Chapter 4 Ethics and Social Responsibility

1. Chapter 4 Ethics and Social Responsibility

2. Organizational Stakeholders The individuals and groups that have an interest or claim in an organization and in what it does • Shareholders • Managers • Nonmanagerial employees • Customers • Suppliers • Local community

3. Ethics Moral principles or beliefs about what is right or wrong

4. Ethical Dilemmas Managers confront ethical dilemmas every time they have to balance the claims of one stakeholder group against the claims of another. • They might feel tempted to engage in unethical acts if the harm done to stakeholders is indirect or seems insignificant relative to the benefits they receive from the unethical activity.

5. Reputation – A Valuable Asset • An important safeguard against unethical behavior is the potential for loss of reputation. • Behaving unethically in the short run can have serious long-term consequences.

6. Ethics Around the World Ethics -the study of morality and standards of conduct • Unethical Business Practices • Insider Trading Scandals • Bribes • “Mad” Syndrome • mergers, acquisitions, divestitures

7. Ethical Concerns in Japan • Political and Business Scandals • Prejudice and Discrimination • Social responsibility Implications from Lobbying • Status of women managers

8. Ethical Concerns in Europe The Status of Women Managers • France • women are underrepresented in the corporate management • glass ceiling • enforcement of equal opportunity is weak • Germany • has introduced laws that mandate equal opportunity positions throughout the public sector • legislation hard to enforce

9. Great Britain • women are still not well represented at the highest levels of most organizations • legislation is weak • women’s associations are being established to increase political power • British companies are proactively trying to recruit and promote more women

10. Ethical Concerns in China • Piracy, Industrial Spying, and Counterfeit Problems • Chinese backed industrial spying has increased against u.s. businesses • illegal production of counterfeit cd-roms, music -cd’s, and video-cd’s • patent violations

11. Women managers • Cultural stereotypes, restricted opportunities, and discrimination limit women managers in China

12. Regulating Foreign Investment • Regulation of Acquisitions • MNC’s must obtain host government clearance prior to establishing new operations or purchasing ongoing businesses • Purpose:To control own economies and gain independence from foreign companies

13. Reciprocity • Is their an ethical and social responsibility to engage in reciprocal trade? • Example: obligations to maintain an import/export balance with trading partner? • retaliation? • ongoing issue between Japan and the U.S., and between Japan and Taiwan

14. Response to Social Obligations • Foreign Corrupt Practices Act (1977) • makes it illegal to influence foreign officials through personal payment or campaign contributions • International Assistance • Provides assistance such as food, machinery, and equipment to underdeveloped countries helps to stimulate economies

15. Social Responsibility • Social responsibility • A manager’s duty to make decisions that nurture, protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole. • Approaches to Social Responsibility • Obstructionist approach • Defensive approach • Accommodation approach • Proactive approach