Managing with Ethics and Social Responsibility

1. Managing with Ethics and Social Responsibility We Will • Examine the issues of managerial ethics and corporate social responsibility; • Define the terms....look at the ways of thinking about ethical behavior; and • Asses the role of the organization as a member of the broader social community.

2. What is Ethical Behavior? • MORALS Doctrine of Conduct relating to, dealing with, or capable of making the distinction between right and wrong in conduct or character. • ETHICS The system or Code of Morals of a particular person, religion, group, or profession.

3. Being Ethical is: Conforming to Moral Standards; conforming to the standards of conduct of a given group or profession. • Ethical Behavior is: Doing what is accepted as "good" and "right" as opposed to "bad" and "wrong" in the context of the governing Moral Code. Ethical Behavior=Legal Behavior +"something else"

4. Context of the Governing Moral Code • Refers to the group, organization, or broader societal venue within which the prevailing norms and values underlying a governing moral code are established.

5. Laws, Values, and Ethical Behavior Any behavior considered Ethical should also be legal in a just and fair society. However Legal behavior is not necessarily ethical behavior.

6. Four Views of Ethical Behavior • Utilitarian View Where moral behavior is that which delivers the greatest good to the greatest number of people. • Individualism View Where moral behavior is that which is best for long-term self-interest.

7. Moral-Rights View Where moral behavior is that which respects fundamental rights shared by all human beings. • Justice View Where moral behavior is that which is impartial, fair, and equitable in treating people. (Procedural and DistributiveJustice)

8. Managerial Ethics • Principles that guide the actions and decisions of managers, and determine if they are good or bad, or right or wrong.

9. Ethical Dilemmas • An ethical dilemma occurs when someone must decide whether or not to pursue a course of action that, although offering the potential of personal or organizational benefit or both, may be considered potentially unethical. • Most ethical dilemmas involve conflicts with superiors, customers, and subordinates.

10. Most Common Unethical Requests From the Boss • Supporting Incorrect Viewpoints • Signing False Documents • Overlooking Boss’s Wrongdoing • Doing Business with Boss’s Friend

11. Rationalizations for Unethical Behavior • Convincing yourself that the behavior isnot really illegal. • Convincing yourself that the behavior isin everyone's best interest. • Convincing yourself that nobody will ever know what you’ve done. • Convincing yourself that the organization will protect you.

12. Factors Affecting Managerial Ethics • The Manager as a Person • Family influences • Religious values • Personal standards, and needs • The Employing Organization • Policies, codes of conduct • Behavior of supervisors • Behavior of peers

13. Factors Affecting Managerial Ethics • The External Environment • Government regulations • Norms and values of society • Ethical climate of the industry

14. Maintaining High Ethical Standards • ETHICAL TRAINING • It is not about teaching people right from wrong...we assume they know that, and, • It is not about giving people the moral courage to do what is right...they should be able to do that anyhow. Ethical Training is about dealing with dilemmas

15. A Checklist for Making Ethical Decisions • Recognize the ethical dilemma • Get the facts • Identify your options • Test each option Is it legal? Is it right? Is it beneficial? • Decide which option to follow • Double-check your decision by asking:"How will I feel if my family finds out about my decision?” • Take action

16. Whistleblower Protection • Laws vary from state to state, and federal laws protect mainly government workers. • Where legal protection exists whistleblowers face a number of barriers that can make it hard for them to expose unethical behavior in the workplace.

17. Top Management Support • Top management set the Ethical Tone for the organization as a whole. • Top managers have the power to shape an organization's policies and set its moral tone as well. • Top managers can and should serve as models of appropriate ethical behavior for the entire workforce.

18. Top Management Support • Supervisors must be careful not to unwittingly encourage unethical behavior by exerting too much pressure for the accomplishment of difficult goals.

19. Formal Code of Ethics • Written and official guidelines on how to behave in situations prone to create ethical dilemmas. • Areas often addressed in written codes of ethics: • Workforce Diversity • Bribes and Kickbacks • Conflicts of Interest • Political Contributions • Customer and Supplier Relations • Misappropriation of Corporate Assets

20. Corporate Social Responsibility • An obligation of the organization to act in ways that serve both its own interests and the interests of its many external publics. • These publics are considered STAKEHOLDERS, the persons and groups who are affected in one way or another by the behavior of an organization.

21. Employees Stockholders Customers Suppliers Competitors Labor Unions Financial Institutions Political Parties Educational Institutions Courts and Legal Institutions Stakeholders

22. Contrasting Views on Social Responsibility • Classical View Holds that management’s only responsibility is running a business to maximize profits. • Socio-Economic View Holds that any organization must be concerned about the broader social welfare.

23. The Classical View Against Social Responsibility • Reduced business profits • Higher business costs • Dilution of business purpose • Too much social power for businesses • Lack of business accountability to the public

24. The Socio-Economic View “For” Social Responsibility • Long-run profits for businesses. • Public expectations support business social responsibility. • Better public image for businesses. • Businesses may avoid more regulation. • Businesses have the resources. • Businesses have the ethical obligation. • The public wants it.

25. Evaluation of Corporate Social Performance There are many action domains in which social responsibility can be pursued by business firms and other types of organizations. They include: • Concerns for Ecology and Environmental Quality. • Truth-in-Lending and Consumer Protection

26. Evaluation of Corporate Social Performance • Aid-to-Education and Service to Community • Employment Practices Affecting Minorities • Progressive Labor Relations • Employee Assistance • General Corporate Philanthropy

27. Criteria for Evaluating Corporate Social Performance • Economic Responsibility Is fulfilled when it earns a profit through the provision of goods and services desired by the public. • Legal Responsibility Is fulfilled when an organization operates within the law and according to the requirements of various external regulations.

28. Ethical Responsibility Is met when its actions voluntarily conform not only to legal expectations, but also to the broader values and moral expectations of society. • Discretionary Responsibility Is met when the organization voluntarily moves beyond basic economic, legal, and ethical expectations to provide leadership in advancing the well-being of individuals, communities, and society as a whole.

29. A Continuum of Social Responsibility Strategies • Obstruction • Fight social demands • Defensive • Do the minimum legally required • Accommodation • Do the minimum ethically required • Proactive • Take leadership in social initiatives

30. Government Regulation of Business • Health and Safety • Fair Labor Practices • Consumer Protection • Environmental Protection FAA EPA OSHA ICC FDA EEOC OFCCP NLRB SEC (To name a few)