1. Managerial Ethics & Corporate Social Responsibility

2. A Case for Companies to be Socially Responsible
A company is a corporate citizen—it should act as a responsible citizen
Improves a company’s reputation
Companies should solve the problems they cause
Example—pollution
Keeps the government out of business
Increased market share

3. A Case Against Companies being Socially Responsible
Increases costs
A company’s job is to make a good or service, not improve society
Stealing shareholders’ money
A company’s social obligations are discharged when it pays taxes
Gives company’s too much power
Businesses may exert too much influence over charitable causes

4. 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.

5. Ethical Dilemma
A situation that arises when all alternative choices or behaviors have been deemed undesirable.
Potentially negative ethical consequences, making it difficult to distinguish right from wrong.

6. Criteria for Ethical Decision Making
Most ethical dilemmas involve
A conflict between needs of the part & whole.
The individual versus the organization.
The organization versus society as a whole.

7. Four Considerations in Ethical Decision Making
Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach

8. Utilitarian Approach
Moral behavior produces the greatest good for the greatest number.
Computations can be very complex, simplifying them is considered appropriate.
Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual.

9. Individualism Approach
Acts are moral when they promote the individual's best long-term interests.
Individual self-direction paramount.
Individualism is believed to lead to honesty & integrity since that works best in the long run.

10. Moral-Rights Approach
Asserts human beings have fundamental rights and liberties.
Moral decisions are those that best maintain the rights of those people affected by them.
An ethical decision is one that avoids interfering with the fundamental rights of others.

11. “Moral Rights” Considerations
The right of free consent
The right to privacy
The right of freedom of conscience
The right of free speech
The right to due process
The right to life & safety

12. Justice Approach
Moral Decisions must be based on standards of equity, fairness, and impartiality.
Treatment of individuals should not be based on arbitrary characteristics.
Closet thinking to codified law.

13. Levels of Moral Development
SOURCES: Based on L. Kahlberg, “Moral Stages and Moralization: The Cognitive-Developmental Approach, in Moral Development and Behavior: Theory, Research, and Social Issues, ed. T. Lickona (New York: Holt, Rinehart, and Winston, 1976), 31-53; and Jill W. Graham, “Leadership, Moral Development and Citizenship Behavior,” Business Ethics Quarterly 5, no. 1 (January 1995),

14. Cultural Impact Questions
Identify the organizations heroes.
What are some important organizational rituals?
What are the ethical messages sent to new entrants into the organization, must they obey authority at all costs?
Does analysis of organizational stories and myths reveal individuals who stand up for what is right, or is conformity the valued characteristic?
Does language exist for discussing ethical concerns?
What informal socialization process exist?
SOURCE: Linda Klebe Trevino, “A Cultural Perspective on Changing and Developing Organizational Ethics,” in Research in Organizational Change and Development, ed. R. Woodman and W. Pasmore (Greenwich, Conn: JAI Press, 1990), 4.

15. Social Responsibility
Organization’s obligation to make choices and take actions that will contribute to the welfare and interests of society and organization.
Distinguishing right from wrong.
Being a good corporate citizen.
Many social responsibilities issues are ambiguous with respect to right and wrong.

16. Shades of Corporate Green
Activist Approach
Actively conserve the environment
Stakeholder Approach
Address multiple stakeholder concerns
Market Approach
Respond to customers
Legal Approach
Satisfy legal requirements regarding environmental conservation
SOURCE: Based on R.E. Freeman, J. Pierce, and R. Dodd, Shades of Green: Ethics and the Environment (New York: Oxford University Press, 1995).

17. Total Corporate Social Responsibility
SOURCES: Based on Archie B. Carroll, “A Three-Dimensional Conceptual Model of Corporate Performance,” Academy of Management Review 4(1979), 499; and “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Corporate Stakeholders,” Business Horizons 34 (July-August 1991), 42.

18. Corporate Responses to Social Demands
High
Low
Degree of Social Responsibility
Proactive
Take social initiatives.
Accommodation
Accept ethical responsibility.
Defense
Do only what is legally required.
Obstruction
Fight all the way.

19. Three Pillars of an Ethical Organization
SOURCE: Adapted from Linda Klebe Trevino, Laura Pincus Hartman, and Michael Brown, “Moral Person and Moral Manager,” California Management Review 42, No. 4 (Summer 2000),