Managerial Ethics & Corporate Social Responsibility BMGT – Principles of Management hapter Managerial Ethics & Corporate Social Responsibility 1

Ethics BMGT – Principles of Management The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong. 2

Three Domains of Human Action Domain of Certified Law (Legal Standard) Domain of Ethics (Social Standard) Domain of Free Choice (Personal Standard) Amount of Explicit Control High Low

BMGT – Principles of Management Ethical Dilemma A situation that arises when all alternative choices or behaviors have been deemed undesirable Potentially negative ethical consequences, making it difficult to distinguish right from wrong. 4

Students For Responsible Business BMGT – Principles of Management Criteria For Ethical Decision Making Most ethical dilemmas involve A conflict between needs of the part & whole The individual versus the organization The organization versus society as a whole Students For Responsible Business 5

Four Considerations In Ethical Decision Making BMGT – Principles of Management Four Considerations In Ethical Decision Making Utilitarian Approach Individualism Approach Moral-Rights Approach Justice Approach 6

Utilitarian Approach BMGT – Principles of Management Moral behavior produces the greatest good for the greatest number Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual 7

Individualism Approach BMGT – Principles of Management Individualism Approach Acts are moral when they promote the individual's best long-term interests, which ultimately leads to the greater good Individual self-direction paramount Individualism is believed to lead to honesty & integrity since that works best in the long run 8

Moral-Rights Approach BMGT – Principles of Management Moral-Rights Approach Moral decisions are those that best maintain the rights of those people affected by them. An ethical decision is one that avoids interfering with the fundamental rights of others 9

“Moral Rights” The right of free consent The right to privacy The right of freedom of conscience The right of free speech The right to due process The right to life & safety

Justice Approach BMGT – Principles of Management Moral Decisions must be based on standards of equity, fairness, and impartiality Three types of Justice Approaches: Distributive Justice Procedural Justice Compensatory Justice 11

Distributive Justice BMGT – Principles of Management Treatment of people should not be based on arbitrary characteristics People should be treated differently in proportion to the differences among them 12

Procedural Justice BMGT – Principles of Management Rules should be clearly stated Rules should be consistently and impartially enforced 13

Compensatory Justice BMGT – Principles of Management Individuals should not be held responsible for matters they have no control over Individuals should be compensated for the cost of their injuries by the party responsible 14

Factors Affecting Ethical Choices BMGT – Principles of Management Factors Affecting Ethical Choices The Manager Levels or stages of moral development Pre-conventional Conventional Post-conventional The Organization Moral Development 15

Social Responsibility BMGT – Principles of Management Social Responsibility Organization’s obligation to make choices and take actions that will contribute to the welfare and interests of society and organization Distinguishing right from wrong Being a good corporate citizen Many social responsibilities issues are ambiguous with respect to right and wrong 16

Environmental Consumers BMGT – Principles of Management Environmental Consumers True-Blue Greens... Highly committed and make decisions to help (14%) Greenback Greens... Usually will not change purchase behavior, but support (6%) Sprouts... Make few environmental purchases and support some causes(26%) Grousers ... Grudgingly acknowledge mandates (13%) Basic Browns ... Generally do not support (32%). Which one are you? 17

Ethical Responsibility BMGT – Principles of Management Total Corporate Responsibility Discretionary Responsibility Ethical Responsibility Legal Responsibility Economic Responsibility 18

Degree of Social Responsibility Corporate Responses to Social Demands High Low Degree of Social Responsibility Proactive Take social initiatives. Accommodation Accept ethical responsibility. Defense Do only what is legally required. Obstruction Fight all the way.

Managing Company Ethics You Need Levi Strauss Leadership Code of Ethics Ethical Structure Whistle Blowers