Managing Social Responsibility and Ethics Lesson 4
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Questions and Answers

What is the main focus of the classical view of management’s social responsibility?

  • To maximize profits for stockholders (correct)
  • To address ethical behavior within the organization
  • To engage in social activism and improve community welfare
  • To ensure environmental sustainability

How does social responsibility differ from social obligation?

  • Social responsibility involves profit maximization only
  • Social obligation includes community engagement
  • Social obligation is limited to legal compliance only
  • Social responsibility includes a wider intention to benefit society (correct)

What characterizes social responsiveness in a business context?

  • Meeting only legal obligations
  • Engaging in actions based on popular social needs (correct)
  • Focusing solely on profit margins
  • Actively avoiding social issues

What is a potential negative consequence of focusing exclusively on maximizing profits?

<p>Increased costs and a negative impact on society (D)</p> Signup and view all the answers

What does it mean for a firm to have a moral responsibility to society?

<p>To contribute positively to societal welfare (D)</p> Signup and view all the answers

Which of the following statements best reflects the socioeconomic view of management’s responsibilities?

<p>Management should consider their impact on community welfare (A)</p> Signup and view all the answers

Why may a business decide to engage in activities considered socially responsible?

<p>To align with public expectations and improve brand image (C)</p> Signup and view all the answers

What is the role of management in encouraging ethical behavior within an organization?

<p>To create a culture that values ethical standards and accountability (B)</p> Signup and view all the answers

Which argument suggests that a business is socially responsible only when it pursues its economic interests?

<p>Violation of profit maximization (D)</p> Signup and view all the answers

Which approach to social responsibility focuses on complying with legal requirements?

<p>Legal (light green) approach (A)</p> Signup and view all the answers

What does the stakeholder approach emphasize in terms of environmental responsibility?

<p>Addressing the demands of multiple stakeholders (A)</p> Signup and view all the answers

What primary obligation did Avon fulfill by changing its practices in response to PETA's protest?

<p>social obligation (A)</p> Signup and view all the answers

Which approach looks for ways to protect the earth's natural resources directly?

<p>Activist (dark green) approach (D)</p> Signup and view all the answers

What is a significant reason businesses are encouraged to pursue social responsibility?

<p>It can reduce government regulation. (A)</p> Signup and view all the answers

Which of the following arguments against social responsibility claims that businesses already possess considerable power?

<p>Too much power (A)</p> Signup and view all the answers

What is a common argument against businesses engaging in social responsibility due to skill limitations?

<p>Managers lack the necessary skills to address social issues (A)</p> Signup and view all the answers

Which of the following is NOT a reason against pursuing social responsibility?

<p>Enhancing public image (B)</p> Signup and view all the answers

Which argument supports the idea that socially responsible actions can lead to better long-run profits?

<p>Businesses addressing social issues beforehand reduces future costs. (D)</p> Signup and view all the answers

In what way can employees and customers influence corporate behavior toward environmental standards?

<p>Through public statements and demands for action (B)</p> Signup and view all the answers

How does the market approach to environmental responsibility operate?

<p>It responds to customer preferences and demands (C)</p> Signup and view all the answers

What can be considered a public expectation concerning businesses and social responsibility?

<p>Companies should engage in actions that benefit both their image and society. (B)</p> Signup and view all the answers

Why might stockholder interests be positively affected by social responsibility?

<p>It creates a favorable public image that leads to increased profits. (C)</p> Signup and view all the answers

What is an ethical obligation for businesses in terms of social responsibility?

<p>To support charitable initiatives and public projects. (C)</p> Signup and view all the answers

How can the possession of resources by businesses contribute to social responsibility?

<p>They can support public projects that require assistance. (B)</p> Signup and view all the answers

What approach to sustainability involves the use of laws and regulations?

<p>Legal approach (B)</p> Signup and view all the answers

At which level of moral development do individuals define moral values independently of societal influence?

<p>Principled (C)</p> Signup and view all the answers

Which test encourages individuals to consider how they would feel if their actions were made public?

<p>The Front Page/Social Media Test (B)</p> Signup and view all the answers

What is crucial for the effectiveness of a code of ethics within an organization?

<p>Management's support and treatment of violators (B)</p> Signup and view all the answers

What is the term for individuals or organizations that aim to use innovative methods to improve societal conditions?

<p>Social entrepreneurs (C)</p> Signup and view all the answers

Under what circumstances might ethical employees act unethically?

<p>Under unrealistic job goals (D)</p> Signup and view all the answers

Which ethical test asks whether an action aligns with the individual's conscience?

<p>The Conscience Test (D)</p> Signup and view all the answers

What is the main role of top management in fostering ethical behavior in organizations?

<p>Upholding shared values and setting cultural tone (D)</p> Signup and view all the answers

What is a common reason for resistance to change in organizations?

<p>Fear of loss (A)</p> Signup and view all the answers

Which technique is most effective when resisters have the expertise to contribute?

<p>Participation (C)</p> Signup and view all the answers

What could be a disadvantage of using facilitation and support?

