1. Ethics & Social Responsibility
Meeting 2
Ethics & Social Responsibility
STRATEGIC MANAGEMENT & BUSINESS POLICY
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2. Ethics & Social Responsibility
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3. Broader responsibility --
Corporate Governance
Broader responsibility --
Private corporations have responsibility to society that extend beyond making a profit
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4. Social Responsibility
Milton Friedman
There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
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5. Carroll’s 4 Responsibilities
Corporate Governance
Carroll’s 4 Responsibilities
Economic
Legal
Ethical
Discretionary
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6. Carroll’s 4 Responsibilities
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7. Corporate Stakeholders
Affect or are affected by the achievement of the corporation’s objectives
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8. Stakeholder Analysis –
Corporate Stakeholders
Stakeholder Analysis –
Primary stakeholder
Sufficient bargaining power to affect outcomes
Secondary stakeholder
Indirect stake but are affected by corporation’s actions
Stakeholder Input
Determine whether input is necessary
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9. Ethical Behavior
“business ethics”
Argument that there is no such thing … it is an oxymoron
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10. Corporate practices --
Ethical Decision Making
Corporate practices --
Massive write-downs and restatements of profit
Misclassification of expenses as capital expenditures
Pirating corporate assets for personal gain
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11. Provocative Question --
Reasons for Unethical Behavior
Provocative Question --
Why are businesspeople perceived to be acting unethically?
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12. Perceptions caused by -- Not aware of impropriety
Reasons for Unethical Behavior
Perceptions caused by --
Not aware of impropriety
Cultural norms and values vary
Governance systems based on rule or relationships
Differences in values between businesspeople and key stakeholders
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13. Allport-Vernon-Lindzey Study of Values -- Aesthetic Economic Political
Reasons for Unethical Behavior
Allport-Vernon-Lindzey Study of Values --
Aesthetic
Economic
Political
Religious
Social
Theoretical
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14. Most common reasons for bending rules --
Reasons for Unethical Behavior
Most common reasons for bending rules --
Organizational performance required it
Ambiguous or out of date rules
Pressure from others – everyone else does it
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15. Moral Relativism
Morality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another.
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16. 1. Preconventional level
Kohlberg’s Levels of Moral Development
1. Preconventional level
Characterized by a concern for self
Personal interest
Avoidance of punishment
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17. 2. Conventional level Characterized consideration of society’s values
Kohlberg’s Levels of Moral Development
2. Conventional level
Characterized consideration of society’s values
External code of conduct
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18. 3. Principled level Characterized by adherence to internal moral code
Kohlberg’s Levels of Moral Development
3. Principled level
Characterized by adherence to internal moral code
Universal values or principles
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19. Encouraging Ethical Behavior
Codes of Ethics
Specifies how an organization expects its employees to behave on the job.
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20. Guidelines for Ethical Behavior
Encouraging Ethical Behavior
Guidelines for Ethical Behavior
Ethics
Morality
Law
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21. Approaches to Ethical Behavior
Encouraging Ethical Behavior
Approaches to Ethical Behavior
Utilitarian
Judged by consequences
Individual Rights
Fundamental rights in all decisions
Justice
Distribution in equitable fashion
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22. Approaches to Ethical Behavior
Encouraging Ethical Behavior
Approaches to Ethical Behavior
Categorical imperative
“golden rule”
Means - Ends
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23. 192 U.S. companies surveyed --
Strategy Bits
192 U.S. companies surveyed --
92% monitored employees use of /Internet
26% monitored employees electronic activities all the time
Almost none had checks in place to protect employees privacy
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