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Questions and Answers
A company adhering strictly to the classical view of social responsibility would primarily focus on which of the following actions?
A company adhering strictly to the classical view of social responsibility would primarily focus on which of the following actions?
- Donating a percentage of profits to charitable organizations and social causes.
- Maximizing shareholder profits through efficient and legal business operations. (correct)
- Investing in community development programs to improve local living standards.
- Implementing environmentally sustainable practices that exceed legal requirements.
Which of the following best describes the socioeconomic view of social responsibility?
Which of the following best describes the socioeconomic view of social responsibility?
- A company's only responsibility is to generate profits for its shareholders.
- A company should consider the long-term impact of its decisions on society's welfare, not only profits. (correct)
- A company should react to immediate social needs as they arise to maintain a positive public image.
- A company should abide by all laws and regulations while striving to minimize costs.
A company that changes its manufacturing processes to reduce pollution in response to public pressure is demonstrating:
A company that changes its manufacturing processes to reduce pollution in response to public pressure is demonstrating:
- Social responsiveness, as it is reacting to an immediate societal concern. (correct)
- Green management because it reduces pollution.
- Social obligation, as it is complying with environmental regulations.
- Social responsibility, as it is acting in accordance with its ethical obligations.
What is the key differentiator between 'social responsibility' and 'social responsiveness'?
What is the key differentiator between 'social responsibility' and 'social responsiveness'?
ABC Corp. decides to implement a comprehensive recycling program, reducing waste and conserving resources, even though it's not legally required. This action best exemplifies:
ABC Corp. decides to implement a comprehensive recycling program, reducing waste and conserving resources, even though it's not legally required. This action best exemplifies:
What is a potential disadvantage for organizations that choose to be socially involved?
What is a potential disadvantage for organizations that choose to be socially involved?
Ecover, the Belgian firm, seems to prioritize various aspects in its sustainability vision. Which combination of aspects does Ecover consider?
Ecover, the Belgian firm, seems to prioritize various aspects in its sustainability vision. Which combination of aspects does Ecover consider?
A manager is deciding whether to lay off employees to cut costs during an economic downturn. Which aspect should the manager consider to ensure their decision-making aligns with ethical standards?
A manager is deciding whether to lay off employees to cut costs during an economic downturn. Which aspect should the manager consider to ensure their decision-making aligns with ethical standards?
A paper company refrains from cutting trees in a forest reserve even though they own the land and it is legal to do so. This demonstrates:
A paper company refrains from cutting trees in a forest reserve even though they own the land and it is legal to do so. This demonstrates:
In which scenario is a company demonstrating a focus on 'pragmatic' considerations?
In which scenario is a company demonstrating a focus on 'pragmatic' considerations?
An employee consistently follows the company's code of conduct because they fear being reprimanded by their supervisor if they don't. According to the stages of moral development, which level is this employee demonstrating?
An employee consistently follows the company's code of conduct because they fear being reprimanded by their supervisor if they don't. According to the stages of moral development, which level is this employee demonstrating?
A company rewards employees who meet sales targets with substantial bonuses. However, this has led some employees to engage in aggressive and unethical sales tactics to reach those targets. Which 'Structural Variable' is the most responsible for the unethical behavior?
A company rewards employees who meet sales targets with substantial bonuses. However, this has led some employees to engage in aggressive and unethical sales tactics to reach those targets. Which 'Structural Variable' is the most responsible for the unethical behavior?
A manager strongly believes in honesty and integrity, and consistently acts according to these beliefs, even when faced with pressure to compromise. Which is a personality trait that best describes the manager's ethical stance?
A manager strongly believes in honesty and integrity, and consistently acts according to these beliefs, even when faced with pressure to compromise. Which is a personality trait that best describes the manager's ethical stance?
A company is facing a decision on whether to outsource production to a country with lower labor costs but weaker environmental regulations. Which moral development stage would a manager be operating from if they chose to outsource solely to maximize profits, without regard for the environmental impact or worker exploitation?
A company is facing a decision on whether to outsource production to a country with lower labor costs but weaker environmental regulations. Which moral development stage would a manager be operating from if they chose to outsource solely to maximize profits, without regard for the environmental impact or worker exploitation?
A senior executive discovers that their company has been using misleading advertising. They decide to blow the whistle and expose the unethical practice, even though it could cost them their job and reputation. Which moral development stage is evident in the senior executive's decision?
