Ch03.ppt

PowerPoint Presentation
to Accompany Chapter 3 of
Management Fundamentals
Canadian Edition
Schermerhorn  Wright
.
Prepared by: Michael K. McCuddy
Adapted by: Lynda Anstett & Lorie Guest
Published by: John Wiley & Sons Canada, Ltd.

Management Fundamentals - Chapter 3 2
Planning Ahead — Chapter 3 Study Questions
What is ethical behavior?
How do ethical dilemmas complicate the
workplace?
How can high ethical standards be
maintained?
What is corporate social responsibility?
How do organizations and governments
work together in society?

Ethics
– Code of moral principles.
– Set standards of “good” and “bad” as opposed
to “right” and “wrong.”
Ethical behavior
– What is accepted as good and right in the
context of the governing moral code.
Study Question 1: What is ethical behavior?

Law, values, and ethical behavior:
– Legal behavior is not necessarily ethical
behavior.
– Personal values help determine individual
ethical behavior.
• Terminal values
• Instrumental values

 Utilitarian view of ethics — greatest good to the
greatest number of people.
 Individualism view of ethics — primary
commitment is to one’s long-term self-interests.
 Moral-rights view of ethics — respects and
protects the fundamental rights of all people.
 Justice view of ethics — fair and impartial
treatment of people according to legal rules and
standards.

Figure 3.1 Four views of ethical behavior.

Cultural issues in ethical behavior:
– Cultural relativism
• Ethical behavior is always determined by cultural
context.
– Cultural universalism
• Behavior that is unacceptable in one’s home
environment should not be acceptable anywhere
else.

Figure 3.2 The extremes of cultural relativism and ethical
imperialism in international business ethics.
Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,”
Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.

How international businesses can respect core or universal values:
Respect for human dignity
• Create culture that values employees, customers, and suppliers.
• Keep a safe workplace.
• Produce safe products and services.
Respect for basic rights
• Protect rights of employees, customers, and communities.
• Avoid anything that threatening safety, health, education, and living
standards.
Be good citizens
• Support social institutions, including economic and educational
systems.
• Work with local government and institutions to protect environment.

 An ethical dilemma occurs when choices,
although having potential for personal and/or
organizational benefit, may be considered
unethical.
 Ethical dilemmas include:
– Discrimination
– Sexual harassment
– Conflicts of interest
– Customer confidence
– Organizational resources
Study Question 2: How do ethical dilemmas
complicate the workplace?

 Ethical behavior can be rationalized by convincing
yourself that:
– Behavior is not really illegal.
– Behavior is really in everyone’s best interests.
– Nobody will ever find out.
– The organization will “protect” you.

 Factors influencing ethical behavior include:
– The person
• Family influences, religious values, personal standards, and
personal needs.
– The organization
• Supervisory behavior, peer group norms and behavior, and
policy statements and written rules.
– The environment
• Government laws and regulations, societal norms and values,
and competitive climate in an industry.

Figure 3.3 Factors influencing ethical managerial
behavior—the person, organization, and environment.

Study Question 3: How can high ethical
standards be maintained?
Checklist for dealing with ethical dilemmas
Step 1. Recognize the ethical dilemma
Step 2: Get the facts
Step 3. Identify your options
Step 4. Test each option: Is it legal? Is it right? Is it beneficial?
Step 5. Decide which option to follow
Step 6. Double-check decision by asking the “spotlight” questions: “How
would I feel if my family found out about my decision?” “How would
I feel about this if my decision were printed in the local newspaper?”
Step 7. Take action.

Ethics training:
– Structured programs that help participants
to understand ethical aspects of decision
making.
– Helps people incorporate high ethical
standards into daily life.
– Helps people deal with ethical issues
under pressure.

