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Module 3
Module 3
Ethics and
Social Responsibility
3.1
• How do ethics and ethical behavior play
out in the workplace?
• How can we maintain high standards of
ethical conduct?
• What should we know about the social
responsibilities of organizations?
ETHICS IN THE WORKPLACE
Ethics in the workplace
Ethical Behavior
• Ethical behavior is values driven.
• What is considered ethical varies among
moral reasoning approaches.
• What is considered ethical can vary across
cultures.
• Ethical dilemmas arise as tests of personal
ethics and values.
• People have tendencies to rationalize
unethical behaviors.
• Ethics
– A code of moral standards of conduct for what
is “good” and “right” as opposed to what is
“bad” or “wrong”.
g
• Ethical Behavior
– That which is “right” or “good” in the context of
governing moral code.
– Ethical behavior is value driven
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ETHICS IN THE WORKPLACE
ETHICS IN THE WORKPLACE
Values
Moral Reasoning
• Values
• Moral Reasoning
– Broad beliefs about what is appropriate
behavior
– Reasons for various ethical practices
• Terminal Values
– Preferences about desired end states
• Instrumental Values
– Preferences regarding the means to desired
ends
ETHICS IN THE WORKPLACE
ETHICS IN THE WORKPLACE
Ethics and Culture
Ethics and Culture
• Cultural Relativism
– Suggest that there is no one right way to
behave; cultural context determines ethical
behavior
•
•
•
•
•
Excerpt From Universal Declaration of Human Rights
United Nations
Article 1—All human beings are born free and equal in
dignity and right
Article 18—Everyone has the right to freedom of thought
thought,
conscience, and religion
Article 19—Everyone has the right to freedom of opinion
and expression
Article 23—Everyone has the right to work, to free choice
of employment, to just and favorable conditions of work
Article 26—Everyone has the right to education
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ETHICS IN THE WORKPLACE
ETHICS IN THE WORKPLACE
Ethical Dilemma
Ethical Dilemma
• Ethical Dilemma
– A situation that, although offering potential
benefits, is unethical.
–O
One off th
the mostt common ethical
thi l dil
dilemmas
occurs when a company’s culture conflicts
with an employee’s
personal ethics.
ETHICS IN THE WORKPLACE
Ethics and Work
The Wall Street Journal reports:
• 36% of workers calling in sick are lying.
• 35% keep quiet about co-worker misconduct.
• 12% of job resumes contain falsehoods
falsehoods.
• Managers are more likely than other workers
to report wrongdoing.
• Managers with 0–3 years experience feel
most pressure to violate personal ethics.
• Checklist for dealing with ethical dilemmas
Step 1
Recognize the ethical dilemma.
Step 2
Get the facts.
Step 3
Identify your options.
St 4
Step
Test each option: Is it legal? Is it right?
Is it beneficial?
Step 5
Decide which option to follow.
Step 6
Ask the “Spotlight Questions”: To
double check your decision.
“How would I feel if my family found
out about my decision?”
“How would I feel if the local
newspaper printed my decision?”
Step 7
Take action
ETHICS IN THE WORKPLACE
Rationalizing Unethical Behavior
Four reasons:
1. “What I’m doing is not really illegal.”
2. “My behavior is in everyone’s best interests.”
3. “Nobody will ever find out what I’ve done.”
4. “The organization will protect me.”
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3.2
MAINTAINING HIGH STANDARDS
Maintaining high standards
Influence on Moral Development
• Personal factors moral development
influence ethical conduct.
• Training in ethical decision making may
improve ethical conduct.
• Protection
P t ti off whistleblowers
hi tl bl
may
encourage ethical conduct.
• Managers acting as positive role models
can inspire ethical conduct.
• Formal codes of ethics set standards for
ethical conduct
• Ethical Frameworks
MAINTAINING HIGH STANDARDS
MAINTAINING HIGH STANDARDS
Ethics Training
Ethics Training
• Ethics Training
• Highlight the risk of public exposure of
one’s actions:
– Seeks to help people understand the ethical
aspects of decision making and to incorporate
high
g ethical standards into their daily
y
behavior.
• Code of Ethics
– Personal rules and strategies for making
ethical decisions
• Lawrence Kohlberg
– Three levels of moral development
• “How would I feel if my family found out about my
decision?”
• How would I feel if the local newspaper printed my
decision?
– A formal statement of values and ethical
standards.
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MAINTAINING HIGH STANDARDS
MAINTAINING HIGH STANDARDS
Whistleblowing
Management Influence
• Whistleblowers
• Management Behavior
– Persons who expose organizational misdeeds
in order to preserve ethical standards and
protect against
p
g
wasteful,, harmful,, or illegal
g
acts.
– Many whistleblowers were / are fired for their
actions.
– State and federal laws now offer some
protection.
– In order to have a positive impact on ethical
conduct throughout an organization, those at
the top
p must walk the talk.
MAINTAINING HIGH STANDARDS
MAINTAINING HIGH STANDARDS
Management Influence
Codes of Ethics
• Formal codes of ethics set standards for
ethical conduct.
– Explain ethical principles
– Describe expected behavior
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3.3
SOCIAL RESPONSIBILITY
Social Responsibility
Social Responsibility is Serving Society
• Social responsibility is an organization’s
obligation to best serve society.
• Scholars argue cases for and against
corporate
p
social responsibility.
p
y
• Social business and social
entrepreneurship point the way in social
responsibility
• Failures of ethics and social responsibility
prompt calls for stronger governance.
• Stakeholders are the groups that have a
direct interest in the success or failure of
an organization.
SOCIAL RESPONSIBILITY
SOCIAL RESPONSIBILITY
Social Responsibility is Serving Society
Corporate Social Responsibility
• Corporate Social Responsibility
– The obligation of an organization to serve its own
interest and those of its stakeholders
• Triple Bottom Line—how well an organization
performs
f
when
h measured
d nott only
l on
financial criteria, but also on social and
environmental ones.
– Is the decision economically sound?
– Is the decision socially responsible?
– Is the decision environmentally sound?
Socioeconomic View
• Responsibility Increases
long‐run profits
• Improves public image
• Helps avoid government
regulation
• Businesses have
resources and ethical
obligations to act
responsibly
Classical View
• Reduces business profits
Creates higher business
costs
• Dilutes business purpose
• Gives too much social
power to business
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SOCIAL RESPONSIBILITY
SOCIAL RESPONSIBILITY
Social Responsibility is Serving Society
New Business Models
• Virtuous Circle
• Social Business
– Socially responsible actions lead to improved
financial performance.
– Organization is more likely to engage in
socially responsible acts in the future.
• Example: car manufacturers who produce fuelefficient and hybrid cars may see improved
financial performance and introduce more fuel
efficient models.
SOCIAL RESPONSIBILITY
– Business addresses a social problem
• Example: Micro-credit lending
– Social Entrepreneurship
• Example: many non-profits fight poverty or
illiteracy
Governance
Module 3 Case
• Failures of ethics and social responsibility
prompt calls for stronger governance.
• Weak corporate governance can result in
more government regulation.
regulation
• Moral management builds capacities for
self-governance in organizations.
• Tom’s of Maine– Where doing business
means doing good.
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