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Chapter 5
Ethics and Social Responsibility
Managerial Ethics
• Ethics - code of moral principles and values that
govern the behaviors of right or wrong
• Standards a...
5.1 Three Domains of
Human Action
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 3
• Ethical scandals during the last decade have
been pervasive
• Corporations and people have become
associated with greed,...
5.2 Examples of Unethical and
Illegal Organizational Behavior
Copyright ©2012 by South-Western, a division of Cengage Lear...
Ethical Dilemmas
You are the moral agent, what would you do?
Your company requires a terrorist watch list that
screens all...
Criteria for Ethical
Decision Making
• Utilitarian Approach – moral behavior produces the
greatest good for the greatest n...
• Justice Approach – moral decisions must be based on
standards of equity, fairness, and impartiality
• Virtue Ethics Appr...
A Manager’s Ethical Choices
 Individuals bring their own personality and traits
to organizations
 Personal needs, family...
5.3 Three Levels of Personal
Moral Development
Copyright ©2012 by South-Western, a division of Cengage Learning. All right...
What is Corporate Social
Responsibility (CSR)?
• Distinguishing right from wrong; doing right
• Good corporate citizenship...
• Is management’s obligation to make choices and
take actions that will contribute to the welfare
and interests of society...
5.4 Major Stakeholders Relevant to
Monsanto Company
Copyright ©2012 by South-Western, a division of Cengage Learning. All ...
• Going GREEN is a new business imperative
– Change in social attitudes
– New governmental policies
– Climate change
• Inf...
The Ethic of Sustainability
Sustainability – economic development
that generates wealth and meets the needs
of current pop...
5.5 Criteria of Corporate
Social Performance
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights ...
Managing Company Ethics and
Social Responsibility
Code of Ethics – a formal statement of the
company’s values regarding et...
5.6 Building an Ethical
Organization
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved...
The Business Case for Ethics and
Social Responsibility
 Ethics and social responsibility
are important business issues
 ...
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Ethics and social responsibility

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Ethics - code of moral principles and values that govern the behaviors of right or wrong
Standards about good/bad
Ethical issues can be complex
People in organizations have divergent views about right/wrong
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Ethics and social responsibility

  1. 1. Chapter 5 Ethics and Social Responsibility
  2. 2. Managerial Ethics • Ethics - code of moral principles and values that govern the behaviors of right or wrong • Standards about good/bad • Ethical issues can be complex • People in organizations have divergent views about right/wrong Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 2
  3. 3. 5.1 Three Domains of Human Action Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 3
  4. 4. • Ethical scandals during the last decade have been pervasive • Corporations and people have become associated with greed, deceit, irresponsibility, and lack of moral conscience • Managers carry a big responsibility for setting an ethical climate • Ethical crises have brought ethical management to the forefront Ethical Management Today Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 4
  5. 5. 5.2 Examples of Unethical and Illegal Organizational Behavior Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 5
  6. 6. Ethical Dilemmas You are the moral agent, what would you do? Your company requires a terrorist watch list that screens all new customers and takes approximately 24 hours from the time an order is placed. You can close a lucrative deal with a potential long-term customer overnight, even though that means the required watch-list screening will have to be done after the fact. Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 6
  7. 7. Criteria for Ethical Decision Making • Utilitarian Approach – moral behavior produces the greatest good for the greatest number. E.g. it would be moral to put 1 person to death to save 5. • Individualism Approach – acts are moral if they promote the individual’s long-term interest • Moral-Rights Approach – humans have fundamental rights and liberties that cannot be taken away by an individual's decision Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 7
  8. 8. • Justice Approach – moral decisions must be based on standards of equity, fairness, and impartiality • Virtue Ethics Approach– moral behavior stems from personal virtues( e.g. if manager develops good character traits such as generosity and courage and learns how to overcome negative traits such as greed or anger, he will make ethical decisions naturally) • Practical Approach– bases decisions on prevailing standards, society, and all stakeholders Criteria for Ethical Decision Making Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 8
  9. 9. A Manager’s Ethical Choices  Individuals bring their own personality and traits to organizations  Personal needs, family influence, and religious background shape individuals  Personality characteristics like ego, confidence, and independence Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 9
  10. 10. 5.3 Three Levels of Personal Moral Development Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 10
  11. 11. What is Corporate Social Responsibility (CSR)? • Distinguishing right from wrong; doing right • Good corporate citizenship • Make choices that contribute to society and stakeholders • Stakeholders – any group within or outside Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 11
  12. 12. • Is management’s obligation to make choices and take actions that will contribute to the welfare and interests of society as well as the organizations Corporate Social Responsibility Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 12
  13. 13. 5.4 Major Stakeholders Relevant to Monsanto Company Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 13
  14. 14. • Going GREEN is a new business imperative – Change in social attitudes – New governmental policies – Climate change • Information technology immediately spreads the negative decisions of corporations • More organizations are embracing sustainability The Green Movement Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 14
  15. 15. The Ethic of Sustainability Sustainability – economic development that generates wealth and meets the needs of current population while preserving the environment for the needs of future generations Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 15
  16. 16. 5.5 Criteria of Corporate Social Performance Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 16
  17. 17. Managing Company Ethics and Social Responsibility Code of Ethics – a formal statement of the company’s values regarding ethics and social issues Ethical Structures – systems, positions, and programs like ethics training Whistle-blowing – employee disclosure of illegal, immoral, or illegitimate practices Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 17
  18. 18. 5.6 Building an Ethical Organization Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 18
  19. 19. The Business Case for Ethics and Social Responsibility  Ethics and social responsibility are important business issues  Stakeholders are pushing more initiatives and issues  The connection between ethics and financial performance has been widely debated  What do you THINK? Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved. 19

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