Management, Hitt, Black, Porter, Vahdi Boydaş, Mensur Boydaş

363 views

Published on

Management, Hitt, Black, Porter, Vahdi Boydaş, Mensur Boydaş

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
363
On SlideShare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Management, Hitt, Black, Porter, Vahdi Boydaş, Mensur Boydaş

  1. 1. PowerPoint slides by Susan A. Peterson, Scottsdale Community College Chapter 2: Social Responsibility and Managerial Ethics m a n a g e m e n t 2e H i t t / B l a c k / P o r t e r
  2. 2. © 2008 Prentice-Hall Business Publishing 2 Learning Objectives After studying this chapter, you should be able to: Describe why an understanding of basic approaches to ethical decision making and corporate social responsibility is important Compare and contrast the efficiency and social responsibility perspectives Explain the strategic corporate social responsibility approach Explain the basic approaches to ethical decision making
  3. 3. © 2008 Prentice-Hall Business Publishing 3 Learning Objectives Explain the aspects of moral intensity Describe the actions that can foster a high degree of ethical behavior in an organization
  4. 4. © 2008 Prentice-Hall Business Publishing 4 Corporate Social Responsibility Obligation corporations have to constituencies and the nature and extent of those obligations Constituencies include shareholders, customers, employees, specific communities, society at large, governments Issue: constituencies may not share same expectations
  5. 5. © 2008 Prentice-Hall Business Publishing 5 Efficiency Perspective Efficiency perspective: maximize profits for the owners of the business MANAGERS AS OWNERS Self-interests of the manager-owner are best achieved by serving the needs of society MANAGERS AS AGENTS Managers have no obligation to act on behalf of society if it does not maximize value for the shareholders
  6. 6. © 2008 Prentice-Hall Business Publishing 6 Social Responsibility Perspective Social responsibility perspective: firms have responsibilities and obligations to society as a whole, not just shareholders Shareholders Society Financiers Communities Suppliers Employees FIRM Key Stakeholders
  7. 7. © 2008 Prentice-Hall Business Publishing 7 Efficiency Versus Social Responsibility Perspective Efficiency Perspective Managerially Irresponsible Social Responsibility Perspective Managerially Responsible Efficiency Perspective Managerially Irresponsible Social Responsibility Perspective Managerially Irresponsible Efficiency Perspective Managerially Responsible Social Responsibility Perspective Managerially Responsible Efficiency Perspective Managerially Responsible Social Responsibility Perspective Managerially Irresponsible Action harms other stakeholders No Yes NoYes Action harms other share- holders Adapted from Exhibit 2.1
  8. 8. © 2008 Prentice-Hall Business Publishing 8 Corporate Responses We will change when legally compelled to do so. Maximize profits. Abide by the letter of the law. Change when legally compelled to do so. We must fight against efforts to restrict or regulate our activities and profit- making potential. Maximize profits. Find legal loopholes. Fight new restrictions and regulations. Belief Focus Defenders Accommodators Adapted from Exhibit 2.2
  9. 9. © 2008 Prentice-Hall Business Publishing 9 Corporate Responses (cont.) We owe it to society to anticipate and avoid actions with harmful consequences, even if we are not pressured or legally required to do so. Obtain profits, Abide by the law. Anticipate harmful consequences independent of pressures and laws. We should respond to significant pressure even if we are not legally required to. Protect profits. Abide by the law. React to pressure that could affect business results. Belief Focus Reactors Anticipators Adapted from Exhibit 2.2
  10. 10. © 2008 Prentice-Hall Business Publishing 10 Strategic Corporate Social Responsibility Perspective Three fundamental criteria guide managers: Inside-Out Approach Outside-In Approach Outside-Out Approach Look inside company at issues that are important to the company Look outside company at issues that company has an impact upon Look at social issues in general in terms of the extent to which they are problematic
  11. 11. © 2008 Prentice-Hall Business Publishing 11 Strategic Corporate Social Responsibility Adapted from Exhibit 2.3 Worthy Cause (for someone else) Prime Focus Low High Critical to the Company Low Low High High Affected by the Company Problem in Society
