Management Chapter 7: Social Responsibility and Managerial Ethics

Social Responsibility

• Social responsibility refers to a business's intention to do what is right and good for society, beyond its legal and economic obligations. This concept is often misunderstood, as many businesses focus solely on increasing profits and neglect the social implications of their actions.

  There are three stages of social responsibility: social obligation, social responsiveness, and social responsibility. Social obligation refers to a business's obligation to meet its economic and legal responsibilities. Social responsiveness is a firm's response to social needs and expectations. Social responsibility is a business's intention to do what is right and good for society.

  Classical and Socioeconomic Views of Social Responsibility

  The classical view of social responsibility is often referred to as the "shareholder approach." This perspective argues that a business's only social responsibility is to maximize profits, and expending resources on social good is unjustifiable. This view has been criticized for its short-sightedness and failure to consider the long-term social implications of business decisions.

  The socioeconomic view, on the other hand, takes a more holistic approach to social responsibility. This perspective argues that management's social responsibility goes beyond profit-making and includes protecting and improving society's welfare. This view is often referred to as the "stakeholder approach."

  The Role of Stakeholders

  Stakeholders play a crucial role in the four stages of social responsibility. Stakeholders include employees, suppliers, customers, and the community. Effective communication and engagement with stakeholders are essential for building trust and fostering a positive social impact.

  Social Responsibility and Economic Performance

  Research studies have shown that there is a positive relationship between an organization's social involvement and its economic performance. Furthermore, social screening is the process of evaluating the social responsibility of a company before investing in it.

  The Greening of Management

  The greening of management refers to the recognition of the close link between an organization's decisions and activities and its impact on the natural environment. Global environmental problems facing managers include air, water, and soil pollution, global warming, and natural resource depletion.

  Approaches to being green include legal, market, stakeholder, and activist approaches. The legal approach involves complying with environmental laws and regulations, the market approach involves responding to customer preferences for environmentally friendly products, the stakeholder approach involves meeting the environmental demands of multiple stakeholders, and the activist approach involves actively seeking to respect and preserve the environment.

  Managerial Ethics

  Ethics are principles, values, and beliefs that define what is right and wrong behavior. Factors that affect employee ethics include moral development, individual characteristics, and organizational characteristics. Moral development refers to independence from outside influences, individual characteristics include values, personality variables, and other traits, and organizational characteristics include structural design, culture, and intensity of ethical issues.

  Managers can improve ethical behavior in an organization by hiring individuals with high ethical standards, establishing codes of ethics and decision rules, leading by example, providing ethics training and support, and conducting independent social audits.

  Social Responsibility and Ethics in Today's World

  Ethical leadership is important in today's world. Managers and organizations can protect employees who raise ethical issues or concerns. Social entrepreneurs play a crucial role in creating social value, and social impact management involves measuring and managing the social impact of an organization's activities.

This quiz covers the concepts of social responsibility and managerial ethics in management. It explores the importance of ethics in business and organization decision-making.