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Transcript of Ethics & Social Responsibility MANAGING: A COMPETENCY BASED APPROACH 11 th Edition Chapter...
Ethics &Social
Responsibility
MANAGING: A COMPETENCY BASED APPROACH
11th Edition
Chapter 3—Ethics and Social Responsibility
Prepared by
Argie ButlerTexas A&M University
Don Hellriegel
John W. Slocum, Jr.
Susan E. Jackson
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.1
CHAPTER 3—ETHICS AND SOCIAL RESPONSIBILITY
LEARNING GOALS
1. State the importance of ethics for individual employees and organizations
2. Describe four influences that shape the ethical behavior and decisions of individuals and organizations
3. Describe three approaches that people use when making ethical judgments
4. Explain stakeholder social responsibility and how it influences managers’ ethical decisions and behavior
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.2
IMPORTANCE OF ETHICS:SNAPSHOT
“While the majority of corporate CEOs are honest leaders dedicated to building their companies, far too many got caught up in the quest for personal gain and wound up sacrificing their values and their stakeholders. Call it greed, because that’s what it is. It threatens the very fabric of our system.”
William W. George, Former CEO and Chairman, Medtronic, Inc.
Ethics
The set of values, principles, and rules that define right and wrong conduct
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.3
LONG-TERM ORGANIZATIONALEFFECTIVENESS
Stronger financial performance over the long run
Greater sales, brand image, and reputation
More employee loyalty and commitment
Less vulnerability to activist pressure and boycotts
Fewer or no fines, court-imposed remedies,and criminal charges
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.4 (Figure 3.1)
Individual Influences
Legal and Regulatory Influences
Organizational Influences
Cultural Influences
Ethical Conduct Individual Organization
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.5
Cultural Influences
Culture
The dominant pattern of living, thinking, and believing that is developed and transmitted by people, consciously or unconsciously, to subsequent generations
Culture Values
Those consciously and subconsciously deeply held beliefs that specify general preferences and behaviors, and define what is right and wrong
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.6
Personal Values
Honesty
Integrity
Trustworthiness
Respect forOther People
Self-respect
Family
Achievement
Reliability
Fairness
Loyalty
Core Values in North American Culture
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.7
Laws: Society’s values and standards that are enforceable in the courts
Legality doesn’t always mean ethical
At one time U.S. organizations could legally discriminate against women
and minorities
Legal and Regulatory Influences
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.8
Legal and Regulatory Influences
Examples of Lawful Reasons for Dismissing Employees
Incompetence in performance that does not respond to training or to accommodation
Gross or repeated insubordination
Civil rights violations such as engaging in harassment
Illegal behavior such as theft or physical violence
Repeated lateness or unexcused absences
Drug activity or drunkenness on the job
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.9 (Adapted from Table 3.1)
Legal and Regulatory Influences
Examples of Unlawful Reasons for Dismissing Employees Blowing the whistle about illegal conduct by the employer
Reporting Occupational Safety and Health Administration violations
Filing discrimination charges with the Equal Employment Opportunity Commission or a state or municipal fair employment agency
Engaging in union activities, provided there is no violence or unlawful behavior
Complaining or testifying about violations of equal pay, wage, or hour law
Filing unfair labor practice charges with the National Labor Relations Board or a state agency
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.10
Legal and Regulatory Influences
Sarbanes-Oxley Act
Snapshot
Imposes rigorous auditing, financial disclosure, executive compensation, and corporate governance requirements on publicly traded companies
“…today’s compliance challenges are really information challenges. At its core, the Sarbanes-Oxley Act is about ensuring that data is turned into financial information in a way that enables accurate, reliable, transparent and timely financial reporting.”
Lee Dittmar, Principal, Deloitte Consulting LLP
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.11
Management’s Day-to-Day Behaviors and Decisions are Key
Create Formal Ethics System
Make It Acceptable
to Talk About Ethics
Communicate Ethical
Expectations
Include Ethical Conduct in
Performance Evaluations
Fostering an Ethical Culture
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.12 (Adapted from Table 3.2)
Organizational Influences
Abbreviated Principles in a World Code of Ethics
Reliability Principle: Honor commitments
Property Principle: Respect property and the rights of those who own it
Fiduciary Principle: Act as a fiduciary (representative) for the company and its investors
Transparency Principle: Conduct business in a truthful and open manner
(continued)
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.13 (Adapted from Table 3.2)
Continued: Abbreviated Principles in a World Code of Ethics
Citizenship Principle: Act as responsible citizens of the community
Fairness Principle: Engage in free and fair competition, deal with all parties fairly and equitably
Dignity Principle: Respect the dignity of all people; protect the health, safety, privacy, and human rights of others
Responsiveness Principle: Engage with parties who may have legitimate claims and concerns relating to the company’s activities
Source: Adapted from L. Paine, R. Deshpandé, J.D. Margolis, and K.E. Bettcher. Up to code: Does your company’s conduct meet world-class standards? Harvard Business Review, 2005, 82(2), 122-133.
