Ehtical Decision Making

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Ethics and Social Responsibility

Chapter5


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Copyright 2005 by South-Western, a division of Thomson Learning. !! rights reserved.2

Ethics and Social

Responsibility

Ethical values

Social responsibility

Fundamental approaches to ethical issues

Chapter 5

Topics

Managerss Challenge: Timberland


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Ethics

The code of moral principles and values that govern

the behaviors of a person or group with respect to what

is right or wrong


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Three Domains of Human Action

Amount of

Explicit ControlHigh Low

Domain of Certified Law

(Legal Standard)

Domain of Ethics

(Social Standard)

Domain of Free Choice

(Personal Standard)


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Ethical Dilemma

! situation that arises when all alternative

choices or behaviors have been deemedundesirable because

potentially of negative ethical conse"uences#

ma$ing it difficult to distinguish right from

wrong


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riteria !or

Ethical Decision "a#in$

Most ethical dilemmas involve

Conflict between needs of the part % whole& 'ndividual versus the organi(ation

& )rgani(ation versus society as a whole

Managers use normative strategiesto guide

their decision ma$ing & norms and values


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Ethical Decision "a#in$ Approaches

*tilitarian !pproach

'ndividualism !pproach

Moral&+ights !pproach

,ustice !pproach


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'tilitarian Approach

- Moral behavior produces the greatest good for the greatest number

- Critics fear a ./ig /rother0 approach and as$ if the common good iss"uee(ing the life out of the individual

- E1ample 2 )regons decision to e1tend Medicaid to 344#444 previously

ineligible recipients by refusing to pay for high&cost# high&ris$

procedures


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)ndi*idualism Approach

- !cts are moral when they promote the individuals

best long&term interests# which ultimately leads to thegreater good

- 'ndividual self&direction paramount

- 'ndividualism is believed to lead to honesty % integrity

since that wor$s best in the long run

- E1amples:Top e1ecutives from 6orldCom# Enron#

Tyco demonstrate flaws of approach


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"oral-Ri$hts Approach

Moral decisions are those that best

maintain the rights of those peopleaffected by them

!n ethical decision is one that avoids

interfering with the fundamental rights ofothers


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Si. "oral Ri$hts

". The right of free consent". The right of free consent

7 The right to privacy7 The right to privacy

8 The right of freedom of conscience8 The right of freedom of conscience

3 The right of free speech3 The right of free speech

5 The right to due process5 The right to due process

9 The right to life % safety9 The right to life % safety


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/ustice Approach

Moral ecisions must be based on standards

of e"uity# fairness# impartiality

Three types of ,ustice !pproaches:

istributive ,ustice

;rocedural ,ustice Compensatory ,ustice



Distributi*e /ustice

ifferent treatment of people should not be

based on arbitrary characteristics

'n case of substantive differences# people

should be treated differently in proportion tothe differences among them



0rocedural /ustice

+ules should be clearly stated

+ules should be consistently and

impartially enforced



ompensatory /ustice

- 'ndividuals should be compensated for thecost of their in



!actors Affectin$ Ethical hoices

The Manager

=evels or stages of moral

development> ;re&conventional

> Conventional

> ;ost&conventional

The )rgani(ation


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1e*els of 0ersonal "oral

De*elopment


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The r$aniation

+arely can ethical or unethical corporate actions be

attributed solely to the personal values of a single

manager

?alues adopted within the organi(ation are highly

important

Most people believe their duty is to fulfill obligationsand e1pectations of others

E1periential E1ercise: Ethical 6or$ Climates


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Social Responsibility

)rgani(ations obligation to ma$e

choices and ta$e actions that willcontribute to the welfare and

interests of society and organi(ation

/eing a good corporate citi(en

ifficulty in understanding 2 issuescan be ambiguous with respect to

right and wrong


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r$aniational Sta#eholders

!ny group within or outside the organi(ation

that has a sta$e in the organi(ationsperformance

Each sta$eholder2 @as a different criterion of responsiveness

2 @as a different interest in the company

Monsanto


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En*ironmental Responsibility

ommitment

!ctivist

!pproach

Sta$eholder

!pproach

Mar$et !pproach

=egal !pproach

The Shades of

Corporate Areen


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Total orporate Responsibility

Economic

+esponsibility

=egal

+esponsibilityEthical

+esponsibility

iscretionary

+esponsibility

Ethical ilemma: Should 6e Ao /eyond the

=awB


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The Ethical r$aniation

- Ethical individuals honest# have integrity# strive for a

high level of moral development

- Ethical leadership provides the necessary actions#

committed to ethical values and helps others to embody

those values

-

)rgani(ational structure embodies a code of ethics#and methods to implement ethical behavior


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Ethics and the e or#place

Telecommuting# virtual wor$# and fle1ible hours &Success of new programs depends on mutual trust

'T provides opportunities for monitoring

Companies that ma$e an unwavering

commitment to maintaining high standards ofethics and social responsibility will lead theway toward a brighter future for bothbusiness and society

Ehtical Decision Making

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