Place Slide Title Text Here JOHN R SCHERMERHORN

Place Slide Title Text Here JOHN R. SCHERMERHORN, JR. MANAGEMENT 12 th Edition Chapter 3 Ethics and Social Responsibility © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -1 1 -1

Place Slide Title Text Here 3 Study Questions Planning Ahead — Chapter 1. What is ethical behavior? 2. How do ethical dilemmas complicate the workplace? 3. How can high ethical standards be maintained? 4. What is social responsibility and governance? © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -2

Place Slide Title Text Here Dashboard Chapter 3 Learning 1. What is ethical behavior? 1. 2. 3. Laws and values as determinants of ethical behavior Alternative views of ethics Cultural issues in ethical behavior 2. Ethics in the workplace 1. 2. 3. Ethical dilemmas at work Influences on ethical decision making Rationalizations for unethical behavior © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -3

Place Slide Title Text Here Dashboard Chapter 3 Learning 3. Maintaining High Ethical Standards 1. 2. 3. 4. Ethics training Codes of ethical conduct Moral management Whistleblower protection 4. Social Responsibility 1. 2. 3. 4. Stakeholder management Perspectives on corporate social responsibility Evaluating corporate social performance Corporate governance © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -4

Takeaway What Is Ethical Behavior? Place Slide Title 1: Text Here • Ethics – Moral code of principles. – Set standards of “good” or “bad” or “right” or “wrong” in one’s conduct. • Ethical behavior – What is accepted as good and right in the context of the governing moral code. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -5

Takeaway : What Is Ethical Behavior? Place Slide Title 1 Text Here • Law, values, and ethical behavior: – Legal behavior is not necessarily ethical behavior. – Personal values help determine individual ethical behavior. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -6

Takeaway : What Is Ethical Behavior? Place Slide Title 1 Text Here • Law, values, and ethical behavior: – Values - underlying beliefs and attitudes that help determine individual behavior • Terminal values - preferences about desired ends • Instrumental values – preferences regarding the means to desired ends © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -7

Place Slide Title Text Here Figure 3. 1: Four views of ethical behavior © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -8

Place Slide Title Here Takeaway 1: Text What Is Ethical Behavior? • Four alternative ethical views – Utilitarian • Delivers the greatest good to the most people – Individualism • Advances long-term self-interests – Moral rights • Maintains fundamental rights of all human beings © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -9

Takeaway What Is Ethical Behavior? Place Slide Title 1: Text Here – Justice view of ethics • Fair and impartial treatment of people according to legal rules and standards – Procedural justice – policies and rules fairly applied – Distributive justice – equal treatment for all people – Interactional justice – people treated with dignity and respect – Commutative justice – fairness to all involved © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -10

Takeaway What Is Ethical Behavior? Place Slide Title 1: Text Here • Cultural issues in ethical behavior: – Cultural relativism • Ethical behavior is always determined by cultural context. – Moral absolutism • Behavior unacceptable in one’s home environment should not be acceptable anywhere else. – Ethical imperialism • Imposing one’s ethical standards on others. Management 12 e/ Chapter 3 © 2013 John Wiley & Sons, Inc. All rights reserved. 11 3 -11

Place Slide Title Text Here The extremes of cultural relativism and ethical imperialism in international business ethics. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -12

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • An ethical dilemma – occurs when choices, although having potential for personal and/or organizational benefit, may be considered unethical. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -13

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • Ethical dilemmas include: Discrimination Sexual harassment Conflicts of interest Product Safety Organizational resources © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -14

Place Slide Title Text Checklist for Here ethical dilemmas Step 1 Recognize the ethical dilemma. Step 2 Get the facts and identify your options. Step 3 Test each option: Is it legal? Is it right? Is it beneficial? Step 4 Decide which option to follow. Step 5 Ask the Spotlight Questions: To double check your decision. • “How would I feel if my family found out about my decision? ” • “How would I feel if my decision was printed in the local paper or posted online? ” Step 6 Take action © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -15

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • Influences on Ethical Decision Making – Ethical framework • Provides personal rules or strategies for ethical decision making • Includes personal values – – Honesty Fairness Integrity Self-respect © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -16

Kohlberg’s of individual Place Slidestages Title Text Here moral development © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -17

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • Situational Context and Ethics Intensity – Will the situation pose an important ethic challenge? • • Magnitude of the situation Risk of immediate harm Proximity and concentration of harm Social consensus © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -18

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • Organizational Culture – What is considered ethical behavior within the organizational context? • What are the expectations of management? • What are the expectations of co-workers? • Is there a code of ethics? © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -19

