Summary of the Management hook’ Chapter S Social Responsibility and Ethics What is Social Responsibility? : Discuss what it means to he socially responsible and what factors influence that decision. Managers regularly face decisions that have a dimension of social responsibility in areas such as employee relations, philanthropy, pricing, resource conservation, product quality and safety, and doing business in countries that devalue human rights. Prom obligations to responsiveness to responsibility Social obligation: even a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities.
The organization does What its obligated to do and nothing more. Classical view (of social responsibility): the view that management’s only social responsibility is to maximize profits. Social responsiveness and social responsibility reflect the socioeconomic view: the view that management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare. Corporations are not independent entities responsible only to stockholders, but have an obligation to the larger society. Social responsiveness: when a firm engages in social actions in response to some popular social need.
Managers are guided by social norms and values and make practical, market-oriented decisions about their actions, Social responsibility: a business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society, The business obeys the law and cares tort its stockholders, but adds an ethical imperative to do those things that make society better. For example, social obligation is when you meet the pollution control standards and don’t discriminate people over age 40 in job promotions.
Social responsiveness is when you provide on-site child-care ND use recycles paper because the consumers ask for it. Should organizations be socially involved? Exhibit 5-1 A relationship is affected by various contextual factors such as firm size, industry economic conditions and regulatory environment. Causation is another concern: social involvement doesn’t necessarily cause higher economic performances. Social responsible investing funds (SIR): a way for individual investors to support socially responsible companies. Social screening: applying social criteria (screens) to investment decisions.
A company’s social actions don’t hurt its economic performance. Given political and societal pressures to be socially involved, managers need to take social issues into consideration. Green Management and Sustainability: Explain green management and how organizations can go green. Green management managers consider the impact of their organization on the natural environment. How organizations go green Some do no more than required by law,’ they fulfill their social obligation. Other radically change their products. Model (shades of green): I. Eight green legal approach simply doing What is required legally. 2. Market approach: respond to environmental preferences of customers. . Stakeholder approach: organization works to meet the environmental demands of multiple stakeholders such as employees, suppliers or community. 4 dark green = activist approach: looks for ways to protect the earth’s natural resources. Shows social responsibility. Evaluating green management actions Global Reporting Initiative (GRID): a company that develops guidelines tort environmental sustainability.
International Organization for Standardization (ISO): a company that develops standards for environmental challenges Global 100 list: a list of the most sustainable corporations in the world, To be named n this list a company has displayed a superior ability to effectively manage environmental and social factors. Managers and Ethical Behavior: Discuss the factors that lead to ethical and unethical behavior. As managers plan, Organize, lead and control, they must consider ethical dimensions. Ethics: principles, values, and beliefs that define what is right and wrong behavior.
Managers need to consider the process and Who’s affected by the result. Factors that determine ethical and unethical behavior Whether someone behaves ethically or unethically when faced with an ethical dilemma is influenced by several things: . Is or her stage of moral development – individual characteristics – the organization’s structural design – the organization’s culture – the intensity of the ethical issue Stage of moral development Moral development in three levels, each having two stages.
At each successive stage, an individual’s moral judgment becomes less dependent on outside influences and more internalized. The first level is the presentational level: a person’s choice between right or wrong is based on personal consequences from outside sources. The second level is the conventional level: ethical decisions rely n maintaining expected standards and living up to the expectations of others. The third level is the principled level: individuals define moral values apart from the authority of the groups to which they belong or society in general.
Individual characteristics Two individual characteristics: values and personality. They play a role in determining whether a person behaves ethically. Values: basic convictions about what is right and wrong. Values are broad and cover a Wide range Of issues. The stage of moral development is a measure of independence from outside influences. Ego strength: a personality measure Of the strength Of a person’s convictions. People with a high ego strength are likely to resist impulses to act unethically, they follow their convictions.
Locus of control: a personality attribute that measures the degree to which people believe they control their own fate. People with an internal locus of control believe they control their own destinies. People with an external locos of control believe what happens to them is due to luck or chance. Structural variables An organization’s structural design can influence whether employees behave ethically. Structures that minimize ambiguity and uncertainty with formal rules and regulations and those that continuously remind employees of what is ethical – are more likely to encourage ethical behavior.
Other structural variables that influence ethical choices: goals, performance appraisal system, and reward allocation procedures. A reward or appraisal system can work out, however when the employees are pressured because there will be punishments or the rewards are really necessary. The employees will be more likely to compromise their ethical standards to get the reward and not get punished. Organization’s culture A culture that encourages ethical behavior: a culture that’s high in risk tolerance, control, and conflict tolerance.
The employees are encouraged to be aggressive and innovative, and are aware that unethical practices will be discovered, and feel free to challenge expectations they consider unrealistic or undesirable. Values-based management: the organization’s values guide employees in the way they do their jobs. Organization’s managers: are responsible for creating an environment that encourages employees to embrace the culture and the desired values as they do their jobs. If a culture is strong and purports high ethical standards, it has a powerful and positive influence on the decision to act ethically or unethically.
