UNIT 2: CONTEXT

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Chapter 3: Ethics & Social Responsibility

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.

What is Ethics?

Law, values, and ethical behavior: Legal behavior is not necessarily ethical behavior.

Most ethical problems in the workplace arise when people are asked to do, or find themselves about to do, something that violates their personal beliefs.

Personal values help determine individual ethical behavior. Terminal values (preferences about desired end states/

goals you strive to achieve in life—self-respect, happiness, family security)

Instrumental values (preferences regarding means to desired ends—honesty, courage, imagination, self-discipline)

What is Ethics?

Alternative Views of Ethics:

Moral rights examples—free speech, privacy, religion, health & safety

Justice view examples—legal rules and standards such as wearing a seatbelt in a car, or not on a cell phone while driving

Cultural Issues in Ethical Behaviour:

Examples: Sweatshop Cultural relativism: You would be okay if your company

used sweatshops in countries that it is deemed acceptable (even if you don’t believe in this type of work)= cost savings

Ethical Imperialism: Because you are against sweatshops, you would never run sweatshops, even if it is acceptable in that country = extra costs

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

Business & Ethics

Business & Ethics

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.

Ethics training: Structured programs that help participants to

understand ethical aspects of decision making.

Whistleblowers

People who expose misdeeds of others

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.

Maintaining High Ethical Standards in the Workplace:

Maintaining High Ethical Standards in the Workplace:

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

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.

Organizational Stakeholders Those persons, groups, and

other organizations directly affected by the behavior of the organization and holding a stake in its performance.

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.

Perspectives on Corporate Social 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

Someone who recognized that certain groups in their communities area experiencing difficulties and they seek new ways to solve the problems.

They undertake tasks for the benefit of society rather than for personal profit.

They search out things that are not working for those who need them.

They see to solve the problem first by changing the system, then by spreading the solution, and lastly by working to persuade entire societies to take up the challenge to change.

What is a Social Entrepreneur?