Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–1 CHAPTER 4 SOCIAL RESPONSIBILITY & ETHICS IN MANAGEMENT

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–2 LECTURE OUTLINE Organisational social responsibility Organisational social responsiveness Managing an ethical organisation

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–3 MANAGERIAL ETHICS Ethics Standards of behaviour and moral judgment differentiating right from wrong Managerial ethics Standards of conduct and moral judgment mangers use in their business

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–4 ORGANISATIONAL SOCIAL RESPONSIBILITY ‘The obligation of an organisation to seek actions protecting and improving society’s welfare along with its own interests.’

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–5 ORGANISATIONAL SOCIAL RESPONSIBILITY Major viewpoints: Invisible hand Hand of government Hand of management

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–6 ORGANISATIONAL SOCIAL RESPONSIBILITY INVISIBLE HAND ARGUMENT A view holding that the entire social responsibility of a corporation can be summed up as ‘make profits and obey the law’. Corporate responsibility is guided by the ‘invisible hand’ of free market forces

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–7 ORGANISATIONAL SOCIAL RESPONSIBILITY HAND OF GOVERNMENT ARGUMENT A view holding that the interests of society are best served by having the law and political process guide the corporation’s activities. Law and political process controls corporation re: employee well-being, customer protection and community issues e.g. environment.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–8 ORGANISATIONAL SOCIAL RESPONSIBILITY Hand of Management argument Incorporates: Anti-freeloader argument Capacity argument Enlightened self-interest argument

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–9 ORGANISATIONAL SOCIAL RESPONSIBILITY HAND OF MANAGEMENT ARGUMENT 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.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–10 ORGANISATIONAL SOCIAL RESPONSIBILITY ANTI-FREELOADER ARGUMENT Holds that since businesses benefit from a better society, they should bear part of the costs by actively working to bring about solutions to social problems.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–11 ORGANISATIONAL SOCIAL RESPONSIBILITY CAPACITY ARGUMENT States that the private sector, because of its considerable economic resources, must make up for government cutbacks in social programs.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–12 ORGANISATIONAL SOCIAL RESPONSIBILITY ENLIGHTENED SELF-INTEREST ARGUMENT Holds that businesses exist at society’s pleasure and that, for their own legitimacy and survival, businesses should meet the public’s expectations regarding social responsibility.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–13 SOCIAL RESPONSIBILITIES OF MANAGERS Economic and legal Responsibility to make a profit and obey the law (recognised by: invisible hand, hand of government, hand of management). Ethical and discretionary Ethical behaviour expected by society (recognised by: hand of management). Difficult to determine, identify

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–14 SOCIAL STAKEHOLDERS Shareholders Employees Customers Local community Society

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–15 SOCIAL STAKEHOLDERS Employees Local community Shareholders Society (regional & national) Customers International community THE ORGANISATION

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–16 SOCIAL STAKEHOLDERS DIVERSITY AS COMPETITIVE ADVANTAGE Attracting workers is costly, diversity may help attract and retain workers Workforce that reflects customer base may give insight into customer wants, needs, preferences Innovations are more likely where diversity exists

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–17 DOES SOCIAL RESPONSIBILITY PAY? Evidence is mixed Strategically beneficial Likely, profit  socially responsible management Shareholders are sensitive to the extent that it affects profit

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–18 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

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–19 MONITORING SOCIAL DEMANDS/EXPECTATIONS Social forecasting Opinion surveys Social audits Issues management Social scanning

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–20 INTERNAL SOCIAL RESPONSE MECHANISMS Individual executives Temporary task forces Permanent committees Permanent departments Combination approaches

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–21 BEING AN ETHICAL MANAGER The difficulties and concerns with business ethics raise three important issues about being a manager: Types of managerial ethics Ethical guidelines for managers Ethical career issues

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–22 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

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–23 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.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–24 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.

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–25 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

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–26 MECHANISMS FOR ETHICAL MANAGEMENT Increasing awareness of diversity Top management commitment Codes of ethics Ethics committees Ethics audits Ethics hotlines Ethics training

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–27 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

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–28 LECTURE SUMMARY Organisational social responsiveness – Monitoring social demands and expectations: forecasting, opinion surveys, social audits, issues management, social scanning, internal social response mechanisms

Copyright  2005 McGraw-Hill Australia Pty Ltd PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin 4–29 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