Management: Top 4 Social Responsibility and Ethics (PDF)

Management Topic 4 Fifteenth Edition, Global Edition Social Responsibili ty and Ethics...

Management Topic 4 Fifteenth Edition, Global Edition Social Responsibili ty and Ethics Chapter 6 Managing Social Responsibility and Ethics Copyright © 2021 Pearson Education Ltd. This is a very important topic as it is related to a scheme learning outcome for which you will be assessed (Topic Four (R&C Ch. 6) Social Responsibility and Ethics.) 2 2  Learning objectives 1. Discuss what it means to be socially responsible and what factors influence that decision. 2. Explain green management and how organizations can go green. 3. Discuss the factors that lead to ethical and unethical behavior. 4. Describe management’s role in encouraging ethical behavior. – Know how to make good decisions about ethical dilemmas. 5. Discuss current social responsibility and ethics issues. 3 From Obligation to Responsiveness to Responsibility Social Obligation – the obligation of a business to meet its economic and legal responsibilities and nothing more. A. Classical view – the view that management’s only social responsibility is to maximize profits. 4 From Obligation to Responsiveness to Responsibility (cont.) B. Socioeconomic view – the view that management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare. 1. Social responsiveness – when a firm engages in social actions in response to some popular social need. 2. Social responsibility – a business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good 5  Should Organizations Be Socially Involved? Social Screening – applying social criteria (screens) to investment decisions. Socially responsible investing (SRI) funds usually will not invest in companies involved in liquor, gambling, tobacco, nuclear power, weapons, price fixing, fraud, or in companies that have poor product safety, employee relations, and environmental track records. 6  Green Management and Sustainability Green Management – managers consider the impact of their organization on the natural environment. 7  How Organizations Go Green Legal (or Light Green) Approach – firms simply do what is legally required by obeying laws, rules, and regulations willingly and without legal challenge. Market Approach – firms respond to the preferences of their customers for environmentally friendly products. 8  How Organizations Go Green (cont.) Stakeholder Approach – firms work to meet the environmental demands of multiple stakeholders—employees, suppliers, and the community. Activist Approach – firms look for ways to respect and preserve the environment and be actively socially responsible. 9  Exhibit 6.3 Green Approaches Exhibit 6.3 uses the terms shades of green to describe the different environmental approaches that organizations may take. 10  Managers and Ethical Behavior Ethics – principles, values, and beliefs that define right and wrong behavior. Many decisions managers make require them to consider both the process and who’s affected by the result. 11  Exhibit 6.5 Factors that Determine Ethical and Unethical Behavior Exhibit 6.5 shows factors that determine ethical and unethical behavior. Whether someone behaves ethically or unethically when faced with an ethical dilemma is influenced by several things: his or her stage of moral development and other moderating variables, including 12 individual characteristics and the organization’s structural design, Factors That Determine Ethical and Unethical Behavior Stage s of Moral Development – Preconventional level – a person’s choice between right or wrong is based on personal consequences from outside sources (stage 1 & 2). – Conventional level, ethical decisions rely on maintaining expected standards and living up to the expectations of others (stage 3 & 4). – Principled level, individuals define moral values apart from the authority of13  Exhibit 6.6 Stages of Moral Development Exhibit 6.6 shows the three levels and six stages of moral development. 14 Factors That Determine Ethical and Unethical Behavior (cont.) Individual Characteristics – Values – basic convictions about what is right and wrong. – Ego Strength – a personality measure of the strength of a person’s convictions. – Locus of Control – a personality attribute that measures the degree to which people believe they control their own fate. 15  Factors That Determine Ethical and Unethical Behavior (cont.) Structural Variables – Ethical behavior can be influenced by: An organization’s structural design Goals Performance appraisal system Reward allocation 16 Factors That Determine Ethical and Unethical Behavior (cont.) Issue Intensity – six characteristics determine issue intensity or how important an ethical issue is to an individual or how likely employees are likely to behave ethically: – Greatness of harm – Consensus of wrong – Probability of harm – Immediacy of consequences – Proximity to victim(s) – Concentration of effect 17 17  Issue Intensity Greatness of Harm: How many people will be harmed? – The larger the number of people harmed, the greater the issue intensity or importance. Consensus of Wrong: How much agreement is there that the action is wrong? – The more agreement that the action is wrong, the greater the issue intensity or importance. Probability of Harm: How likely is it that this action will cause harm? – The greater the likelihood that the action will cause harm, the greater the issue intensity or importance. 18  Issue Intensity (cont.) Immediacy of Consequences: Will harm be felt immediately? – The faster the consequences of the action will be felt, the greater the issue intensity or importance. Proximity to victim(s): How close are the potential victims? – The more familiar the person feels to the victim(s), the greater the issue intensity or importance. Concentration of Effect: How condense is the effect of the action on the victim(s) – The more focus the effect of the action on the 19  Ethics in an International Context Ethical standards are not universal – Social and cultural differences determine acceptable behaviors. Foreign Corrupt Practices Act – It is illegal to corrupt a foreign official, yet “token” payments to officials are permissible when doing so is an accepted practice in that country. 