managerial ethics and social responsibility. the community of stakeholders inside the organization...
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Managerial Ethics and Social Responsibility
The Community of Stakeholders Inside the Organization
• Stakeholders the people whose interests are affected by
an organization’s activities Internal, external
3 - 3
The Organization’s Environment
Figure 3.1
Is Ethics important?
• •
Yet…
• 76% of business students have cheated on at least one test 19% on four more
• 56% of workers report having lied to their boss
• Organizations short change employees $19B a year in overtime pay
Flawed Justifications
• “It’s only a little white lie”• “When in Rome”• “I’m Desperate”• “The Devil made me do it”• “Ignorance”• “Eye for Eye”• “No one will know”
Working Definitions
• Legal Compliance Conforming with formal laws and
regulations
• Ethical Behavior Conforming with accepted social norms
and standards of right and wrong
• Social Responsibility actions that will benefit the interests of
society as well as of the organization
Ethical Perspectives
• Utilitarian guided by what will result in the greatest
good for the greatest number of people
• Moral Imperatives Moral rules are without exception,
conditions, or extenuating cicumstances
• Individual guide by what will result in the individual’s
best long term interest, which ultimately are in everyone’s self-interest
Ethical Perspectives
• Moral-rights guided by respect for the fundamental
rights of human beings
• Justice guided by respect for impartial standards of
fairness and equity
Ethical Dilemmas
• •
Ethical Dilemmas
• Drug Testing• Cultural Differences• Technology
How Managers Can Promote Ethics
1. Support by top managers of a strong ethical climate
2. Selection
3. Ethics codes• Communicated internally and externally• Must be specific to the business
How Managers Can Promote Ethics
4. Ethics training programs• • • • • • •
5. Rewarding ethical behavior: • Encourage and protect whistleblowers
6. Punish unethical behavior
Two Types of Social Responsibility
• Sustainability economic development that meets the
needs of the present without compromising the ability of future generations to meet their own needs
Example: GE, Walmart, Toyota
• Philanthropy making charitable donations to benefit
humankind Examples: Google, Bill Gates, McDonalds
Social Responsibility
• Classical Economics (Milton Friedman) Management’s responsibility is to maximize
profits and generate shareholder wealth
• Socioeconomics Management also has a responsibility to
protect and improve society
• Which perspective makes sense to you?