3-(ethics)1 Social responsibility & ethics in management Ridel A. 3

3-(ethics)2 Social responsibility The obligation of an organization to seek actions that protect and improve the welfare of society along with its own interests. Corporate social responsibility guided by the invisible hand (make profit & obey law) –→Allocated resources efficiently –→less accountability to society

3-(ethics)3 The hand-of-government A view that argues that the interests of society are best served by having the regulatory hands of the law & the political process, rather than the invisible hand, guide the results of corporations, endeavers. Invisible-hand vs. the hand-of-gov’t –Why unethics? –Make profits within existing law, is it right? → the hand of gov’t –To protect & improve society welfare

3-(ethics)4 Discretionary responsibilities Ethical responsibilities Legal responsibilities Economic responsibilities Social responsibilities of management (adapted from Archie B. Carroll, “A 3 dimensional conceptual model of corporate performance,” Academy of management review, vol. 4, 1979, p. 499

3-(ethics)5 To whom are they to be responsible? Shareholders Employees Customers Local community Society International community

3-(ethics)6 Monitoring Social forecasting Opinion surveys Social audit Issues management Social scanning

3-(ethics)7 Internal social response mechanisms Individual executives Temporary task forces Permanent committees Permanent departments Combination approaches

3-(ethics)8 Types of managerial ethics Moral management Amoral management Immoral management

3-(ethics)9 Ethical guidelines Obey the law Tell the truth Show respect for people Stick to the golden rule Above all, do no harm Practice participation, not paternalism Always act when you have responsibility

3-(ethics)10 Influence factors External –Environmental competitiveness –Environmental munificence –Extreme dependency Internal –Pressure for high performance –Labor dissatisfaction –Delegation –Encouragement of innovation

3-(ethics)11 Mechanism for ethical mn’t Top mn’t commitment Code of ethics Ethics committees Ethics audits

3-(ethics)12 Source Management Kathry M. Bartol : University of Maryland, College Park David C. Martin : American University