Management 12e richard draft chapter 05
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Chapter 5
Managing Ethics and Social Responsibility
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Managerial Ethics
Ethics – code of moral principles and values
that govern the behaviors of right or wrong
Standards about good/bad
Ethical issues can be complex
People in organizations have divergent
views about right/wrong
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5.1 Three Domains of
Human Action
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Ethical Management Today
Ethical lapses during the last decade have
been pervasive
Corporations and people have become
associated with greed, deceit, irresponsibility,
and lack of moral conscience
Managers carry a big responsibility for setting
an ethical climate
Ethical crises have brought ethical
management to the forefront
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Ethical Management Today
Ethical managers
Display honesty and integrity
Communicate and enforce ethical standards through their
behavior
Are fair in their decisions and the distribution of rewards
Show kindness and concern for others
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5.2 Four Types of Ethical
Manager Behavior
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The Business Case for Ethics
and Social Responsibility
Ethics and social responsibility are important
business issues
The connection between ethics and financial
performance has been widely debated
Customers would switch brands to do
business with a company that is ethical and
socially responsible
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Ethical Dilemmas
You are the moral agent–what would you do?
Your company requires a terrorist watch list that screens all
new customers and takes approximately 24 hours from the
time an order is placed. You can close a lucrative deal with
a potential long-term customer overnight, even though that
means the required watch list screening will have to be
done after the fact.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Criteria for Ethical
Decision Making
Utilitarian approach – moral behavior
produces the greatest good for the greatest
number
Individualism approach – acts are moral if
they promote the individual’s long-term interest
Moral-rights approach – humans have
fundamental rights and liberties that cannot be
taken away by an individual’s decision
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Criteria for Ethical
Decision Making (cont’d)
Justice approach – moral decisions must be
based on standards of equity, fairness, and
impartiality
Distributive justice
Procedural justice
Compensatory justice
Practical approach – bases decisions on
prevailing standards, society, and all stakeholders
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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A Manager’s Ethical Choices
Individuals bring their own personality and traits
to organizations
Personal needs, family influence, and religious
background shape individuals
Personality characteristics such as ego,
confidence, and independence may enable
managers to make ethical choices
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5.3 Three Levels of Personal
Moral Development
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What Is Corporate Social
Responsibility (CSR)?
Distinguishing right from wrong; doing right
Good corporate citizenship
Make choices that contribute to society and
stakeholders
Stakeholders – any group within or outside
Stakeholder mapping identifies needs,
importance and power of stakeholders
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5.4 Major Stakeholders Relevant to
Gap Inc.
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The Green Movement
Going GREEN is a new business imperative
Change in social attitudes
New governmental policies
Climate change
Information technology immediately spreads the
negative decisions of corporations
More organizations are embracing
sustainability
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The Ethic of Sustainability
Sustainability – economic development that
generates wealth and meets the needs of
current generation while preserving the
environment for the needs of future
generations
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Evaluating Corporate Social
Responsibility
Legal Responsibility
appropriate business behavior
Discretionary Responsibility
voluntary contributions to society
Organizational Virtuousness
a positive human impact, moral goodness
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5.5 Criteria of Corporate
Social Performance
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5.6 Building an Ethical
Organization
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Managing Company Ethics and
Social Responsibility
Code of ethics – a formal statement of the
company’s values regarding ethics and
social issues
Ethical structures – systems, positions, and
programs like ethics training
Whistle-blowing – employee disclosure of
illegal, immoral, or illegitimate practices
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