Lecture Art of Leadership and Motivation - Lecture 28

Art of Leadership & Motivation
HRM – 760
Lecture ­ 28

FACILITATOR
Prof. Dr. Mohammad Majid Mahmood


Corporate Social Responsibility 
& Ethics­II


Ethical Principles
 No  discrimination  should  be  done  on  the  basis  of 
caste, color, and religion
 The polices should be fair and transparent
 Proper  provision  of  safety  should  be  provided  by  the 
company to the employees.
 There  should  be  honesty,  loyalty,  and  integrity  in  the 
employees.
 The company’s resources should not be utilized by the 
employees for their personal usage.


Ethical Principles
• Information about employee’s personal lives, health, and work 
evaluations should be kept confidential.
• To neither give nor take any illegal payment, remuneration, gift, 
donation, or benefits to obtain business or favors.
• To  comply  with  all  regulations  regarding  preservation  of  the 
environment.

Ethical Principles
•
•
•
•
•

Rights and equitable treatment of shareholders
Interests of stakeholders
Role and responsibilities of the Board
Integrity and ethical behavior
Disclosure and transparency


Advantages of Ethical Behavior
•
•
•
•

Brand image
Greater loyalty
Greater commitment of employees
Employees become more creative


Why have a Code of Ethics?
•

•
•
•

To define acceptable behavior
To promote high standards of practice
To provide a benchmark for self­evaluation
To establish a framework for professional behavior 
and responsibilities


CODE OF ETHICS ­TRANSITION
Compliance

Integrity

Enforcement

Inspiration

Punishment

Motivation

Directive

Educational

Secretive

Open


Are Ethics and Business 
Compatible?


Are Ethics & Business Compatible?
• In an extreme, business and ethics may seem
incompatible:
– Earning profits may also be unethical
– In Islamic finance, earning interest is unethical
– Possession itself may be unethical in extreme sense

• Lots of businesses may need violence of some degree:
– E.g., Medical research

• Where do we draw the line between business and
morality:
– If the approach is subjective, then ethics lose their meaning as
everyone defines ethics to suit one’s convenience


Ethics and Society
• In fact, ethics serve society
• Societies are built on support
• All societies, whether those of humans or nonhumans, need mutual support, patience and care.


ETHICS IS LONG TERM POLICY

• All religions, all ethics and morals spring from the 
basic conflict between short term and long term:
– If we limit ourselves to the short term:
• Pleasures today, even at the cost of pains 
tomorrow, sound like a good bargain
– If we take long term into account:
• Every such pleasure which is not lasting, should 
be avoidable
• Long term is how long:
– Do we look at our lifetime?
– Do we look at the lives of our children?


LONG TERMISM IN BUSINESS
• Issues of corporate ethics have taken the form of short­
termism vs. long­termism
• If businesses are focused on long term stability and growth, 
they are ethical:
– Short term strategies compromise on longer interests
• Warren Buffet has stressed on long term strategies
• McKinsey survey shows that companies are focused on short 
term strategies due to market pressures


TELEOLOGICAL

No act is wrong
or right in itself,
only in terms of
its consequences

Ethical Theories
DEONTOLOGICAL

Acts are wrong
or right
irrespective of
their
consequences

Do the best thing Do the right
thing
Do what
The right thing
produces the
may not produce

VIRTUE ETHICS

Acts are wrong
or right
depending on
what the morally
good person
would do
Be the most
honest person
Being good is a
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matter

of


Why ethical problems occur in 
business?
1)
2)
3)
4)

Personal gains and selfish interests
Competitive pressure on profits
Business goals vs. personal values
Cross cultural contradiction
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Typical issues of ethics in business
 Bribery and kickbacks
 Corporate crime, e.g. Price fixing
 Employee issues
 Product issues, e.g.. Patent and copyright violation, 
product defects

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Warren Buffet’s 
Rule of Thumb for Ethical Conduct
• “…I want employees to ask themselves (when

they are in doubt about whether a particular
conduct is ethical or not), whether they are willing
that their act appear the next day on the front
page of local paper – to be read by their spouses,
children and friends.”
[Berkshire, code of ethics]


Coca Cola International
“Make every drop count”


Mission
“ To refresh the world in body, mind and 
spirit” 
“ To inspire moments of optimism through our 
brands and our action” 
“ To create value and make a difference 
everywhere we engage” 


Values
Leadership 
Passion 
Integrity 
Accountability
Collaboration 
Innovation
Quality 

20


Company Profile
Worlds largest liquid non­alcoholic 
refreshments producer. 
Headquarter in Georgia Atlanta, 
USA

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Powerful Brand  
   Interbrands 2011 ranked coca cola the 
no.1 brand in the world and estimated 
its brand value at $150 billions.


Coca Cola in Pakistan  
Established in 1964


Corporate Social Responsibility
The good side of picture