Transcript 3 Bus ethics and responsibility (gabungan)

Chapter 2
Conducting
Business Ethically
and Responsibly
“The more I help others
to succeed, the more I
succeed.”
— Ray Kroc, Founder,
McDonald’s
What Is Ethical Behavior?
• Ethics
– Right and wrong,
good and bad, in
actions that affect
others
• Ethical Behavior
– Conforming to
generally accepted
ethical norms
Ethical Considerations
• Regarding a particular act…
– Utility: Does it optimize what is best for those
who are affected by it?
– Rights:
Does it respect the rights of the
individuals involved?
– Justice: Is it consistent with what we regard
as fair?
– Caring: Is it consistent with people’s
responsibilities to each other?
Data
Gathering
Expanded Model of Ethical Judgment
Making
Gather the facts concerning the act or policy
Is the act or policy acceptable according to the four ethical norms?
• Utility: Does it optimize the satisfaction of all constituencies?
• Rights: Does it respect the rights and duties of the individuals involved?
• Justice: Is it consistent with the canons of justice?
• Caring: Is it consistent with the responsibility to care?
Analysis
No on all
No on one or
Yes on all
criteria
two criteria
criteria
Is there any reason for overriding one or two of the ethical norms?
Is one ethical norm more important than the others?
Is there any reason why a person may have been forced into
committing an act or following a policy?
No
Judgment
The act or policy is not ethical.
Yes
The act or policy is ethical.
Figure 2–2
Company Practices and
Business Ethics
Best Approach: Open, Honest, Responsive!
The Coca Cola Scare Case
The Tylenol Scare Case
How Much Privacy Does Your
Employer Owe You?
• Email
• Internet
• Cellular Phones
Formalizing the Commitment to
Ethics
Adopting Written Codes
Instituting Ethics Programs
Social Responsibility: Balancing
Commitments to Stakeholders
• Stakeholders
– Groups, individuals, and organizations that are
directly affected by the practices of an
organization
Employees
Investors
Customers
CORPORATION
Local Communities
Suppliers
Responsibility Toward the
Environment
• Air pollution
• Water pollution
• Land pollution
– Toxic waste
– Recycling
Responsibility Toward
Customers
Consumer Rights
Unfair Pricing
Ethics in Advertising
Responsibility Toward
Employees
Legal and Social
Commitments
Whistle-blowers
Responsibility Toward Investors
• Improper financial
management
• Check kiting
• Insider trading
• Misrepresentation
of finances
Approaches to Social
Responsibility
Level of Social Responsibility
Highest
Lowest
Obstructionist
Stance
Actively
Avoids
Responsibility
Defensive
Stance
Does Legal
Minimum
Accommodative
Stance
Responds to
Requests
Proactive
Stance
Actively Seeks
Opportunities
to Contribute
Ethics, Social Responsibility,
and the Small Business
Do small businesses
face different issues
with regard to ethics
and social
responsibility?
Chapter Review
• Discuss how individuals develop their personal
codes of ethics.
• Explain why ethics matter in the workplace.
• Distinguish social responsibility from ethics.
• Show how social responsibility applies to
environmental issues and to relationships with
customers, employees, and investors.
• Identify four approaches to social responsibility.
• Describe the four steps a firm must take to implement
a social responsibility program.
• Explain how social responsibly and ethics affect
Ethics
• Ethics
–the system of rules governing the ordering of values
• affects people’s behavior and the ‘goods’ that are worth seeking
• values - principles of conduct
– ethics becomes more complicated when a situation dictates that
one value overrules another
–business ethics - the moral principles and standards
that guide behavior in the world of business
Ethics (cont.)
• Ethical systems
–moral philosophy - the principles, rules, and values
people use in deciding what is right and wrong
–universalism - individuals should uphold certain
values, regardless of the immediate result
• important values are those that society needs to function
–teleology - an act is morally right if it produces a
desired result
• egoism - acceptable behavior maximizes consequences for the
individual
• utilitarianism - seeks the greatest good for the greatest number
of people, thereby maximizing total utility
Ethics (cont.)
• Ethical systems (cont.)
–deontology - focuses on the rights of individuals
• ensures that equal respect is given to all persons
• concentrates on means
–relativism - ethical behavior defined by the opinions
and behavior of relevant other people
• acknowledges the existence of different theoretical viewpoints
• group consensus is sought
– positive consensus signifies that an action is right, ethical, and
acceptable
Ethics (cont.)
• Ethical systems (cont.)
– virtue ethics - morality defined by what a mature person with
‘good’ moral character would deem right
• society’s rules provide a moral minimum
• individual’s can transcend rules by applying personal standards
– Kohlberg’s model of cognitive moral development
• preconventional stage - decisions based on concrete rewards,
punishments, and immediate self-interest
• conventional stage - actions conform to societal expectations
• principled stage - follow self-chosen ethical principle
– see beyond authority, laws, and norms
Ethics (cont.)
