MGT 330 Principles of Management PDF

MGT 330 Principles of Management...

MGT 330 Principles of Management Chapter 4: Ethics and Social Responsibility Jonathan Canger, PhD Week 2 ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  Agenda Current Events? Upcoming Events - Individual Topic Presentations & Exam Groups Update Chapter 4 – Ethics and Social Responsibility Class Assignment – At the end of each class, −Send me a “reflections” email (jcanger@ ut.edu) ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  Upcoming Topic Presentations & Exams 330-1) Week 3: 9/10 Workplace Deviance (Ch. 4) Kayla Stone 9/12 Social Responsibility (Ch. 4) Aiden Maciel Week 4: 9/17 Strategic Plans (Ch. 5) Bianca Butnaru 9/17 SMART Goals (Ch. 5) Christian Slack 9/19 – Exam 1 – Chapters 1-6 ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  Group Project Update – MGT 330-1 APPLE TESLA or TARGET AMEX or COSTCO Tilde Morin John Mastrosimone Kayla Stone Rory Gaynor Kate Dilella Christian Slack Chase D. Evans Courtney Zuccarini Preston Shembekar Barnabas Fluck Panagioti Dalmarel Emma Stewart Emily R. Gulla Aiden Maciel Andrew Jones Benjamin J. Castro PROFIT PIONEERS PRIME FORD or MICROSOFT PEPSICO or NETFLIX AMAZON Brian O’Connell Kayla Moner Anastacia Wolfe Dylan Rice Kadie Braga Brooke Robinson Kayla Schmidt Stephen Pieraccini Natalia Rosario Kayla Collins James Fowler Joanie Tripi-Vitale Daniella Spankowski Raina Jones Hunter Lewis Hugo LeGal Bianca Butnaru ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  Learning Outcomes (1 of 2) You should be able to: 1. Identify common kinds of workplace deviance. 2. Describe how the US Sentencing Commission Guidelines Manual for Organizations encourages ethical behavior, including how to calculate fines for unethical behavior. 3. Describe what influences ethical decision-making. 4. Apply the practical steps managers can take to improve ethical decision-making in real-world situations. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  Learning Outcomes (2 of 2) You should be able to: 5. Explain to whom organizations are socially responsible. 6. Explain for what organizations are socially responsible. 7. Identify how organizations can respond to societal demands for social responsibility. 8. Explain whether social responsibility hurts or helps an organization’s economic performance. 9. Describe the logic behind the “Anti-woke” movement ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6  Ethics Ethics: the set of moral principles or values that defines right and wrong for a person or group Ethical behavior: behavior that conforms to a society’s accepted principles of right and wrong Workplace deviance: unethical behavior that violates organizational norms about right and wrong ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  TED talk: What motivates people to be honest/ethical in business? (13 min). https://www.youtube.com/watch?v=Qhomjw2P-V0 ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 TED talk: What motivates people to be honest/ethical in business?. Expected Reported https://www.youtube.com/watch?v=Qhomjw2P-V0 0 1 2 3 4 ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9  Some High Profile Examples Enron – Ken Lay and Jeff Skilling 2001 - 2006 Volkswagen – Martin Winterkorn 2015-2024 Theranos – Elizabeth Holmes 2018-2022 FTX – Sam Bankman-Fried – 2022-2024 ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  Workplace Deviance Production deviance: unethical behavior that hurts the quality and quantity of work produced Property deviance: unethical behavior aimed at the organization’s property or products Employee shrinkage: employee theft of company merchandise Political deviance: using one’s influence to harm others in the company Personal aggression: hostile or aggressive behavior toward others ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Exhibit 4.1 Types of Workplace Deviance ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12  Polling Activity 1 Which of the following situations do you see as most unethical? a. You know a team member is moving in a month and leaving the company. You allow her to do a significant amount of the team’s work on a client’s project before she leaves and then take credit for the project results after she leaves. b. You were a day late getting a project done because you procrastinated, but you tell your overly demanding manager that you didn’t get necessary information on time. c. You are a doctor with a patient whose medication isn’t working. You have several treatment options that vary in cost. You give him samples for the most expensive option. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13  US Sentencing Commission Guidelines Manual for Organizations Cover offenses defined by federal laws Encourage companies to take proactive steps that will discourage or prevent white-collar crime Give companies an incentive to cooperate and disclose illegal activities to federal authorities ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  Determining the Punishment Step 1 – Computation of base fine by determining the level of offense – Level of offense varies depending on the kind of crime, loss incurred, and the amount of planning that went into the crime Step 2 – Judicial determination of a culpability score Step 3 – Determination of total fine – Multiplying the base fine by the culpability score ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Exhibit 4.3 Compliance Program Steps from the U.S. Sentencing Commission Guidelines Manual ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16  Knowledge Check 1 Which of the following statements best explains the carrot-and-stick approach of the US Sentencing Commission Guidelines Manual for Organizations? a. Unincorporated organizations and associations are exempted from penalties. b. Smaller fines are imposed on companies that take proactive steps to encourage ethical behavior. c. Organizations accused of unethical behavior are excused if the management was unaware of such behavior. d. Nonprofit organizations are exempted from fines. