehoods

• Managers are more likely than other workers to report wrongdoing

• Managers with 0–3 years experience feel most pressure to violate personal ethics

Rationalizing Unethical Behavior

Four reasons:

Maintaining high standards

• Personal factors moral development

influence ethical conduct.

• Training in ethical decision making may improve ethical conduct.

• Protection of whistleblowers may

encourage ethical conduct

• Managers acting as positive role models can inspire ethical conduct.

• Formal codes of ethics set standards for ethical conduct

Influence on Moral Development

Ethics Training

• Ethics Training

– Seeks to help people understand the ethical aspects of decision making and to incorporate high ethical standards into their daily

behavior

Ethics Training

Spotlight questions highlight the risk of public exposure of one’s actions:

about my decision?

the local newspaper or posted on the internet?

has the strongest character and best ethical judgment say about my

decision?

• Whistleblowers

– Persons who expose organizational misdeeds

in order to preserve ethical standards and

protect against wasteful, harmful, or illegal

• Organizational barriers to whistleblowing

– Strict chain of command

– Strong work group identities

– Ambiguous priorities

Management Influence

• Management Behavior

– In order to have a positive impact on ethical conduct throughout an organization, those at the top must walk the talk

Codes of Ethics

• Formal codes of ethics set standards for ethical conduct.

– Explain ethical principles

– Describe expected behavior

Social Responsibility

• Social responsibility is an organization’s obligation to best serve society

• Scholars argue cases for and against

corporate social responsibility

• Social responsibility audits measure the social performance of organizations

• Sustainability is an important social

responsibility goal

• Social business and social entrepreneurs point the way in social responsibility

Social Responsibility is Serving

Society

• Stakeholders are the groups that have a direct interest in the success or failure of

an organization.

Social Responsibility is Serving

Society

• Corporate Social Responsibility

– The obligation of an organization to serve its own interest and those of its stakeholders

Social Responsibility is Serving

Society

• Triple Bottom Line—how well an

organization performs when measured not only on financial criteria, but also on social and environmental ones

– Is the decision economically sound?

– Is the decision socially responsible?

– Is the decision environmentally sound?

– Three Ps

– Profit, People, Planet

• Virtuous Circle

– Socially responsible actions lead to improved financial performance

– Organization is more likely to engage in

socially responsible acts in the future

fuel-efficient and hybrid cars may see improved financial performance and introduce more fuel efficient models.

• Social responsibility audit

– Determines the organization’s performance in various areas of social responsibility

– Ranges from compliance to conviction

• Sustainability

– concerns doing business in such a way that respects future generations and their right to the world's natural resources

– uses natural resources in such a way that

today's needs are met, yet they are preserved for future generations

• ISO14001

– Global quality standard that certifies

organizational environmental objectives for minimal environmental impact

• Social business

– Business model that addresses social

problems such as hunger, illiteracy, poverty