© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 1 CHAPTER 4 SOCIAL RESPONSIBILITY & ETHICS IN MANAGEMENT

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 2 Lecture outline Organisational social responsibility Organisational social responsiveness Managing an ethical organisation

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 3 Organisational social responsibility ‘The obligation of an organisation to seek actions protecting and improving society’s welfare along with its own interests.’

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 4 Organisational social responsibility Major perspectives: Invisible hand A view holding that the entire social responsibility of a corporation can be summed up as ‘make profits and obey the law’. Hand of government A view holding that the interests of society are best served by having the law and political process guide the corporation’s activities.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 5 Organisational social responsibility Major perspectives: Hand of management A view stating that corporations and their managers are expected to act in ways that protect and improve society’s welfare as well as make profit.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 6 Organisational social responsibility Hand of management Incorporates these arguments: Anti-freeloader argument. Capacity argument. Enlightened self-interest argument.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 7 Social responsibilities of managers Economic and legal Responsibility to make a profit and obey the law (invisible hand, hand of government, hand of management). Ethical and discretionary Ethical behaviour expected by society (invisible hand, hand of government). Difficult to determine, identify.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 8 Social stakeholders Shareholders Employees Customers Local community Society

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 9 Social stakeholders Employees Local community Shareholders Society (regional & national) Customers International community The organisation

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 10 Does social responsibility pay? Evidence is mixed. Strategically beneficial. Likely, profit  socially responsible management. Shareholders sensitive to extent it affects profit.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 11 Organisational social responsiveness ‘A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility.’ Two aspects: Monitoring social demands and expectations. Internal social response mechanisms.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 12 Monitoring social demands/expectations Social forecasting Opinion surveys Social audits Issues management Social scanning

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 13 Internal social response mechanisms Individual executives Temporary task forces Permanent committees Permanent departments Combination approaches

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 14 Being an ethical manager ‘The difficulties and concerns with business ethics raises three important issues about being a manager.’ Types of managerial ethics Ethical guidelines for managers Ethical career issues

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 15 Types of managerial ethics Immoral management Lacks ethical principles, concern for profit only. Amoral management Ignores or oblivious to ethical issues. Moral management Conscious attention to ethical standards and issues.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 16 Ethical guidelines for managers Obey the law. Tell the truth. Show respect for people. Stick to the Golden Rule. Above all, do no harm. Participation not paternalism. Responsibility requires action.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 17 Ethical career issues Assessing values and protecting yourself –Seek advice and support from trusted sources. –Take action to change what you see as not being ethical. –Take actions to protect yourself. Anticipating ethical conflicts –Pre-employment checks: Is this an ethical company? –Is the industry marked by patterns of unethical behaviour? –Avoid ethical compromises.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 18 Managing an ethical organisation Situational factors influencing ethical behaviour: External factors Competitiveness, high/low opportunities for success, dependency on other organisations. Internal factors Push for high performance, labour unrest, delegation, quests for innovation.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 19 Managing an ethical organisation Ethics training Ethics hotlines Ethics audits Ethics committees Codes of ethics Top-management commitment Increasing awareness of diversity

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 20 Lecture summary Organisational social responsibility –Major perspectives: invisible hand, hands of government and management. –Social responsibilities of managers. –Social stakeholders: shareholders, employees, customers, local and international community, society. –Does social responsibility pay? Evidence mixed. Organisational social responsiveness Monitoring social demands and expectations: forecasting, opinion surveys, social audits, issues management, social scanning, Internal social response mechanisms.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 21 Lecture summary Being an ethical manager –Types of managerial ethics: immoral, amoral, moral. –Ethical guidelines for managers. –Ethical career issues: assessing & anticipating ethical conflicts. Managing an ethical organisation –Situational factors influencing ethical behaviour external and internal. –Mechanisms for ethical behaviour.