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MGMT Chuck Williams. Chapter 4 Ethics and Social Responsibility. Designed & Prepared by B-books, Ltd. Ethics The set of moral principles or values that defines right and wrong for a person or group. Ethical and Unethical Workplace Behavior.

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chapter 4 ethics and social responsibility

MGMT

Chuck Williams

Chapter 4Ethics and Social Responsibility

Designed & Prepared byB-books, Ltd.

ethical and unethical workplace behavior

Ethics

The set of moral principles or values that defines right and wrong for a person or group.

Ethical and Unethical Workplace Behavior
what is ethical and unethical workplace behavior
What Is Ethical and Unethical Workplace Behavior?

After reading these sections, you should be able to:

identity common kinds of workplace deviance.

describe the U.S. Sentencing Commission Guidelines for Organizations and explain how they both encourage ethical behavior and punish unethical behavior by businesses.

u s sentencing commission guidelines
U.S. Sentencing Commission Guidelines

Companies can be prosecuted and punished even if management didn’t know about the unethical behavior.

2

who what and why
Who, What, and Why?
  • Nearly all businesses are covered
  • Punishes a number of offenses
  • Encourages businesses to be proactive

2.1

partial list of offenses

Money laundering

Conflicts of interest

Embezzlement

Dealing in stolen goods

Copyright infringements

Extortion

…and more

Partial List of Offenses

Invasion of privacy

Price fixing

Fraud

Customs violations

Antitrust violations

Civil rights violations

Theft

2.1

compliance program steps
Compliance Program Steps

Steps in determining fine size:

  • Determine the base fine.
  • Compute a culpability score.
  • Multiply the base fine by the culpability score.

Proactive companies get smaller fines!

2.2

compliance program steps9

1. Establish standards and procedures.

2. Assign upper-level managers to be in charge.

3. Delegate decision-making authority only to ethical employees.

4. Encourage employees to report violations.

5. Train employees on standards and procedures.

6. Enforce standards consistentlyandfairly.

7. Improve program after violations.

Compliance Program Steps

2.2

how do you make ethical decisions
How Do You Make Ethical Decisions?

After reading the next two sections, you should be able to:

describe what influences ethical decision making.

explain what practical steps managers can take to improve ethical decision making.

influences on ethical decision making

Ethical Intensity of Decision

Moral Development of Manager

Ethical Principles Used

Influences on Ethical Decision Making

EthicalAnswersDepend on…

3

ethical intensity depends on

Magnitude of consequences

Social consensus

Probability of effect

Temporal immediacy

Proximity of effect

Concentration of effect

Ethical Intensity Depends on…

3.1

moral development

Kohlberg’s Stages of Moral Development

Preconventional

Conventional

Postconventional

Societal Expectations

InternalizedPrinciples

Selfish

Moral Development

3.2

stages of moral development

Preconventional

Conventional

Postconventional

  • Punishment andObedience
  • InstrumentalExchange
  • Good boy, nice girl
  • Law and order
  • Social contract
  • Universalprinciple
Stages of Moral Development

3.2

principles of ethical decision making

Long-term self-interest

Personal virtue

Religious injunctions

Government requirements

Utilitarian benefits

Individual rights

Distributive justice

Principles of Ethical Decision Making

3.3

principles of ethical decision making16

Principle of long-term self-interest

Never take any action not in your organization’s long-term self-interest.

Principles of Ethical Decision Making

3.3

principles of ethical decision making17

Principle of Personal Virtue

Never do anything that is not honest, open, and truthful and that you would not beglad to see reported in the newspapersor on TV.

Principles of Ethical Decision Making

3.3

principles of ethical decision making18

Principle of Religious Injunctions

Never take any action that is not kindand that does not build a sense of community.

Principles of Ethical Decision Making

3.3

principles of ethical decision making19

Principle of Government Requirements

Never take any action that violates the law,for the law represents the minimalmoral standard.