• The ethics environment
–Ethical climate - processes by which decisions are
evaluated and made on the basis of right and wrong
• unethical corporate behavior may be the responsibility of an
unethical individual
– often reveals a company culture that is ethically lax
–Corporate ethical standards- organizations must be
explicit regarding their ethical standards and
expectations
• there are many different corporate ethical standards
– golden rule
– accepted business practice
– intuitive approach
Business Ethics and Social
Responsibility
• Business Ethics:
– The principles and standards that define
acceptable conduct in business
• Social Responsibility:
– A business’s obligation to maximize its
positive impact and minimize its negative
impact on society
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Recognizing an Ethical Issue
• An ethical issue is an identifiable problem,
situation, or opportunity that requires a
person to choose from among several
actions that may be evaluated as right or
wrong, ethical or unethical
Did You Know?
The most common types of observed misconduct
are lying, withholding information, and abusive/
intimidating behavior.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Ethical Issue Categories
• Conflict of interest
• Fairness and
honesty
• Communications
• Business
relationships
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Conflict of Interest
• Occurs when a person must choose
whether to advance their own
personal interest or those of others
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Fairness and Honesty
• The heart of business
ethics
– General values of
decision makers
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Communications
• False and misleading
advertising and deceptive
personal-selling tactics
anger customers and may
cause a business to fail.
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Business Relationships
• Businesspeople must be ethical toward
their customers, suppliers, and others in
their workplace.
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Reasons For Not Reporting
Observed Misconduct
1. Fear of not being considered a team player
2. Didn’t believe corrective action would be taken
3. Feared retribution or retaliation from supervisor
or management
4. No one else cares about business ethics so
why should I
5. Didn’t trust organization to keep report
confidential
Source: 1997 Society for Human Resource Management/Ethics Resource Center
Business Ethics Survey Report, p. 21.
Climate Factors Conducive To
Unethical Behavior
Emphasis on shortterm revenues
Shareholders concerns
take precedence over
other constituencies
Lack clear procedures
for dealing with ethical
problems
Ethics considered
from legal or public
relations viewpoint
No written code
of ethics
Danger
Signs
Desire for “quick
fix” solutions
Financial concerns
take precedence over
ethical considerations
Misconduct Observed in the
Workplace
Questions to Consider in Determining
Whether an Action is Ethical
• Are there any potential legal restrictions or
violations that could result from the action?
– Question: If I do this will it break any laws?
• Does your company have a specific code of
ethics or a policy on the action?
– Question: If I do this will I go against the
employee handbook?
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Questions to Consider in Determining
Whether an Action is Ethical
• Is this activity customary in your industry?
• Are there any industry trade groups that
provide guidelines or codes of conduct
that address this issue?
– Question: If I do this will I violate any trade
practices?
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Questions to Consider in Determining
Whether an Action is Ethical
• Would this activity be accepted by your
coworkers?
• Will your decision or action withstand open
discussion with coworkers and managers
and survive untarnished?
– Question: Will my action cause peer
acceptance or rejection, or any peer
pressure?
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Questions to Consider in Determining
Whether an Action is Ethical
• How does this activity fit with your own
beliefs and values?
– Question: Will my action violate any of my
personal ethics, religious beliefs, or social
values?
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Ethics (cont.)
• The ethics environment (cont.)
–Ethics codes - most visible sign of corporate
commitment to ethical behavior
• must be tailored to individual company’s philosophies
• address subjects such as employee conduct, community and
environment, shareholders, customers, political activity
–Ethics programs
• compliance-based - designed by corporate counsel to prevent,
detect, and punish legal violations
– increases surveillance and controls
• integrity-based - guiding principles that instill personal
responsibility for ethical behavior
Ethical Decision Making
Define the
issue clearly
Identify the
relevant values
in the
situation
Ethical
Decision
Making
Implement the
decision
Weigh conflicting
values and choose
option that
balances them
Three Factors that Influence
Business Ethics
Individual
Standards
and
Values
Managers’
and
Coworkers’
Influence
Opportunity:
Codes and
Compliance
Requirements
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Ethical/Unethical
Choices
in Business
Codes of Ethics
• Formalized rules and standards that
describe what a company expects of its
employees
Did You Know?
Written ethics standards are more often found in
larger companies than smaller ones.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Whistleblowing
• The act of an employee exposing the
employer’s wrongdoing to outsiders
– The media
– Government regulatory agencies
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The Facts on Business
Ethics Today
• Of employees surveyed:
– 50% reported that their organizations have an
ethics officer or a phone line for ethics advice
– 84% reported that their organizations offer
mandatory ethics training
– 54% reported that ethics training was useful
at work
Source: Ethics Resource Center, 2000 National Business Ethics Survey: How
Employees Perceive Ethics at Work.
