1. SOCIAL RESPONSIBILITY AND BUSINESS ETHICS
HUMAN RESOURCES:
SOCIAL RESPONSIBILITY AND BUSINESS ETHICS

2. Chapter Objectives
Describe changing attitudes toward social responsibility and business ethics.
Describe concept of corporate social responsibility.
Explain attempts at legislating social responsibility.
Explain what is meant by stakeholder analysis and the social contract.
Understand the model of ethics and describe human resource ethics.
Understand the importance of a code of ethics and describe ethics and the HR manager.

3. Changing Attitudes Toward Social Responsibility and Business Ethics
It includes…….
Foundations
Religious organizations
Community Development
(Source: Social Investment Forum)

4. Changing Attitudes Toward Social Responsibility and Business Ethics
To meet society’s expectations, managers will need to be more socially responsible.
Most of 500 largest U.S. corporations now have a code of ethics.

5. Corporate Social Responsibility (CSR)
Defined The implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves.
Simple Terms:
How a company behaves towards society

6. Corporate Social Responsibility
What is Rule 14? When in doubt, do what’s right!

7. Corporate Social Responsibility
Companies leading the charge
Patagonia
(1% of net sales for socially and environmentally initiatives)
Norm Thompson
Keen Footwear
Timberland Footwear
Nike

8. Legislating Ethics and Social Responsibility
Procurement Integrity Act of 1988
--passed after reports of military contracts for $500 toilet seats
Federal Sentencing Guidelines for Organizations (FSGO)
--softer punishments for companies that have an ethic program in place

9. Stakeholder Analysis and the Social Contract
Worker Adjustment and Retraining Notification Act of 1988
--firms employing 100 or more to give 60 -days notice when a plant is closing or layoffs off affecting 50 or more 90 days notice

10. Legislating Ethics and Social Responsibility (Continued)
Corporate and Auditing Accountability, Responsibility and Transparency Act
--known as Sarbanes Oxley Act, primary focus is to redress accounting and financial reporting abuses in light of recent corporate scandals
--provides a whistle-blower protection

11. Legislating Ethics and Social Responsibility
What is new in corporations:
90% have written ethics program
Hired an Ethics Officer
--Collaborate with Management
--Implement strategies to reinforce conduct
--Work with employees across all levels to determine the right course of action
Holding professionals accountable

12. Stakeholder Analysis and the Social Contract
Organizations, profit and non
profit have large number of
stakeholders

13. The Social Contract Individuals The Organization Other Organizations
Government
social contract—Set of written and unwritten rules and assumptions about acceptable interrelationships among the various elements of society.
Obligations to Individuals—Organizations have certain obligations to their employees.
Obligations to Other Organizations—Managers must be concerned with relationships involving other organizations--both organizations that are like their own, such as competitors, and very different ones.
Obligations to Government—Government is an important party to the social contract for every kind of organization.
Obligations to Society in General—Businesses operate by public consent with the basic purpose of satisfying the needs of society.
Society

14. The Social Contract Organizational Stakeholder
--individual or group whose interests are affected by organizational activities
Social Contract
--set of written and unwritten rules and assumptions about acceptable interrelationships among various elements of society - hiring minorities
Obligations to Individuals
--certain obligations to organization’s employees- Voting and Jury Duty

15. The Social Contract Obligations to Other Organizations
--managers must be concerned with relationships with other organizations, both like their own (such as competitors) and very different ones
Obligations to Government
--expect to work with government agencies

16. The Social Contract Businesses are expected to help Society Meet
Eliminate poverty
Quality health-care
Standards of having a clean environment
Job opportunities
Improve the quality of working life
Save livable communities

17. Social Audit Systematic assessment of a
company’s activities in terms of its
social impact

18. Social Audit Three Types
Inventory of activities
--Minority employment and training
Compilation of social expenditures
--Corporate giving's
Social Impact
--Involvement in selected communities

19. Ethics
What is Ethics?
--Discipline of dealing with what is good and bad, or right and wrong, or with moral duty and obligation
Sources of Ethical Guidance
--a number of sources to determine what is right or wrong, good or bad, moral or immoral

20. Ethics
Type I Ethics
--strength of relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct
Type II Ethics
--strength of relationship between what one believes and how one behaves

21. A MODEL OF ETHICS Sources of ethical guidance
Our beliefs about what is right or wrong
Lead to
Determine
Our actions
Type I Ethics
Type II Ethics
sources of ethical guidance—One might use a number of sources to determine what is right or wrong, good or bad, moral or immoral.
Type I ethics: Strength of the relationship between what an individual or an organization believes to be moral and correct and what available sources of guidance suggest is morally correct.
Type II ethics: Strength of the relationship between what one believes and how one behaves.

22. Human Resource Ethics
The application of ethical principles to human resource relationships and activities
A Code of Ethics
--establishes the rules by which the organizations lives

23. Human Resource Ethics Code of Ethics
--Easy to talk the talk but harder to execute
Must breathe it
Train its people
Communicate the code
--Topics for Code of Ethics
Business conduct and Fair competition
Workplace and HR issues

24. Human Resource Ethics Reinforcing the Code of Ethics
--Committee is established w/
Legal
HR, Corporate Compliance
Corporate Communication
External Affairs
Training and Development
Baldrige National Quality Award are changing criteria

25. Ethics and HR Manager
The Role
Restore trust in the organization
Help instill ethical practices in cultural
SHRM Code of Ethics
As HR professionals, we are responsible for adding value to the organizations we serve and contributing to the ethical success of those organizations

26. Ethics and HR Manager
Surveys of HR and Trust
HR effective= 62% believe the company is trustworthy
HR ineffective= 8% believe company is not trustworthy
79% HR Executives= blow the whistle over legal violation
83% HR Executives= take strong action against legal violation

27. Ethics and HR Manager
What Can HR Do?

28. Ethics and HR Management
Two Areas Impact on Corporate Ethics
2 areas where HR can have a major impact on ethics
Corporate Governance
Executive Compensation

29. Ethics and HR Manager Corporate Governance
Enforce polices and implementation methods to ensure executive integrity and effectiveness
Employees should know what is ethical and unethical

30. Executive Compensation
Ethics and HR Manager
Executive Compensation
HR can provide the greatness impact in this area
HR should make sure that the compensation committee has relevant data for decision making

31. Ethics Case Study Read HRM Incident 1: An Ethical Flaw
Discuss and answer questions related to case study