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Chapter 5

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.

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Chapter 5

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  1. Chapter 5 Managing Ethics and Social Responsibility

  2. 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

  3. 5.1 Three Domains of Human Action

  4. 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

  5. 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

  6. 5.2 Four Types of Ethical Manager Behavior

  7. 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

  8. 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.

  9. 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

  10. Criteria for EthicalDecision 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

  11. 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

  12. 5.3 Three Levels of Personal Moral Development

  13. 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 mappingidentifies needs, importance and power of stakeholders

  14. 5.4 Major Stakeholders Relevant to Gap Inc.

  15. 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

  16. The Ethic of Sustainability Sustainability –economic development that generateswealth and meets the needs of current generation while preserving the environment for the needs of future generations

  17. Evaluating Corporate Social Responsibility • Legal Responsibility • appropriate business behavior • Discretionary Responsibility • voluntary contributions to society • Organizational Virtuousness • a positive human impact, moral goodness

  18. 5.5 Criteria of Corporate Social Performance

  19. 5.6 Building an Ethical Organization

  20. 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

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