Ethics and Social Responsibility Doing the Right Thing
Ethics and Social Responsibility: Doing the Right Thing Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1
Business Ethics The fundamental moral values and behavioral standards that form the foundation for the people of an organization as they make decisions and interact with stakeholders Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2
Key Stakeholders External Stakeholders Customers Special Interest Groups Unions Internal Stakeholders Employees Board of Directors Investors Management Creditors Suppliers Government General Public Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3 3
Three Levels of Ethical Standards The law n Organizational policies and procedures n The moral stance employees take when faced with decisions not governed by formal rules n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4
An Ethical Framework Step 1. Recognize the ethical dimensions involved in the dilemma or decision Step 2. Identify the key stakeholders involved and determine how the decision will affect them Step 3. Generate alternative choices and distinguish between ethical and unethical responses Step 4. Choose the “best” ethical response and implement it Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 5
Three Styles of Management n Immoral management - driving force is greed Amoral management - does not consider ethical impact on others n Moral management - sees the law as a minimum standard of behavior n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6
The Benefits of Moral Management 1. 2. 3. 4. Earning a profit does not conflict with maintaining high ethical standards Avoid the damage to a company’s reputation that results from unethical behavior Dealing with diverse stakeholders is easier with a solid ethical foundation Attracting and retaining quality workers is easier A company’s ethical philosophy determines its ability to provide value for its customers Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7
Why Ethical Lapses Occur An unethical employee n An unethical organizational culture n Moral blindness n Competitive pressures n Opportunity pressures n Globalization of business n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8
Establishing Ethical Standards The utilitarian principle n Kant's categorical imperative n The professional ethic n The Golden Rule n The television test n The family test n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 9
Maintaining Ethical Standards Create a company credo n Develop a code of ethics n Enforce the code fairly and consistently n Conduct ethics training n Hire the right people n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 10
Maintaining Ethical Standards Perform periodic ethical audits n Establish high standards of behavior. . . not just rules n Set an impeccable ethical example n Create a culture that emphasizes two-way communication n Involve employees in establishing ethical standards n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11
Social Responsibility Social responsibility - the awareness by a company’s managers of the social environmental, political, human, and financial consequences its actions produce Studies: Companies that incorporate social responsibility into their competitive strategies outperform those that fail to do so Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 12
Business has a Social Responsibility to. . . The environment n Employees n Customers n Investors n The community n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13
Responsibility to the Environment The “Three R’s”: n Reduce the amount of materials used in your company n Reuse whatever you can n Recycle the materials that you must dispose of Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14
Responsibility to Employees n Diversity Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15
Source: U. S. Census Bureau, 2007. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 16
SPLENDID Approach to Diversity n n n n Study Plan Lead Encourage Notice Discussion Inclusion Dedication Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 17
Managing Diversity Assess your company’s diversity needs n Learn to recognize your own biases and stereotypes n Avoid making invalid assumptions n Push for diversity in your management team n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 18
Managing Diversity Concentrate on communication n Make diversity a core value in the organization n Continue to adjust your company to your workers n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 19
Responsibility to Employees Diversity n Drug testing n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20
A Drug Prevention Program Should Include. . . A written substance abuse policy n Training supervisors to detect drugusing workers n An employee education program n A drug testing program, when necessary n An employee assistance program (EAP) n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21
Responsibility to Employees Diversity n Drug testing n AIDS n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22
An AIDS Policy Should Address … Employment n Discrimination n Employee benefits n Confidentiality n Education n “Reasonable accommodations” n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 23
Responsibility to Employees Diversity n Drug testing n AIDS n Sexual harassment n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 24
Sexual Harassment n n n Any unwelcome sexual advance, request for sexual favors, or other verbal or physical sexual conduct made explicitly or implicitly as a condition of employment 85% of sexual harassment cases are filed by women Harassment can take several forms Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 25
Behavior Leading to Sexual Harassment Charges n Quid Pro Quo (“something for something”) harassment n Hostile environment n Harassment by non-employees Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 26
Source: Equal Employment Opportunity Commission, 2007 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 27
Preventing Sexual Harassment n n n Education Policy Procedure Listen without judging Ø Investigate complaints promptly Ø Interview parties involved and witnesses Ø Maintain confidentiality Ø Follow company policy Ø Inform both parties of actions taken Ø Document the investigation Ø Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 28
Responsibility to Employees Diversity n Drug testing n AIDS n Sexual harassment n Privacy n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 29
Responsibility to Customers Right to safety n Right to know n Right to be heard n Right to education n Right to choice n Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 30
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 21 Ethics and Social Responsibility Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 31
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