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Chapter 3

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  1. Exploring Management Chapter 3 Ethics and Social Responsibility

  2. Chapter 3 • How do ethics and ethical behavior play out in the workplace? • How can we maintain high standards of ethical conduct? • What should we know about the social responsibilities of organizations?

  3. 3.1Ethics in the workplace • Ethical behavior is values driven. • What is considered ethical varies among moral reasoning approaches. • What is considered ethical can vary across cultures. • Ethical dilemmas arise as tests of personal ethics and values. • People have tendencies to rationalize unethical behaviors.

  4. ethics in the workplaceEthical Behavior • Ethics • A code of moral principles that sets standards of good or bad, or right or wrong, in our conduct. • Ethical Behavior • That which is “right” or “good” in the context of governing moral code. • Ethical behavior is value driven

  5. ethics in the workplaceValues • Values • Broad beliefs about what is appropriate behavior • Terminal Values • Preferences about desired end states • Instrumental Values • Preferences regarding the means to desired ends

  6. ethics in the workplaceMoral Reasoning • Moral Reasoning • Reasons for various ethical practices

  7. ethics in the workplaceMoral Reasoning • Utilitarian View • Which action delivers the most good to the largest amount of people?

  8. ethics in the workplaceMoral Reasoning • Individualism View • Which action is in our best interest in the long-term? • Can be quite different from the best choice for the short term

  9. ethics in the workplaceMoral Reasoning • Justice View

  10. ethics in the workplaceMoral Reasoning • Moral Rights View • Fundamental rights of all people are respected

  11. ethics in the workplace Moral Reasoning Excerpt From Universal Declaration of Human Rights United Nations • Article 1—All human beings are born free and equal in dignity and right • Article 18—Everyone has the right to freedom of thought, conscience, and religion • Article 19—Everyone has the right to freedom of opinion and expression • Article 23—Everyone has the right to work, to free choice of employment, to just and favorable conditions of work • Article 26—Everyone has the right to education

  12. ethics in the workplace Ethics and Culture • Cultural Relativism • Suggest that there is no one right way to behave; cultural context determines ethical behavior

  13. ethics in the workplaceEthical Dilemma • Ethical Dilemma • A situation that, although offering potential benefits, is unethical. • One of the most common ethical dilemmas occurs when a company’s culture conflicts with an employee’s personal ethics.

  14. ethics in the workplace Ethics and Work The Wall Street Journal reports: • 36% of workers calling in sick are lying. • 35% keep quiet about co-worker misconduct. • 12% of job resumes contain falsehoods. • Managers are more likely than other workers to report wrongdoing. • Managers with 0–3 years experience feel most pressure to violate personal ethics.

  15. ethics in the workplace Rationalizing Unethical Behavior Four reasons:

  16. 3.2Maintaining high standards • Personal factors moral development influence ethical conduct. • Training in ethical decision making may improve ethical conduct. • Protection of whistleblowers may encourage ethical conduct. • Managers acting as positive role models can inspire ethical conduct. • Formal codes of ethics set standards for ethical conduct

  17. maintaining high standardsInfluence on Moral Development • Ethical Frameworks • Personal rules and strategies for making ethical decisions • Lawrence Kohlberg • Three levels of moral development

  18. maintaining high standardsEthics Training • Ethics Training • Seeks to help people understand the ethical aspects of decision making and to incorporate high ethical standards into their daily behavior.

  19. ethics in the workplaceEthical Dilemma • Checklist for dealing with ethical dilemmas • Step 1 • Recognize the ethical dilemma. • Step 2 • Get the facts. • Step 3 • Identify your options. • Step 4 • Test each option: Is it legal? Is it right? Is it beneficial? • Step 5 • Decide which option to follow. • Step 6 • Ask the “Spotlight Questions”: To double check your decision. • “How would I feel if my family found out about my decision?” • “How would I feel if the local newspaper printed my decision?” • Step 7 • Take action

  20. maintaining high standardsEthics Training Spotlight questions highlight the risk of public exposure of one’s actions: • How would I feel if my family found out about my decision? • How would I feel if my decision was in the local newspaper or posted on the internet? • What would the person I know who has the strongest character and best ethical judgment say about my decision?

  21. maintaining high standardsWhistleblowing • Whistleblowers • Persons who expose organizational misdeeds in order to preserve ethical standards and protect against wasteful, harmful, or illegal acts. • Many whistleblowers were / are fired for their actions. • State and federal laws now offer some protection.

  22. maintaining high standardsWhistleblowing • Organizational barriers to whistleblowing • Strict chain of command • Strong work group identities • Ambiguous priorities

  23. maintaining high standardsManagement Influence • Management Behavior • In order to have a positive impact on ethical conduct throughout an organization, those at the top must walk the talk.

  24. Maintaining high standardsCodes of Ethics • Formal codes of ethics set standards for ethical conduct. • Explain ethical principles • Describe expected behavior

  25. 3.3Social Responsibility • Social responsibility is an organization’s obligation to best serve society • Scholars argue cases for and against corporate social responsibility • Social responsibility audits measure the social performance of organizations • Sustainability is an important social responsibility goal • Social business and social entrepreneurs point the way in social responsibility

  26. SOCIAL RESPONSIBILITYSocial Responsibility is Serving Society • Stakeholders are the groups that have a direct interest in the success or failure of an organization.

  27. SOCIAL RESPONSIBILITYSocial Responsibility is Serving Society • Corporate Social Responsibility • The obligation of an organization to serve its own interest and those of its stakeholders

  28. SOCIAL RESPONSIBILITYSocial Responsibility is Serving Society • Triple Bottom Line—how well an organization performs when measured not only on financial criteria, but also on social and environmental ones. • Is the decision economically sound? • Is the decision socially responsible? • Is the decision environmentally sound? • Three Ps • Profit, People, Planet

  29. SOCIAL RESPONSIBILITYCorporate Social Responsibility

  30. SOCIAL RESPONSIBILITYSocial Responsibility • Virtuous Circle • Socially responsible actions lead to improved financial performance. • Organization is more likely to engage in socially responsible acts in the future. • Example: car manufacturers who produce fuel-efficient and hybrid cars may see improved financial performance and introduce more fuel efficient models.

  31. SOCIAL RESPONSIBILITYMeasuring Social Responsibility • Social responsibility audit • Determines the organization’s performance in various areas of social responsibility • Ranges from compliance to conviction

  32. SOCIAL RESPONSIBILITYSustainability • Sustainability • concerns doing business in such a way that respects future generations and their right to the world's natural resources

  33. SOCIAL RESPONSIBILITYSustainability • Sustainable business • Organization operates in a way that meets the needs of the customer and protects natural environment • Sustainable development • uses natural resources in such a way that today's needs are met, yet they are preserved for future generations

  34. SOCIAL RESPONSIBILITYSustainability • Environmental Capital • Land • Water • Minerals • Atmosphere

  35. SOCIAL RESPONSIBILITYSustainability • ISO14001 • Global quality standard that certifies organizational environmental objectives for minimal environmental impact.

  36. SOCIAL RESPONSIBILITYSustainability • Social business • Business model that addresses social problems such as hunger, illiteracy, poverty • Social entrepreneurs • Create businesses that help to solve social problems • Examples: Grameen Bank, Tom’s Shoes