Management Ethics and Social Responsibility Meeting and Exceeding Customer Expectations EIGHTH EDITION Prepared by Deborah Baker Texas Christian University

learning objectives Describe the two broad categories of ethical theories Explain what individuals need in order to act ethically Describe the organizational influences on ethical conduct Discuss three primary ways in which business can promote ethical conduct Describe the relationship between law and ethics

learning objectives (continued) Explain the concept of an ethical dilemma Discuss the guidelines for acting ethically Explain the three approaches by business to social responsibility Explain the responsibilities businesses have to stakeholders Describe the government’s role in promoting socially responsible conduct by businesses Discuss the ways in which businesses can promote socially responsible conduct

Managing Ethically 1 Business Ethics The rules or standards governing the conduct of persons or members of organizations in the field of commerce

Balancing Demands 1 Many conflicting demands have been made on those who manage institutions Consequences of management decisions affect more people and environments than ever before

Individuals and Ethical Conduct 2 Morality Core values and beliefs that act as a guide when individuals formulate courses of action

An Individual’s Code of Ethics 2 Religious beliefs and training Educational background Socialization Political and economic philosophy

Organizational Influences 3 Encouraging Unethical Behavior Offer unusually high rewards Threaten unusually severe punishments Emphasize results

Importance of Organizational Controls 4 Unifying Ethics Code of Ethics Compliance Programs Commitment of Top Management

Commitment of Top Management 4 Discouraging Unethical Behavior Establish a code of ethics Training and oversight, reward ethical behavior Punish wrongdoers

Codes of Ethics 4 Characteristics Visible guidelines for behavior Unchallengeable basis for firing an unethical employee Protect all personnel from market pressures Remind employees to look beyond the bottom line

Compliance Programs 4 Ethics Training Compliance Training Cognitive Thinking alerts people to policies, regulations, and laws develops skills to allow people to think through “moral mazes”

Legal Constraints 5

Suggestions for Ethical Dilemmas 6 Suggestions for Ethical Dilemmas When in doubt, don’t Don’t try to find out “how far is too far” Superiors who push you to do things better, faster, cheaper will turn on you when you when you cross the line between right and wrong

Guidelines for Acting Ethically 7 Consider other people’s well-being Think as a member of the business community Obey, but do not depend solely on, the law Think of yourself and your company as part of society Obey moral rules Think objectively Ask “What sort of person would do such a thing?” Respect the customs of others, but not at the expense of your own ethics

Guidelines for Acting Ethically 7 The Ethical Test Is it legal? Is it balanced? How will it make me feel about myself?

Dimensions of Reputation 7 Products and Services Financial Performance Vision and Leadership Social Responsibility Emotional Appeal Workplace Environment

Approaches to Social Responsibility 8 Resistance Approach Businesses actively fight to eliminate, delay, or fend off demands being made of them Reactive Approach Businesses wait for demands to be made and then react to them, choosing a response by evaluating alternatives Proactive Approach Businesses continually look to the needs of constituents and try to find ways to meet those needs

Responsibilities to Stakeholders 9 Communities Customers Owners and Stockholders Society Suppliers Employees

Government Regulation: Pros and Cons 10 Social Responsibility to Prevent Pollution Redesigning of processes and products Recycling and repackaging for reduced waste Anticipating needs Facing problems up front

Managing for Social Responsibility 11 Making Organizations Proactive Top-level commitment and support Corporate policies that integrate environmental issues Effective interfaces between corporate and business-unit staff High degree of employee awareness and training Strong auditing programs Establishment of responsibility for dealing with environmental problems