Post on 18-Jan-2018
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transcript
Corporate Responsibility And
Ethical Dilemma
Managerial Ethics
Agenda
Corporate Responsibilityo Evolution of Corporate Responsibilityo Types of Corporate Responsibilityo Areas of Responsibilityo The Crossroads
Ethical Dilemmao On-the-Job Dilemmao Factors Influencing Ethical Behavioro Some Exampleso Resolving the Dilemma
Corporate Responsibility
Definition: Corporate Responsibility, also known as Corporate Social Responsibility, is a form of corporate self-regulation integrated into a business model.
In other words: Corporate social responsibility is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment.
EarlyEarly2020thth Century Century
MiddleMiddle2020thth Century Century
EarlyEarly2121stst Century Century
MaximizeMaximizeProfitsProfits
Provide JobsProvide Jobsand Pay Taxesand Pay Taxes
Balance EthicsBalance Ethicsand Profitsand Profits
Evolution of Corporate Responsibility
Types of Corporate ResponsibilityTypes of
ResponsibilitySocietal
ExpectationExplanations
Economic Required by society
Be profitable. Make sound strategic decisions. Provide adequate and attractive returns on investment.
Legal Required by society
Obey all laws and regulations. Fulfill all contractual obligations. Honor warranties and guarantees.
Ethical Expected by society
Avoid questionable practices Respond to spirit as well as letter of law. Assume law is floor of behavior and operate above minimum required. Do what is right, fair, and just.
Philanthropic Desired/expected by society
Be a good corporate citizen. Give back. Improve quality of life overall.
Area of Responsibility
Responsibilities to the General Public
Public Health Issues
Protecting the Environment
Developing the Quality of the Workforce
Corporate Philanthropy
Responsibilities to Customers
The Right to Be Safe:
The Right to Be Informed
The Right to Choose
The Right to Be Heard
Responsibilities to Employees
Workplace Safety
Quality-of-Life Issues
Ensuring Equal Opportunity on the Job
Sexual Harassment and Sexism
Responsibilities to Investors and the Financial Community
Obligation to make profits for shareholders.
Expectation of ethical and moral behavior.
Investors protected by regulation by the Securities and Exchange Commission and state regulations.
Acting Responsibility to Satisfy Society
Management’s acceptance of the obligation to consider profit, consumer satisfaction, and societal well-being of equal value in evaluating the firm’s performance.
For example:
Contributions to the overall economy, job opportunities, and charitable contributions and service.
Measured through social audits.
• Arguments against :
o Higher business costs;
o Reduced business profits;
o Dilution of business purpose;
o Too much social involvement for business;
o Increased public accountability.
• Arguments for :
o Adds long-run profits;
o Better public image;
o Avoids more government regulation;
o Businesses have resources and ethical obligation;
o Better environment;
o Public wants it.
The Crossroads
Ethical Dilemma
A situation in which a person must decide whether or not to do something that, although beneficial to oneself or the organization, may be considered unethical and perhaps illegal.
Examples of Ethical Dilemmaso Should I conduct personal business on company time?o Should we spend more on pollution control?o Is it O.K. to give a friend a special rate?o If I find out that my boss took a bribe, should I tell someone?
On – the – Job Ethical Dilemma’s
Situation in which a business decision may be influenced for personal gain.
Telling the truth and adhering to deeply felt ethical principles in business decisions.
Businesspeople expect employees to be loyal and truthful, but ethical conflicts may arise.
Employee’s disclosure of illegal, immoral, or unethical practices in the organization.
Factors Influencing Ethical Managerial Behaviour
Some Examples
Company Allegation Action
KPMG2003
Establishing fake tax shelters for wealthy clients. Allowed $2.5 billion tax dollars to be evaded.
Paid $456 million to avoid indictment by DOJ.
Xerox2002
Applying inappropriate accounting manuveurs which caused them to overstate financial statements.
Paid $10 million penalty and restate financial statements in years 1997-2000.
Resolving Ethical Dilemma
Recognize the problem
Identify the source of conflict
Engage all involved parties and brainstorm the “ BEST ” course of action
Develop/modify the Code of Practice
Anticipate likely trouble spots
Thank You!!!