This chapter discusses the importance of managerial ethics and social responsibility. It argues that managers must make ethical decisions that consider social impacts, as organizations cannot be seen as socially irresponsible. It also presents research showing that social responsibility can positively impact economic performance. The chapter explores how managers and organizations can improve ethical behavior through codes of ethics, training, and leading by example.

1. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 1
Chapter 2
Managerial Ethics

2. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 2
Society’s Expectations from
Organizations and Managers
 Managers regularly make decisions
about issues with a social dimension
 In competitive environment,
organizations cannot afford to be seen
as socially irresponsible

3. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 3
Demonstrating Social
Responsibility
 Social responsibility
 Social obligation
 Social responsiveness

4. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 4
Relationship Between Social
Responsibility and Economic
Performance
 Research studies show positive
relationship
 General public perception that
companies who behave in a socially
responsible way have better business
performance

5. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 5
Managers Becoming More
Socially Responsible
 It is the collective behaviour and actions
of managers that make a company
socially responsible
 Managers who make the right decisions
are described as being or behaving
ethically

6. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 6
Managerial Ethics
 Ethics
 Rules and principles that define right
and wrong conduct
 Three Views of Ethics
 Utilitarian view - ethical decisions
are made on the basis of their
outcomes or consequences
(continued)

7. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 7
Managerial Ethics (continued)
 Three Views of Ethics (continued)
 Rights view - respects and protects
individual liberties and privileges
 Theory of justice view - managers
impose and enforce rules fairly and
impartially

8. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 8
Values
 Basic convictions about what is right
and wrong
 Influence ethical behaviour
 Values are developed in early years

9. Organizational Factors That Affect Ethical
And Unethical Behaviour
Moderators
Ethical/Unethical
Behaviour
Organizational
Culture
Structural
Variables
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
03 Pearson Education Canada Inc.
9

10. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 10
Managers Improving Ethical
Behaviour
 Hire individuals with high ethical
standards
 Establish codes of ethics and
decision rules
 Lead by example
(continued)

11. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 11
Managers Improving Ethical
Behaviour (continued)
 Delineate job goals and performance
review mechanisms
 Provide ethics training
 Conduct social audits
 Provide support to individuals facing
ethical dilemmas

12. Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 12
Code of Ethics
 Formal statement of an organization’s
primary values and ethical rules it
expects employees to follow
 Usually written
 Must state in detail acceptable
behaviours and actions