A senior executive discovers that their company has been using misleading advertising. They decide to blow the whistle and expose the unethical practice, even though it could cost them their job and reputation. Which moral development stage is evident in the senior executive's decision?
A company promotes a culture where employees are encouraged to report ethical concerns without fear of retaliation. This initiative is best described as an effort to:
A company promotes a culture where employees are encouraged to report ethical concerns without fear of retaliation. This initiative is best described as an effort to:
Which of the following is an example of a trade-off a company might face when engaging in socially responsible activities?
Which of the following is an example of a trade-off a company might face when engaging in socially responsible activities?
A company decides to implement a new sustainability initiative that requires significant upfront investment but is projected to reduce operational costs and environmental impact in the long term. This decision primarily reflects a focus on:
A company decides to implement a new sustainability initiative that requires significant upfront investment but is projected to reduce operational costs and environmental impact in the long term. This decision primarily reflects a focus on:
Which of the following scenarios best illustrates the 'Stakeholder Approach' to green management?
Which of the following scenarios best illustrates the 'Stakeholder Approach' to green management?
A manufacturing company is struggling to balance cost-cutting measures with reducing its environmental impact. Faced with the decision to either upgrade to more energy-efficient equipment or continue using older, cheaper technology, which approach aligns with shifting towards green management?
A manufacturing company is struggling to balance cost-cutting measures with reducing its environmental impact. Faced with the decision to either upgrade to more energy-efficient equipment or continue using older, cheaper technology, which approach aligns with shifting towards green management?
A company is considering adopting the 'Activist Approach' to green management. What action would be most representative of this approach?
A company is considering adopting the 'Activist Approach' to green management. What action would be most representative of this approach?
Which global environmental problem is most directly addressed by initiatives aimed at reducing greenhouse gas emissions?
Which global environmental problem is most directly addressed by initiatives aimed at reducing greenhouse gas emissions?
A company has set a goal to 'halve the environmental footprint' of its operations by a specific year. Which aspect of social responsibility and sustainability does this goal primarily address?
A company has set a goal to 'halve the environmental footprint' of its operations by a specific year. Which aspect of social responsibility and sustainability does this goal primarily address?
An organization decides to publicly report its environmental impact, social initiatives, and governance practices. This is an example of:
An organization decides to publicly report its environmental impact, social initiatives, and governance practices. This is an example of:
Flashcards
Classical View
Classical View
Management's only social responsibility is to maximize profits for stockholders.
Social Obligation
Social Obligation
Engaging in social actions to meet economic and legal obligations.
Socioeconomic View
Socioeconomic View
Management's responsibility includes protecting and improving society's welfare, beyond profits.
Social Responsiveness
Social Responsiveness
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Social Responsibility
Social Responsibility
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Social Responsibility's Major Consideration
Social Responsibility's Major Consideration
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Social Responsiveness' Major Consideration
Social Responsiveness' Major Consideration
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Social Responsibility's Decision Timeframe
Social Responsibility's Decision Timeframe
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Ethics
Ethics
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Preconventional Level
Preconventional Level
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Conventional Level
Conventional Level
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Principled Level
Principled Level
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Values
Values
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Ego Strength
Ego Strength
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Locus of Control
Locus of Control
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Value-Based Management
Value-Based Management
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Violation of Profit Maximization
Violation of Profit Maximization
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Dilution of Purpose
Dilution of Purpose
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Social Responsibility Costs
Social Responsibility Costs
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Lack of Skills
Lack of Skills
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ESG Reporting
ESG Reporting
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Green Management
Green Management
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Legal (Light Green) Approach
Legal (Light Green) Approach
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Activist (Dark Green) Approach
Activist (Dark Green) Approach
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Study Notes
- Topic 4 focuses on managing social responsibilities and ethics in business.
Learning Objectives
- Classical vs. socio-economic views on social responsibility.
- Understand how obligations transform into responsiveness and then into responsibility.
- Advantages and disadvantages for organizations that are socially engaged.
- Green management practices
- Methods organizations use to become more environmentally friendly.
- Ethics, and factors influencing ethical/unethical behavior
- Ways to encourage ethical behavior in organizations.
Classical View
- This view asserts that management's sole social responsibility is to maximize profits.
- Managers should operate businesses in the best financial interests of the stockholders.
