Management 13th edtion by schermerhorn bachrach chapter 03

John R. Schermerhorn, Jr.
Daniel G. Bachrach

Management
13th edition

Chapter 3
Ethics and Social Responsibility


Planning Ahead — Key Takeaways

 Define ethics and describe the foundations of ethical behavior.
 Discuss ethical dilemmas and issues in the workplace.
 Describe approaches to maintaining high ethical standards.
 Discuss social responsibility and corporate governance.

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Chapter 3 Outline

Ethics
•
•
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Laws and values as influences on ethical behavior
Alternative views of ethics
Cultural issues in ethical behavior

Ethics in the workplace
• Ethical dilemmas
• Influences on ethical decision making
• Rationalizations for unethical behavior

Copyright ©2015 John Wiley & Sons, Inc.


Chapter 3 Outline

Maintaining High Ethical Standards
• Moral management
• Ethics training
• Codes of ethical conduct
• Whistleblower protection
Social Responsibility
• Social responsibility, sustainability, and the triple bottom line
• Perspectives on corporate social responsibility
• Evaluating corporate social performance
• Corporate governance

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Ethics
Ethics

 Moral code of principles.
 Set standards of “good” or “bad” or “right” or “wrong” in one’s conduct.
Ethical behavior

 What is accepted as good and right in the context of the governing moral code.

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Ethics
Laws and values as influences on ethical behavior:

 Legal behavior is not necessarily ethical behavior.
 Personal values help determine individual ethical behavior.

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Ethics
Laws and values as influences on ethical behavior:

 Values - underlying beliefs and attitudes that help influence individual behavior
Terminal values - preferences about desired ends
Instrumental values – preferences regarding the means to desired ends

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Figure 3.1: Four views of ethical behavior

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Ethics
Four alternative ethical views

 Utilitarian
 Delivers the greatest good to the most people

 Individualism
 Advances long-term self-interests

 Moral rights
 Respects and protects the fundamental rights of all people

 Justice
 Fair and impartial treatment of people according to legal rules and standards
Procedural justice – policies and rules fairly applied
Distributive justice – fair distribution of outcomes
Interactional justice – people treated with dignity and respect
Commutative justice – fairness to all involved

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Ethics
Cultural issues in ethical behavior:

Cultural relativism
 Ethical behavior is always determined by cultural context.

Moral absolutism
 Behavior unacceptable in one’s home environment should not be acceptable anywhere

else.

Ethical imperialism
 Imposing one’s ethical standards on others.

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Figure 3.2 The extremes of cultural relativism and ethical
imperialism in international business ethics.

Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,” Harvard Business Review, vol. 74 (September–October 1996), pp. 48–62.

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Ethics in the Workplace
Ethical dilemmas

 occur when choices, although having potential for personal and/or organizational benefit,
may be considered unethical.

Ethical dilemmas common examples include:
 Discrimination
 Sexual harassment
 Conflicts of interest
 Product safety
 Use of organizational resources

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Checklist for ethical dilemmas

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Ethics in the Workplace
Influences on Ethical Decision Making

 Ethical framework
 Provides personal rules or strategies for ethical decision making
 Includes personal values
 Honesty
 Courage
 Fairness
 Integrity
 Self-respect

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Figure 3.3 Kohlberg’s levels of individual moral
development

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Situational Context and Ethics Intensity
 Ethics intensity or issue intensity

 the extent to which situations are perceived to pose important ethics challenges
 Organization Setting
 The work and social settings of organizations have a strong influence on the ethics of members
 External Environment, Government Regulation, and Industry Norms
 Laws reflect social values and define appropriate behavior; regulations help governments monitor these
behaviors and keep them within acceptable limits

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Ethics in the Workplace
External environment

Government laws and
regulations
(Sarbanes/Oxley Act
of 2002)

Competitive climate in

Societal norms

an industry

and values

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Ethics in the Workplace

Rationalizations for unethical behavior

People often rationalize ethical transgressions with after-the-fact
justifications:

Behavior is not really illegal.
Behavior is really in everyone’s best interests.
Nobody will ever find out.

The organization will “protect” you.

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Maintaining High Ethical Standards

• Moral Management
Managers behave in one of three

ways

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Maintaining High Ethical Standards

 Ethics training:
 Structured programs that help participants to understand ethical aspects of decision making.
 Helps people incorporate high ethical standards into daily life.
 Codes of Ethical Conduct

 Formal statement of an organization’s values and ethical principles that set expectations for behavior.

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Maintaining High Ethical Standards
 Areas often covered by codes of ethics:

Organizational citizenship
Illegal or improper acts
Customer/coworkers relationships
Bribes and kickbacks
Political contributions
Honesty of books or records
Confidentiality of corporate information

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Maintaining High Ethical Standards

 Whistleblowers

Expose misdeeds of others to:
Preserve ethical standards
Protect against wasteful, harmful, or illegal acts

Laws protecting whistleblowers vary

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Maintaining High Ethical Standards

 Barriers to whistleblowing include:
 Strict chain of command
 Strong work group identities
 Ambiguous priorities

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Social Responsibility
• Stakeholder Management

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Stakeholders: persons, groups, and other organizations directly affected by the behavior of the
organization and holding a stake in its performance.

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Stakeholder power: the capacity of the stakeholder to positively or negatively affect the operations of
the organization.

–

Demand legitimacy: the validity and legitimacy of a stakeholder’s interest in the organization.

–

Issue urgency: the extent to which a stakeholder’s concerns need immediate attention.

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Figure 3.4: The Many Stakeholders of Organizations

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