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.14 (Figure 3.2)
Obedience & PunishmentObedience & Punishment
InstrumentalInstrumental
InterpersonalInterpersonal
Law & OrderLaw & Order
Social ContractSocial Contract
Universal PrinciplesUniversal Principles
Childhood Through Adulthood
Kohlberg’s Stages of Moral Development
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.15
Kohlberg’s Stages of Moral Development (cont’d)
Obedience and Punishment Stage: a person does the right thing mainly to avoid punishment or to obtain approval
Instrumental Stage: a person becomes aware that others also have needs and begins to defer to them to get what the individual wants
Interpersonal Stage: a person considers appropriate behaviors as that which pleases or is approved by friends or family
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.16
Kohlberg’s Stages of Moral Development (cont’d)
Law and Order Stage: a person considers proper behavior as doing one’s duty (obligation), showing respect for authority, and maintaining the social order for its own sake; loyalty to the nation and its laws are paramount
Social Contract Stage: a person is aware that people hold a variety of conflicting personal views that go beyond the letter of the law; a “greatest good for the greatest number” emphasis
Universal Principles Stage: a person considers appropriate conduct as determined by a person’s conscience, based on universal ethical principles
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.17
Individual Influences
Whistle-blowing
Whistle-blowers: employees who report unethical or illegal actions by their employers to other people or organizations that are capable of taking corrective action
Four questions to ask before whistle-blowing
1. Is this the only way?
4. Am I ready? 2. Do I have the evidence?
3. Why am I doing this?
Key Questions
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.18
Making Ethical Judgments:Utilitarian Approach
Focuses on behaviors and their results,not on the motives for such actions
Organizational Goal Primary managerial obligation is to maximize
shareholders’ profits and their long-term interests
Efficiency Obligation is to minimize inputs and maximize outputs
Conflicts of Interest Personal interests are not to conflict with achievement
of organizational goals
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.19
Making Ethical Judgments: Utilitarian Approach
CoreValues
Profit maximization
Competition benefits society and consumers
Rewards based on abilities and achievements
Sacrifice and hard work
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.20 (Figure 3.3)
Decisions should be consistent with fundamental rights and privileges (e.g., life, freedom, health, and privacy).
MoralRights
Freedom of
conscience and speech
Truthfulness
Life and Safety
Privacy
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.21
Snapshot
“If you are truly interested in teaching a grand andcritically important concept like honesty, you must be
willing to accept the awkward situations and inevitableflaring of human passions that are certain to occur.
However, it’s unquestionably worth the effort.”
Tom Asacker, Business Consultant and Author of Sandbox Wisdom
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.22
Decisions and behavior are evaluated with regardto how equitably they distribute benefits and costsamong individuals and group
Distributive Justice Principle
Requires that individuals not be treated differently on the basis of arbitrarily defined characteristics
Individuals who are similar in relevant respects should be treated similarly
Individuals who differ in relevant respects should be treated differently in proportion to the differences among them
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.23
Fairness Principle
Requires employees to support the rules of the organization as long as the organization is just (or fair) and employees have voluntarily accepted some benefits or opportunities in order to further their own interests
Both the organization and its employees have obligations and both should accept their responsibilities
Procedural justice: formal process for investigating grievances and taking remedial actions
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.24
Natural Duty Principle
Requires that decisions and behaviors be based on universal principles associatedwith being a responsible member of society
To supportand comply with just institutions
Not to cause unnecessary
suffering
Help others who are in need or jeopardy, without excessive
personal risk or loss
Not to harm or injure another
Universalduties
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.25 (Figure 3.4)
Ideal inEthical
DecisionMaking
UtilitarianApproach
Moral Rights Approach
Justice Approach
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.26
Stakeholder Social Responsibility
Managers and other employees have obligations toidentifiable groups that are affected by or can affectthe achievement of an organization’s goals
Enlightened self-interest Sound investment Inference avoidance
Rationale
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.27 (Figure 3.5)
TheOrganization
Media
PoliticalAction
Groups/Activists
UnionsSuppliers Employees
Shareholders
NongovernmentalOrganizations
Customers
Primary Stakeholders
Secondary StakeholdersGovernments
(Regulatory Agencies)
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.28 (Adapted from Table 3.4)
Examples of Types ofStakeholder Pressures
Employees
Shareholders
Pay and benefits Safety and healthRights at work/global labor standards
Demands for efficiency/profitability Viability (sustainability)Growth of investment
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.29 (Adapted from Table 3.4)
Examples of Types ofStakeholder Stakeholder Pressures
(cont’d)
Customers
Suppliers
Meet commitments Repeat business Fair trade practices/ethical treatment
Competitive prices Quality and safe products Respect for customer’s privacy
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.30
Sustainable Development
Conducting business in a way that protects the
natural environment while making economic
progress, thus meeting the needs of the present
generation without compromising the ability of
future generations to meet their own needs
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.31 (Adapted from Table 3.5)
Sustainable Development
A Few Components of Sustainable Development and Sustainability
Integrated solutions to environmental, social and economic needs
Using resources more efficiently and decoupling growth from environmental damage
Recognizing that decisions and actions taken locally have global impacts
Acting now to address sustainable development concerns, many of which will be global and long-term in nature
Win-win-win solutions possible, rather than trade-offs between social, environmental and economic issues
Ethics &Social
Responsibility
Chapter 3: PowerPoint 3.32
Disclosure of Social and Environmental
Information
ProactiveManagement Beyond
Minimum Requirements
Creating Shareholder Value with Corporate
Responsibility
Communication and
Engagementwith Various
Groups
MajorThemes
Evaluating Social Performance