  12. 12. © 2008 Prentice-Hall Business Publishing 12 The Development of Individual Ethics Life Experiences Job Experiences Religion Teachers Peers Friends Family Individual Ethics
  13. 13. © 2008 Prentice-Hall Business Publishing 13 Basic Approaches to Ethics Ethical dilemmas The choice between two competing but arguably valid options Frameworks for ethical decision making: Utilitarian approach Moral rights approach Universalism approach Justice approach
  14. 14. © 2008 Prentice-Hall Business Publishing 14 Basic Approaches to Ethics: Utilitarian Approach Focused on the consequences of an action What is the “greatest good?” Different people may see the outcome differently in terms of good or bad
  15. 15. © 2008 Prentice-Hall Business Publishing 15 Basic Approaches to Ethics: Moral Rights Approach Focused on moral standing of actions, independent of their consequences Some things are simply “right” or “wrong” When two actions have moral standing, then the positive or negative consequences of each will determine the more ethical
  16. 16. © 2008 Prentice-Hall Business Publishing 16 Basic Approaches to Ethics: Universal Approach “Do unto others as you would have them do unto everyone, including yourself.” Choose a course of action you believe can apply to all people under all situations The issue of rights Rights stem from freedom and autonomy Actions that limit freedom and autonomy generally lack moral justification
  17. 17. © 2008 Prentice-Hall Business Publishing 17 Basic Approaches to Ethics: Justice Approach Costs and benefits of actions: Costs and benefits should be equitably distributed Rules should be impartially applied Those damaged should be compensated Distributive justice Equitable distribution is based on performance
  18. 18. © 2008 Prentice-Hall Business Publishing 18 Basic Approaches to Ethics: Justice Approach Procedural justice Ensure that people consent to the decision-making process Ensure that the process is administered impartially Compensatory justice If distributive and procedural justice fail, those hurt by inequitable distribution of rewards are compensated
  19. 19. © 2008 Prentice-Hall Business Publishing 19 Moral Intensity in Ethical Decision Making Moral intensity The degree to which people see an issue as an ethical one Moral Intensity Social Consequences Proximity
  20. 20. © 2008 Prentice-Hall Business Publishing 20 Moral Intensity Moral Intensity in Ethical Decision Making Magnitude of the consequences Level of impact anticipated Impact is independent of whether consequences are positive or negative Adapted from Exhibit 5.2: Factors of Moral Intensity Adapted from Exhibit 2.4
  21. 21. © 2008 Prentice-Hall Business Publishing 21 Moral Intensity Moral Intensity in Ethical Decision Making Social consequences The extent to which members of a society agree that an act is either good or bad Population diversity weakens social consensus Social Consequences Adapted from Exhibit 5.2: Factors of Moral Intensity Adapted from Exhibit 2.4
  22. 22. © 2008 Prentice-Hall Business Publishing 22 Moral Intensity Moral Intensity in Ethical Decision Making Probability of effect How likely people think the consequences are The higher the probability of the consequence, the more intense the sense of ethical obligation Social Consequences Adapted from Exhibit 5.2: Factors of Moral Intensity Adapted from Exhibit 2.4
  23. 23. © 2008 Prentice-Hall Business Publishing 23 Moral Intensity Moral Intensity in Ethical Decision Making Temporal immediacy Interval between the time the action occurs and the onset of its consequences The greater the time interval, the less intensity people typically feel toward the issue Social Consequences Adapted from Exhibit 5.2: Factors of Moral Intensity Adapted from Exhibit 2.4
  24. 24. © 2008 Prentice-Hall Business Publishing 24 Moral Intensity Moral Intensity in Ethical Decision Making Proximity The closeness the decision maker feels to those affected Closeness leads to more consideration of the consequences Closeness increases feeling that it has ethical implications Social Consequences Proximity Adapted from Exhibit 5.2: Factors of Moral Intensity Adapted from Exhibit 2.4
  25. 25. © 2008 Prentice-Hall Business Publishing 25 Moral Intensity Moral Intensity in Ethical Decision Making Concentration of effect Focus of effect on only a few or disbursed across many individuals Higher concentration leads to feelings of greater ethical responsibility Social Consequences Proximity Adapted from Exhibit 5.2: Factors of Moral Intensity Adapted from Exhibit 2.4