 Whistleblowers
– Expose misdeeds of others to:
• Preserve ethical standards
• Protect against wasteful, harmful, or illegal acts
 Laws protecting whistleblowers vary

Barriers to whistleblowing include:
– Strict chain of command
– Strong work group identities
– Ambiguous priorities
Organizational methods for overcoming
whistleblowing barriers:
– Ethics staff units who serve as ethics advocates
– Moral quality circles

 Ethical role models:
– Top managers serve as ethical role models.
– All managers can influence the ethical behavior of
people who work for and with them.
– Excessive pressure can foster unethical behavior.
– Managers should be realistic in setting performance
goals for others.

Codes of ethics:
– Formal statement of an organization’s values and
ethical principles regarding how to behave in situations
susceptible to the creation of ethical dilemmas.
 Areas often covered by codes of ethics:
– Bribes and kickbacks
– Political contributions
– Honesty of books or records
– Customer/supplier relationships
– Confidentiality of corporate information

Study Question 4: What is corporate social
responsibility?
Corporate social responsibility:
– Looks at ethical issues on the organization
level.
– Obligates organizations to act in ways that
serve both its own interests and the interests of
society at large.

responsibility?
 Organizational stakeholders
– Those persons, groups, and other organizations directly affected by
the behavior of the organization and holding a stake in its
performance.
 Typical organizational stakeholders
– Employees
– Customers
– Suppliers
– Owners
– Competitors
– Regulators
– Interest groups

Figure 3.4 Multiple stakeholders in the
environment of an organization.

responsibility?
 Beliefs that guide socially responsible business
practices:
– People do their best with a balance of work and family
life.
– Organizations perform best in healthy communities.
– Organizations gain by respecting the natural
environment.
– Organizations must be managed and led for long-term
success.
– Organizations must protect their reputations.

responsibility?
 Perspectives on corporate social responsibility:
– Classical view—
• Management’s only responsibility is to maximize profits.
– Socioeconomic view—
• Management must be concerned for the broader social welfare,
not just profits.

responsibility?
 Arguments against
social responsibility:
– Reduced business
profits
– Higher business costs
– Dilution of business
purpose
– Too much social power
for business
– Lack of public
accountability
 Arguments in favor of
social responsibility:
– Adds long-run profits
– Improved public image
– Avoids more
government regulation
– Businesses have
resources and ethical
obligation

responsibility?
Criteria for evaluating corporate social
performance:
– Is the organization’s …
• Economic responsibility met?
• Legal responsibility met?
• Ethical responsibility met?
• Discretionary responsibility met?

Figure 3.5 Criteria for evaluating
corporate social performance.

responsibility?
Strategies for pursuing social responsibility:
– Obstructionist — meets economic
responsibilities.
– Defensive — meets economic and legal
responsibilities.
– Accommodative — meets economic, legal, and
ethical responsibilities.
– Proactive — meets economic, legal, ethical,
and discretionary responsibilities.

Figure 3.6 Four strategies of corporate social
responsibility—from obstructionist to proactive behavior.

Study Question 5: How do organizations and
governments work together in society?
How government influences organizations:
– Common areas of government regulation of
business affairs:
• Occupational safety and health
• Fair labor practices
• Consumer protection
• Environmental protection

 How organizations influence governments:
– Personal contacts and networks
– Public relations campaigns
– Lobbying
– Political action committees
– Sometimes by illegal acts, such as bribery or illegal
financial contributions to political campaigns

Figure 3.7 Centrality of ethics and social responsibility in
leadership and the managerial role.

 Corporate governance:
– The oversight of the top management of an
organization by a board of directors.
 Corporate governance involves:
– Hiring, firing, and compensating the CEO.
– Assessing strategy.
– Verifying financial records.

COPYRIGHT
Copyright © 2007 John Wiley & Sons Canada, Ltd. All rights
reserved. Reproduction or translation of this work beyond that
permitted by Access Copyright (The Canadian Copyright Licensing
Agency) is unlawful. Requests for further information should be
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caused by the use of these programs or from the use of the
information contained herein.

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