Transcript Chapter 4
CHAPTER 4 SOCIAL RESPONSIBILITY AND ETHICS IN MANAGEMENT Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–1 Lecture Outline • Organisational social responsibility - Perspectives, stakeholders, managerial responsibilities, does it pay? • Organisational social responsiveness • Being an ethical manager - Types, guidelines, career issues • Managing an ethical organisation Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–2 MANAGERIAL ETHICS • Ethics Standards of behaviour and moral judgment differentiating right from wrong • Managerial ethics Standards of conduct and moral judgment mangers use in their business Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–3 ORGANISATIONAL SOCIAL RESPONSIBILITY ‘The obligation of an organisation to act to protect and improve society’s welfare as well as its own interests.’ p112 Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–4 ORGANISATIONAL SOCIAL RESPONSIBILITY Major perspectives: • Invisible hand • Hand of government • Hand of management Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–5 ORGANISATIONAL SOCIAL RESPONSIBILITY INVISIBLE HAND ARGUMENT • A view holding that the entire social responsibility of a corporation can be summed up as ‘make profits and obey the law’. • Corporate responsibility is guided by the ‘invisible hand’ of free market forces Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–6 ORGANISATIONAL SOCIAL RESPONSIBILITY HAND OF GOVERNMENT PERSPECTIVE • A view holding that the interests of society are best served by having the law and the political process guide the corporation’s activities. • Law and political processes control organisations on employee well-being, customer protection and community issues e.g. the natural environment. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–7 ORGANISATIONAL SOCIAL RESPONSIBILITY Hand of Management perspective Incorporates: • Anti-freeloader argument • Capacity argument • Enlightened self-interest argument Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–8 ORGANISATIONAL SOCIAL RESPONSIBILITY HAND OF MANAGEMENT PERSPECTIVE • A view stating that corporations and their managers are expected to act in ways that protect and improve society’s welfare as well as make profit. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–9 ORGANISATIONAL SOCIAL RESPONSIBILITY ANTI-FREELOADER ARGUMENT • Holds that since businesses benefit from a better society, they should bear part of the costs by actively working to bring about solutions to social problems. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–10 ORGANISATIONAL SOCIAL RESPONSIBILITY CAPACITY ARGUMENT • States that the private sector, because of its considerable economic resources, must make up for government cutbacks in social programs. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–11 ORGANISATIONAL SOCIAL RESPONSIBILITY ENLIGHTENED SELF-INTEREST ARGUMENT • Holds that businesses exist at society’s pleasure and that, for their own legitimacy and survival, businesses should meet the public’s expectations regarding social responsibility. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–12 SOCIAL RESPONSIBILITIES OF MANAGERS • Economic and legal Responsibility to make a profit and obey the law (recognised by: invisible hand, hand of government, hand of management). • Ethical and discretionary Ethical behaviour expected by society (recognised by: hand of management). Difficult to determine, identify Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–13 SOCIAL STAKEHOLDERS • • • • • • Shareholders Employees Customers Local community General society International community Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–14 SOCIAL STAKEHOLDERS Employees Shareholders THE ORGANISATION Customers International community Local community Society (regional & national) Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–15 SOCIAL STAKEHOLDERS DIVERSITY AS COMPETITIVE ADVANTAGE • Attracting workers is costly, diversity may help attract and retain workers • Workforce that reflects customer base may give insight into customer wants, needs, preferences • Innovations are more likely where diversity exists Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–16 DOES SOCIAL RESPONSIBILITY PAY? • Evidence is mixed • Strategically beneficial • Likely, profit socially responsible management • Shareholders are sensitive to the extent that it affects profit Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–17 PROMOTING INNOVATION: VANGUARD COMPANIES Characteristically, they: • try to satisfy all their stakeholders • are committed to some higher purpose (profits not the only end of corporate efforts) • value continuous learning • aim high (dedicated to being best in all they do) Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–18 ORGANISATIONAL SOCIAL RESPONSIVENESS ‘A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility.’ Two aspects: • Monitoring social demands and expectations • Internal social response mechanisms Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–19 MONITORING SOCIAL DEMANDS/EXPECTATIONS • Social forecasting • Opinion surveys • Social audits • Issues management • Social scanning Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–20 INTERNAL SOCIAL RESPONSE MECHANISMS • Individual executives • Temporary task forces • Permanent committees • Permanent departments • Combination approaches Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–21 BEING AN ETHICAL MANAGER The difficulties and concerns with business ethics raise three important issues about being a manager: • Types of managerial ethics • Ethical guidelines for managers • Ethical career issues Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–22 TYPES OF MANAGERIAL ETHICS • Immoral management Lacks ethical principles, concern for profit only • Amoral management Ignores, or is oblivious to, ethical issues • Moral management Conscious attention to ethical standards and issues Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–23 ETHICAL GUIDELINES FOR MANAGERS • Obey the law. • Tell the truth. • Show respect for people. • Stick to the Golden Rule. • Above all, do no harm. • Participation not paternalism. • Responsibility requires action. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–24 FACTORS AFFECTING CSR STAGES OF MORAL DEVELOPMENT (Kohlberg, 1969) • Level 1: Pre-conventional morality (Punishment/reward) • Level 2: Conventional morality (Good by/Good girl - Authority orientation) • Level 3: Post-conventional morality (Social contracts/Ethical principles) Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–25 FACTORS AFFECTING CSR Moral intensity of ethical issues (Jones 1991) • Magnitude of consequences • Social consensus • Probability of effect • Temporal immediacy • Proximity • Concentration of effect Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–26 FACTORS AFFECTING CSR Individual values… four modes • Practical - what worked in the past • Moral - strong sense of right or wrong • Gratifying - drive to feel good about decisions • Economic - focus on organisational resources Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–27 ETHICAL CAREER ISSUES • Assessing values and protecting yourself – – – Seek advice and support from trusted sources. Take action to change what you see as not being ethical. Take actions to protect yourself. • Anticipating ethical conflicts – – – Pre-employment checks: Is this an ethical company? Is the industry marked by patterns of unethical behaviour? Avoid ethical compromises - they can escalate. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–28 MANAGING AN ETHICAL ORGANISATION Situational factors influencing ethical behaviour: • External factors Extreme competitiveness, high/low opportunities for success, dependency on other organisations • Internal factors Push for high performance, labour unrest, delegation, quests for innovation Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–29 MECHANISMS FOR ETHICAL MANAGEMENT • Increasing awareness of diversity • Top management commitment • Codes of ethics • Ethics committees • Ethics audits • Ethics hotlines • Ethics training Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–30 LECTURE SUMMARY • Organisational social responsibility defined • Three major perspectives (Invisible hand, Hand of • • • • government, Hand of management). Management’s social responsibility: Six stakeholder groups, links to organisational success? CSR: two processes - monitoring social expectations; internal response mechanisms Managers’ ethical standards: immoral, amoral and moral; Ethical guidelines; Ethical career issues Operating an ethical organisation: mechanisms to facilitate ethical behaviour. Copyright 2008 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 5e by Bartol, Tein, Matthews, Sharma Slides prepared by Rob Lawrence, Victoria University (Australia) 4–31