Transcript PowerPoint Presentation to Accompany Management, 10/e John R. Schermerhorn, Jr. Chapter 4: Ethics and Social Responsibility Prepared by: Jim LoPresti University of Colorado, Boulder Published by: John Wiley.

PowerPoint Presentation
to Accompany
Management, 10/e
John R. Schermerhorn, Jr.
Chapter 4:
Ethics and Social Responsibility
Prepared by: Jim LoPresti
University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.
Planning Ahead — Chapter 4 Study Questions
 What is ethical behavior?
 How do ethical dilemmas complicate
the workplace?
 How can high ethical standards be
maintained?
 What is social responsibility and
governance?
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Study Question 1: What is ethical behavior?
 Ethics


Code of moral principles.
Set standards of “good” or “bad” or
“right” or “wrong” in one’s conduct.
 Ethical behavior

What is accepted as good and right in
the context of the governing moral
code.
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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.
 Values broad beliefs
Terminal values
Instrumental values
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Study Question 1: What is ethical behavior?
 Law, values, and ethical behavior:
 Values

underlying beliefs and attitudes that
help determine individual behavior
 Terminal values - preferences about
desired ends
 Instrumental values – preferences
regarding the means to desired ends
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Study Question 1: What is ethical behavior?
 Utilitarian view of ethics
• greatest good to the greatest number of people.
 Individualism view of ethics
• primary commitment is to one’s long-term selfinterests.
 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.
• Procedural justice – policies and rules fairly applied
• Distributive justice – equal treatment for all people
• Interactional justice – people treated with dignity and
respect
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Figure 4.1 Four views of ethical behavior.
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Study Question 1: What is ethical behavior?
 Cultural issues in ethical behavior:
 Cultural relativism

Ethical behavior is always determined by
cultural context.
 Cultural universalism


Behavior unacceptable in one’s home
environment should not be acceptable
anywhere else.
Considered by some to be ethical
imperialism
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Figure 4.2 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.
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Study Question 1: What is ethical behavior?
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.
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Study Question 2: How do ethical dilemmas
complicate the workplace?
 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
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Study Question 2: How do ethical dilemmas
complicate the workplace?
 Factors influencing ethical behavior include:
 Situational context
 ethics intensity or issue intensity indicates the degree
to which a situation is recognized to pose ethical
challenges
 The person
 Family influences, religious values, personal standards,
and personal needs.
 ethical framework is a personal rule or strategy for making
ethical decisions
 Kohlberg’s stages of individual moral development
 pre-conventional stage
 conventional stage
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Figure 4.3 Kohlberg’s stages
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Study Question 2: How do ethical dilemmas
complicate the workplace?
 Factors influencing ethical behavior
 Internal environment and the organization
 Supervisory behavior, peer group norms and
behavior, and policy statements and written rules.
 External environment
 Government laws and regulations, societal norms
and values, and competitive climate in an industry.
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Study Question 2: How do ethical dilemmas
complicate the workplace?
 Checklist for dealing with ethical
dilemmas:







Recognize the ethical dilemma
Get the facts
Identify your options
Test each option: Is it legal? Is it right? Is it beneficial?
Decide which option to follow
Double-check decision by asking “spotlight” questions:
 “How would I feel if my family found out about my
decision?”
 “How would I feel about this if my decision were in the
local news?”
Take action
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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.
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Study Question 3: How can high ethical standards
be maintained?
 Whistleblowers

Expose misdeeds of others to:
Preserve ethical standards
 Protect against wasteful, harmful, or
illegal acts


Laws protecting whistleblowers vary
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Study Question 3: How can high ethical standards
be maintained?
 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
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Study Question 3: How can high ethical standards
be maintained?
 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.
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Study Question 3: How can high ethical standards
be maintained?
 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
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Study Question 3: How can high ethical standards
be maintained?
 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.
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Study Question 3: How can high ethical standards
be maintained?
 Social entrepreneurship:
 a unique form of entrepreneurship that seeks novel
ways to solve pressing social problems at home and
abroad
 Housing and job training for homeless
 Bringing technology to poor families
 Improving literacy among disadvantaged
youth
 Offering small loans to start minority-owned
businesses
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Figure 4.4 How can high ethical standards be
maintained?
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Study Question 3: How can high ethical standards
be maintained?
 Criteria for evaluating corporate social
performance:
 Social responsibility audit – assesses
organization’s accomplishments in areas of CSR

Is the organization’s …

Economic responsibility met?

Legal responsibility met?

Ethical responsibility met?

Discretionary responsibility met?
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Study Question 3: How can high ethical standards
be maintained?
 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.
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Study Question 3: How can high ethical standards
be maintained?
 Perspectives on 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.
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Study Question 4: What is social responsibility and
governance?
 Corporate social responsibility and
governance:
 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.
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Study Question 4: What is social responsibility and
governance?
 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
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Study Question 4: What is social responsibility and
governance?

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
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Figure 4.5 Criteria for evaluating corporate social
performance.
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Study Question 4: What is social responsibility and
governance?
 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.
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Figure 4.6 Four strategies of corporate social
responsibility—from obstructionist to proactive
behavior.
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Study Question 4: What is social responsibility and
governance?
 How government influences
organizations:
 Common areas of government
regulation of business affairs:
 Occupational safety and health
 Fair labor practices
 Consumer protection
 Environmental protection
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Figure 4.7 Centrality of ethics and social responsibility
in leadership and the managerial role.
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