Social Responsibility & Business Ethics

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An insight on social responsibility & business ethics.

An insight on social responsibility & business ethics.

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  • 1. Management’s Social and Ethical Responsibilities Chapter 3 Ready Notes For in-class note taking, choose Handouts or Notes Pages from the print options, with three slides per page.
  • 2. Chapter Objectives
    • Define corporate social responsibility and summarize the arguments for and against it.
    • Identify and describe the four social responsibility strategies.
    • Explain the role of enlightened self-interest in social responsibility.
    • Summarize the three practical lessons from business ethics research.
    • Identify and describe at least four of the ten general ethical principles.
    • Discuss what management can do to improve business ethics
  • 3. Social Responsibility: Definition and Debate
    • Corporate Social Responsibility
      • The idea that business has social obligations above and beyond making a profit.
      • Business has an obligation to constituent groups in society other than stockholders and beyond that prescribed by law.
  • 4. Social Responsibility: Definition and Debate (cont’d)
    • What Does Social Responsibility Involve?
      • Voluntary action
        • Action before lawsuits or other actions that are taken to force a firm to take action on a matter.
      • An emphasis on means, not ends
        • How the decision to act was reached, not the decision itself.
  • 5. Figure 3.2 A Continuum of Social Responsibility Strategies
  • 6. Social Responsibility Strategies
    • Reactive Strategy
      • Denying responsibility while striving to maintain the status quo by resisting change.
    • Defensive Strategy
      • Resisting additional social responsibilities with legal and public relations tactics.
  • 7. Social Responsibility Strategies (cont’d)
    • Accommodation Strategy
      • Assuming social responsibility only in response to pressure from interest groups or the government.
    • Proactive Strategy
      • Taking the initiative in formulating and putting in place new programs that serve as role models for industry.
  • 8. Who Benefits from Corporate Social Responsibility?
    • Altruism
      • The unselfish devotion to the interests of others.
    • Research Findings
      • There is a positive correlation between industry leadership on a socially responsible issue (pollution control) and profitability.
      • Corporate social responsibility is a competitive advantage in recruiting talented people.
  • 9. Who Benefits from Corporate Social Responsibility? (cont’d)
    • Enlightened Self-Interest
      • A business ultimately helps itself by helping solve social problems.
    • An Array of Benefits for the Organization
      • Tax-free incentives to employees.
      • Retention of talented employees.
      • Help in recruiting the talented and socially conscious.
      • Help in swaying public opinion.
      • Improved community living standards.
      • …Others.
  • 10. The Ethical Dimension of Management
    • Ethics
      • The study of moral obligation involving the distinction between right and wrong.
    • Business Ethics
      • The study of the complex business practices and behaviors that give rise to ethical issues in organizations.
  • 11. Practical Lessons from Business Ethics Research: Ethical Hot Spots
    • Balancing work and family
    • Poor internal communications
    • Poor leadership
    • Work hours, work load
    • Lack of management support
    • Need to meet sales, budget, or profit goals
    • Little or no recognition of achievements
    • Company politics
    • Personal financial worries
    • Insufficient resources
  • 12. Practical Lessons from Business Ethics Research (cont’d)
    • Pressure from Above
      • The problem of superiors pressuring subordinates is widespread.
    • Responding to Pressure from Above
      • Consciously avoid putting undue pressure on subordinates.
      • Be prepared to deal with excessive organization pressure.
  • 13. Practical Lessons from Business Ethics Research (cont’d)
    • Ambiguous Situations
      • Situations where there are no clear-cut ethical guidelines.
      • Ethical codes can help satisfy employees’ need for formal guidelines.
    • A Call to Action
      • The deliberate and conscious actions of a manager to do the right thing is an ethical and personal matter.
  • 14. General Ethical Principles
    • Self-Interests
    • Personal virtues
    • Religious injunctions
    • Government requirements
    • Utilitarian benefits
    • Universal rules
    • Individual rights
    • Economic efficiency
    • Distributive justice
    • Contributive justice
  • 15. Encouraging Ethical Conduct
    • Ethics Training
      • Amoral managers: managers who are neither moral or immoral, but ethically lazy.
      • Key features of effective ethics training programs
        • Top management support.
        • Open discussion.
        • A clear focus on ethical issues.
        • Integration of ethics into the organization.
        • A mechanism for anonymously reporting ethical violations.
        • Reward ethical conduct.
  • 16. Encouraging Ethical Conduct (cont’d)
    • Whistle-Blowing
      • The reporting of perceived unethical matters.
      • Reducing the fear of retaliation against whistleblowers
        • Anonymous hotlines and web sites
        • Personal, confidential guidance
    • Ethical Advocate
      • An ethics specialist who plays a role of critical questioner in top-management’s decision-making.
      • Serves as the Board of directors’ social conscience.
      • Helps prevent groupthink and blind conformity
  • 17. Encouraging Ethical Conduct (cont’d)
    • Code of Ethics
      • Published statement of moral expectations for employee conduct
      • Requirements for an effective ethics code
        • Must describe specific practices as unethical (e.g., kickbacks, payoffs, gifts, falsification of records, and misleading product claims).
        • Must be firmly supported and fairly enforced by top management.