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17  Knowledge Check 1: Answer Which of the following statements best explains the carrot-and-stick approach of the US Sentencing Commission Guidelines Manual for Organizations? b. Smaller fines are imposed on companies that take proactive steps to encourage ethical behavior. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18  Influences on Ethical Decision Making LO 4-3: Describe what influences ethical decision-making. Ethical intensity: the degree of concern people have about an ethical issue Moral development Principles of ethical decision making ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19  Factors That Contribute to Ethical Intensity Magnitude of consequences: the total harm or benefit derived from an ethical decision Social consensus: agreement on whether behavior is bad or good Probability of effect: the chance that something will happen that results in harm to others Temporal immediacy: the time between an act and the consequences the act produces Proximity of effect: the social, psychological, cultural, or physical distance between a decision maker and those affected by his or her decisions Concentration of effect: the total harm or benefit that an act produces on the average person ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20 Exhibit 4.5 Kohlberg’s Stages of Moral Development ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  Principles of Ethical Decision-Making (slide 1 of 2) Principle of long-term self-interest: an ethical principle that holds that you should never take any action that is not in your or your organization’s long-term self-interest Principle of religious injunctions: an ethical principle that holds that you should never take any action that is not kind and that does not build a sense of community Principle of government requirements: an ethical principle that holds that you should never take any action that violates the law, for the law represents the minimal moral standard ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22  Principles of Ethical Decision-Making (slide 2 of 2) Principle of individual rights: an ethical principle that holds that you should never take any action that infringes on others’ agreed-upon rights Principle of personal virtue: an ethical principle that holds that you should never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV Principle of distributive justice: an ethical principle that holds that you should never take any action that harms the least fortunate among us: the poor, the uneducated, the unemployed Principle of utilitarian benefits: an ethical principle that holds that you should never take any action that does not result in greater good for society ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23  Discussion Activity 1 What factors do you consider when you are making an ethical decision? ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24  Discussion Activity 1: Debrief What factors do you consider when you are making an ethical decision? − Ethical decisions depend on the following: ▪ Ethical intensity is the degree of concern a person has about an ethical issue. ▪ The level of moral development of the person making the decisions, whether the preconventional level, conventional level, or postconventional level of moral development. ▪ Principles of ethical decision-making held by the decision makers may include long-term self-interest, personal virtue, religious injunctions, government requirements, utilitarian benefits, individual rights, or distributive justice. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25  Practical Steps to Ethical Decision-Making LO 4-4: Apply the practical steps managers can take to improve ethical decision-making in real-world situations. Managers can encourage more ethical decision-making in their organizations by − carefully selecting and hiring ethical employees − establishing a specific code of ethics − training employees to make ethical decisions − creating an ethical climate ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26  Selecting and Hiring Ethical Employees Overt integrity test: a written test that estimates job applicants’ honesty by directly asking them what they think or feel about theft or about punishment of unethical behaviors Personality-based integrity test a written test that indirectly estimates job applicants’ honesty by measuring psychological traits, such as dependability and conscientiousness ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27  Code of Ethics Companies establish a specific code of ethics, or code for business conduct among organization’s members − Communicate the code to others both inside and outside the company − Develop standards and procedures specific to the company ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28  Code of Ethics ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29  Knowledge Check 2 Which of the following bests enables a code of ethics to encourage ethical decision-making and behavior in a company? a. It must be communicated only inside the company. b. Management must focus primarily on customer and shareholder interests. c. Management must develop practical ethical standards and procedures specific to the company’s line of business. d. It should revolve around legal factors rather than organizational goals and mission. