Transcript Chapter 2: MANAGERIAL ETHICS

Chapter 2
Managerial Ethics
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2.1
Learning Outcomes



Define social responsibility and ethics
List at least six main arguments for at at
least four main arguments against
businesses being socially responsible
Explain the importance of
demonstrating social responsibility in
today’s business world
(continued)
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-2
Learning Objectives
(continued)




Describe the concerns people have
about business ethics
Explain the relationship between social
responsibility and managerial ethics
Identify the seven factors that influence
ethical behaviour
Describe ways an organization can
improve ethical behaviour
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-3
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-4
Arguments Supporting Businesses
Being Socially Responsible










Public expectations
Long-run profits
Ethical obligation
Public image
Better environment
Discouragement of further government regulation
Balance of responsibility and power
Shareholder interests
Possession of resources
Superiority of prevention over cures
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-5
Arguments Against Businesses
Being Socially Responsible







Violation of profit maximization
Dilution of purpose
Costs
Too much power
Lack of skills
Lack of accountability
Lack of broad public support
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-6
Demonstrating Social
Responsibility



Social responsibility
Social obligation
Social responsiveness
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-7
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-8
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-9
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)
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-10
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-11
Moral Development


Is a measure of an individual’s
independence as his/her moral judgment
becomes less and less dependent on
outside influences
Stages start with making a choice
between right and wrong based on
personal consequences
(continued)
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-12
Moral Development
(continued)


As development evolves, moral judgment
is less dependent on outside factors
Individuals with highly-developed moral
development can make clear distinctions
to define moral principles separate from
any authority
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-13
Values



Basic convictions about what is right
and wrong
Influence ethical behaviour
Values are developed in early years
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-14
Organizational Factors That Affect Ethical
And Unethical Behaviour
Organizational
Culture
Moderators
Ethical/Unethical
Behaviour
Structural
Variables
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
03 Pearson Education Canada Inc.
FOM 2.15
Determinants Of Issue Intensity (Exhibit 2.3)
Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary
Coulter, and Robin Stuart-Kotze, page 113. Copyright © 2003. Reprinted by
permission of Pearson Education Canada Inc.
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
ation Canada Inc.
FOM 2.16
Businesses Improving Ethical
Behaviour



Strong emphasis on corporate
governance
Companies refocusing efforts on
business ethics
New legislation to hold boards of
directors more accountable
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-17
Managers Improving Ethical
Behaviour



Hire individuals with high ethical
standards
Establish codes of ethics and
decision rules
Lead by example
(continued)
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-18
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-19
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-20
Management Responsibility
Relating to Codes of Ethics




If possible, develop codes with active
involvement of everyone in the
organization
All levels of management must support
and continually reaffirm the importance
Consistently discipline those who break
the code
Set an example by behaviour and action
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-21
Concluding Remarks



More and more organizations are
appearing in newspaper headlines
about ethical conduct
Survey of employees shows workplace
pressures are leading to more people
considering acting unethically
Concerns about social responsibility are
growing
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc.
FOM 2-22