MGMT 2130
Business Ethics and Social Responsibility
Session #1: Introduction
Agenda
• Introduction to this course:
• What?
• Why?
• How?
2
Let’s Begin with Three Questions
• Why are you here?
• What do you care about in this course?
• How much do you know about this course?
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[Case] P&G’s Competitive Intelligence Challenge
• In spring of 2001, members of P&G competitive analysis department
gathered about 80 documents detailing Unilever’s plans for its U.S. hair
care business over the next three years.
• The documents were obtained by P&G’s competitor intelligence contractor
through “dumpster diving,” which is not a violation of the law.
• At the moment, Unilever had not discovered this and might never know
about it.
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[Discussion] What Should P&G’s Chairman Do?
• Whose interests or concerns should he consider when making the
decision?
• What are the different options for handling this incident? What are
the possible consequences of each option?
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Why He Did What He Did?
• P&G immediately stopped the campaign and fired three managers
responsible for hiring the contractor.
• P&G confessed to Unilever directly. The two companies reached a
settlement involving P&G paying multi-million dollars to Unilever.
• John E. Pepper: "I have been personally involved in ensuring that none
of the information has been or will be used in any P&G plans.”
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[Case] Speeding Bus Killed 19 in Hong Kong
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[Discussion] The Ability to Respond
• “I think many passengers there lost bets at the racecourse so they
were not in a good mood. As they waited for the driver they became
impatient and stirred up some noisy disturbance.” (SCMP)
• “The survivors claimed the driver was ‘throwing a tantrum’ after
being late and getting the blame from impatient passengers.” (SCMP)
• Who should be responsible for the fatal incident?
• If you were the bus driver, how would you have responded to the
passengers in rage?
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Any Similarities?
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MGMT2130: WHAT
• Issues that involve different demands from various stakeholders.
• Business decisions that have significant social or environmental impacts
• Situations where potential conflicts arise among prudential, legal, and ethical aspects
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The Three Dimensions of Actions
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What is business ethics?
• The study of ethics is a branch of philosophy dealing with right and
wrong:… The systematic study of reasoning about how we ought to
act (Singer, 1994)
• Ethics refers to certain kinds of behaviors but are difficult to define in
terms of what ‘is’.
• Business ethics is a set of moral rules that govern how business
decisions are made and how people are treated.
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Instrumental approach
• … There is one and only one
social responsibility of business
– to use its resources and
engage in activities designed to
increase its profits so long as it
stays within the rules of the
game, which is to say, engage in
open and free competition
without deception or fraud
(Friedman, 1970)
• Social issues are not the concern
of businesspeople.
• Business is not equipped to
handle social activities.
• Corporate social responsibility
(CSR) dilutes the primary
purpose of business
• Business has too much power
already
Source: Friedman, M. (1970). The social responsibility of business is to increase its profits. The
New York Times Magazine. 13 September: 70-71: 122-126.
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Social contract approach
• Companies depend on society for
its existence and continued growth.
There is an obligation for
companies to meet the demands of
the society rather than just the
demands of a targeted group of
stakeholders.
• Companies should be recognized as
social institutions as well as
economic enterprises.
•
•
•
•
Enlighten self-interest
Ward off government regulation
Business has the resources
Pro-acting is better than reacting
• [Companies] … are subject to moral
evaluations which transcends the
boundaries of the political systems
that contain them. The underlying
function of [companies] from the
standpoint of society is to enhance
social welfare through satisfying
consumer and worker interests,
while at the same time remaining
within the bound of justice
(Donaldson, 1982)
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• Managers must evaluate not only what is legal, but what they, their
employees, and society consider ethical as well. Companies must also
consider what behaviors their stakeholders will and will not accept.
• Interests in the impact of business in society can be traced back many
centuries. A single definition of CSR will remain elusive. Companies’
responsibilities under the modern business model include
maintaining economic prosperity, improving environmental quality
and contributing to change in social justice.
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Course Structure
• Introduction: What, Why, How
• Macro: Role of Business in Society
Foundations • Micro: Psychology of Corporate (Ir)responsibility
•
•
•
Stakeholders •
•
Strategies
Business and Employees
Business and Customers
Business and Suppliers
Business and Communities
Business and the Natural Environment
• Strategy and Innovation for Sustainability
• Implementing Sustainability Strategy
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MGMT2130: WHY
• No one is an island.
• Our decisions unavoidably affect others and ourselves, especially in
professional settings.
• Without a clear mind, we will make suboptimal decisions and suffer
from unbearable consequences.
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Mindfulness as a Superpower
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MGMT2130: HOW
• This is a discussion-based seminar: A variety of dilemmatic scenarios
will be discussed in class.
• We mindfully observe how we and others respond and reflect on our
observations and feelings.
• We develop awareness, perspectives, and mindset (instead of
academic frameworks).
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Course Materials
• 12 class meetings
• Sessions #11 & 12: Group presentations
• Internet resources (links on Canvas)
• No textbook
• Class notes (downloadable)
• News, videos, articles;
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Assessment
• (a) Attendance
• (b) Individual participation
• (c) Self-reflection essays
• (d) Case analysis report
• (e) Group project
5%
20%
20%
20%
35%
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Individual Assignments
• Two self-reflection essays (20%)
• Mar. 5: One most thought-provoking idea from Session 2, or 3, or 4
• Apr. 23: One most thought-provoking idea from Session 8, or 9, or 10
• What does the idea mean to your personal life or future career?
• Analysis of ‘The Mills’ case (20%)
• Mar. 29: due
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Group Project
• To assume the role of business consultants who review a firm’s
sustainability strategy and give recommendations
• The firm must be a listed company on HKEX
• Deliverables:
• Oral presentation with Q&A (in week 11 or 12)
• Written report (due by May. 21)
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Between Now and Next Class
• Read the syllabus thoroughly
• Read the article, Creating Shared Value, by Porter & Kramer, Harvard
Business Review, 2011
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