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Jay Hays

Ethics and Corporate Social Responsibility. Jay Hays. Objectives. Understand and apply the concept of ethics. Place ethics in the context of Corporate Social Responsibility. Formulate and show a working understanding of a definition of Corporate Social Responsibility.

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Jay Hays

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  1. Ethics and Corporate Social Responsibility Jay Hays

  2. Objectives Understand and apply the concept of ethics. Place ethics in the context of Corporate Social Responsibility. Formulate and show a working understanding of a definition of Corporate Social Responsibility. See that ethics is everyone’s business. Know what organisations can do to promote ethical behaviour. See that ethical and responsible behaviour is important and possible. See how citizenship requires ethical and responsible behaviour, and that this is a privilege and obligation; see the relationship between community and organisational citizen, and corporate citizenship.

  3. Ethics Ethics A code of behaviour, especially of a particular group, profession, or individual. The moral fitness of a decision or course of action. The study of the moral value of human conduct. Related Terms Principles, morals, beliefs, moral principles, moral values, moral code, conscience.

  4. Ethics Ethic A moral principle or set of moral values held by an individual or group. Ethical Of or based on a system of moral beliefs about right and wrong. In accordance with principles of professional conduct. Related Terms Conscientious, correct, decent, fair, fitting, good, just, honest, honourable, moral, principles, virtuous, righteous.

  5. ETHICS • Ethics Standards of behaviour and moral judgment differentiating right from wrong • Managerial ethics Standards of conduct and moral judgment mangers use in their business

  6. Ethics Related Terms Moral(s) Principles of behaviour in accordance with standards of right and wrong. Concerned with the distinction between good and bad, right and wrong. Principles Moral rules guiding personal (or organisational) conduct. A basic law or rule underlying philosophy or conduct. Related Terms Values, main beliefs, philosophy, ideology, morality, doctrine, fundamental.

  7. Ethics Related Terms Righteous Moral, just, virtuous; morally justifiable or right; equitable, fair. Righteousness Integrity, honesty, honour, justice. Conscientious – governed by conscience Conscience – the sense of right and wrong that governs a person’s thoughts and actions. Conscious(ness) – awareness of ones surroundings and oneself that determines courses of action.

  8. Ethics Related Terms Philosophy A system of beliefs or values; an outlook or viewpoint. Viewpoint, thinking, values, attitude, idea, way of life, convictions. Responsibility The state of being responsible; a person or thing for which one is responsible. Responsible – having control or authority over; being accountable for ones actions and decisions.

  9. ORGANISATIONAL SOCIAL RESPONSIBILITY ‘The obligation of an organisation to seek actions protecting and improving society’s welfare along with its own interests.’

  10. ORGANISATIONAL SOCIAL RESPONSIBILITY Major viewpoints: • Invisible hand • Hand of government • Hand of management

  11. ORGANISATIONAL SOCIAL RESPONSIBILITY INVISIBLE HAND ARGUMENT • A view holding that the entire social responsibility of a corporation can be summed up as ‘make profits and obey the law’. • Corporate responsibility is guided by the ‘invisible hand’ of free market forces

  12. ORGANISATIONAL SOCIAL RESPONSIBILITY HAND OF GOVERNMENT ARGUMENT • A view holding that the interests of society are best served by having the law and political process guide the corporation’s activities. • Law and political process controls corporation re: employee well-being, customer protection and community issues e.g. environment.

  13. ORGANISATIONAL SOCIAL RESPONSIBILITY Hand of Management argument Incorporates: • Anti-freeloader argument • Capacity argument • Enlightened self-interest argument

  14. ORGANISATIONAL SOCIAL RESPONSIBILITY HAND OF MANAGEMENT ARGUMENT • A view stating that corporations and their managers are expected to act in ways that protect and improve society’s welfare as well as make profit.

  15. ORGANISATIONAL SOCIAL RESPONSIBILITY ANTI-FREELOADER ARGUMENT • Holds that since businesses benefit from a better society, they should bear part of the costs by actively working to bring about solutions to social problems.

  16. ORGANISATIONAL SOCIAL RESPONSIBILITY CAPACITY ARGUMENT • States that the private sector, because of its considerable economic resources, must make up for government cutbacks in social programs.

  17. ORGANISATIONAL SOCIAL RESPONSIBILITY ENLIGHTENED SELF-INTEREST ARGUMENT • Holds that businesses exist at society’s pleasure and that, for their own legitimacy and survival, businesses should meet the public’s expectations regarding social responsibility.