The Nature of Social
Responsibility
• Four Dimensions:
– Economic – earn profits
– Legal – comply with the law
– Ethical
• Not just “for profit” only
– Voluntary & Philanthropic
• Promote human welfare and goodwill
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
The Pyramid of Social Responsibility
Voluntary
Responsibilities
being a
“good corporate citizen;”
contributing to the
community and quality of life
Ethical Responsibilities
being ethical; doing what is right, just,
and fair; avoiding harm
Legal Responsibilities
obeying the law (society’s codification
of right and wrong)
Economic Responsibilities
being profitable
Source: Adapted from Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral
Management of Organizational Stakeholders.” Business Horizons 34 (July/August 1991): 42.
Best Corporate Citizens
1.
2.
3.
4.
5.
Fannie Mae
Procter & Gamble
Intel Corporation
St. Paul Companies
Green Mountain Coffee
Roasters
6. Deere & Company
7. Avon Products
8. Hewlett-Packard
9. Agilent Technologies
10. Ecobab
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Imation
IBM
Nuveen Investments
Herman Miller
J. M. Smucker
Safeco
Timberland
Zimmer Holdings
Cisco
3M
Source: Philip Johnansson, “The Best 100 Corporate Citizens,” Business Ethics, March/April
2001, p. 15.
Arguments for Social Responsibility
1. Business helped to create many of the social
problems that exist today, so it should play a
significant role in solving them
2. Businesses should be more responsible
because they have the financial and technical
resources to help solve social problems
3. As members of society, businesses should do
their fair share to help others
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Arguments for Social
Responsibility
4. Socially responsible decision making by
businesses can prevent increased government
regulation
5. Social responsibility is necessary to ensure
economic survival
–
Businesses must take steps to help solve the social
and environmental problems that exist today
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Arguments Against Social
Responsibility
1. Managers are sidetracked from the primary
goal of business
– Earning profits
2. Participation in social programs gives
businesses greater power, perhaps at the
expense of particular segments of society
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Arguments Against Social
Responsibility
3. Some people question whether business has
the expertise needed to assess and make
decisions about social problems
4. Many people believe that social problems are
the responsibility of government agencies and
officials
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Social Responsibility Issues
• Organizational relationships with owners and
stockholders:
– Profit and ROI
• Employee relations:
– Providing a safe workplace, adequate pay,
information about the company, listening to
grievances, and treating employees fairly
• Consumer relations:
– Respecting the rights of customers and providing
them with safe and satisfying products
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Social Responsibility Issues
• Environmental issues:
– Animal rights
– Pollution
– Global warming
• Community relations:
– Responsibility to the general welfare of
the community
Did You Know?
In one year, Americans generated 230 million
tons of trash and recycled 23.5 percent of it.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
John F. Kennedy’s 1962
Consumer Bill of Rights
•
•
•
•
The right to safety
The right to be informed
The right to choose
The right to be heard
Did You Know?
John F. Kennedy was the 35th President of
the United States.
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Responsibility of the Ethics
Officer
• Provide advice about ethics to employees and
management
• Distribute the company’s code of ethics
• Create and maintain an anonymous, confidential
service to answer questions about ethical issues
• Take action on ethics violations
• Review and modify the code of ethics as needed
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved
Corporate Social Responsibility
• Corporate social responsibility
–the obligation toward society assumed by business
• maximizes it positive effects on society and minimizes it negative
effects
–economic responsibilities - produce goods and
services that society wants at a price that perpetuates
the business
–legal responsibilities - obey local, state, federal and
relevant international laws
–ethical responsibilities - meeting other societal
expectations, not written as law
–voluntary responsibilities - additional behaviors that
society finds desirable and that the values of the
business support
Pyramid Of Corporate Social
Responsibility
Voluntary
Responsibilities
Be a good corporate
citizen
Ethical
Responsibilities
Be ethical
Legal
Responsibilities
Obey the law
Economic
Responsibilities
Be profitable
Corporate Social Responsibility
(cont.)
• Contrasting views
–profit maximization view
• managers obligated to maximize the present value of the firm
• economic performance is an organization’s primary social
responsibility
–business judgment rule - allows management wide
latitude in policy if the policy can be justified
• duty to pursue profits is not absolute
–principled moral reasoning view
• ethical actions are not optional, but mandatory
• organizations have a wider range of responsibilities that extend
beyond the production of goods and services for a profit
Corproate Social Responsibility
(cont.)