20  Encouraging Ethical Behavior 1. Employee Selection – an opportunity to learn about an individual’s level of moral development, personal values, ego strength, and locus of control. – Some firms do pre-employment integrity testing to weed out applicants that are likely to be dishonest or engage in other undesirable workplace behaviors – Firms need to state that background checks will be conducted and references contacted – Use the interview to pose ethical questions to determine the applicant’s integrity 21  Encouraging Ethical Behavior (cont.) 2. Code of ethics – a formal statement of an organization’s primary values and the ethical rules it expects its employees to follow. 3. Leadership – doing business ethically requires a commitment from top managers because: – They uphold the shared values and set the cultural tone. – they’re role models in terms of both words and actions. 22  Encouraging Ethical Behavior (cont.) 4. Job Goals and Performance Appraisal – Under the stress of unrealistic goals, otherwise ethical employees may feel they have no choice but to do whatever is necessary to meet those goals – To encourage ethical behavior, both the result of goal achievement and means of goal achievement should be evaluated. – Follow code of ethics? 23  Encouraging Ethical Behavior (cont.) 5. Ethics Training – seminars, workshops, and similar ethics training programs to encourage ethical behavior. 6. Independent Social Audits – evaluate decisions and management practices in terms of the organization’s code of ethics. 24  Social Responsibility and Ethics Issues in Today’s World Ethical Leadership –What managers do has a strong influence on employees’ decisions whether to behave ethically. Protection of Employees Who Raise Ethical Issues: – Whistle-Blower – individuals who raise ethical concerns or issues to others – Protective Mechanisms – allow employees who face ethical dilemmas to do what’s right without fear of reprimand. 25  Exhibit 5-9 Being an Ethical Leader Exhibit 5-9 gives some suggestions on how managers can provide ethical 26 leadership.  Social Responsibility and Ethics Issues in Today’s World (cont.) Social Entrepreneur – an individual or organization who seeks out opportunities to improve society by using practical, innovative, and sustainable approaches. Corporate Philanthropy – (e.g. charity) can be an effective way for companies to address societal problems. Employee Volunteering Efforts – a popular way for businesses to be involved in promoting social change. 27 Review Learning Objective 1 Discuss what it means to be socially responsible and what factors influence that decision. – Social obligation – a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. – Social responsiveness – when a firm engages in social actions in response to some popular social need. 28 Review Learning objective 2 Explain green management and how organizations can go green. – Different approaches Light green Market approach Stakeholder approach Activist or dark green approach 29 Review Learning objective 3 Discuss the factors that lead to ethical and unethical behavior. – Factors that affect ethical and unethical behavior include an individual’s level of moral development individual characteristics structural variables organizational culture issue intensity 30 Review Learning objective 4 Describe management’s role in encouraging ethical behavior. – The behavior of managers is the single most important influence on an individual’s decision to act ethically or unethically. – Other ways include employee selection, a code of ethics, using means and ends for goals and performance appraisal and ethics training. 31 Review Learning objective 5 Discuss current social responsibility and ethics issues. – Ethical leaders also are honest, share their values, stress important shared values, and use the reward system appropriately. – Managers can protect whistle-blowers (employees who raise ethical issues or concerns) by adopting policies and encouraging them to come forward. – Social entrepreneurship – Has the potential to solve global problems – Corporate philanthropy – Has benefits to society and the firm 32  Question 1 The _____ view of social responsibility holds that management’s only social responsibility is to maximise profits. a)socioeconomic. b)classical. c)contemporary. d)sociolegal. 33  Question 2 Under what approach is the organisation driven to look for ways to respect and preserve the earth and its natural resources? a)Stakeholder approach b)Market approach c)Legal approach d)Activist approach 34  Question 3 True or false: The higher the stage an individual reaches, the more likely that he or she will behave ethically. 35  Question 4 _____ is/are defined as the principals and beliefs that define right and wrong decisions and behaviours. a)Whistle-blowing b)Entreprenuering c)Ethics d)Values 36  Question 5 Six characteristics determine issue intensity or how important an ethical issue is to an individual such as __________. a) concentration of effect b) greatness of wrong c) consensus of harm d) probability of right 37  Question 6 When a person claims that “I control my own destiny and not even god can change it.” This is an example of __________. a) internal locus of control b) ego strength c) external locus of control d) self confidence 38 Terms to Know Social obligation Values Classical view Ego strength Socioeconomic view Locus of control Social responsiveness Values-based Social responsibility management Social screening Code of ethics Green management Whistle-blower Ethics Social entrepreneur 39