Social and ethical responsibility of management

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Social and ethical responsibility of management

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Social and ethical responsibility of management

  1. 1. Social and Ethical Responsibility of Management
  2. 2. Organization’s Social Responsibilities Don’t violate principles of right and wrong Obey the Law Make a Profit Social responsibilities Ethical Legal Economic Discretionary
  3. 3. What’s Social Responsibility? <ul><li>Corporate Social Responsibility </li></ul><ul><ul><li>The idea that business has social obligations above and beyond making a profit. </li></ul></ul><ul><ul><li>Business has an obligation to constituent groups in society other than stockholders and beyond that prescribed by law. </li></ul></ul><ul><li>Social Responsibility is … the ethical accountability framework for the industry which defines principles, policies and practices and codes of conduct designed to ensure: </li></ul><ul><ul><li>the protection of stakeholders, </li></ul></ul><ul><ul><li>the sustainability of industry, and </li></ul></ul><ul><ul><li>quality of life improvements in the communities in which it operates. </li></ul></ul>
  4. 4. Stakeholder Model Primary Stakeholders: Shareholders Employees Customers Suppliers Governments Local Communities Secondary Stakeholders: Media Trade Associations
  5. 5. Responses to Demands for Social Responsibility Reactive Defensive Accommo- dative Proactive Fight all the way DO NOTHING DO MUCH Withdrawal Do only what is required Legal Approach Bargaining Problem Solving Public Relations Approach Be progressive Lead the industry
  6. 6. Approaches To Corporate Social Responsiveness Performance Do less than required Do the least that is required Do all that is required Do more than is required Approach 1. Reactive 2. Defensive 3. Accommodative 4. Proactive Posture or Strategy Deny responsibility Admit responsibility but fight it Accept responsibility Anticipate responsibility
  7. 7. Arguments Supporting Businesses Being Socially Responsible <ul><li>Public expectations </li></ul><ul><li>Long-run profits </li></ul><ul><li>Ethical obligation </li></ul><ul><li>Public image </li></ul><ul><li>Better environment </li></ul><ul><li>Discouragement of further government regulation </li></ul><ul><li>Balance of responsibility and power </li></ul><ul><li>Shareholder interests </li></ul><ul><li>Possession of resources </li></ul><ul><li>Superiority of prevention over cures </li></ul>
  8. 8. Arguments Against Businesses Being Socially Responsible <ul><li>Violation of profit maximization </li></ul><ul><li>Dilution of purpose </li></ul><ul><li>Costs </li></ul><ul><li>Too much power </li></ul><ul><li>Lack of skills </li></ul><ul><li>Lack of accountability </li></ul>
  9. 9. <ul><li>Stakeholders: customers, employees, and investors. </li></ul><ul><li>The natural environment: environmentally sensitive products, recycling, and public safety. </li></ul><ul><li>The general social welfare: charitable contributions, and support for social issues such as child labor and human rights. </li></ul>Areas of Social Responsibility
  10. 10. ORGANISATIONAL SOCIAL RESPONSIVENESS <ul><li>‘ A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility.’ </li></ul><ul><li>Two aspects: </li></ul><ul><li>Monitoring social demands and expectations </li></ul><ul><li>Internal social response mechanisms </li></ul>
  11. 11. MONITORING SOCIAL DEMANDS/EXPECTATIONS <ul><li>Social forecasting </li></ul><ul><li>Opinion surveys </li></ul><ul><li>Social audits </li></ul><ul><li>Issues management </li></ul><ul><li>Social scanning </li></ul>
  12. 12. SR Management Process <ul><li>Planning </li></ul><ul><li>Leadership & People Focus </li></ul><ul><li>Client & Stakeholder Focus </li></ul><ul><li>Process Management </li></ul><ul><li>Outcome Assessment </li></ul>
  13. 13. Dilemmas in Business <ul><li>A dilemma exists when you have a choice between two or more options. </li></ul><ul><li>A business dilemma exists when an organizational decision maker faces a choice between two or more options that will have various impacts on (a) the organization’s profitability and competitiveness and (b) its stakeholders. </li></ul>
  14. 14. ETHICS <ul><li>Ethics (also called moral philosophy), involves systematizing, defending, and recommending concepts of right and wrong behavior. </li></ul><ul><li>Business ethics is the application of general ethical principles to business dilemmas. </li></ul>
  15. 15. TYPES OF MANAGERIAL ETHICS <ul><li>Immoral management </li></ul><ul><li>Lacks ethical principles, concern for profit only </li></ul><ul><li>Amoral management </li></ul><ul><li>Ignores, or oblivious to, ethical issues </li></ul><ul><li>Moral management </li></ul><ul><li>Conscious attention to ethical standards and issues </li></ul>
  16. 16. W HAT I NFLUENCES E THICAL B EHAVIOR? T HE I NDIVIDUAL’S R OLE <ul><li>T HE O RGANIZATION’S R OLE </li></ul><ul><li>Structure </li></ul><ul><li>Culture </li></ul>
  17. 17. Determinants of Individual Ethics Family Influences Situational Factors Values and Morals Experiences Peer Influences Individual Ethics
  18. 18. ETHICAL GUIDELINES FOR MANAGERS <ul><li>Obey the law. </li></ul><ul><li>Tell the truth. </li></ul><ul><li>Show respect for people. </li></ul><ul><li>Stick to the Golden Rule. </li></ul><ul><li>Above all, do no harm. </li></ul><ul><li>Participation not paternalism. </li></ul><ul><li>Responsibility requires action. </li></ul>
  19. 19. MECHANISMS FOR ETHICAL MANAGEMENT <ul><li>Increasing awareness of diversity </li></ul><ul><li>Top management commitment </li></ul><ul><li>Codes of ethics </li></ul><ul><li>Ethics committees </li></ul><ul><li>Ethics audits </li></ul><ul><li>Ethics hotlines </li></ul><ul><li>Ethics training </li></ul>
  20. 20. Process of Rationalization <ul><li>Mental strategies that allow employees (and others around them) to view their corrupt acts as justified </li></ul><ul><ul><ul><li>Denial of responsibility ..no choice…everyone does it </li></ul></ul></ul><ul><ul><ul><li>Denial of injury…no one is really injured </li></ul></ul></ul><ul><ul><ul><li>Denial of victim…the violated party deserves it </li></ul></ul></ul><ul><ul><ul><li>Social weighting…comparison…others do worst things </li></ul></ul></ul><ul><ul><ul><li>Appeal to higher authorities…loyalty to boss or co. </li></ul></ul></ul><ul><ul><ul><li>Ledger approach…accrued credits…we deserve it </li></ul></ul></ul>
  21. 21. THANK YOU

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