Transcript Ethics and Social Responsibility

Ethics and Social
Responsibility:
Doing the Right
Thing
Chapter 21 Ethics and Social Responsibility
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Business Ethics
The fundamental moral values and
behavioral standards that form the
foundation for the people of an
organization as they make decisions
and interact with stakeholders
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Key Stakeholders
External Stakeholders
Customers
Special
Interest
Groups
Unions
Internal Stakeholders
Employees
Board of
Directors
Investors
Management
Creditors
Suppliers
Government
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General Public
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Three Levels of Ethical
Standards
The law
 Organizational policies and procedures
 The moral stance employees take
when faced with decisions not
governed by formal rules
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An Ethical Framework
Step 1. Recognize the ethical dimensions
involved in the dilemma or decision
Step 2. Identify the key stakeholders
involved and determine how the decision
will affect them
Step 3. Generate alternative choices and
distinguish between ethical and unethical
responses
Step 4. Choose the “best” ethical response
and implement it
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Three Styles of
Management
Immoral management - driving force
is greed
 Amoral management - does not
consider ethical impact on others
 Moral management - sees the law as a
minimum standard of behavior
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The Benefits of Moral
Management
1.
2.
3.
4.
Earning a profit does not conflict with
maintaining high ethical standards
Avoid the damage to a company’s reputation
that results from unethical behavior
Dealing with diverse stakeholders is easier
with a solid ethical foundation
Attracting and retaining quality workers is
easier
A company’s ethical philosophy determines its
ability to provide value for its customers
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Why Ethical Lapses
Occur
An unethical employee
 An unethical organizational culture
 Moral blindness
 Competitive pressures
 Opportunity pressures
 Globalization of business

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Establishing Ethical
Standards
The u’tili’tarian principle
 Kant's categorical imperative
 The professional ethic
 The Golden Rule
 The television test
 The family test

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Maintaining Ethical
Standards
Create a company credo
 Develop a code of ethics
 Enforce the code fairly and
consistently
 Conduct ethics training
 Hire the right people

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Maintaining Ethical
Standards
Perform periodic ethical audits
 Establish high standards of
behavior...not just rules
 Set an impeccable ethical example
 Create a culture that emphasizes
two-way communication
 Involve employees in establishing
ethical standards

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Social Responsibility
Social responsibility - the awareness by a
company’s managers of the social
environmental, political, human, and
financial consequences its actions produce
Studies: Companies that incorporate social
responsibility into their competitive
strategies outperform those that fail to do
so
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Business has a Social
Responsibility to...
The environment
 Employees
 Customers
 Investors
 The community

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Responsibility to the
Environment
The “Three R’s”:
 Reduce the amount of materials used
in your company
 Reuse whatever you can
 Recycle the materials that you must
dispose of
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Responsibility to
Employees

Diversity
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U.S. Population by Demographic Group
Pacific Islander, 0.3%
Native American and
Alaskan Native, 1.5%
Asian, 4.9%
Black, 13.2%
Hispanic, 14.6%
White, 65.4%
Source: U.S. Census Bureau, 2007.
SPLENDID Approach to
Diversity
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Study
Plan
Lead
Encourage
Notice
Discussion
Inclusion
Dedication
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Managing Diversity
Assess your company’s diversity
needs
 Learn to recognize your own biases
and stereotypes
 Avoid making invalid assumptions
 Push for diversity in your
management team

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Managing Diversity
Concentrate on communication
 Make diversity a core value in the
organization
 Continue to adjust your company to
your workers

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Responsibility to
Employees
Diversity
 Drug testing

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A Drug Prevention Program
Should Include . . .
A written substance abuse policy
 Training supervisors to detect drugusing workers
 An employee education program
 A drug testing program, when
necessary
 An employee assistance program
(EAP)

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Responsibility to
Employees
Diversity
 Drug testing
 AIDS

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An AIDS Policy
Should Address …
Employment
 Discrimination
 Employee benefits
 Confidentiality
 Education
 “Reasonable accommodations”

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Responsibility to
Employees
Diversity
 Drug testing
 AIDS
 Sexual harassment
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Sexual Harassment
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Any unwelcome sexual advance, request
for sexual favors, or other verbal or
physical sexual conduct made explicitly or
implicitly as a condition of employment
85% of sexual harassment cases are filed
by women
Harassment an take several forms
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Behavior Leading to Sexual
Harassment Charges
 Quid
Pro Quo (“something for
something”) harassment
 Hostile environment
 Harassment by non-employees
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Number of Sexual Harassment Charges Filed
16,000
14,000
Number of Charges Filed
12,000
10,000
8,000
6,000
4,000
2,000
1992
1993
1994
1995
1996
1997
1998
1999
Year
Source: Equal Employment Opportunity Commission, 2007
2000
2001
2002
2003
2004
2005
2006
Preventing Sexual
Harassment
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Education
Policy
Procedure
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Listen without judging
Investigate complaints promptly
Interview parties involved and witnesses
Maintain confidentiality
Follow company policy
Inform both parties of actions taken
Document the investigation
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Responsibility to
Employees
Diversity
 Drug testing
 AIDS
 Sexual harassment
 Privacy

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Responsibility to
Customers
Right
 Right
 Right
 Right
 Right

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to
to
to
to
to
safety
know
be heard
education
choice
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photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the
United States of America.
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Inc. Publishing as Prentice Hall
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