Transcript Chapter 5: Managerial Ethics & Corporate Social Responsibility

Managerial Ethics
What is Ethics?
 Criteria for Ethical Decision Making
 Social Responsibility
 Corporate Actions Toward Social
Demands
 Code of Ethics

Ethics
The code of moral principles and
values that govern the behaviors of a
person or group with respect to what
is right or wrong.
 Lies between the domains of codified
law and free choice
 Based on shared principles and
values
 Disagreements and dilemmas about
proper behavior often occur.
Three Domains of Human
Action
Domain of
Codified Law
Domain of
Ethics
Domain of
Free Choice
(Legal Standard)
(Social Standard)
(Personal Standard)
Amount of
Explicit Control
High
Low
Ethical Dilemma
A situation that arises when all
alternative choices or behaviors have
been deemed undesirable because of
potentially negative ethical
consequences, making it difficult to
distinguish right from wrong.
Criteria for Ethical Decision
Making
Utilitarian Approach
 Individualism Approach
 Moral-Rights Approach
 Justice Approach

Utilitarian Approach
Moral behaviors produce the greatest
good for the greatest number.
Individualism Approach
Acts are moral when they promote
the individual's best long-term
interests.
Moral-Rights Approach
Human beings have fundamental
rights that cannot be taken away by
an individual's decision.
1. Free consent
2. Privacy
3. Conscience
4. Free speech
5. Due process
6. Life and safety.
Justice Approach
Standards of equity, fairness, and
impartiality.
 Distributive Justice
 Procedural Justice
 Compensatory Justice
Social Responsibility
Management's obligation to make
choices and take actions that will
contribute to the welfare and
interests of society as well as to the
welfare and interests of the
organization
 Being a good corporate citizen.
 4 criteria: economic, legal, ethical,
discretionary.

Economic Responsibilities
Be Profitable
Legal Responsibilities
Obey the Law
Ethical Responsibilities
Do What is Right
Discretionary Responsibilities
Contribute to Quality of Life
Corporate Actions Toward
Social Demands
Obstructive
 Defensive
 Accommodative
 Proactive

Obstructive
Fight All the Way
Defensive
Do Only What is Legally Required
Accommodative
Accept Ethical Responsibility
Proactive
Take Social Initiatives
Code of Ethics
A formal statement of the company's
values concerning ethics and social
issues.