1. Managing Ethics and Social Responsibility
Chapter 5
Managing Ethics and Social Responsibility

2. Managerial Ethics
Ethics – code of moral principles and values that govern the behaviors of right or wrong
Standards about good/bad
Ethical issues can be complex
People in organizations have divergent views about right/wrong

3. 5.1 Three Domains of Human Action

4. Ethical Management Today
Ethical lapses during the last decade have been pervasive
Corporations and people have become associated with greed, deceit, irresponsibility, and lack of moral conscience
Managers carry a big responsibility for setting an ethical climate
Ethical crises have brought ethical management to the forefront

5. Ethical Management Today
Ethical managers
Display honesty and integrity
Communicate and enforce ethical standards through their behavior
Are fair in their decisions and the distribution of rewards
Show kindness and concern for others

6. 5.2 Four Types of Ethical Manager Behavior

7. The Business Case for Ethics and Social Responsibility
Ethics and social responsibility are important business issues
The connection between ethics and financial performance has been widely debated
Customers would switch brands to do business with a company that is ethical and socially responsible

8. Ethical Dilemmas You are the moral agent–what would you do?
Your company requires a terrorist watch list that screens all new customers and takes approximately 24 hours from the time an order is placed. You can close a lucrative deal with a potential long-term customer overnight, even though that means the required watch list screening will have to be done after the fact.

9. Criteria for Ethical Decision Making
Utilitarian approach – moral behavior produces the greatest good for the greatest number
Individualism approach – acts are moral if they promote the individual’s long-term interest
Moral-rights approach – humans have fundamental rights and liberties that cannot be taken away by an individual’s decision

10. Criteria for Ethical Decision Making (cont’d)
Justice approach – moral decisions must be based on standards of equity, fairness, and impartiality
Distributive justice
Procedural justice
Compensatory justice
Practical approach – bases decisions on prevailing standards, society, and all stakeholders

11. A Manager’s Ethical Choices
Individuals bring their own personality and traits to organizations
Personal needs, family influence, and religious background shape individuals
Personality characteristics such as ego, confidence, and independence may enable managers to make ethical choices

12. 5.3 Three Levels of Personal Moral Development

13. What Is Corporate Social Responsibility (CSR)?
Distinguishing right from wrong; doing right
Good corporate citizenship
Make choices that contribute to society and stakeholders
Stakeholders – any group within or outside
Stakeholder mapping identifies needs, importance and power of stakeholders

14. 5.4 Major Stakeholders Relevant to Gap Inc.

15. The Green Movement Going GREEN is a new business imperative
Change in social attitudes
New governmental policies
Climate change
Information technology immediately spreads the negative decisions of corporations
More organizations are embracing sustainability

16. The Ethic of Sustainability
Sustainability – economic development that generates wealth and meets the needs of current generation while preserving the environment for the needs of future generations

17. Evaluating Corporate Social Responsibility
Legal Responsibility
appropriate business behavior
Discretionary Responsibility
voluntary contributions to society
Organizational Virtuousness
a positive human impact, moral goodness

18. 5.5 Criteria of Corporate Social Performance

19. 5.6 Building an Ethical Organization

20. Managing Company Ethics and Social Responsibility
Code of ethics – a formal statement of the company’s values regarding ethics and social issues
Ethical structures – systems, positions, and programs like ethics training
Whistle-blowing – employee disclosure of illegal, immoral, or illegitimate practices