  18. SOCIAL RESPONSIBILITIES OF MANAGERS • Economic and legal Responsibility to make a profit and obey the law (recognised by: invisible hand, hand of government, hand of management). • Ethical and discretionary Ethical behaviour expected by society(recognised by: hand of management). Difficult to determine, identify

  19. SOCIAL STAKEHOLDERS Employees THE ORGANISATION Shareholders Customers International community Local community Society (regional & national)

  20. SOCIAL STAKEHOLDERS DIVERSITY AS COMPETITIVE ADVANTAGE • Attracting workers is costly, diversity may help attract and retain workers • Workforce that reflects customer base may give insight into customer wants, needs, preferences • Innovations are more likely where diversity exists

  21. DOES SOCIAL RESPONSIBILITY PAY? • Evidence is mixed • Strategically beneficial • Likely, profit  sociallyresponsible management • Shareholders are sensitive to the extent that it affects profit

  22. ORGANISATIONAL SOCIAL RESPONSIVENESS A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility.’ Two aspects: • Monitoring social demands and expectations • Internal social response mechanisms

  23. MONITORING SOCIAL DEMANDS / EXPECTATIONS • Social forecasting • Opinion surveys • Social audits • Issues management • Social scanning

  24. INTERNAL SOCIAL RESPONSE MECHANISMS • Individual executives • Temporary task forces • Permanent committees • Permanent departments • Combination approaches

  25. BEING AN ETHICAL MANAGER The difficulties and concerns with business ethics raise three important issues about being a manager: • Types of managerial ethics • Ethical guidelines for managers • Ethical career issues

  26. TYPES OF MANAGERIAL ETHICS • Immoral management Lacks ethical principles, concern for profit only • Amoral management Ignores, or oblivious to, ethical issues • Moral management Conscious attention to ethical standards and issues

  27. ETHICAL GUIDELINES FOR MANAGERS • Obey the law. • Tell the truth. • Show respect for people. • Stick to the Golden Rule. • Above all, do no harm. • Participation not paternalism. • Responsibility requires action.

  28. ETHICAL CAREER ISSUES • Assessing values and protecting yourself • Seek advice and support from trusted sources. • Take action to change what you see as not being ethical. • Take actions to protect yourself. • Anticipating ethical conflicts • Pre-employment checks: Is this an ethical company? • Is the industry marked by patterns of unethical behaviour? • Avoid ethical compromises.

  29. MANAGING AN ETHICAL ORGANISATION Situational factors influencing ethical behaviour: • External factors Competitiveness, high/low opportunities for success, dependency on other organisations • Internal factors Push for high performance, labour unrest, delegation, quests for innovation

  30. MECHANISMS FOR ETHICAL MANAGEMENT • Increasing awareness of diversity • Top management commitment • Codes of ethics • Ethics committees • Ethics audits • Ethics hotlines • Ethics training

  31. Positive Outcomes (“Dividends”) Community Health Profitability Image A System for Ethics and Responsibility • AS IS – TO BE • What / who are we? • How are we? • Is this what we want • and need? • What / who do we want • and need to be? Clarity of Principles Clarity of Values Training Coaching Education Clarity of Stakeholder Views Performance Management / R+ Systems Thinking Understanding of Environment Reflection Understanding of Self Judgment (Wise Thoughts and Plans) Learning from Mistakes (and Successes) Community / Societal Demands and Expectations Wise Action (Strategies / Implementations that Serve the Greater Good) Organisational Role Modelling Legal Restrictions & Regulatory Diligence Motivation (to join the bandwagon) More Pervasive Cultural Values and Standards

  32. Questions / Topics 1. Discuss instances / examples of unethical behaviour you have personally observed. What was it? What happened as a result? Why did it happen? What could have been done to stop it or learn from it? 2. Develop a list / table of ethical and unethical behaviours amongst students. Speculate on the longer-term consequences and implications of this behaviour. 3. Discuss and list the University’s social responsibilities. Provide indicators / examples of these being or failing to be met. 4. What are some of a lecturer’s ethical and socially responsible behaviours? What checks and balances exist to ensure appropriate behaviour is maintained? What additionally might need to be done? 5. Discuss the merits / pros and cons of businesses acting ethically / socially responsible (or not). What are the advantages and risks? 6. Identify and discuss some of the more public cases of unethical, irresponsible behaviour on the part of organisations. 7. What is or should be the role of governments in assuring businesses and organisations act ethically and responsibly?

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