Ethics and Social Responsibility CHAPTER 4 Ethics and Social Responsibility Andrew J. DuBrin Essentials of Management, 6/e South-Western College Publishing Copyright © 2003 Screen graphics created by: Jana F. Kuzmicki, PhD, Christian Brothers University 1

After reading this chapter, you should be able to: 4.1 After reading this chapter, you should be able to: Identify the philosophical principles behind business ethics. Explain how values relate to ethics. Identify factors contributing to lax ethics and common ethical temptations. Apply a guide to ethical decision making. Describe the stakeholder viewpoint of social responsibility and corporate social performance. Present an overview of social-responsibility initiatives. Summarize the benefits of ethical and socially responsible behavior, and show how managers can create an environment that fosters such behavior. 2

Philosophical Principles of Business Ethics 4.2 Philosophical Principles of Business Ethics Consequences - If no one gets hurt, the decision is ethical. When attempting to decide what is right and wrong, managers can focus on: Duties, obligations, and principles - If a decision violates a universal principle, it is unethical. Integrity - If the person in question has good character, he/she is behaving ethically. 3

Factors Contributing to Ethical Problems 4.3 Factors Contributing to Ethical Problems An individual’s desire to maximize self-gain at the expense of others An organizational atmosphere that condones unethical behavior Moral laxity - slippage in moral behavior because other issues seem more important Pressure from higher management to achieve organizational goals Strength of relationships among people 4

Ethical Temptations and Violations 4.4 Ethical Temptations and Violations Stealing from employers & customers Greed, gluttony, avarice Illegally copying software Misuse of corporate resources Treating people unfairly Divulging confidential information Sexual harassment Conflict of interest 5

A Guide to Ethical Decision Making 4.5 A Guide to Ethical Decision Making Is it right? Is it fair? Who gets hurt? Would you be comfortable if the details of your decision were reported on the front page of your newspaper or throughout the company? Would you tell your child to do it? How does it smell? 6

The Stakeholder Viewpoint of Social Responsibility 4.6 The Stakeholder Viewpoint of Social Responsibility Owners Stockholders Internal Stakeholders Employees The Organization Board of Directors Customers Suppliers Creditors Labor Unions External Stakeholders Competitors Special Interest Groups Customer Groups Government Agencies Financial Institutions Adapted from Exhibit 4.4 7

Social Responsibility Initiatives 4.7 Environmental Management Work/Life Programs Compassionate Downsizing Social Responsibility Initiatives Acceptance of Whistle Blowers Social Leaves of Absence Community Redevelopment Projects 8

Creating an Ethical and Socially Responsible Work Place 4.8 Creating an Ethical and Socially Responsible Work Place Create formal mechanisms to monitor ethics Provide written codes of conduct Offer training programs Confront ethical deviations Lead by example Talk about the issues 9