Management Thirteenth Canadian Edition PDF

Management Thirteenth Canadian Edition Chapter 6 Managing Responsibly and Ethically Copyright © 2022 Pearson Canada Inc....

Management Thirteenth Canadian Edition Chapter 6 Managing Responsibly and Ethically Copyright © 2022 Pearson Canada Inc. 6-1 Learning Outcomes 1. Discuss what it means to be socially responsible and what factors influence that decision. 2. Describe how managing responsibly contributes to organizational performance. 3. Discuss the factors that lead to ethical and unethical behaviour. 4. Describe management’s role in encouraging ethical behaviour. Copyright © 2022 Pearson Canada Inc. 6-2 What Is Meant by Socially Responsible Management? social responsibility is a business’s obligation, beyond that required by law and economics, to pursue long-term goals that are good for society. This definition assumes that a business obeys laws and pursues economic interests. The concept of Social Responsibility has been interpreted as….. Profit making only Going beyond profit making Any discretionary corporate activity intended to further social welfare Improving social or environmental conditions Copyright © 2022 Pearson Canada Inc. 6-3 What Is Meant by Socially Responsible Management? The Classical View: Social Obligation Management’s only social responsibility is to maximize profits for the benefit of the stockholders Doing “social good” unjustifiably increases costs. Social obligation is a firm’s engaging in social actions because of its obligation to meet certain economic and legal responsibilities. Copyright © 2022 Pearson Canada Inc. 6-4 What Is Meant by Socially Responsible Management? The Socio-Economic View: Social Responsiveness and Social Responsibility Management should also protect and improve society’s welfare. Corporations are responsible to more than stockholders/shareholders. Firms have a moral responsibility to the larger society “to do the right thing”.- behave ethically Copyright © 2022 Pearson Canada Inc. 6-5 What Is Meant by Socially Responsible Management? Social Responsiveness Social responsiveness: A firm’s engaging in social actions in response to some popular social need. Social need: A need of a segment of society caused by factors such as physical and mental disabilities; language barriers; and cultural, social, or geographical isolation. Managers in these companies are guided by social norms and values and make practical, market-oriented decisions about their actions. Ex- Purolator's Tackle Hunger Campaign, Facebooks’ dedicated information pages, Food bank programs at the Copyright © 2022 Pearson Canada Inc. grocery stores 6-6 What Is Meant by Socially Responsible Management? Social responsibility: is a business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society A socially responsible organization views things differently. It goes beyond what it’s obligated to do or chooses to do because of some popular social need and does what it can to help improve society because it’s the right thing to do. Ex- TOMS shoes https://www.toms.com/ca/impact.html - explore their webpage, what makes them a good example of social responsibility? Copyright © 2022 Pearson Canada Inc. 6-7 Corporate Social Responsibility and Economic Performance Many studies have shown positive relationship between social involvement and economic performance. However, cannot generalize findings. A recent analysis of several studies concluded that managers can afford to be (and should be) socially responsible. Ex- when companies treat employees right and fairly attrition and cost of recruitment can be reduced, when companies recycle and opt for renewable energy sources, the cost they have to incur on production can be reduced in the long-run. Apple: https://youtu.be/66XwG1CLHuU https://youtu.be/ANOgCY6NlGs Copyright © 2022 Pearson Canada Inc. 6-9 Corporate Social Responsibility and Economic Performance Socially Responsible Investing (SRI): SRI’s are funds which provide a way for individual investors to support socially responsible companies. These funds generally use some type of social screening; that is, applying social and environmental criteria to investment decisions. Ex- invest only in companies that are listed on the Dow Jones sustainability index, FTSE4 Good Index Copyright © 2022 Pearson Canada Inc. 6 - 10 Ethics Copyright © 2022 Pearson Canada Inc. 6 - 12 Managers and Ethical Behaviour Ethics: Principles, values, and beliefs that define what is right and wrong behavior. What are some examples of unethical activities that businesses do? https://www.transparency.org/en/cpi/2021 What determines ethical behaviour of a manager or an employee? Copyright © 2022 Pearson Canada Inc. 6 - 13  14 Business ethics as depicted in movies https://www.youtube.com/watch?v=yknIZsvQjG4 https://youtu.be/-w6duQhWuVk Copyright © 2022 Pearson Canada Inc. 6 - 14 EXAMPLE: ETHICAL DILEMMA You and your friends are planning to go to Toronto Islands. Assume there is only one ferry and it departs at 9 am. You know everyone would come on time except for one friend, Ira. You are worried that everyone will miss the ferry if Ira comes late. You have two options; lie to Ira that the ferry is at 8.30 am OR tell her the correct time and hope she comes on time. What will you do? Ethical dilemmas are situations in which you are to choose between two alternative where either choice would conflict with certain moral values and principles. https://youtu.be/cyj1wbfukUw Copyright © 2022 Pearson Canada Inc. 6 - 15 Exhibit 6.4 Factors That Determine Ethical and Unethical Behaviour Values, Does it affect many locus of people, is it generally control, ego regarded as unethical, strength how likely will it harm Formal rules and regulations Goals Performance appraisals Copyright © 2022 Pearson Canada Inc. 6 - 16 Exhibit 6.5 Stages of Moral Development Source: Based on L. Kohlberg, “Moral Stages and Moralization: The Cognitive-Development Approach,” in Moral Development and Behavior: Theory, Research, and Social Issues, ed. T. Lickona (New York: Holt, Rinehart & Winston, 1976), pp. 34–35 Copyright © 2022 Pearson Canada Inc. 6 - 17 Managers and Ethical Behaviour Individual characteristics Values Basic convictions about what is right or wrong on a broad range of issues. Often picked up through schooling, from parents, religious institutions. Ego strength A personality measure of the strength of a person’s convictions (firmly held belief). Copyright © 2022 Pearson Canada Inc. 6 - 18 Managers and Ethical Behaviour Individual characteristics Locus of Control: A personality attribute that measures the degree to which people believe they control their own life. Internal locus: the belief that you control your destiny. External locus: the belief that what happens to you is due to luck or chance. Structural variables Formalities in place within a company in terms of goals, procedures, policies. Ex- the more stringent goals are, more likely for unethical behavior to exist Copyright © 2022 Pearson Canada Inc. 6 - 19 Exhibit 6.6 Issue Intensity Higher the issue intensity, employees/managers tend to act more ethically Ex- If there is a defect in car seats manufactured, i.e. 1 in every million produced has a defect, companies may choose not to disclose this or even further investigate the causes. Copyright © 2022 Pearson Canada Inc. 6 - 20 At Home Activity Individually, research on how managers can encourage ethical behaviour within a company. Write a brief forum post on the space provided under week 4 on Moodle explaining your answer using examples. Copyright © 2022 Pearson Canada Inc. 6 - 21