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30  Knowledge Check 2: Answer Which of the following bests enables a code of ethics to encourage ethical decision-making and behavior in a company? c. Management must develop practical ethical standards and procedures specific to the company’s line of business. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31  Ethics Training Training employees to make ethical decisions involves − developing employees' awareness of ethics − achieving credibility with employees − teaching a practical model of ethical decision-making ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 32  Ethical Climate Fostering ethical decision-making starts with the organizational culture: − Ensure that managers act ethically themselves − Promote top management activity and commitment to the company ethics program − Develop a system that encourages report of violations ▪ Whistleblowing: reporting others’ ethics violations to management or legal authorities − Fairly and consistently punish those who violate the code of ethics ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33 TED talk: Ethical Leadership (8 min) https://www.youtube.com/watch?v=Nmsl1xVx7Ec ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 34  Polling Activity 2 You discover that one of your employees has alerted the Federal Trade Commission about a company executive who has been sharing insider information about the company with an investment firm. What is your next move? a. Reinforce the whistleblower’s actions to others in the company as a way to safeguard the company’s ethical reputation b. Talk with HR to ensure that the whistleblower’s identity is protected c. Say nothing to avoid putting yourself on the FTC’s radar d. Review the company’s code of ethics with all your subordinates ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 35  Social Responsibility of Organizations (slide 1 of 2) LO 4-5: Explain to whom organizations are socially responsible. Social responsibility: a business’s obligation to pursue policies, make decisions, and take actions that benefit society Shareholder model: a view of social responsibility that holds that an organization’s overriding goal should be profit maximization for the benefit of shareholders View held by economist Milton Friedman who believed: − organizations are not effective moral agents − attention to social causes undermines market efficiency ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 36  Social Responsibility of Organizations (slide 2 of 2) Stakeholder model: a theory of corporate responsibility that holds that management’s most important responsibility, long-term survival, is achieved by satisfying the interests of multiple corporate stakeholders Stakeholders: persons or groups with a stake, or legitimate interest, in a company’s actions − Primary stakeholder: any group on which an organization relies for its long- term survival − Secondary stakeholder: any group that can influence or be influenced by a company and can affect public perceptions about the company’s socially responsible behavior ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 37  Social Responsibility of Organizations (slide 2 of 2) Stakeholder model: a theory of corporate responsibility that holds that management’s most important responsibility, long-term survival, is achieved by satisfying the interests of multiple corporate stakeholders Stakeholders: persons or groups with a stake, or legitimate interest, in a company’s actions − Primary stakeholder: any group on which an organization relies for its long- term survival − Secondary stakeholder: any group that can influence or be influenced by a company and can affect public perceptions about the company’s socially responsible behavior ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 38 Exhibit 4.7 Stakeholder Model of Corporate Social Responsibility ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 39  Socially Responsible Organizations LO 4-6: Explain for what organizations are socially responsible. Companies best benefit their stakeholders by fulfilling these responsibilities: − Economic responsibility: a company’s social responsibility to make a profit by producing a valued product or service − Legal responsibility: a company’s social responsibility to obey society’s laws and regulations − Ethical responsibility: a company’s social responsibility not to violate accepted principles of right and wrong when conducting its business − Discretionary responsibilities: the social roles that a company fulfills beyond its economic, legal, and ethical responsibilities ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 40  Social Responsiveness (slide 1 of 2) LO 4-7: Identify how organizations can respond to societal demands for social responsibility. Social responsiveness: a company’s strategy to respond to stakeholders’ economic, legal, ethical, or discretionary expectations concerning social responsibility Reactive strategy: a social responsiveness strategy in which a company does less than society expects Defensive strategy: a social responsiveness strategy in which a company admits responsibility for a problem but does the least required to meet societal expectations ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 41  Social Responsiveness (slide 2 of 2) Accommodative strategy: a social responsiveness strategy in which a company accepts responsibility for a problem and does all that society expects to solve that problem Proactive strategy: a social responsiveness strategy in which a company anticipates a problem before it occurs and does more than society expects to take responsibility for and address the problem ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 42  Discussion Activity 2 You are a manager for a company that processes tea. One of your employees has presented a plan for developing an organic, free-trade facility. You are uncertain how profitable this plan will be for the company. What do you tell your employee? ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 43  Discussion Activity 2: Debrief You are a manager for a company that processes tea. One of your employees has presented a plan for developing an organic, free-trade facility. You are uncertain how profitable this plan will be for the company. What do you tell your employee? − Fair trade, a financial relationship between producers, sellers, and consumers based on the principle of equity within the exchange of goods, enables growers to take their livelihoods to the next level and blend the benefits of modern techniques with artisan practices. − Pursuing fair trade certification can benefit the economic and social integrity of the entire supply chain, allow the company to take a holistic approach to business, and create a profitable business model that benefits everyone involved. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 44  Social Responsibility and Economic Performance LO 4-8: Explain whether social responsibility hurts or helps an organization’s economic performance. No trade-off between being socially responsible and economic performance Relationship becomes stronger when a company has a strong reputation for social responsibility No guarantee that socially responsible companies will be profitable ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 45 “Anti-woke” Movement against CSR, ESG and DEI View that DEI initiatives have moved beyond equal opportunity, and have divided us, by having us always focus on race and gender. This movement believes decisions on college admissions, company hiring, corporate governance should be ‘color-blind,’ ‘gender-blind’ and simply focus on merit and qualifications. On CSR and ESG, corporations should be focused on maximizing their return to stockholders, and not social agendas (such as climate change or diversity in its’ leadership ranks). ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 46  What Would You Do? Liquid detergent packages are the fastest growing part of the $2 billion detergent market, of which Procter & Gamble controls 80%. Unfortunately, small children and the elderly often confuse the small multicolored Tide Pod packages with candy. After introducing Tide Pods, the number of detergent-related emergency room visits for children tripled, while the number of detergent-related poison control center calls for children rose by a factor of 2.5. A total of ten people have died from eating Tide Pods. If you were the CEO of Procter & Gamble, what would you do? ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 47  Summary (1 of 2) Now that the lesson has ended, you should have learned how to: 1. Identify common kinds of workplace deviance. 2. Describe the U.S. Sentencing Commission Guidelines Manual for Organizations encourages ethical behavior, including how to calculate fines for unethical behavior. 3. Describe what influences ethical decision making. 4. Apply the practical steps managers can take to improve ethical decision making in real-world situations. ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 48  Summary (2 of 2) Now that the lesson has ended, you should have learned how to: 5. Explain to whom organizations are socially responsible. 6. Explain for what organizations are socially responsible. 7. Identify how organizations can respond to societal demands for social responsibility. 8. Explain whether social responsibility hurts or helps an organization’s economic performance. 9. Describe the logic behind the “Anti-woke” movement ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 49  Before you go… Send a “Reflections- MGT 330-1” email to [email protected], describing what you found most: Valuable Interesting, or Surprising in today’s class or the reading Send your Group’s final Company choice if not done already Complete the Learn Its for Ch3 and Ch4 by tomorrow 11:59 PM. Prep for your Individual Topic presentation if you’re on deck ©2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 50