1. Management Ethics and Social Responsibility
MGMT 370
Chapter 5

2. Ethical Behavior Ethics
The system of rules that governs the ordering of values
Values
Terminal
Instrumental
Perspectives
Individualism
Utilitarianism
Moral-Rights
Justice

3. Telling the Truth and Lying: Possible Outcomes

4. Personal Ethics
Most of us believe we are ethical but most have unconscious biases that favor ourselves and our own group
Managers often:
Hire people who are like them
Think they are immune to conflicts of interest
Take more credit than they deserve
Blame others when they deserve some blame themselves

5. Is it ethical to: Shop online during company time?
Using office equipment for personal use?
Read personal s while at work?

6. Cultural Issues and Ethics
Dimensions of justice perceptions
Procedural
Distributive
Interactional
Cultural Relativism
Universalism
Ethical Imperialism

7. Ethical Systems Moral philosophy Universalism
Principles, rules, and values people use in deciding what is right or wrong
Universalism
The ethical system stating that all people should uphold certain values that society needs to function.

8. Ethical Systems Egoism Utilitarianism
An ethical system defining acceptable behavior as that which maximizes consequences for the individual
Utilitarianism
An ethical system stating that the greatest good for the greatest number should be the overriding concern of decision makers.

9. Ethics Systems Relativism Virtue ethics
Philosophy that bases ethical behavior on the opinions and behaviors of relevant other people
Virtue ethics
Classification of people based on their level of moral judgment.

10. Ethics Systems Kohlberg’s model of cognitive moral development
Perspective that what is moral comes from what a mature person with “good” moral character would deem right.

11. Ethics in the Workplace
Ethical dilemmas
Rationalizing
Factors
Individual
Organization
External environment

12. Ethics in the Workplace
Ethical issue
Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong
Business ethics
The moral principles and standards that guide behavior in the world of business.

13. Dangerous Practice
Excessive emphasis on short-term revenues over longer-term considerations.
Failure to establish a written code of ethics.
A desire for simple, “quick fix” solutions to ethical problems.
An unwillingness to take an ethical stand that may impose financial costs.

14. Dangerous Practices
Consideration of ethics solely as a legal issue or a public relations tool
Lack of clear procedures for handling ethical problems.
Responding to the demands of shareholders at the expense of other constituencies

15. Ethical Standards Training Whistleblowing Modeling Code of ethics
Moral management
Immoral
Amoral
Moral

16. Ethical Environment Sarbanes-Oxley Act
Act passed into law by Congress in 2002 to establish strict accounting and reporting rules in order to make senior managers more accountable and to improve and maintain investor confidence

17. Ethics Programming Compliance-based ethics programs
Company mechanisms typically designed by corporate counsel to prevent, detect, and punish legal violations.
Integrity-based ethics programs
Company mechanisms designed to instill in people a personal responsibility for ethical behavior

18. Ethical Issues in Business

19. Ethical Decision Making Model

20. Ethical Decision Making
Moral awareness
realizing the issue has ethical implications
Moral judgment
knowing what actions are morally defensible
Moral character
the strength and persistence to act in accordance with your ethics despite the challenges

21. Courage to be Ethical
Why might employees lack courage in ethical issues?
A belief that the company would not take corrective action
A fear that management would retaliate against the employee for speaking up
Doubt that the employee’s report would be kept confidential

22. Business Costs of Unethical Activity

23. Corporate social responsibility (CSR)
Obligation toward society assumed by business.

24. Corporate Social Responsibility
Economic responsibilities
Produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors.
Legal responsibilities
Obey local, state, federal, and relevant international laws

25. Corporate Social Responsibility
Ethical responsibilities
Meeting other social expectations, not written as law.
Philanthropic responsibilities
Additional behaviors and activities that society finds desirable and that the values of the business support.

26. Pyramid of Global Corporate Social Responsibility and Performance

27. Contrasting Views
First - holds that managers act as agents for shareholders and, as such, are obligated to maximize the present value of the firm Second - managers should be motivated by principled moral reasoning

28. CSR as Competitive Advantage
Profit maximization and corporate social responsibility used to be considered antagonistic, leading to opposing policies; the two views can converge
Recent attention has also been centered on the potential competitive advantage of socially responsible actions

29. Ecocentric management
Creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders.

30. Ecocentric Management
Sustainable growth
Economic growth and development that meet present needs without harming the needs of future generations
Life-cycle analysis (LCA)
A process of analyzing all inputs and outputs, though the entire “cradle-to-grave” life of a product, to determine total environmental impact