Social Responsibility &
Ethics in Management
Chapter 3
Prepared by C.J. Bamforth
Definitions
• ‘Organisational social responsibility refers to an
organisation’s obligation to act to protect and improve
society’s welfare as well as its own interests.’
(Bartol et al, 2011, p.72)
• ‘Managerial ethics are the standards of conduct or
moral judgement managers use in their work’
(Bartol et al, 2011, p.72)
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Learning Objectives
• LO1 – Three major perspectives on corporate social
responsibility and the major stakeholder groups often
mentioned in conjunction with social responsibility.
• LO2 –Assess the extent to which organisational social
responsibility pays.
• LO3 – The characteristics of vanguard companies.
• LO4 – Monitoring social demands and expectations.
• LO5 – Internal organisational social response mechanisms.
• LO6 – Three major types of managerial ethics.
• LO7 –Ethical guidelines for managers and the actions they can
take to handle ethical situations to avoid ethical conflicts.
• LO8 – Describe the situational factors influencing ethical
behaviour and outline mechanisms for ethical management.
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LO1 –Major Perspectives
The Invisible
Hand
The Hand of
Government
The Hand of
Management
Make profits &
obey the law
Make profits
within the law
Protect &
improve
society’s
welfare
Look to market
to set CSR
guidelines
Look to laws &
legal process to
set CSR
guidelines
Look to own
concern for
society to set
CSR guidelines
What approach do the organisations you know adopt?
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Social Stakeholders
Employees
Shareholders
Customers
Social
Stakeholders
International
community
Of the organisations you
know, who do they protect
and why?
Local
community
Society
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LO2 –Does CSR Pay?
Does CSR
increase
profits?
Results are
mixed, but
some say yes
What are the pros and cons of being socially responsible?
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LO3 –Promoting Innovation: Vanguard
Companies
Satisfy all
stakeholders
• Shareholder
interests are
best served
by satisfying
all
stakeholders
needs
Have higher
purpose
Value
continuous
learning
Aim high
• Organisations • See flexibility and • Being the
see themselves responsiveness to best in all
environmental
they do
as having a
CSR leadership needs are key to
success
role in society.
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LO4 – Monitoring Social Demands and
Expectations
Social
forecasting
Social
scanning
Why are the
colours of the
outer boxes
different from
each other?
Finding
out
what’s
going on
Issues
management
Opinion
surveys
Social audits
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LO5 – Internal Social Response
Mechanisms
Individuals
Temporary task
forces
Committees
Responding
to internal
CSR
concerns
Combination
Departments
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LO6 –Types of Managerial Ethics
Immoral
Amoral
Moral
• Lacks ethical
principles
• Actively
opposes ethical
behaviour
• Neither
immoral nor
moral
• Ignores or not
aware of ethical
issues
• Inattentive &
Insensitive
• Follows ethical
principles and
precepts
• Success
through ethical
behaviour
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LO7 – Ethical guidelines for Managers
Obey the law
Tell the truth
Show respect
to others
Do no harm
Treat others as
you would like
to be treated
What are the strengths and weaknesses of these guidelines?
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Moral Development Stages
Your partner
is sick
There is a
drug
You can’t
afford it
Is your
behaviour
ethical?
What do you
do?
No one will
do a deal
with you
Look at the ethical
guidelines
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LO8 –Situational factors Influencing Ethical
Behaviour and how to Manage them
Your moral
level
You as a
manager
Individual
values
Organisational
culture
Moral intensity
of issue
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Stages of Moral Development
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Ethical Decision Making Model
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Individual Values
Practical
Economic
What is
your
value
system?
Gratifying
Moral
Do you think these value
perspectives change as
you age?
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Ethical Career Issues
How do you
do this?
Assessing
your own
values &
protecting
yourself
Anticipating
ethical
conflicts
How do you
do this?
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LO8 –Situational Factors Influencing Ethical
Behaviour
External factors
Internal factors
Ethical management
mechanisms
Environmental
competitiveness
Pressure for high
performance
Level of
environmental
bounty
Labour
dissatisfaction
Extreme
dependency on
others or
resources
Delegation &
encouragement to
innovate
• Increase awareness of
diversity
• Get top management
commitment
• Establish a code of ethics
• Establish ethics
committees
• Carry out ethics audits
• Set up an ethics hotline
• Have ethics training
How do these ethical management mechanisms help manage these
external and internal factors?
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Conclusion
• How we act towards our social and ethical
responsibilities may be influenced by multiple factors:
–
–
–
–
External environmental factors.
Internal environmental factors.
Societal values and expectations.
Our own personal viewpoint.
• Whilst ethical and social responsibility decision
guidelines help, it needs to be recognised that these
types of decisions are often complex.
• Clear organisational guidelines and support
mechanisms are needed.
• We need to understand the consequences of our social
and ethical decisions before we make them.
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