Transcript Chapter 4

CHAPTER 4
SOCIAL
RESPONSIBILITY &
ETHICS IN
MANAGEMENT
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
4–1
LECTURE OUTLINE
• Organisational social responsibility
• Organisational social responsiveness
• Managing an ethical organisation
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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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
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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ORGANISATIONAL SOCIAL
RESPONSIBILITY
‘The obligation of an organisation
to seek actions protecting and
improving society’s welfare along
with its own interests.’
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ORGANISATIONAL SOCIAL
RESPONSIBILITY
Major viewpoints:
• Invisible hand
• Hand of government
• Hand of management
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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
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ORGANISATIONAL SOCIAL
RESPONSIBILITY
HAND OF GOVERNMENT ARGUMENT
• A view holding that the interests of society are best
served by having the law and political process
guide the corporation’s activities.
• Law and political process controls corporation re:
employee well-being, customer protection and
community issues e.g. environment.
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ORGANISATIONAL SOCIAL
RESPONSIBILITY
Hand of Management argument
Incorporates:
• Anti-freeloader argument
• Capacity argument
• Enlightened self-interest argument
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ORGANISATIONAL SOCIAL
RESPONSIBILITY
HAND OF MANAGEMENT ARGUMENT
• 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.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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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.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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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.
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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.
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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
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SOCIAL STAKEHOLDERS
• Shareholders
• Employees
• Customers
• Local community
• Society
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SOCIAL STAKEHOLDERS
Employees
Shareholders
THE
ORGANISATION
Customers
International
community
Local community
Society (regional & national)
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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
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DOES SOCIAL RESPONSIBILITY
PAY?
• Evidence is mixed
• Strategically beneficial
• Likely, profit  socially responsible
management
• Shareholders are sensitive to the
extent that it affects profit
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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
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MONITORING SOCIAL
DEMANDS/EXPECTATIONS
• Social forecasting
• Opinion surveys
• Social audits
• Issues management
• Social scanning
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INTERNAL SOCIAL
RESPONSE MECHANISMS
• Individual executives
• Temporary task forces
• Permanent committees
• Permanent departments
• Combination approaches
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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
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TYPES OF MANAGERIAL
ETHICS
• Immoral management
Lacks ethical principles, concern for profit only
• Amoral management
Ignores, or oblivious to, ethical issues
• Moral management
Conscious attention to ethical standards and
issues
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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.
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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.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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MANAGING AN ETHICAL
ORGANISATION
Situational factors influencing
ethical behaviour:
• External factors
Competitiveness, high/low opportunities for
success, dependency on other organisations
• Internal factors
Push for high performance, labour unrest,
delegation, quests for innovation
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MECHANISMS FOR ETHICAL
MANAGEMENT
• Increasing awareness of diversity
• Top management commitment
• Codes of ethics
• Ethics committees
• Ethics audits
• Ethics hotlines
• Ethics training
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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LECTURE SUMMARY
• Organisational social responsibility
–
–
–
–
Major perspectives: invisible hand, hands of
government and management
Social responsibilities of managers
Social stakeholders: shareholders, employees,
customers, local and international community,
society
Does social responsibility pay? Evidence mixed
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
4–27
LECTURE SUMMARY
• Organisational social responsiveness
–
Monitoring social demands and
expectations: forecasting, opinion surveys,
social audits, issues management, social
scanning, internal social response
mechanisms
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
4–28
LECTURE SUMMARY
• Being an ethical manager
–
–
–
Types of managerial ethics: immoral, amoral,
moral
Ethical guidelines for managers
Ethical career issues: assessing & anticipating
ethical conflicts
• Managing an ethical organisation
–
Situational factors influencing ethical
behaviour; external and internal
– Mechanisms for ethical behaviour
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
4–29