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • External environment Government laws and regulations (Sarbanes/Oxley Act of 2002) Competitive climate in an industry Societal norms and values © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -20

Takeaway 2: Ethics in the Workplace Place Slide Title Text Here • Ethical behavior can be rationalized by convincing yourself that: Behavior is not really illegal. Behavior is really in everyone’s best interests. Nobody will ever find out. The organization will “protect” you. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -21

3: Maintaining High Ethical Standards Place. Takeaway Slide Title Text Here • Moral Management Managers behave in one of three ways © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -22

3: Maintaining High Ethical Standards Place. Takeaway Slide Title Text Here • Ethics training: – Structured programs that help participants to understand ethical aspects of decision making. – Helps people incorporate high ethical standards into daily life. – Helps people deal with ethical issues under pressure. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -23

3: Maintaining High Ethical Standards Place. Takeaway Slide Title Text Here • Codes of Ethical Conduct – Formal statement of an organization’s values and ethical principles regarding how to behave in situations susceptible to the creation of ethical dilemmas © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -24

3: Maintaining High Ethical Standards Place. Takeaway Slide Title Text Here • Areas often covered by codes of ethics: Bribes and kickbacks Political contributions Honesty of books or records Customer/supplier relationships Confidentiality of corporate information © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -25

3: Maintaining High Ethical Standards Place. Takeaway Slide Title Text Here • Whistleblowers – Expose misdeeds of others to: • Preserve ethical standards • Protect against wasteful, harmful, or illegal acts – Laws protecting whistleblowers vary © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -26

3: Maintaining High Ethical Standards Place. Takeaway Slide Title Text Here • Barriers to whistleblowing include: – Strict chain of command – Strong work group identities – Ambiguous priorities © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -27

Place Slide Title Text Here Responsibility Takeaway 4: Social • Sustainability: – acting in ways that support a high quality of life for present and future generations • Alternative energy • Recycling • Waste avoidance © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -28

Takeaway 4: Social Place Slide Title Text Here. Responsibility • Corporate social responsibility and governance: – Looks at ethical issues on the organization level. – Obligates organizations to act in ways that serve both its own interests and the interests of society at large. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -29

Takeaway 4: Social Place Slide Title Text Here. Responsibility • Stewardship – Taking personal responsibility to always respect and protect the interests of society at large – Triple bottom line – 3 P’s of organizational performance – profit, people, and planet © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -30

Takeaway 4: Social Place Slide Title Text Here. Responsibility • Stakeholder Management – Stakeholders: persons, groups, and other organizations directly affected by the behavior of the organization and holding a stake in its performance. – Stakeholder power: the capacity of the stakeholder to positively or negatively affect the operations of the organization. – Demand legitimacy: the validity and legitimacy of a stakeholder’s interest in the organization. – Issue urgency: the extent to which a stakeholder’s concerns need immediate attention. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -31

Place Slide Title Text Here Figure 3. 4: The Many Stakeholders of Organizations © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -32

Place Slide Title Text Here Responsibility Takeaway 4: Social • Perspectives on social responsibility: – Classical view • Management’s only responsibility is to maximize profits. – Socioeconomic view • Management must be concerned for the broader social welfare, not just profits. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -33

Place Slide Title Text Here Responsibility Takeaway 4: Social • Perspectives on social responsibility: – Shared value view • Approaches business decisions with the understanding that economic and social progress are interconnected • Virtuous circle-socially responsible behavior improves financial performance which leads to more responsible behavior © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -34

Takeaway 4: Social Place Slide Title Text Here. Responsibility Arguments against social responsibility: Arguments in favor of social responsibility: • Reduced business profits • Higher business costs • Dilution of business purpose • Too much social power for business • Lack of public accountability • Adds long-run profits • Improved public image • Avoids more government regulation • Businesses have resources and ethical obligation © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -35

Place Slide Title Text Here Four strategies of corporate social responsibility— from obstructionist to proactive behavior. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -36

Takeaway 4: Social Place Slide Title Text Here. Responsibility • Corporate governance: – The oversight of the top management of an organization by a board of directors. • Corporate governance involves: – Hiring, firing, and compensating the CEO. – Assessing strategy. – Verifying financial records. © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -37

Takeaway 4: Social Place Slide Title Text Here. Responsibility • How government influences organizations: – Businesses required by law to have boards of directors that are elected by stockholders © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -38

Place Slide Title Text Here Figure 3. 6: Ethics Self-governance in Leadership and the Managerial Role © 2013 John Wiley & Sons, Inc. All rights reserved. 3 -39