Quản trị kinh doanh - Chapter 6: Ethics and social responsibility

Chapter 6Ethics and Social ResponsibilityLearning ObjectivesExplain ethics as they relate to the five domains of individuals, organizations, stakeholders, government, and the global communityDemonstrate processes and practices for managing organizational ethicsDescribe how businesses approach social responsibilitySummarize management’s role in building responsible businesses based on ethical decision makingEthicsThe moral principles, values, and beliefs that govern group or individual behavior according to what is right or wrong and what contributes to the balanced good of all stakeholdersEthical dilemma – a situation in which no choice is entirely rightWhat Are Ethics? (p. 144)Domains of ethical decision makingWhat Are Ethics? (cont.)Figure 6.1Individuals (p. 145)Lawrence Kohlberg’s “stages of moral development”Progression from interests in self to interest in others (p. 146)Preconventional – moral decisions are based primarily on self-protection or self-interestConventional – moral decisions are based primarily on social normsSocietal norms – expectations about how people (and organizations) should behavePostconventional – moral decisions are based primarily on what individual believes is good for society as a wholeWhat Are Ethics? (cont.)What Are Ethics? (cont.)Kohlberg’s stages of moral developmentFigure 6.2What Are Ethics? (cont.)Organizations - posture of the organization toward the local and global communities (p. 146)Figure 6.3What Are Ethics? (cont.)Value-based management - company’s culture impacts employee behavior in ways that are consistent with the organization’s mission and values (p. 147)Figure 6.4What Are Ethics? (cont.)Stakeholders (p. 148)Internal and external constituents with a direct interest in the organization’s behaviorExperience the effects of company’s management decisionsFigure 6.5What Are Ethics? (cont.)Externality – a cost (negative) or benefit (positive) that occurs beyond the direct exchange between an organization and its stakeholders (p. 148)Escalation – an increase in an organization’s behavior as a direct response to a competitor’s behavior (p. 149)CRITICALTHINKINGWhat Are Ethics? (cont.)Governments (p. 149)Enact legal requirements to prevent unethical behaviorE.g., Sarbannes-Oxley Act (2002) – requires greater transparency in company accounting practicesFace “fundamental large-firm problem” stemming from:Separation of ownership and controlDecentralized regulation systemWhat Are Ethics? (cont.)Globe (p. 150)Global-level of ethics – principles, values, and beliefs that are widely considered universalUnited Nations’ - “The Global Compact”Intended to guide decision making in the areas of human rights, labor, the environment, and anti-corruption Making Ethical Decisions (p. 151)Principles of ethics (p. 152)Legal principle – decisions that follow both the letter and spirit of the lawIndividual rights principle – decisions that do not infringe upon the rights of other peopleVirtuous principle – decisions of which you would be publicly proudLong-term principle – decisions that support the long-term interests of yourself and your organizationMaking Ethical Decisions (cont.)Principles of ethics (cont.)Community principle – decisions that contribute to the strength and well-being of the community (p. 152)Utilitarian principle – decisions that provide the greatest good to the greatest number (or the least harm to the fewest number)Distributed justice principle – decisions that do not harm those who already are disadvantagedMaking Ethical Decisions (cont.)Codes of conduct - organization’s published guidelines of its expectations about ethical behavior (p. 153)Typically address conduct in eight areasFiduciaryDignityPropertyTransparencyReliabilityFairnessCitizenshipResponsivenessMaking Ethical Decisions (cont.)Principle-based management (p. 153)Organization proactively connects values and beliefs to behavior expectationsAll stakeholders are continuously made aware of standards for behaviorStakeholders become a vital component to decision makingSocial Responsibility (p. 154)Social responsibility (p. 155)Proactive behaviors for the benefit of societyCorporate social responsibility (CSR)Programs that coordinate the company’s efforts to address societal and community challenges as they emergeSocial Responsibility (cont.)Approaches to social responsibility (p. 155)Proactive approach – organization goes beyond industry norms to solve and prevent problemsBegin by consulting the articles of incorporationMay change the legal structure to support socially responsible activitiesB Lab – non-profit organization that certifies socially responsible companiesAccommodative approach – organization accepts responsibility and takes action in response to societal pressures (p. 156)Social Responsibility (cont.)Approaches to social responsibility (cont.)Defensive approach – organization accepts responsibility, but does only the minimum required (p. 156)Reactive approach – organization denies responsibility for social problems and responds only when legally requiredHow Does Social Responsibility Pay? (p. 157)Social entrepreneurs - people who start a business for the dual purpose of profits and societal benefitsConsumers and investors becoming more active in supporting and investing in socially responsible companiesSocial investing – e.g., Calvert Social Investment Fund screens companies on financial performance and: Environment Workplace Human rights Indigenous peoples’ rights Community relations Product safety and impact Governance business ethics Managing Social Responsibility Today (p. 158)Managers must make principle-based decisions informed by industry and societal standardsInternalizing an externality – management proactively addresses a negative externality for the benefit of its stakeholdersBuilding an ethical cultureApply a framework for ethical decision makingEthics trainingManaging Social Responsibility Today (cont.)Ethical decision making framework (p. 158)Duties (p. 159) Perfect duties – clearly articulated moral obligations Imperfect duties – moral obligations that can be interpreted in different waysRights –behaviors that can be expected from others, based on their dutiesStandards of excellence – organization’s highest expectations of behaviorCommitments – self-defined principles unique to an individual or organizationManaging Social Responsibility Today (cont.)Ethical decision making framework (cont.)Applying the framework (p. 159)Understanding the situationConnecting behaviors to standardsImpartial analysisVisibility – the “newspaper test”Generality – would all organizational members be comfortable with action takenLegacy – would decision maker be comfortable being remembered for the action takenManaging Social Responsibility Today(cont.)Ethics training (p. 159)Intended to prevent unethical behavior from occurringFigure 6.6Managing Social Responsibility Today(cont.)Ethics training (cont.)Audience for trainingTraining characteristics – trainees’ current moral profileAudience’s assertiveness, cognitive ability, perspective on ethical behavior (p. 159)Needs assessment – determine audience’s need for ethics training (p. 160)Training transfer – steps to assure that what is learned about ethics will be used on the jobEvaluation – determine the effect of training on trainees’:Reaction to the training Workplace behaviorKnowledge/skills tests Organizational performanceManaging Social Responsibility Today(cont.)In the interests of self or others? (p. 161)Tragedy of the commonsFigure 6.7