<p>It can be expensive (D)</p> Signup and view all the answers

When might negotiation be a viable technique for reducing resistance?

<p>When resistance comes from a powerful group (B)</p> Signup and view all the answers

Which technique could potentially backfire by causing the change agent to lose credibility?

<p>Manipulation and co-optation (A)</p> Signup and view all the answers

What is a primary disadvantage of using coercion to facilitate change?

<p>It may undermine the change agent's credibility (D)</p> Signup and view all the answers

What happens when education and communication do not succeed in reducing resistance?

<p>Trust and credibility issues are likely present (B)</p> Signup and view all the answers

What is the primary purpose of participation in the change process?

<p>To increase involvement and acceptance (D)</p> Signup and view all the answers

What is the primary distinction between creativity and innovation?

<p>Creativity is about generating ideas; innovation is about executing them. (B)</p> Signup and view all the answers

Which characteristic is NOT commonly associated with innovative organizations?

<p>High levels of external control (D)</p> Signup and view all the answers

What role does an Idea Champion play in an organization?

<p>To support and facilitate the implementation of innovations (A)</p> Signup and view all the answers

What does disruptive innovation entail?

<p>Radical changes in industry standards and practices (A)</p> Signup and view all the answers

How can organizations encourage individuals to be more creative?

<p>By providing minimal external controls (C)</p> Signup and view all the answers

What is the focus of a design thinker within an organization?

<p>To understand customers as real people with real problems (D)</p> Signup and view all the answers

Which of the following options would likely inhibit innovation within an organization?

<p>Making decisions based on strict procedures (A)</p> Signup and view all the answers

Sustaining innovation refers to which of the following?

<p>Incremental improvements to existing products (A)</p> Signup and view all the answers

Flashcards

Social Responsibility

A business's intention, beyond legal and economic obligations, to act in ways that benefit society.

Social Obligation

A business's responsibility to meet its economic and legal obligations, and nothing more.

Social Responsiveness

A business engaging in social actions in response to popular social needs.

Classical View

Management's only social responsibility is maximizing profits for stockholders.

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Socioeconomic View

Management's social responsibility extends beyond profit to include protecting and improving societal welfare.

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Ethical Behavior

Acting in ways that are morally right and just.

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Unethical Behavior

Actions that violate accepted principles of right and wrong.

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Management's Role (ethics)

To encourage ethical behavior within the organization.

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Argument For Social Responsibility (Long-run Profits)

Socially responsible companies often achieve greater and more stable long-term profits.

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Argument For Social Responsibility (Public Image)

Companies that are socially responsible usually improve their public image which leads to better opportunities.

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Argument Against Social Responsibility (Violation of Profit Maximization)

Some believe that social responsibility distracts from the primary goal of maximizing profits.

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Argument Against Social Responsibility (Dilution of Purpose)

Critics argue that pursuing social goals detracts from the core purpose of business.

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Argument Against Social Responsibility (Costs)

Implementing social programs can have financial costs associated with them.

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Social Responsibility Against Argument

Businesses already have considerable power; pursuing social goals would augment that power.

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Lack of Skills in Social Responsibility

Business leaders may lack the necessary expertise in addressing social issues.

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Lack of Accountability in Social Responsibility

There isn't a clear system for evaluating businesses' social actions.

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Profit Maximization as Sole Social Responsibility

A business is socially responsible only when pursuing its economic interests.

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Green Management

Managers integrating environmental considerations into business operations.

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Legal Approach to Green Management

Following environmental regulations as a minimum requirement.

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Market Approach to Green Management

Responding to customers' preferences for environmental products/services.

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Stakeholder Approach to Green Management

Meeting environmental expectations of all stakeholders (employees, suppliers, community).

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Sustainability Approach

A way of addressing sustainability, considering different viewpoints like legal, market, stakeholder, or activist perspectives.

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Principled Moral Development

Moral values are defined independently of groups or society.

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Ethical Dilemma Tests

Methods to evaluate actions' ethics, such as the Golden Rule, What-If-Everyone-Did-This, Family, Conscience, or Front Page test.

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Code of Ethics

A formal statement of an organization's values and expected ethical behavior for employees.

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Management Support (Ethics)

Strong management support of ethical codes is crucial for their success, along with how employees who violate them are treated.

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Leadership & Ethics

Ethical business behavior requires commitment from top-level managers who set the tone and are role models.

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Unrealistic Job Goals

Unrealistic goals can pressure otherwise ethical employees to act unethically to meet them.

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Social Entrepreneur

Someone or a group that uses innovative, sustainable ways to improve society.

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Negotiation in change

Bringing those affected by a change into the decision-making process ensures a smoother transition and buy-in from stakeholders.

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Creativity vs. Innovation

Creativity is the ability to come up with new ideas, while innovation turns those ideas into practical solutions or products.

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What makes an innovative organization?

Innovative organizations embody characteristics like accepting ambiguity, tolerating risk, and focusing on outcomes rather than strict processes.

