MANAGEMENT
RICHARD L. DAFT
Managing Ethics and
Social Responsibility
CHAPTER 5
chapter5
Learning Outcomes
•
Define ethics and explain how ethical behavior relates to behavior governed by
law and free choice.
•
Explain the utilitarian, individualism, moral-rights, and justice approaches
for evaluating ethical behavior.
•
Describe the factors that shape a manager’s ethical decision making.
•
Identify important stakeholders for an organization and discuss how managers
balance the interests of various stakeholders.
•
Explain the bottom-of –the pyramid concept and some of the innovative
strategies companies are using.
•
Explain the philosophy of sustainability and why organizations are embracing
it.
•
Define corporate social responsibility and how to evaluate it along economic,
legal, ethical, and discretionary criteria.
•
Discuss how ethical organizations are created through ethical leadership and
organizational structures and systems.
3
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chapter5
Will You Be A
Courageous Manager?
• Managers exercise the strength of their
moral beliefs and sense of justice
• Moral lapses and financial scandals has
made ethical and courageous behavior an
important trait for today’s managers
4
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Ethics
chapter5
The code of moral principles and
values that govern the behaviors of
a person or group with respect to
what is right or wrong.
5
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chapter5
Managerial Ethics
• Ethics can be difficult to define
• Ethical issues are exceedingly complex
• Managers face a variety of difficult
situations
• Ethics fall between law and free choice
6
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chapter5
Ethical Dilemmas: What
Would You Do?
• An ethical dilemma arises in a situation
concerning right or wrong when values
are in conflict
• Managers and employees are the moral
agents who must make ethical choices
• Decisions about advertising, operations,
and Internet usage are all dilemmas YOU
might face
7
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chapter5
Criteria for Ethical
Decision Making
• Utilitarian approach – moral behaviors should produce the
greatest good for the greatest number
• Individualism approach – acts are moral when they
promote the individual’s best long-term interests
• Moral Rights Approach – moral decisions are those that
best maintains the rights of those affected
• Justice Approach – decisions must be based on standards
of equity, fairness, and impartiality
• Disruptive Approach – different treatment of people should
not be based on arbitrary characteristics
8
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chapter5
Defining Justice
Disruptive Justice – different treatment of
people should not be based on arbitrary
characteristics.
Compensatory Justice – individuals
should be compensated for the cost of
their injuries by the party responsible.
9
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chapter5
Manager Ethical Choices
An important personal trait that mangers poses is their
stage of moral development
10
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chapter5
Globalization and Ethics
• Globalization makes ethical issues more complex
• Bribes are common practice in many countries
• Transparency International ranks countries based on Bribe
Payers Index
11
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What is Corporate
Responsibility?
chapter5
Corporate Social
Responsibility (CSR) is the
obligation of organization
management to make
decisions and take actions
that will enhance the
welfare and interests of
society as well as the
organization
12
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chapter5 Organizational Stakeholders
Stakeholders are any group within or outside the organization
that has a stake in the organization’s performance.
13
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chapter5
The Bottom of
the Pyramid (BOP)
• Sometimes called base of the pyramid
• Alleviate poverty and social ills while making profits
• Selling to the world’s poorest people
• 4 Billion people make up the lowest level of the
world’s economic pyramid
• These people have traditionally been underserved
• Companies can make money while addressing
global poverty, environmental destruction, social
decay and political instability
14
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chapter5
The Ethic of Sustainability
• Sustainable Development
– Economic Development that generates wealth
– Meets the needs of current generation
– Saving the environment for future generations
• Managers are weaving sustainability into
strategic decisions
15
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chapter5
Evaluating Corporate
Responsibility
16
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chapter5
Managing Company Ethics
and Social Responsibility
Code of Ethics – formal statement of the
organization’s values regarding ethics and
social issues
Ethical Structures – systems, positions and
programs to implement ethical behavior
Whistle-Blowing – employee disclosure of
illegal, immoral, or illegitimate practices
17
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chapter5
The Ethical Organization
18
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The Business Case for Ethics
chapter5
and Social Responsibility
• Paying attention to ethics and social
responsibility is as important as profits
and costs
• Ethical and social actions impact
financial performance
• Companies are beginning to measure
nonfinancial factors that create value
• Customers pay attention to a company’s
ethics and social responsibility
19
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