Management Lecture 04 Social and Ethics by AbdulAleem5


									Principles of Management

 Social Responsibility and Ethics
           Social Responsibility
• The argument that an organization has a greater
  obligation to society beyond the pursuit of its
  own goals.
• Organizations should act in a manner that
  benefits the society as well
• Social Beliefs, Attitudes, and Values
• Can be considered over four levels:
  –   Economic,
  –   Legal,
  –   Ethical, and
  –   Discretionary
 Corporate Social Performance
• An organization’s degree of integration of
  the principles of social responsibility, the
  process if responsiveness to social issues,
  and the development of policies to
  address social problems.
                • Conflicts of interest
                • Secrecy and
                • Honesty

Employees                                    Organization
                • Hiring and firing
                • Wages and working
                • Privacy and respect

            Subject to ethical ambiguities
            • Advertising and promotions
            • Ordering and purchasing
            • Bargaining and negotiation
            • Financial disclosure
            • Shipping and solicitation
            • Other business relationships

                  Economic Agents
                  • Customers
                  • Competitors
                  • Stockholders
                  • Suppliers
                  • Dealers
                  • Unions
• Any group inside or outside the organization that can
  affect or be affected by the organization's activities.

                              Creditors Customers

                   Local                           Local
                 government                      community

              State/federal                             Suppliers
               Foreign          Organization
              government                                Employees

               Colleges and
               universities                            Interest

                         Courts                 Trade
    Areas of Social Responsibility
•   The Community
•   Health and Welfare
•   Education
•   Human Rights
•   The Natural Environment
•   Consumer Rights
•   Culture
   Arguments For and Against social
       Involvement of Business

Arguments For Social Responsibility                      Arguments Against Social Responsibility

 1. Business creates problems and                           1. Business lacks the expertise to
    should therefore help solve them.                          manage social programs.

 2. Corporations are citizens in our                        2. Involvement in social programs
    society.                                                   gives business too much power.
 3. Business often has the resources                        3. There is potential for conflicts
    necessary to solve problems.                               of interest.

 4. Business is a partner in our                            4. The purpose of business in U.S.
    society, along with the govern-                            society is to generate profit
    ment and the general population.                           for owners.
              Approaches to Social
• The Continuum of Social Responsibility
   –   Social Opposition
   –   Social Obligation
   –   Social Responsiveness
   –   Social Contribution
• The Social Audit
• Methods of Institutionalizing
   –   Public Affairs Department
   –   Advocacy
   –   Partnerships
   –   Executive Loans
   –   Philanthropy
   –   Cause – Related Marketing
                 Degree of Social Responsibility

Obstructionist    Defensive    Accommodative       Proactive
stance            stance       stance              stance

  Lowest                                             Highest
     Management and Ethics
• Ethics is the study of decision making
  within the framework of a system of moral
• Ethical Behaviour is the conduct that is
  considered “right” or “good” in the context
  of a governing moral code
• Unethical Behaviour is the conduct that
  is considered “wrong” or “bad” in the
  context of a governing moral code
 Ethical Dilemmas and Lapses
• Ethical Dilemma is an unresolved Ethical
  question in which each of the conflicting
  sides has an arguable case to make.
• Ethical Lapse is a situation that occurs
  when a manager makes an unethical
  decision or engages in unethical
             Approaches to Ethical
• Identifying Ethical Pressure
   – Organizational Goals
      • How and organization treats it employees
      • How employees treat the organization
      • How the organization treats other economic agents
   – Personal Goals
      •   Family Influences
      •   Peer Influences
      •   Life Experiences
      •   Personal Values and Morals
      •   Situational Factors
   – Competition
   – Conformity
   – Fear
• Resolving Ethical Dilemmas
  – Utilitarian Theories
  – Deontology
  – Theories of Justice
  – Theories of Rights
  – Social Contract Theories
  – Empathy
    Institutionalizing Ethical Behaviour
•   Leadership and Commitment
•   Whistle Blowing
•   Ethical Standards and Codes
•   Ethics Training
•   Ombudsmanship
•   Ethics Committee and Ethical Audits
    How Business and The
Government Influence Each Other
                                 The government influences business
                                 through direct and indirect regulation:
        The                      •   Environmental protection legislation
     Government                  •   Consumer protection legislation
                                 •   Employee protection legislation
                                 •   Securities legislation
                                 •   The tax codes

 Business influences the government
 •   Personal contacts and networks
 •   Lobbying
 •   Political action committees (PACs)
 •   Favors and other influence tactics

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