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Idea Champion

A person who actively promotes and supports new ideas, overcoming resistance and ensuring their implementation.

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Design Thinking Mentality

Understanding customers as individuals with real problems, not just as data points or targets.

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Disruptive Innovation

A radical change that disrupts an entire industry with new products, services, or processes.

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Sustaining Innovation

Small, incremental improvements to existing products or processes, rather than major breakthroughs.

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What is a Design Thinker?

A person who actively supports new ideas, helps build support for them, overcomes resistance, and ensures their implementation.

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Uncertainty

The feeling of doubt or lack of confidence about the future or a particular situation. In change, it refers to the unknown outcomes and potential risks.

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Habit

A regular, often unconscious behavior that is hard to break. It's a powerful force that can make resisting change even harder.

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Fear of Loss

The anxiety associated with losing something valuable, like a job, status, or control. This fear can drive people to resist change.

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Belief Change is Inconsistent with Goals

A resistance factor where individuals believe that the proposed changes will contradict their personal or organizational goals, making them resistant to change.

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Education and Communication

A technique to reduce resistance by providing clear information about the need for change, its benefits, and how it will be implemented.

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Participation

Engaging resisters in the change process by providing them with opportunities to contribute ideas and opinions, increasing their buy-in.

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Facilitation and Support

Providing assistance, guidance, and encouragement to help individuals overcome their fears and anxieties regarding change.

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Negotiation

Finding a compromise or agreement between those promoting change and resisters by addressing their concerns and finding mutually acceptable solutions.

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Study Notes

Lesson 4: Managing Social Responsibility and Ethics

  • This lesson covers social responsibility, green management, ethical behavior, and managing change and disruptive innovation.
  • Students will be able to discuss social responsibility, explain green management, analyze factors leading to ethical and unethical behavior, and describe a manager's role in encouraging ethical behavior.

Social Responsibility

  • Classical view: A firm's sole responsibility is maximizing profits for shareholders.
  • Socioeconomic view: A firm's responsibility extends to protecting and improving society's welfare, including legal, social, and political issues.

Social Obligation, Responsiveness, and Responsibility

  • Social obligation: Meeting economic and legal responsibilities is the minimum expectation.
  • Social responsiveness: Responding to social actions in response to social needs.
  • Social responsibility: Going beyond legal and economic obligations to do what is right for society.

How Organizations Go Green

  • Legal approach: Following the minimum required rules and regulations.
  • Market approach: Responding to customer preferences regarding environmental concerns.
  • Stakeholder approach: Meeting environmental demands of multiple stakeholders (employees, suppliers, community).
  • Activist approach: Seeking ways to protect the earth's natural resources.

Ethical Dilemma Tests

  • Golden rule test: Would you want others to do this to you?
  • What-if-Everybody-Did-This test: Would everyone doing this be beneficial/detrimental?
  • Family test: How would your family/significant others feel if you performed this action?
  • Conscience test: Does this action align with your personal moral values?
  • Front-page/social media test: Would you feel comfortable if this action were publicized?

Codes of Ethics and Decision Rules

  • Code of ethics: A formal statement of an organization's primary values and ethical rules for employees to follow.
  • Importance of leadership: Top management's commitment to ethical values and actions directly influences employees.
  • Job goals: Unrealistic job goals may pressure employees to compromise ethical standards.

Managing Change and Disruptive Innovation

  • Organizational change: Any alteration in people, structure, or technology within an organization.

  • Change agent: Someone who acts as a catalyst and assumes responsibility for managing the change process.

  • External forces: Consumer needs/wants, governmental regulations, technology, and the economy.

  • Internal forces: New organizational strategies, workforce composition, new equipment, and employee attitudes.

  • Four main areas of change focus for managers: Strategy, Structure, Technology, and People.

Resistance to Change

  • Reasons for resistance: Uncertainty, habit, fear of loss, belief that change is inconsistent with organizational goals.
  • Techniques for reducing resistance: Education and communication, participation, facilitation and support, negotiation, manipulation and cooptation, coercion.

Creativity and Innovation

  • Creativity: Ability to combine ideas in a unique way or make unusual associations.
  • Innovation: Taking creative ideas and turning them into tangible products, services, or processes.

Characteristics of an Innovative Organization

  • Accepting ambiguity, tolerating the impractical, minimal external controls, tolerating risk, tolerating conflict, focusing on ends over means, providing positive feedback.

Idea Champion

  • An individual who actively and enthusiastically supports new ideas, overcomes resistance, and ensures their implementation.

Design-thinking mentality

  • A mindset that focuses on understanding customers and their problems, rather than simply targeting demographics or sales stats.

Disruptive vs. Sustaining Innovation

  • Disruptive innovation: Products, services, or processes that change industry rules.
  • Sustaining innovation: Small, incremental changes in established products/services.

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Description

Explore the key concepts of social responsibility, ethical behavior, and green management in this lesson. Understand the differences between classical and socioeconomic views, and learn how managers can promote ethical practices within their organizations. This lesson aims to equip students with the tools to navigate complex ethical challenges in business.

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