Ethics and CSR<br />"What does ethics mean to you?“<br />
"What does ethics mean to you?“<br />A few years ago, sociologist Raymond Baumhart asked business people. Major replies were-<br />"Ethics has to do with what my feelings tell me is right or wrong.“<br />"Ethics has to do with my religious beliefs.“<br />"Being ethical is doing what the law requires.“<br />"Ethics consists of the standards of behavior our society accepts.“<br />"I don't know what the word means." <br />
Three Domains of Human Action<br />Domain of Certified Law<br />(Legal Standard)<br />Domain of Free Choice<br />(Personal Standard)<br />Domain of Ethics<br />(Social Standard)<br />Amount of<br />High<br />Explicit Control<br />Low<br />
Ethical Dilemma<br />A situation that arises when all alternative choices or behaviors have been deemed undesirable. <br />Potentially negative ethical consequences, making it difficult to distinguish right from wrong.<br />
Ethics<br />The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.<br />
Criteria for Ethical Decision Making<br />Most ethical dilemmas involve<br /><ul><li>A conflict between needs of the part & whole.
Justice Approach</li></li></ul><li>Utilitarian Approach<br /><ul><li>Moral behavior produces the greatest good for the greatest number.
Computations can be very complex, simplifying them is considered appropriate.
Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual.</li></li></ul><li>Individualism Approach<br /><ul><li>Acts are moral when they promote the individual's best long-term interests.
Individualism is believed to lead to honesty & integrity since that works best in the long run.</li></li></ul><li>Moral-Rights Approach<br />Asserts human beings have fundamental rights and liberties.<br />Moral decisions are those that best maintain the rights of those people affected by them.<br />An ethical decision is one that avoids interfering with the fundamental rights of others.<br />
“Moral Rights” Considerations<br />The right of free consent<br />The right to privacy<br />The right of freedom of conscience<br />The right of free speech<br />The right to due process<br />The right to life & safety<br />
Justice Approach<br />Moral Decisions must be based on standards of equity, fairness, and impartiality.<br />Treatment of individuals should not be based on arbitrary characteristics.<br />Organizations and individuals could draft code of conduct, make it known to all and implement equally on all<br />Closet thinking to codified law.<br />
Levels of Moral Development<br />SOURCES: Based on L. Kahlberg, “Moral Stages and Moralization: The Cognitive-Developmental Approach, in Moral Development and Behavior: Theory, Research, and Social Issues, ed. T. Lickona (New York: Holt, Rinehart, and Winston, 1976), 31-53; and Jill W. Graham, “Leadership, Moral Development and Citizenship Behavior,” Business Ethics Quarterly 5, no. 1 (January 1995), 43-54.<br />
Social Responsibility<br />Organization’s obligation to make choices and take actions that will contribute to the welfare and interests of society and organization.<br />Distinguishing right from wrong.<br />Being a good corporate citizen.<br /><ul><li>Many social responsibilities issues are ambiguous with respect to right and wrong.</li></li></ul><li>Shades of Corporate Green<br />Activist Approach<br />Actively conserve the environment<br />Stakeholder Approach<br />Address multiple stakeholder concerns<br />Market Approach<br />Respond to customers<br />Legal Approach<br />Satisfy legal requirements regarding environmental conservation<br />
Corporate Responses toSocial Demands<br />High<br />Degree of Social Responsibility<br />Low<br />Proactive<br />Take social initiatives.<br />Accommodation<br />Accept ethical responsibility.<br />Defense<br />Do only what is legally required.<br />Obstruction<br />Fight all the way.<br />
Three Pillars of an Ethical Organization<br />SOURCE: Adapted from Linda Klebe Trevino, Laura Pincus Hartman, and Michael Brown, “Moral Person and Moral Manager,” California Management Review 42, No. 4 (Summer 2000), 128-142.<br />
Enlightened Companies<br />Realize the importance of:<br />integrity<br />trust<br />