  26. 26. © 2008 Prentice-Hall Business Publishing 26 How Firms Make Better Ethical Decisions Code of ethics: a formal one-to- three page statement outlining the types of behavior that are and are not acceptable Codes generally stress: Being a good “organization citizen” Guiding employee behavior away from unlawful or improper acts that could harm the organization
  27. 27. © 2008 Prentice-Hall Business Publishing 27 Johnson & Johnson Credo Our Credo • We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. • In meeting their needs everything we do must be of high quality. • We must constantly strive to reduce our costs in order to maintain reasonable prices. • Customers' orders must be serviced promptly and accurately. • Our suppliers and distributors must have an opportunity to make a fair profit. Adapted from Exhibit 2.5
  28. 28. © 2008 Prentice-Hall Business Publishing 28 Johnson & Johnson Credo (cont.) • We are responsible to our employees, the men and women who work with us throughout the world. • Everyone must be considered as an individual. • We must respect their dignity and recognize their merit. • They must have a sense of security in their jobs. • Compensation must be fair and adequate, and working conditions clean, orderly and safe. • We must be mindful of ways to help our employees fulfill their family responsibilities. • Employees must feel free to make suggestions and complaints. • There must be equal opportunity for employment, development and advancement for those qualified. • We must provide competent management, and their actions must be just and ethical. Adapted from Exhibit 2.5
  29. 29. © 2008 Prentice-Hall Business Publishing 29 Johnson & Johnson Credo (cont.) • We are responsible to the communities in which we live and work and to the world community as well. • We must be good citizens – support good works and charities and bear our fair share of taxes. • We must encourage civic improvements and better health and education. • We must maintain in good order the property we are privileged to use, protecting the environment and natural resources. Adapted from Exhibit 2.5
  30. 30. © 2008 Prentice-Hall Business Publishing 30 Johnson & Johnson Credo (cont.) • Our final responsibility is to our stockholders. • Business must make a sound profit. • We must experiment with new ideas. • Research must be carried on, innovative programs developed and mistakes paid for. • New equipment must be purchased, new facilities provided and new products launched. • Reserves must be created to provide for adverse times. • When we operate according to these principles, the stockholders should realize a fair return. Adapted from Exhibit 2.5
  31. 31. © 2008 Prentice-Hall Business Publishing 31 Categories Found in Corporate Codes of Ethics Cluster 1 “Be a dependable organizational citizen” Cluster 2 “Don’t do anything unlawful or improper that will harm the organization.” Unclustered Items Cluster 3 “Be good to our customers.” Adapted from Exhibit 2.6
  32. 32. © 2008 Prentice-Hall Business Publishing 32 Adoption of Codes of Ethics 47% 18% 31% 53% 82% 69% Germany France United Kingdom With codes Without codes Percentage of Firms Adapted from Exhibit 2.7
  33. 33. © 2008 Prentice-Hall Business Publishing 33 Subjects Addressed in Corporate Codes of Ethics Adapted from Exhibit 2.8 Employee conduct Community and environment Customers Shareholders Suppliers and contractors Political interests Innovation and technology Most often used for European firms Most often used for United States firms Least often used for European firms Least often used for United States firms
  34. 34. © 2008 Prentice-Hall Business Publishing 34 Successfully Implementing Codes of Ethics Implementing a Code of Ethics Communication Training Reward & Recognition Whistle- blowing
  35. 35. © 2008 Prentice-Hall Business Publishing 35 The Government: Foreign Corrupt Practices Act Cannot corrupt actions of foreign officials, politicians, or candidates Cannot make payments to any person when they have "reason to know" that the payments might be used to corrupt the behavior of officials Must take steps to provide "reasonable assurance" that transactions are in compliance with the law and to keep detailed records of them

×