Chapter Twelve
Ethics and Social
Responsibility
After reading this chapter,
you should be able to:
1
2
3
4
5
6
7
Identify the philosophical principles behind
business ethics.
Explain how values relate to ethics.
Identify factors contributing to lax ethics and
common ethical temptations and violations.
Apply a guide to ethical decision making.
Describe the stakeholder viewpoint of social
responsibility and corporate social performance.
Present an overview of social responsibility
initiatives.
Summarize the benefits of ethical and socially
responsible behavior, and show how managers can
create an environment that fosters both.
ENRON
TYCO
NEW
TARGETS
NEW
ISSUES
Philosophical Principles of
Business Ethics
Consequences - If no
one gets hurt, the
decision is ethical.
When attempting to
decide what is right
and wrong,
managers can focus
on:
Duties, obligations, and
principles - If a decision
violates a universal
principle, it is unethical.
Integrity - If the person in
question has good character,
he/she is behaving ethically.
Alternative Views of Ethical
Behavior
 Utilitarian - greatest good to the
greatest number of people
 Individualism - primary commitment
is to one’s long tem self-interests
 Moral-rights - respect the
fundamental rights of people
 Justice - ethical decisions treat
people fairly according to rules
Factors Contributing to Ethical
Problems

An individual’s desire to maximize self-gain
at the expense of others

An organizational atmosphere that
condones unethical behavior

Moral laxity - slippage in moral behavior
because other issues seem more important

Pressure from higher management to
achieve organizational goals

Strength of relationships among people
Ethical Temptations and Violations
Corporate
espionage
Stealing from
employers &
customers
Misuse of
corporate
resources
Divulging
confidential
information
Misuse of
corporate
resources
Treating
people
unfairly
Conflict of
interest
Poor
cyberethics
A Guide to Ethical Decision Making
1
Is it right?
2
Is it fair?
3
Who gets hurt?
4
Would you be comfortable if the details of your
decision were reported on the front page of your
newspaper or throughout the company?
4
Would you tell a child it was OK to do it?
6
How does it smell?
Owners
Stockholders
Employees
Board of Directors
Customers
External
Stakeholders
Government Agencies
Financial Institutions
Suppliers
Creditors
Labor Unions
Competitors
Special Interest Groups
Customer Groups
Environmental
Management
Compassionate
Downsizing
Acceptance
of Whistle
Blowers
Social
Responsibility
Initiatives
Community
Redevelopment
Projects
Work/Life
Programs
Social
Leaves of
Absence
Creating an Ethical and
Socially Responsible Work Place
Create formal
mechanisms
to monitor
ethics
Offer
training
programs
Confront
ethical
deviations
Provide
written codes
of conduct
Lead by
example
Talk about
the issues
ETHICS IN ACTION
 Doing Business in
Southern China