Transcript 0538478462_392252

MANAGEMENT
1st E D I T I O N
Gulati | Mayo | Nohria
Chapter 3
SETTING THE
CONTEXT FOR
MANAGEMENT
ETHICS AND
CORPORATE SOCIAL
RESPONSIBILITY
©South-Western, a part of Cengage Learning
PowerPoint Presentation by Charlie Cook
Learning Objectives
• Differentiate between various ethical frameworks and describe
how they influence the way managers navigate complex ethical
decisions
• Describe the different types of moral dilemmas that managers
face both inside and outside their organizations
• Explain the ethical, legal, and financial obligations of a business
and how these influence a firm’s approach to corporate social
responsibility
• Outline the link between corporate social responsibility and the
overall performance of a firm
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3–2
Introduction
Morality
Ethics
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The standards that people use to judge what is right or
wrong, good or evil
The study of moral standards and their effect on behavior
and conduct
3–3
Ethical Frameworks
Utilitarianism
Kantianism
The ethical philosophy claiming that behaviors are
considered moral if they produce the greatest good, or
utility, for the greatest number of people
An ethical philosophy claiming that motives and universal
rules are important aspects in judging what is right or
wrong
Fiduciary
A person who is entrusted with property, information, or
power to act on behalf of a beneficiary
Virtue
ethics
An ethical philosophy claiming that morality’s primary
function is to develop virtuous character
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3–4
Virtues and Character
Measures of a
virtuous character
A person’s ability to recognize
the moral elements of a situation
How well a person makes moral
judgments
How consistent a person’s actions
are with those judgments
How well a person can teach
others to exhibit character
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3–5
Table 3.1 - Moral Development
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3–6
Justice
An ethical philosophy that provides the framework for society to judge
what is morally right or wrong, fair or unfair, and establishes ways to
evaluate or punish those who behave in morally wrong ways
Distributive
justice
A subset of justice that deals with the distribution
of wealth and prosperity among members of a
society
Procedural
justice
A subset of justice claiming that rules should be clearly
stated, consistently obeyed, and impartially enforced
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3–7
Moral Dilemmas Faced by Organizations
Environmental
• Increasing pollution and depletion of natural resources
• Managers face the question of how much they should
conserve
Privacy
• A person’s right to determine the type and extent of
information that is disclosed about him or her
• Requires managers to strike balance between respecting
privacy and learning about their subordinates
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3–8
Ethical Dilemmas Faced by Individuals
Conflicts of
interest
Conflicts that occur when employees or managers
engage in activities on behalf of the company and have a
personal interest in the outcome of those activities
Trade secrets
Any type of information used in conducting business that
is not commonly known by others. It often provides a
strategic advantage for a company over its competitors
Bribery
Whistle-blowing
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Offering something valuable to a party to act on his
or her behalf, often to an unfair advantage
The release of information by a member of an organization
that is evidence of illegal or immoral conduct to
executives in a company or regulating agencies outside a
company
3–9
Corporate Social Responsibility (CSR)
A business’s obligation to pursue policies, decisions, and actions that
align with the objectives and values of society
Economic
responsibilities
A business’s duty to make a profit and increase
shareholder value
Legal
responsibilities
A business’s duty to pursue its economic responsibilities
within the boundaries of the law
Ethical
responsibilities
A business’s duty to meet the expectations of society
beyond its economic and legal responsibilities
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3–10
Figure 3.2 - Core Responsibilities of Business in Society
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Figure 3.2 - Duties of Corporate Social Responsibility
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3–12
Corporate Social Responsiveness
The practice of businesses responding to pressure from society to
engage in socially responsible ways
Monitor and assess
environmental conditions
on a constant basis
Behaviors of
responsive
firms
Seek to identify the needs
of their stakeholders
Design plans and policies
to respond to changing
conditions
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3–13
CSR and Strategy: Using CSR
for a Competitive Advantage
Strategic CSR
Corporate social responsibility activities
that are directly related to their business
activities so that they can combine social
welfare with financial welfare
Must be planned specifically to
support core business activities
Supervised carefully to create value for
the community and the firm
Evaluated regularly to ensure that CSR
activities benefit society while also
benefitting the business
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3–14
Figure 3.3 - Four-Step Process to Implementing CSR
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3–15
KEY TERMS
Conflicts of interest
Corporate social responsibility
Corporate social responsiveness
Distributive justice
Economic responsibilities
Ethical responsibilities
Ethics
Fiduciary
Justice
Kantianism
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Legal responsibilities
Morality
Privacy
Procedural justice
Strategic CSR
Trade secret
Utilitarianism
Virtue ethics
Whistle-blowing
3–16