CHAPTER 14: ETHICS, SOCIAL
RESPONSIBILITY, AND
SUSTAINABILITY
Business Leadership: Management Fundamentals
John R. Schermerhorn, Jr., Barry Wright, and Lorie Guest
© John Wiley & Sons Canada, Ltd.
VIDEO: BEN & JERRY’S
Ben & Jerry’s: The Greenest Ice
Cream Around
(external link)
© John Wiley & Sons Canada Ltd.
WHAT IS ETHICAL BEHAVIOUR?
• Ethics:
– Code of moral principles
– Set standards of “good” or “bad” or “right” or “wrong” in
one’s conduct
• Ethical behaviour:
– What is accepted as good and right in the context of the
governing moral code
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WHAT IS ETHICAL BEHAVIOUR?
(CONT’D)
• Law, values, and ethical behaviour:
– Legal behaviour is not necessarily ethical behaviour
BRAINSTORM: CAN YOU THIN OF AN EXAMPLE?
– Personal values help determine individual ethical behaviour
– Values span broad beliefs:
• beliefs and attitudes that help determine your behaviour
– Terminal values: preferences about desired ends
– Instrumental values: preferences regarding the means
to desired ends
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ALTERNATE VIEWS OF ETHICS
1. Utilitarian view of ethics:
– Greatest good to the greatest number of people.
2. Individualism view of ethics:
– Primary commitment is to one’s long-term self-interests.
3. Moral-rights view of ethics:
– Respects and protects the fundamental rights of all people.
4. Justice view of ethics:
– Fair and impartial treatment of people according to legal
rules and standards
• Procedural justice: policies and rules fairly applied
• Distributive justice: equal treatment for all people
• Interactional justice: people treated with dignity and
respect
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FIGURE 14.1 FOUR VIEWS OF
ETHICAL BEHAVIOUR
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ETHICS IN THE WORKPLACE
• http://www.youtube.com/watch?v=vstg5c3c3g8
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ETHICS IN THE WORKPLACE
• An ethical dilemma occurs when certain choices may be
considered unethical, despite possible potential for personal
and/or organizational benefit
• Ethical dilemmas include:
– Discrimination
– Sexual harassment
– Conflicts of interest
– Customer confidence
– Organizational resources
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ETHICAL DECISION MAKING
• Checklist for dealing with ethical dilemmas:
1. Recognize the ethical dilemma
2. Get the facts
3. Identify your options
4. Test each option: Is it legal? Is it right? Is it beneficial?
5. Decide which option to follow
6. Double-check decision by asking “spotlight” questions:
• “How would I feel if my family found out about my
decision?”
• “How would I feel about this if my decision were in the
local news?”
7. Take action
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HOW DO WE CONVINCE OURSELVES
THAT UNETHICAL BEHAVIOUR IS OKAY?
• Unethical behaviour can be rationalized by convincing yourself
that:
–
–
–
–
The behaviour is not actually illegal
The behaviour is truly in everyone’s best interests
Nobody will ever find out
The organization will “protect” you
HAVE YOU EVER FOUND YOURSELF FALLING INTO THIS TRAP?
© John Wiley & Sons Canada Ltd.
MAINTAINING HIGH ETHICAL
STANDARDS
• Whistleblowers:
– Expose the misdeeds of others in order to:
• Preserve ethical standards
• Protect against wasteful, harmful, or illegal acts
– Laws protecting whistleblowers may vary
THINK – PAIR – SHARE:
WOULD YOU EVER EXPOSE SOMEONE ELSE? WHY/WHY NOT?
or
WHAT WOULD SOMEONE HAVE TO DO FOR YOU TO STEP IN
AND SAY SOMETHING?
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SOCIAL ENTREPRENEURSHIP
• A unique form of entrepreneurship that seeks novel ways to
solve pressing social problems at home and abroad
• Examples include:
– Housing and job training for homeless
– Bringing technology to poor families
– Improving literacy among disadvantaged youth
– Offering small loans to start minority-owned businesses
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SOCIAL RESPONSIBILITY
• Corporate social responsibility:
– Obligates organizations to act in ways that serve both its
own interests and the interests of society at large
In 1988, Jeffery Hollender
founded cleaning, paper, and
personal care products company
Seventh Generation. The
company focuses on producing
products that have a reduced
environmental impact, avoiding
the harsh chemicals that are part
of many of today's leading
cleaning and personal care
products.
© John Wiley & Sons Canada Ltd.
STAKEHOLDER ISSUES AND
ANALYSIS
• Organizational stakeholders:
– Those persons, groups, and other organizations directly
affected by the behaviour of the organization and holding a
stake in its performance
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FIGURE 14.7 SAMPLE STAKEHOLDER
MODEL
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PERSPECTIVES ON 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
– Examples:
– Environment
– People in Community
– Employee Benefit
http://www.youtube.com/watch?v=SXOJEH0se9A
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EVALUATING CORPORATE SOCIAL
PERFORMANCE
• Social Responsibility Audit: assesses organization’s
accomplishments in areas of CSR
– Asks: is the organization’s…
1. Economic responsibility met? Is it profitable?
2. Legal responsibility met? Does it obey the law?
3. Ethical responsibility met? Is it doing the right thing?
4. Discretionary responsibility met? Does it contribute to
the broader community?
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FIG. 14.8 CRITERIA FOR EVALUATING
CORPORATE SOCIAL PERFORMANCE
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EVALUATING CORPORATE SOCIAL
PERFORMANCE (CONT’D)
• Strategies for pursuing social responsibility:
– Obstructionist: meets only economic responsibilities
– Defensive: meets economic and legal responsibilities
– Accommodative: meets economic, legal, and ethical
responsibilities
– Proactive: meets economic, legal, ethical, and discretionary
responsibilities
© John Wiley & Sons Canada Ltd.
FIGURE 14.9 FOUR STRATEGIES OF CORPORATE
SOCIAL RESPONSIBILITY—FROM
OBSTRUCTIONIST TO PROACTIVE BEHAVIOUR
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ETHICS AND THE ENVIRONMENT
• How “green” is a business? How can a business be “green”? Why
is it so important in today’s society for businesses to go “green”?
• http://www.youtube.com/watch?v=TTNzuXZyl28
YOU BE THE JUDGE
ETHICAL OR NOT?!
• http://www.youtube.com/watch?v=bd2jFAyEnrY
What do you think of the outcome?
© John Wiley & Sons Canada Ltd.
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© John Wiley & Sons Canada Ltd.