- Spending resources on "social good" increases business costs and is passed to consumers/stockholders.
- Social Obligation occurs when firms engage in social actions to meet their economic and legal duties.
Socioeconomic View
- The socioeconomic view believes management's responsibility goes beyond profit-making.
- It includes protecting and improving society's welfare.
- Social responsiveness involves firms acting in response to popular social needs and adapting to societal changes.
- Social responsibility goes beyond legal/economic requirements to pursue long-term goals beneficial to society.
Social Responsibility vs. Social Responsiveness
- Social responsibility's major consideration is ethical, while social responsiveness is pragmatic.
- Social responsibility emphasizes moral obligation, and social responsiveness focuses on responses.
- The decision framework for social responsibility is long term and for social responsiveness is medium to short term.
Social Involvement in Organizations
- Advantages of social responsibility include:
- Meeting public expectations
- Achieving long-run profits
- Fulfilling ethical obligations
- Enhancing public image
- Creating a better environment
- Securing governmental support
- Balancing responsibility and power.
- Drawbacks include:
- Violating profit maximization
- Diluting the organization's purpose
- Incurring extra costs
- Requiring skills the organization may lack.
Social Responsibility Reporting
- ESG (Environmental, Social, and Governance) Reporting
- GLOBAL REPORTING INITIATIVE (GRI)
- ISO 9000 standards
- UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS (SDGs)
- GLOBAL 100 list
Green Management
- Green management involves minimizing harm to the environment.
- Facing global environmental problems like:
- Air, water, and soil pollution
- Global warming from emissions
- Natural resource depletion.
Approaches to becoming Green
- Legal Approach (Light Green): Firms comply with laws and regulations to avoid challenges.
- Market Approach: Firms respond to customer preferences by offering eco-friendly products.
- Stakeholder Approach: Companies meet the environmental needs of multiple stakeholders which encompasses employees, suppliers and the community.
- Activist Approach (Dark Green): Firms strive to preserve the environment and natural resources through socially responsible actions.
Examples of Green Management
- Market Approach:
- Nike
- Ikea
- Coca-Cola
- Tesla Motors
- Dell
- Stakeholder Approach:
- IBM is energy efficient with green procurement and water resource management.
- Unilever
- Samsung
- Activist Approach:
- Ecover
Unilever's Sustainable Living Plan
- Halve the environmental footprint of product manufacturing by 2030
- Enhance the livelihoods of millions of people by 2020
Ecover
- A Belgian firm that produces ecological products from plant and mineral-based ingredients since 30 years ago
- They have green roofs, temperature regulation, and noise-dampening insulation
- Staff conserve energy and are encouraged to commute sustainably
Managers and Ethical Behavior
- Ethics are the principles, values, and beliefs defining right and wrong behavior.
- Managers consider the process and effects of their actions.
- Ethical dimensions must be considered when planning and organizing the business.
Factors Affecting Ethical Behavior
- Individual Characteristics
- Stage of moral development.
- Issue intensity
- Moderators
- Organizational culture
- Structural variables
Stages of Moral Development
- preconventional level: Choices are based on personal consequences.
- conventional level: Decisions are based on maintaining expected standards and expectations.
- principled level: Moral values are defined apart from the authority of groups.
Individual Characteristics
- Values: Basic convictions about right and wrong.
- Ego strength: Measures the strength of a person's convictions.
- Locus of control: Measures the degree to which people believe they control their fate.
Structural Variables
- An organization's design impacts ethical behavior.
- Influence ethical choices through:
- Rules
- Goals
- Performance appraisals
- Reward systems.
Organization's Culture
- Value-based management guides employees in their job performance.
Ethics in an International Context
- Individual managers must recognize social, cultural, and legal influences on appropriate behavior in foreign cultures.
- International businesses should define their ethical guidelines so that employees understand expectations abroad.
Encouraging Ethical Behavior
- Hire individuals with high ethical standards.
- Establish codes of ethics and decision rules.
- Lead by example.
- Set realistic job goals and include ethics in performance appraisals.
- Provide ethics training.
- Conduct independent social audits.
- Provide support for individuals facing ethical dilemmas.
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Description
Explore social responsibility in business, contrasting classical and socioeconomic views. Learn how firms evolve from obligation to responsiveness to responsibility. Understand green management and ethical practices, and methods to promote ethical behavior within organizations.
