1. MANAGEMENT
RICHARD L. DAFT

2. Managing Ethics and Social Responsibility
Managing Ethics and Social Responsibility
CHAPTER 5

3. Learning Outcomes
Define ethics and explain how ethical behavior relates to behavior governed by law and free choice.
Explain the utilitarian, individualism, moral-rights, and justice approaches for evaluating ethical behavior.
Describe the factors that shape a manager’s ethical decision making.
Identify important stakeholders for an organization and discuss how managers balance the interests of various stakeholders.
Explain the bottom-of –the pyramid concept and some of the innovative strategies companies are using.
Explain the philosophy of sustainability and why organizations are embracing it.
Define corporate social responsibility and how to evaluate it along economic, legal, ethical, and discretionary criteria.
Discuss how ethical organizations are created through ethical leadership and organizational structures and systems.
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

4. Will You Be A Courageous Manager?
Managers exercise the strength of their moral beliefs and sense of justice
Moral lapses and financial scandals has made ethical and courageous behavior an important trait for today’s managers
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5. Ethics
The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.
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6. Managerial Ethics Ethics can be difficult to define
Ethics can be difficult to define
Ethical issues are exceedingly complex
Managers face a variety of difficult situations
Ethics fall between law and free choice
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

7. Ethical Dilemmas: What Would You Do?
An ethical dilemma arises in a situation concerning right or wrong when values are in conflict
Managers and employees are the moral agents who must make ethical choices
Decisions about advertising, operations, and Internet usage are all dilemmas YOU might face
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

8. Criteria for Ethical Decision Making
Utilitarian approach – moral behaviors should produce the greatest good for the greatest number
Individualism approach – acts are moral when they promote the individual’s best long-term interests
Moral Rights Approach – moral decisions are those that best maintains the rights of those affected
Justice Approach – decisions must be based on standards of equity, fairness, and impartiality
Disruptive Approach – different treatment of people should not be based on arbitrary characteristics
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

9. Defining Justice
Disruptive Justice – different treatment of people should not be based on arbitrary characteristics.
Compensatory Justice – individuals should be compensated for the cost of their injuries by the party responsible.
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

10. Manager Ethical Choices
An important personal trait that mangers poses is their stage of moral development
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11. Globalization and Ethics
Globalization makes ethical issues more complex
Bribes are common practice in many countries
Transparency International ranks countries based on Bribe Payers Index
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

12. What is Corporate Responsibility?
Corporate Social Responsibility (CSR) is the obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

13. Organizational Stakeholders
Stakeholders are any group within or outside the organization that has a stake in the organization’s performance.
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14. The Bottom of the Pyramid (BOP)
Sometimes called base of the pyramid
Alleviate poverty and social ills while making profits
Selling to the world’s poorest people
4 Billion people make up the lowest level of the world’s economic pyramid
These people have traditionally been underserved
Companies can make money while addressing global poverty, environmental destruction, social decay and political instability
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

15. The Ethic of Sustainability
Sustainable Development
Economic Development that generates wealth
Meets the needs of current generation
Saving the environment for future generations
Managers are weaving sustainability into strategic decisions
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16. Evaluating Corporate Responsibility
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17. Managing Company Ethics and Social Responsibility
Code of Ethics – formal statement of the organization’s values regarding ethics and social issues
Ethical Structures – systems, positions and programs to implement ethical behavior
Whistle-Blowing – employee disclosure of illegal, immoral, or illegitimate practices
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18. The Ethical Organization
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19. The Business Case for Ethics and Social Responsibility
Paying attention to ethics and social responsibility is as important as profits and costs
Ethical and social actions impact financial performance
Companies are beginning to measure nonfinancial factors that create value
Customers pay attention to a company’s ethics and social responsibility
Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.