Lecture management a pacific rim focus chapter 4 social responsibility and ethics in management

CHAPTER 4
SOCIAL RESPONSIBILITY &
ETHICS IN MANAGEMENT

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Lecture outline
• Organisational social responsibility
• Organisational social responsiveness
• Managing an ethical organisation

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Organisational social
responsibility
‘The obligation of an organisation to seek
actions protecting and improving society’s
welfare along with its own interests.’

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Organisational social

responsibility
Major perspectives:
• Invisible hand
A view holding that the entire social responsibility of
a corporation can be summed up as ‘make profits
and obey the law’.

• Hand of government
A view holding that the interests of society are best
served by having the law and political process guide
the corporation’s activities.
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Organisational social
responsibility
Major perspectives:
• Hand of management
A view stating that corporations and their
managers are expected to act in ways that
protect and improve society’s welfare as well
as make profit.

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Organisational social
responsibility
Hand of management
Incorporates these arguments:
• Anti-freeloader argument.
• Capacity argument.
• Enlightened self-interest argument.

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Social responsibilities of
managers
• Economic and legal
Responsibility to make a profit and obey the law
(invisible hand, hand of government, hand of
management).

• Ethical and discretionary
Ethical behaviour expected by society (invisible
hand, hand of government).
Difficult to determine, identify.
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Social stakeholders

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Shareholders
Employees
Customers
Local community
Society

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Social stakeholders
Employees
Shareholders

The organisation

Customers

International
community
Society (regional & national)

Local community

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Does social responsibility pay?
• Evidence is mixed.
• Strategically beneficial.
• Likely, profit  socially responsible
management.
• Shareholders sensitive to extent it affects
profit.

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Organisational social
responsiveness
‘A term referring to the development of
organisational decision processes where
managers anticipate, respond to and manage
areas of social responsibility.’
Two aspects:
• Monitoring social demands and expectations.
• Internal social response mechanisms.
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Monitoring social
demands/expectations
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Social forecasting
Opinion surveys
Social audits
Issues management
Social scanning

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Internal social response
mechanisms
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Individual executives
Temporary task forces
Permanent committees
Permanent departments
Combination approaches

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Being an ethical manager
‘The difficulties and concerns with business
ethics raises three important issues about
being a manager.’
• Types of managerial ethics
• Ethical guidelines for managers
• Ethical career issues

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Types of managerial ethics
• Immoral management
Lacks ethical principles, concern for profit only.

• Amoral management
Ignores or oblivious to ethical issues.

• Moral management
Conscious attention to ethical standards and issues.

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Ethical guidelines for managers
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Obey the law.
Tell the truth.
Show respect for people.
Stick to the Golden Rule.
Above all, do no harm.
Participation not paternalism.
Responsibility requires action.

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Ethical career issues
• Assessing values and protecting yourself
– Seek advice and support from trusted sources.
– Take action to change what you see as not
being ethical.
– Take actions to protect yourself.

• Anticipating ethical conflicts
– Pre-employment checks: Is this an ethical
company?
– Is the industry marked by patterns of unethical
behaviour?
– Avoid ethical compromises.
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Managing an ethical
organisation
Situational factors influencing ethical behaviour:
• External factors
Competitiveness, high/low opportunities for
success, dependency on other organisations.

• Internal factors
Push for high performance, labour unrest,
delegation, quests for innovation.

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Managing an ethical
organisation
Increasing awareness of diversity
Top-management commitment
Codes of ethics
Ethics committees
Ethics audits
Ethics hotlines
Ethics training
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Lecture summary
• Organisational social responsibility
– Major perspectives: invisible hand, hands of government
and management.
– Social responsibilities of managers.
– Social stakeholders: shareholders, employees,
customers, local and international community, society.
– Does social responsibility pay? Evidence mixed.

• Organisational social responsiveness
Monitoring social demands and expectations: forecasting,

opinion surveys, social audits, issues management,
social scanning, Internal social response mechanisms.

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Lecture summary
• Being an ethical manager

– Types of managerial ethics: immoral, amoral, moral.
– Ethical guidelines for managers.
– Ethical career issues: assessing & anticipating ethical
conflicts.

• Managing an ethical organisation

– Situational factors influencing ethical behaviour external
and internal.
– Mechanisms for ethical behaviour.

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