•Reconciliation
–based on the idea that ethical behavior is both
right and more profitable
–competitive advantages of socially responsible
actions, especially over the long-term
• avoid unnecessary and costly regulation
•pay dividends to the reputation of the company
•profits can be made from attempts to solve society’s
problems
Corporate Social Responsibility
(cont.)
• Corporate social responsiveness
–the process companies follow and the actions they take
in the domain of corporate social responsibility
• CSR1 (corporate social responsibility) - principles, philosophies,
and beliefs
• CSR2 (corporate social responsiveness) - processes companies
follow and the actions they take
• both CSR1 and CSR2 have their critics in academia and
business
–stakeholder management - managers do not manage
relationships with society but with stakeholders
Approaches To Corporate Social
Responsiveness
Approach
Posture or Strategy
1. Reactive
Deny responsibility
Do less than required
2. Defensive
Admit responsibility
but fight it
Do the least that is required
3. Accommodative
Accept responsibility
Do all that is required
4. Proactive
Anticipate responsibility
Do more than is required
Performance
Corporate Social Responsibility
(cont.)
•Strategic voluntarism
–corporate philanthropy has become more
strategic
•strive to do things that matter
•get recognition for their contributions
•support causes that both capitalize on and serve their
businesses
–community service is increasingly an employee
benefit
The Political Environment
• Competitive advantage
–progressive organizations realize that government may
be the source of competitive advantages for an
individual company or an entire industry
–numerous examples of public policy that assists
business
• Corporate legitimacy
–motive for business involvement in the public policy
process
–organizations are legitimate to the extent that their
goals and methods are consistent with those of society
–domain defense - activities intended to counter
challenges to the organization’s legitimacy
The Political Environment
(cont.)
• Strategies for influencing the political environment
–public affairs department - monitors key events and
trends, analyzes their effects on the organization,
recommends organizational responses, and implements
political strategies
–Lobbying - traditional form of influence
• involves political professionals or company executives who
establish communication channels with regulatory bodies
–Political action committees (PACs) - make donations
to candidates for political office
• companies may ask employees or shareholders for contributions
to political candidates, subject to certain limitations
• “protection money” - donated money intended to ensure that
company is not disadvantaged in the legislative process
Public Affairs Department
Issues
management
Institutional
advertising
Corporate
contributions
Investor and
stockholder
relations
Government
relations
Activities
of
Public
Affairs
Public
relations
International
relations
The Political Environment
(cont.)
• Strategies for influencing the political environment
(cont.)
–Corporate constituency programs - organizational
effort to identify, educate, and motivate individuals to
take political action that could benefit the organization
• encourage interested stakeholders to take grassroots action
• probably requires the greatest commitment of organizational
resources
–Coalition building - finding other organizations or
voter groups that share political interests on a particular
legislative issue
• combine efforts and power to influence the environment
The Political Environment
(cont.)
• Strategies for influencing the political environment
(cont.)
–Stonewalling - use of public relations, legal action, and
administrative processes to prevent or delay the
introduction of legislation and regulation that may have
an adverse impact on the organization
• rarely changes the conditions that led to the adverse regulation
• consumes considerable time and money, and may boomerang
–Strategic retreat - response to adverse regulatory
change
• efforts to adapt products and processes to changes in the
political and social environments while minimizing the negative
effects of those changes
The Natural Environment
• Environmental issues
–range of issues is broad, and the impact huge
• must consider a mix of technical, ethical, social, and competitive
issues
– e.g., many technological developments used by business are
contributing to the destruction of ecological ecosystems
• A risk society
–sources of risk include:
• excessive production of hazards
• ecologically unsustainable consumption of natural resources
–risk has proliferated due to population explosion,
industrial pollution, and environmental degradation
The Natural Environment (cont.)
• Ecocentric management
–has as its goal the creation of sustainable economic
development and improvement of quality of life
worldwide for all organizational stakeholders
–seeks to minimize negative environmental impact
–design for environment (DFE) - tool for creating
products that are easy to recover, reuse, or recycle
• all environmental effects of a product are examined during the
design phase
– assessments of inputs
– analysis of how consumers will use and dispose of the product
Ecocentric Management
Encourage low
energy loss
Products with
recyclable
materials
Products with
ecofriendly
packaging
Ecocentric
Management
Use smaller
resource quantities
Environmentally
appropriate production
technologies
The Natural Environment (cont.)
•Environmental agenda for the future
–corporations are the only organizations with the
resources, technology, and global power to
help create a sustainable world
•webs of companies with a common ecological vision
can combine their efforts into high-leverage, impactful
action
–companies beginning to acquire the motivation
to solve environmental problems
•may represent the biggest opportunity in the history
of commerce
Key Topics
• Individual codes of ethics and the
importance of ethics in the workplace
• Key terms
– Social responsibility in U.S. business
– Environmental issues and stakeholder
relationships
– Approaches and implementation
– Implications for small business