Managerial Ethics Corporate Social Responsibility Developed by Cool

Managerial Ethics & Corporate Social Responsibility Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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. Developed by Cool Pictures & Multi. Media Presentations American Forest & Paper Association Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Three Domains of Human Action Domain of Certified Law Domain of Ethics Domain of Free Choice (Legal Standard) (Social Standard) (Personal Standard) Amount of High Developed by Cool Pictures & Multi. Media Presentations Explicit Control Low Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Criteria for Ethical Decision Making • Most ethical dilemmas involve æ A conflict between needs of the part & whole. æ The individual versus the organization. æ The organization versus society as a whole. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Four Considerations in Ethical Decision Making àUtilitarian Approach àIndividualism Approach àMoral-Rights Approach àJustice Approach Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Utilitarian Approach ý Moral behavior produces the greatest good for the greatest number. ý Computations can be very complex, simplifying them is considered appropriate. ý Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Individualism Approach ð Acts are moral when they promote the individual's best long-term interests. ð Individual self-direction paramount. ð Individualism is believed to lead to honesty & integrity since that works best in the long run. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

“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 Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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), 43 -54. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Cultural Impact Questions 1. Identify the organizations heroes. 2. What are some important organizational rituals? 3. What are the ethical messages sent to new entrants into the organization, must they obey authority at all costs? 4. Does analysis of organizational stories and myths reveal individuals who stand up for what is right, or is conformity the valued characteristic? 5. Does language exist for discussing ethical concerns? 6. 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. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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. ý Many social responsibilities issues are ambiguous with respect to right and wrong. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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). Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Corporate Responses to Social Demands High Proactive Take social initiatives. Accommodation Degree of Social Responsibility Accept ethical responsibility. Defense Do only what is legally required. Obstruction Low Developed by Cool Pictures & Multi. Media Presentations Fight all the way. Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

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), 128 -142. Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

Enlightened Companies • Realize the importance of: – integrity – trust Developed by Cool Pictures & Multi. Media Presentations Copyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.