Course: Introduction to Management Topics covered: Socioeconomic view of social responsibility Classical view of social responsibility Social obligation Social responsiveness Social responsibility Should companies invest in social welfare Green Management Legal approach to green management Market approach to green management Stakeholder approach to to green management Activist approach to to green management

1. Social Responsibility &
Managerial Ethics
Presented By
Muhammad Kashif
Syed Muhammad Irtesam
Muhammad Mutahhar Bin Muzaffar
Zaeem Naveed Sheikh
Uzair Qamar

2. IntroductionToThe
Chapter&Social
ResponsibilityViews
By Muhammad Kashif

3. Swarovski’s
Dilemma
 Swarovski is based in Austria and is one of the world’s
leading multinational jewelry companies.
 Managers at Swarovski must develop a strategy to
improve profits and remain competitive.
 Swarovski has been sourcing gold from South Africa for
decades but has now been offered the same quality
minerals from Kenya with 30% less cost.
 South Africa has strict labor laws whereas Kenya is
notorious for child labor and worker exploitation.
 Swarovski is not bound by any legal implications if it
moves its sourcing to Kenya.
 Should the managers at Swarovski continue sourcing
from South Africa or move their operations to Kenya?

4. Apple’s
Dilemma
 Apple is one of the world’s leading electronic companies
and is based in the United States.
 In 2012, Apple moved its assembly lines to China
resulting in thousands of people losing jobs in their
home market.
 Apple believes they can provide products at more
competitive prices if they are assembled in China.
 Many Americans believe Apple is denying their own
people jobs in order to maximize profits.
 Apple has no legal obligation to assemble products in
the United States.
 Were the managers at Apple right to move assembly
lines to China?

5. Divergent
Perspectives
SWAROVSKI’S DECISION
 Swarovski’s managers refuse to source from Kenya. As
a result, the labor market beings to view child labor
and exploitation as a threat to the market and works
to improve labor laws.
 This approach is based around socioeconomic view of
social responsibility.
APPLE’S DECISION
 Apple’s managers moved their assembly line to China
for it favored the company and had no legal
implications.
 This approach is centered around the classical view of
social responsibility.

6. Classical&
Socioeconomic
Views
CLASSICAL VIEW
 Endorsed by Nobel laureate Milton Friedman.
 Argues that managers are obligated to center their
decisions around the company and are not answerable to
society for their actions.
 Accepts maximizing profit as a part of social
responsibility.
SOCIOECONOMIC VIEW
 84% companies around the world claim to hold this
perspective.
 Argues that managers are obligated to look after society
welfare just as much as they prioritize company profits.

7. SocialObligationvs
SocialResponsivenessvs
SocialResponsibility
By Syed Muhammad Irtesam

8. Social
Obligation
 Based around the classical view of social responsibility.
 Accepts organizations are bound to follow legal and
economic limitations imposed by regulatory
authorities.
 Argues that organizations must not push the bounds of
social responsibility and not incur monetary loss.
 Organizations are bound to give minimum wages,
discourage child labor, build Corporate Social
Responsibility Programs (CSR) in many countries
including Pakistan.
 Descon, a multinational engineering company, donates
a large sum of money to NAMAL College every year as
part of its CSR Program.

9. Social
Responsiveness
 Centered around the socioeconomic view of social
responsibility.
 Argues that managers should an actions influence on
society into account while making a decision.
 Does not encourage financial expenditure for society
welfare.
 May or may not affect the company revenue.
 Vastly improves corporate-customer relationships.
 Universities across Pakistan set up donation camps
after the 2005 Earthquake and are doing so for the
Supreme Court Dam Fund.
 Careem Pakistan launched a Women on Bikes
Campaign to encourage women to drive motorcycles in
Pakistan.

10. Social
Responsibility
 Also centered around the socioeconomic view of social
responsibility.
 Encourages organizations to go above and beyond for
the welfare of society, despite having no obligation to it.
 Recognizes financial loss as a tradeoff for improving
relationships and fulfilling responsibilities.
 Lahore University of Management Sciences (LUMS)
gives out millions in scholarships via outreach
programs in underdeveloped communities.
 Organizations including Habib Bank, Bahria Town and
numerous other have donated millions to the Supreme
Court Dam Fund.

11. QuickReview
Social Obligation vs
Social Responsiveness vs
Social Responsibility
Social Obligation Social
Responsiveness
Social
Responsibility
Based on
classical view
Based on
socioeconomic
view
Based on
socioeconomic
view
Compulsory Optional Optional
Does not
encourage
financial loss
Does not
encourage
financial loss
Encourages
financial loss
Improves corporate-customer relations

12. Should
CompaniesInvest
InSocialWelfare?
WHAT THEY GAIN
 Improvement in customer relations and public image.
 Long-term public support for future projects.
 Arouses investors, stockholders and customers.
 Moral support in case of lawsuits.
WHAT THEY LOSE
 Financial losses.
 Lack of expertise.
 Staff may lose focus on company objectives and become
sidetracked.
 Actions may affect communities and rival markets
adversely.

13. Green Management
By Mutahhar Bin Muzaffar

14. Environment:
Growing
Concerns
 Managers around the world are starting to account for
the adverse environmental effects of their decisions.
 The Supreme Court of Pakistan recently ruled against
Bestway Cement for destroying water reserves near
the Katras Raj Temple. The lawsuit amount to PKR 2
Billion.
 Managers now tend to social screen their agreements
and decisions on social and environmental basis.
 Some environmental reforms in organizations are
obligated while many are a part of their CSR
initiatives.
 Environmental watchdogs are keeping a close eye on
organizations suspected to be the cause of
environmental hazards.

15. Green
Management:
TheRight
Approach?
LEGAL APPROACH
 Managers apply the regulations imposed on their
organizations to ensure the environment is not affected
adversely but do not go beyond the scope of these
limitations.
 In 1992, the U.S. Government phased out a plan to end
Chlorofluorocarbons by 2002 after the discovery of the
Ozone hole.
MARKET APPROACH
 Managers adapt to the environmental needs of customers
while aligning them to business interests.
 Nestle agreed to limit their water sourcing from Michigan
after locals complained of its affects on the nearby rivers.

16. Green
Management:
TheRight
Approach?
STAKEHOLDER APPROACH
 Managers go beyond customers and communities,
shareholders and employees into account when making
decisions relating to the environment.
 Multiple public transport systems across the world
accept plastic bottles as payment. This benefits
supplies, customers and the company itself.
ACTIVIST APPROACH
 Managers advocate the use of clean energy, green
product sourcing and mechanisms which are less cost-
efficient but environmental friendly.
 Coca-Cola freed its cooling and vending machines of
(HFCs) worldwide in 2015.

17. QuickReview
Legal
Approach
Market
Approach
Stakeholder
Approach
Activist
Approach
Emphasizes on
laws only
Extends to
customer
concerns
Extends to
concerns of
multiple
parties
Adapts
environmental
concerns as
company
concerns
Remains cost
friendly
Tends to
accommodate
slight loss
Accommodates
loss after
prioritizing
profits
Prioritizes
environment
over profit
Benefits the environment and communities
Legal Approach vs
Market Approach vs
Stakeholder Approach vs
Activist Approach

18. TOPICS
REMAINING
 Managers & Ethical Behavior (Uzair)
 Factors that determine ethical and unethical behavior
 Ethics, Values, Ego Sense, Locus of Control, Values
based management (Zaeem)
 Ethics in international context (Zaeem)
 Encouraging Ethical Behavior (Kashif)
 Social Responsibility & Ethical Issues in Today’s world
(Kashif)