Transcript Chapter 4

Chapter 4
Ethics and Social
Responsibility
Ethics
The inner-guiding moral principles,
values, and beliefs that people use to
decide what is the “right” or appropriate
way to behave
 Ethical Dilemma – deciding whether to
do the “right” thing though doing so
might go against your own self-interest
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MGMT 321 – Chapter 4
Ethics and the Law

Ethical beliefs lead to the development
of laws and regulations to prevent
certain behaviors or encourage others

Laws can change or disappear as
ethical beliefs change

Neither laws nor ethics are fixed
MGMT 321 – Chapter 4
Ethics and Stakeholders

Stakeholders
– People and groups affected by the way a company
and its managers behave
– Supply a company with its productive resources
and have a claim on its resources

When the law does not specify how
companies should behave, managers must
decide how to behave toward the people and
groups affected by their actions
MGMT 321 – Chapter 4
Stakeholders
MGMT 321 – Chapter 4
Ethical Decision Making
MGMT 321 – Chapter 4
Practical Decision Model
Does my decision fall within the
acceptable standards that apply in
business today?
2. Am I willing to see the decision
communicated to all people and groups
affected by it?
3. Would the people with whom I have a
significant personal relationship approve
of the decision?
1.
MGMT 321 – Chapter 4
Managers Behaving Ethically

The relentless pursuit of self-interest
can lead to a collective disaster

When one or more people start to profit
from being unethical other people may
be encouraged to act in the same way
MGMT 321 – Chapter 4
Effects of Ethical/Unethical
Behavior
MGMT 321 – Chapter 4
Trust and Reputation
Trust – willingness of a person or group
to have faith or confidence in the
goodwill of another person
 Reputation – esteem or high repute that
individuals or organizations gain when
they behave ethically

MGMT 321 – Chapter 4
Sources of Ethics
MGMT 321 – Chapter 4
Social Responsibility
Way a company views its duty or obligation
to make decisions that protect, enhance,
and promote the welfare and well-being of
stakeholders and society as a whole
MGMT 321 – Chapter 4
Why Be Socially Responsible?
1.
2.
Demonstrating its social responsibility
helps a company build a good
reputation
If all companies in a society act
socially responsible, the quality of life
as a whole increases
MGMT 321 – Chapter 4
Role of Organizational Culture

Ethical values and norms help
organizational members:
– Resist self-interested action
– Realize they are part of something bigger
than themselves
MGMT 321 – Chapter 4