Is it an act of social responsibility if:
• A business enterprise pays their taxes?
– What if the taxes they pay are “the minimum” that
they can pay?
• A business enterprise complies with, or
conducts business in accordance with,
government regulations?
– Is it social responsibility or legal compliance?
• A business enterprise lays off employees
because their profits don’t meet (analyst’s &/or
shareholder’s) expectations?
Ways of Viewing Business & Society
Economic Need
Business
Natural Environment
B
S
Society
Envir.
Opposing Views:
Shareholders
• Inc. Cost & Dec.
profits
• Move away from bus.
purpose
• Bus. lacks
accountability
• Bus. is a Private
Enterprise
• Bus. manager’s are
elected officials
vs
Stakeholders
• Inc. profit in long run
• Inc. Public Image
• Dec. Regulations
imposed
• Bus. has the resources
• Society & Business
are one, not two
Organization as Sub-system of Society
Society
Organiz.
Society
Should business management:
• Only consider their fiduciary responsibilities to the
stockholders of the enterprise, letting the
“invisible hand” attend to the public good? Or
should they give equal weight/attention to
promoting the public good? Why?
OR
• Take as an equal consideration the social
consequences of their decisions? Why?
Rights & Responsibility
Rights
Organization
Society
Responsibilities
Responsibility to Stakeholders
• Principle of Corporate Rights
– An organization and its managers
may not violate the legitimate
rights of others to determine their
own future.
• Principle of Corporate Effects
– An organization and its manager
are responsible for the effects of
their actions on others.
Central Issue
Why be “Socially
Responsible”?
Benefits for Being Socially Responsible
• Since the organization is part of
society, if society wins, the
organization wins
• Retention of socially responsible
people
• Ease of recruiting
• Minimizes government intervention
• Tax incentives for employees to
contribute
• Solidifies relationships with
Social Responsibility Strategies
Proac tivity
Pos.
Neg.
Social Leadership
Accomodative
Defensive
Obstructionist
None
Maximal
Commitment to Corporate Social Responsibility
Ethics & Management
• Can the management or an organization
seek profit maximization and to serve the
public good at the same time? Why/How?
• Can organizations be unethical or is it
simply an issue of unethical employees?
• What makes an act/behavior/decision
“unethical”?
What would you do?
You are the new general manager of an old
manufacturing facility that is the sole employer
of a small rural town. Soon after you take the
position, you discover that the facility is
polluting the river that runs through the town -potentially causing long term health problems.
This has been going on for quite awhile, and
you suspect that the local EPA inspector has
been taking payoffs from your company to keep
it quiet. The company will not invest in fixing
the facility because it is so old.
Being Ethical:
• Is not about following the law
• Is not about following whatever society accepts as
OK
• Is not about the individual in isolation
• Is about being in relationship with other living
things/beings—collective interaction (the social),
the inter-subjective/interpersonal realm of life—It
is about the WE.
• Is about following well-based standards (grounded
in moral beliefs) of right and wrong
– About Goodness, Justness, Rightness, Reciprocity,
Fairness
Ethical Approaches
 Consequence Focused
 Ethical action is one where the alternative that
provides the greatest good for the greatest number
(e.g. cost-benefit analysis & differentiating between
those who count and those who don’t) is preferred.
 Rights Focused
 Ethical action is one that respects the moral rights
of everyone—actions are wrong to the extent that
they violate the rights of individuals. E.g. right to
privacy, to truth, to not be injured, to free speech
etc. Accordingly, we each have an obligation to
uphold the rights of others.
More Ethical Approaches
 Integrity/Virtue Focused
 Assumes there are certain ideals toward which we
strive which provide for the full development of our
humanity. E.g. honesty, courage, compassion,
integrity, fairness…etc. By acting in accordance
with these we promote our development as well as
that of the community.
 Justice Focused
 Ethical actions must be fair—equals treated
equally; un-equals treated un-equally.
 Common-Good Focused
 Ethical action is focused on the good of the society—
individuals good is inextricably linked to that of
society. Focus on social policies, systems and
Making Sound Ethical Decisions
• Understand the situation and the dilemma
– Get all relevant facts from multiple perspectives
• Identify all stakeholders (direct and indirect)
• Establish who have the greater stake &/or special needs
•
•
•
•
– Identify the competing/conflicting rights & values
Develop several alternative courses of action
– Consequences, Rights, Justice, Integrity/Virtue, Common
Good
Evaluate & compare the alternatives
Choose the most appropriate (the most “right”) alternative
– Check your inner (intuitive) sense of the course chosen
– If you were the one most burdened by the choice, how would
you feel about the choice and its rationale?
– Put it to the “front page test”
Take action and follow up
Example: Nutritional Foods
• What is the situation? The dilemma ?
– What are the relevant facts from multiple perspectives
• Who are the stakeholders (direct and indirect)
• Who has the greater stake &/or special needs
•
•
•
•
– What are the competing/conflicting rights & values
What are the alternative courses of action
– Consequences, Rights, Justice, Integrity/Virtue,
Common Good
How does each compare?
Which alternative is “best”? Why this choice?
– Check your inner (intuitive) sense of the course chosen
– If you were the one most burdened by the choice, how
would you feel about the choice and its rationale?
– Put it to the “front page test”
What now? What should your follow-up action be?
Group Exercise: Develop a rationale for your
decision and prepare to explain it to the class
• The Case of the Plant Relocation
• The Case of the Employee’s Right to Know
– How similar to Enron?
• The Case of the Million Dollar Decision
What is it about each of the following
that would cause unethical behavior?
•
•
•
•
•
•
•
•
Imbalance between work and family
Poor internal communications
Poor leadership
Excessive work hours/load
Pressure to meet sales, budget or profit goals
Personal financial worries
Insufficient resources or management support
No recognition of achievements
Strategies to Organizational Ethics
• Compliance Based
– Formal Codes of Conduct
– Ethics Training (e.g. decision
making)
• Integrity Based
– Values & Vision
– Ethics Education & Training