Principles of Management by Christopher Neck, Charles Lattimer, and Jeffrey Houghton. Chapter 6 Ethics and Social Responsibility

Transcription

1 Principles of Management by Christopher Neck, Charles Lattimer, and Jeffrey Houghton Chapter 6 Ethics and Social Responsibility 1

2 Ethics What Are Ethics? The moral principles, values, and beliefs that govern group or individual behavior according to what is right or wrong and what contributes to the balanced good of all stakeholders Ethical dilemma a situation in which no choice is entirely right John Wiley and Sons, Inc.,

3 What Are Ethics? (cont.) Domains of ethical decision making John Wiley and Sons, Inc.,

4 Individuals What Are Ethics (cont.) Lawrence Kohlberg s stages of moral development Progression from interests in self to interest in others Preconventional moral decisions are based primarily on selfprotection or self-interest Conventional moral decisions are based primarily on social norms Societal norms expectations about how people (and organizations) should behave Postconventional moral decisions are based primarily on what individual believes is good for society as a whole John Wiley and Sons, Inc.,

5 What Are Ethics? (cont.) Kohlberg s stages of moral development John Wiley and Sons, Inc.,

6 Organizations What Are Ethics? (cont.) Posture of the organization toward the local and global communities John Wiley and Sons, Inc.,

7 What Are Ethics? (cont.) Value-based management Company s culture impacts employee behavior in ways that are consistent with the organization s mission and values Ben & Jerry s Mission Actions John Wiley and Sons, Inc.,

8 Stakeholders What Are Ethics? (cont.) Internal and external constituents with a direct interest in the organization s behavior Experience the effects of the company s management decisions Stakeholder Model John Wiley and Sons, Inc.,

9 What Are Ethics? (cont.) Stakeholders (cont.) Externality a cost (negative) or benefit (positive) that occurs beyond the direct exchange between an organization and its stakeholders Escalation an increase in an organization s behavior as a direct response to a competitor s behvior Critical Thinking: Escalation John Wiley and Sons, Inc.,

10 Governments What Are Ethics? (cont.) Enact legal requirements to prevent unethical behavior E.g., Sarbannes-Oxley Act (2002) requires greater transparency in company accounting practices Governments face fundamental large-firm problem stemming from: Separation of ownership and control Decentralized regulation system John Wiley and Sons, Inc.,

11 Globe What Are Ethics? (cont.) Global-level of ethics principles, values, and beliefs that are widely considered universal United Nations The Global Compact Intended to guide decision making in the areas of human rights, labor, the environment, and anti-corruption John Wiley and Sons, Inc.,

12 Making Ethical Decisions Principles of ethics Legal principle decisions that follow both the letter and spirit of the law Individual rights principle decisions that do not infringe upon the rights of other people Virtuous principle decisions that you would be publicly proud of Long-term principle decisions that support the longterm interests of yourself and your organization John Wiley and Sons, Inc.,

13 Making Ethical Decisions (cont.) Principles of ethics (cont.) Community principle decisions that contribute to the strength and well-being of the community Utilitarian principle decisions that provide the greatest good to the greatest number (or the least harm to the fewest number) Distributed justice principle decisions that do not harm those who already disadvantaged John Wiley and Sons, Inc.,

14 Making Ethical Decisions (cont.) Codes of conduct Organization s published guidelines of its expectations about ethical behavior Typically address conduct in eight areas Fiduciary Dignity Property Transparency Reliability Fairness Citizenship Responsiveness John Wiley and Sons, Inc.,

15 Making Ethical Decisions (cont.) Principle-based management Organization proactively connects values and beliefs to behavior expectations All stakeholders are continuously made aware of standards for behavior Stakeholders become a vital component to decision making John Wiley and Sons, Inc.,

16 Social responsibility Social Responsibility Proactive behaviors for the benefit of society Corporate social responsibility (CSR) Programs that coordinate the company s efforts to address societal and community challenges as they emerge John Wiley and Sons, Inc.,

17 Social Responsibility (cont.) Approaches to social responsibility Proactive approach organization goes beyond industry norms to solve and prevent problems Begin by consulting the articles of incorporation May change the legal structure to support socially responsible activities B Lab non-profit organization that certifies socially responsible companies Accommodative approach organization accepts responsibility and takes action in response to societal pressures John Wiley and Sons, Inc.,

18 Social Responsibility (cont.) Approaches to social responsibility (cont.) Defensive approach organization accepts responsibility, but does only the minimum required Reactive approach organization denies responsibility for social problems and responds only when legally required John Wiley and Sons, Inc.,

19 How Does Social Responsibility Pay? Social entrepreneurs People who start a business for the dual purpose of profits and societal benefits Consumers and investors are becoming more active in supporting and investing in socially responsible companies Social investing e.g., Calvert Social Investment Fund Screens companies on financial performance and: Environment Human rights Community relations Governance business ethics Workplace Indigenous peoples rights Product safety and impact John Wiley and Sons, Inc.,

20 Managing Social Responsibility Today Managers must make principle-based decisions informed by industry and societal standards Internalizing an externality management proactively addresses a negative externality for the benefit of its stakeholders Building an ethical culture Apply a framework for ethical decision making Ethics training John Wiley and Sons, Inc.,

21 Managing Social Responsibility Today (cont.) Ethical decision making framework Communicates standards for ethical behavior Duties Perfect duties moral obligations that are clearly articulated Imperfect duties moral obligations that can be interpreted in different ways Rights behaviors that can be expected from others, based on their duties Standards of excellence organization s highest expectations of behavior Commitments self-defined principles unique to an individual or organization John Wiley and Sons, Inc.,

22 Managing Social Responsibility Today (cont.) Ethical decision making framework (cont.) Applying the framework Understanding the situation Connecting behaviors to standards Impartial analysis Visibility the newspaper test Generality would all organizational members be comfortable with action taken Legacy would decision maker be comfortable being remembered for the action taken John Wiley and Sons, Inc.,

23 Managing Social Responsibility Today (cont.) Ethics training Intended to prevent unethical behavior from occurring John Wiley and Sons, Inc.,

24 Managing Social Responsibility Today Ethics training (cont.) Audience for training (cont.) Training characteristics trainees current moral profile Audience s assertiveness, cognitive ability, perspective on ethical behavior Needs assessment determine audience s need for ethics training Training transfer steps to assure that what is learned about ethics will be used on the job Evaluation determine the effect of training on trainees : Reaction to the training Knowledge/skills tests Workplace behavior Organizational performance John Wiley and Sons, Inc.,

25 Managing Social Responsibility Today (cont.) In the interests of self or others? Tragedy of the commons John Wiley and Sons, Inc.,