Managing Social Responsibilities

A s i f J a m a l

V i s i t in g L ec t u r e r

Un i ve r s i t y O f S in d h , M i r p u r k ha s c a m p u s

MANAGING SOCIAL

RESPONSIBILITIES AND

ETHICS

Social responsibilities is a

business obligation to pursue

policies, make decisions and

take actions that benefit

society

INTRODUCTION

Management - Chapter 33

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


ETHICAL BEHAVIOR?



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 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.


ETHICAL BEHAVIOR?


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.



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.


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?



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.


THE WORKPLACE?


FACTORS INFLUENCING ETHICAL MANAGERIAL

BEHAVIOR—THE PERSON, ORGANIZATION, AND

ENVIRONMENT.


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.

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

STUDY QUESTION 3: HOW CAN HIGH ETHICAL STANDARDS BE

MAINTAINED?


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


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.


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 3: HOW CAN HIGH ETHICAL STANDARDS BE

MAINTAINED?


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.


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


STUDY QUESTION 5: HOW DO

ORGANIZATIONS AND GOVERNMENTS

WORK TOGETHER IN SOCIETY?

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.

THE 10 COMMANDMENTS OF CORPORATE

SOCIAL RESPONSIBILITY

1. Take corrective action before it is required.

2. Work with affected constituents to resolve mutual problems.

3. Work to establish industry-wide standards and self-regulation.

4. Publicly admit your mistakes.

5. Get involved in appropriate social programs.

6. Help correct environmental problems.

7. Monitor the changing social environment.

8. Establish and enforce a corporate code of conduct.

9. Take needed public stands on social issues.

10.Strive to make profits on an ongoing basis.

SOURCES OF ETHICS

religion

Legal systemBUSINESS

ETHICSculture

MANAGING ETHICS

Ethical

behaviors

Code of ethicsTop

management

Ethics

committees

Ethics auditTraining

programsEthics hotline

SOCIAL AUDIT

is an identification and examination of the

activities of the firm in order to assess, evaluate,

measure and report their impact on the immediate

social environment

It helps to determine the areas where the firm

could be vulnerable to public criticism.

Organizations can inform the public regarding

their activities for society.

The true picture of corporate accountability can be

given to the society.

Date post:	23-Jan-2018
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