Management Chapter 4- Ethics and Social Responsibility

The nature of ethics involves
– ethical dilemmas
– ethics
– social contracts
Ethical dilemma
“what is the right thing to do?”
– doing the right thing even though doing so might go against self-interest
Moral scruples
thoughts and feelings that tell a person what is right or wrong
– hesitate, debate, and reflect upon the rightness or goodness of a course of action
inner guiding moral principles, values, and beliefs about what is the right way to behave
Relationship between ethics and law
– just because it is legal does not mean it is ethical
– not fixed principles
– laws change to reflect society’s changing ethical beliefs
Social contract
– partly expressed in law and resides in social values
– complex, ambiguous, ever changing
Social contract – organization and society
duties organization must perform to retain society’s respect and support
Social contract- manager and employee
duties manager must perform to retain employee’s respect and support
various groups of people who may benefit or be harmed by how managers make decisions
Stakeholders include
1. stockholders
2. managers
3. employees
4. suppliers and distributors
5. customers
6. community, society, nation-state
Rules for ethical decision making
principles to analyze the impact of your decision on stakeholders
1. utilitarian rule
2. moral rights rule
3. justice rule
4. practical rule
Utilitarian rule
ethical decision produces the greatest good for the greatest number of people
– how do you measure the harm and benefit that will be done to each stakeholder?
– how do you evaluate importance of each stakeholder?
– may lead to decisions that permit harm to an individual or minority group’s rights
Moral rights rule
ethical decision maintains and protects the fundamental rights of people
– right to freedom, life, safety, property, privacy, free speech, religion
– how will action affect the rights of the different stakeholders?
– protecting the rights of some may hurt the rights of others
Justice rule
ethical decision distributes benefits and burdens in a fair and impartial way
– employees who are similar in skill and performance should receive the same pay
– outcomes should not be based on gender, race, religion, favorites
Practical rule
ethical decision is one a manager could easily share with others
– how would you feel sharing your actions with family, friends, or the media?
– does my action fall within accepted standards
Sources for managerial ethics
1. societal ethics
2. professional ethics
3. individual ethics
Societal ethics
emanate from a society’s laws, customs, unwritten attitudes, values, and norms
– vary greatly among societies
– ex: justice, poverty, rights of individual
Occupational ethics
standards that govern how members of a profession, trade or craft should conduct themselves when performing work-related activities
Professional ethics
professional groups can punish violators
Organizational ethics
guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders
Individual ethics
personal standards and values that determine how people view their responsibilities to other people and groups; how to act in situations when own self-interest is at stake
– sources include family, peers, upbringing, personality and experiences
social responsibility
way managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare of stakeholders and society
Approaches to social responsibility – low to high
1. Obstructionist approach
2. defensive approach
3. accommodative approach
4. proactive approach
Obstructionist approach
behave unethically and often illegally
– attempt to hide their behavior
– tobacco companies, Lehman Brothers
Defensive approach
stay within the law, but no attempt to exercise social responsibility beyond what is required by law
– WorldCom, Merrill Lynch
Accommodative approach
acknowledge need to support social responsibility
– try to balance interests of different stakeholders
– typical approach for large US companies
Proactive approach
actively embrace the need to behave in socially responsible ways
– forefront of campaigns for causes such as environmental causes, recycling/conservation, elimination of use of animals in drug testing