Principles of Ethical Decision Making

3.3

principles of ethical decision making20

Principle of Utilitarian Benefit

Never take any action that does not result ingreater good for society.

Principles of Ethical Decision Making

3.3

principles of ethical decision making21

Principle of Individual Rights

Never take any action that infringes on others’ agreed-upon rights.

Principles of Ethical Decision Making

3.3

principles of ethical decision making22

Principle of Distributive Justice

Never take any action that harms the least among us: the poor, the uneducated,

the unemployed.

Principles of Ethical Decision Making

3.3

practical steps to ethical decision making
Practical Steps to Ethical Decision Making

Select and hire ethical employees

Establish a Code of Ethics

Train employees to make ethical decisions

Create an ethical climate

4

practical steps to ethical decision making24
Practical Steps to Ethical Decision Making
  • Overt Integrity Tests
  • Personality-Based Integrity Tests

Select and hire ethical employees

If you found a wallet containing $50, would you return it with the money?

4.1

practical steps to ethical decision making25

Web Link

http://www.nortelnetworks.com

Practical Steps to Ethical Decision Making

Establish a Code of Ethics

  • Communicate code of ethics both inside and outside the company
  • Develop ethical standards and proceduresspecific to business

4.2

ethics training

Web Link

http://ethics.bellsouth.com

Ethics Training

Ethics Training

  • Develops employee awareness of ethics
  • Achieves credibility with employees
  • Teaches a practical model of ethical decision making

4.3

ethics training27
Ethics Training

Lockheed

Boeing

Bell South

U.S. Dept. of Justice

3M

City of Philadelphia

…and more require employees to take ethics training.

a basic model of ethical decision making
A Basic Model of Ethical Decision Making

1. Identify the problem

2. Identify the constituents

3. Diagnose the situation

4. Analyze your options

5. Make your choice

6. Act

4.3

ethical climate

Web Link

http://www.whistleblowers.org

Ethical Climate

Establishing an Ethical Climate

Managers establish an ethical climate when they…

  • act ethically.
  • are active in company ethics programs.
  • report potential ethics violations.
  • punish those who violate the code of ethics.

4.4

what is social responsibility
What Is Social Responsibility?

After reading these sections, you should be able to explain:

to whom organizations are socially responsible.

for what organizations are socially responsible.

how organizations can choose to respond to societal demands for social responsibility.

whether social responsibility hurts or helps an organization’s economic performance.

what is social responsibility31

Social Responsibility

  • A business’s obligation to…
  • pursue policies
  • make decisions
  • take actions

…that benefit society.

What Is Social Responsibility?
to whom are organizations socially responsible

StakeholderModel

Satisfy Interests of Multiple Stakeholders

To Whom Are Organizations Socially Responsible?

ShareholderModel

Maximize Profits

5

shareholder model

Cons

  • Organizations cannot act effectively as moral agents for shareholders
  • Time, money, and attention diverted to social causes undermine market efficiency
Shareholder Model

Pros

  • Firm maximizes shareholder wealth and satisfaction
  • The company stock increases in value

5

stakeholder model

Primary Stakeholders:

Shareholders

Employees

Customers

Suppliers

Governments

Local Communities

Secondary Stakeholders:

MediaSpecial Interest GroupsTrade Associations

Stakeholder Model

5

organization s social responsibilities

Serve a social role

Discretionary

Abide by principlesof right and wrong

Ethical

Obey laws andregulations

Legal

Be profitable

Economic

Organization’s Social Responsibilities

?

$

6

responses to demands for social responsibility

Reactive

Defensive

Accommo-dative

Proactive

Fight all the way

Do only what is required

Beprogressive

Lead theindustry

PublicRelationsApproach

Legal Approach

ProblemSolving

Withdrawal

Bargaining

DO NOTHING

DO MUCH

Responses to Demands for Social Responsibility

7

social responsibility and economic performance

Can cost a company

Sometimes it does pay

Realities ofSocialResponsibility

Does not guarantee profitability

Social Responsibility and Economic Performance

8