Social and Ethical Responsibility of Management 2022 01

Social and Ethical Responsibility of Management 2022 -01 -25 1

Organization’s Social Responsibilities Social responsibilities Discretionary Don’t violate principles of right and wrong Ethical Obey the Law Make a Profit 2022 -01 -25 Legal Economic 2

What’s Social Responsibility? • Corporate Social Responsibility The idea that business has social obligations above and beyond making a profit. l Business has an obligation to constituent groups in society other than stockholders and beyond that prescribed by law. l Social Responsibility is … the ethical accountability framework for the industry which defines principles, policies and practices and codes of conduct designed to ensure: l l l 2022 -01 -25 the protection of stakeholders, the sustainability of industry, and quality of life improvements in the communities in which it operates. 3

Stakeholder Model Primary Stakeholders: Shareholders Employees Customers Suppliers Governments Local Communities 2022 -01 -25 Secondary Stakeholders: Media Trade Associations 4

Responses to Demands for Social Responsibility Reactive Defensive Accommodative Proactive Fight all the way Do only what is required Be progressive Lead the industry Withdrawal DO NOTHING 2022 -01 -25 Public Relations Approach Legal Approach Bargaining Problem Solving DO MUCH 5

Approaches To Corporate Social Responsiveness Approach Posture or Strategy 1. Reactive Deny responsibility Do less than required 2. Defensive Admit responsibility but fight it Do the least that is required 3. Accommodative Accept responsibility Do all that is required 4. Proactive Anticipate responsibility Do more than is required 2022 -01 -25 Performance 6

Arguments Supporting Businesses Being Socially Responsible • • • Public expectations Long-run profits Ethical obligation Public image Better environment Discouragement of further government regulation Balance of responsibility and power Shareholder interests Possession of resources Superiority of prevention over cures 2022 -01 -25 7

Arguments Against Businesses Being Socially Responsible • Violation of profit maximization • Dilution of purpose • Costs • Too much power • Lack of skills • Lack of accountability 2022 -01 -25 8

Areas of Social Responsibility • Stakeholders: customers, employees, and investors. • The natural environment: environmentally sensitive products, recycling, and public safety. • The general social welfare: charitable contributions, and support for social issues such as child labor and human rights. 2022 -01 -25 9

ORGANISATIONAL SOCIAL RESPONSIVENESS ‘A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility. ’ Two aspects: • Monitoring social demands and expectations • Internal social response mechanisms 2022 -01 -25 10

MONITORING SOCIAL DEMANDS/EXPECTATIONS • Social forecasting • Opinion surveys • Social audits • Issues management • Social scanning 2022 -01 -25 11

SR Management Process • Planning • Leadership & People Focus • Client & Stakeholder Focus • Process Management • Outcome Assessment 2022 -01 -25 12

Dilemmas in Business A dilemma exists when you have a choice between two or more options. A business dilemma exists when an organizational decision maker faces a choice between two or more options that will have various impacts on (a) the organization’s profitability and competitiveness and (b) its stakeholders. 2022 -01 -25 13

ETHICS • Ethics (also called moral philosophy), involves systematizing, defending, and recommending concepts of right and wrong behavior. • Business ethics is the application of general ethical principles to business dilemmas. 2022 -01 -25 14

TYPES OF MANAGERIAL ETHICS • Immoral management Lacks ethical principles, concern for profit only • Amoral management Ignores, or oblivious to, ethical issues • Moral management Conscious attention to ethical standards and issues 2022 -01 -25 15

WHAT INFLUENCES ETHICAL BEHAVIOR? THE ORGANIZATION’S ROLE • Structure • Culture THE INDIVIDUAL’S ROLE 2022 -01 -25 16

Determinants of Individual Ethics Family Influences Situational Factors Values and Morals Experiences Peer Influences Individual Ethics 2022 -01 -25 17

ETHICAL GUIDELINES FOR MANAGERS • Obey the law. • Tell the truth. • Show respect for people. • Stick to the Golden Rule. • Above all, do no harm. • Participation not paternalism. • Responsibility requires action. 2022 -01 -25 18

MECHANISMS FOR ETHICAL MANAGEMENT • Increasing awareness of diversity • Top management commitment • Codes of ethics • Ethics committees • Ethics audits • Ethics hotlines • Ethics training 2022 -01 -25 19

Process of Rationalization Mental strategies that allow employees (and others around them) to view their corrupt acts as justified l Denial of responsibility. . no choice…everyone does it l Denial of injury…no one is really injured l Denial of victim…the violated party deserves it l Social weighting…comparison…others do worst things l Appeal to higher authorities…loyalty to boss or co. l Ledger approach…accrued credits…we deserve it 2022 -01 -25 20

THANK YOU 2022 -01 -25 21