Issue intensity The intensity of the ethical issue itself or how important an ethical issue is to an individual (6 characteristics) exhibit 5-5: – greatness of harm – consensus of wrong – probability of harm – immediacy of consequences – proximity to victims – concentration of effect These factors suggest that: a. The larger the number of people harmed, the more agreement that the action is wrong b. The greater the likelihood that the action will cause harm, the more immediately the consequences Of the action Will be felt c. He closer the person feels to the victim(s) ant the more concentrated the effect of the action on the victim(s), the greater the issue intensity or importance. Ethics in an international context Social and cultural differences between countries are important factors that determine ethical and unethical behavior. LIST. Managers are guided by the Foreign Corrupt Practices Act (PAPACY: in the case of payments to influence foreign officials or politicians. It is illegal to knowingly corrupt a foreign official.
The United Nations Global Compact, are principles for doing business globally in the areas of human rights, labor, the environment, and anti-corruption. The Organization for Economic Co-operation and Development (COED): fighting bribery and corruption in international business is a high priority. Encouraging Ethical Behavior: Describe management’s role in encouraging ethical behavior. Employee selection A selection process is a way to hire employees with ethical behavior, Codes of ethics and decision rules Code of ethics: a formal statement of an organization’s primary values and the ethical rules it expects its employees to follow.
Are used globally but not always successful. In the code Of ethics exhibit 5-7: be a dependable organizational citizen, no not do anything unlawful or improper that will harm the organization, be good to customers. TO keep the code Of ethics working: 1. Leaders should model appropriate behavior and reward. 2. Managers should continually reaffirm the importance of the ethics code. 3. The stakeholders should be considered as an ethics code is developed or improved. 4. Managers should communicate and reinforce the ethics code regularly. S. Managers should use the five-step process: A process for addressing ethical dilemmas: 1.
What is the ethical dilemma? 2. Who are the affected stakeholders? 3. Which personal, organizational, and external factors are important in this decision? 4. What are possible alternatives? S. What is my decision and how will I act on it? Leadership Top managers are role models in terms of both words and actions, though what they do is far more important than what they say. Job goals and performance appraisal Under the stress of unrealistic goals, otherwise ethical employees may feel hey have no choice but to do whatever is necessary to meet those goals.
To encourage ethical behaviors, both ends and means should be evaluated. Ethics training Ethics are taught When people are young, however teaching ethical problem solving can make an actual difference in ethical behaviors: moral development, awareness Of ethical issues in business. Independent social audits Independent social audits evaluate decisions and management practices in terms of the organization’s code of ethics. Such audits can be regular or occur randomly, Auditors should be responsible to the company’s board of directors and present heir findings directly.
Protective mechanisms Employees who face ethical dilemmas need protective mechanisms so they can do what’s right without fear of punishment. An organizations might assign ethical counselors for employees facing an ethics dilemma. Other organizations have appointed ethics officers who design, direct, and modify the organization’s ethics program. The Ethics and Compliance Officer Association is the world’s largest group of ethics and compliance practitioners. Social Responsibility and Ethics Issues in Today’s World: Discuss current social responsibility and ethics issues.
Managing ethical lapses and social irresponsibility Irresponsible and unethical practices by managers in all kinds Of organizations haven’t gone away. Men are more likely to act unethical when it could harm their masculinity. Students are also unethical, many cheat and accept some level of violence. Ethical leadership Be a good role model by being ethical and honest. Share your personal values by regularly communicating them to employees. Stress the organization’s or team’s important shared values. Use the reward system to hold everyone accountable to the values.
Protection of employees who raise ethical issues It’s important for managers to assure employees who raise ethical concerns or issues that they will face no personal or career risks. Whistle-blower: individual who raises ethical concerns or issues to others. A way for employees to step up against unethical behavior: toll-free ethics hotness, create a culture where bad news can be heard and acted on. The federal legislation Serbians-Lowly: offers some legal protection, any manager who retaliates against an employee for reporting violations faces a stiff penalty: a Ill-year jail sentence. Not always working) Social entrepreneurship Social entrepreneur: an individual or organization who seeks out opportunities to improve society by using practical, innovative, and sustainable approaches. Businesses promoting positive social change Business can engage in activities that promote positive social change through corporate philanthropy and through employee volunteering efforts. Corporate philanthropy Corporate philanthropy can be an effective way for companies to address societal problems. Corporations support social causes: campaigns like AIDS Red.
Corporations donate money to causes that employees and customers care bout Corporations have tended their own foundations to support various social Issues. Employee volunteering efforts Employee volunteering is another popular way for businesses to be involved in promoting social change. Ex, Organizations sent small teams to third world countries, volunteer in their own communities, build houses for people in need etc.. Employees might enter these volunteer programs when paid time off is provided or by created volunteer events. These employee volunteering efforts benefit communities and also enhance employees’ work efforts and motivations.
