Ethical Behavior and Social Responsibility

Introduction to Management 11e
John Schermerhorn
Chapter 3Chapter 3
Ethical Behavior andEthical Behavior and
Social ResponsibilitySocial Responsibility

Planning Ahead — Chapter 3 Study Questions
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?

Study Question 1: What is ethical behavior?
 Ethics
 Code of moral 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.

Study Question 1: What is ethical behavior?Study Question 1: What is ethical behavior?
 Law, values, and ethical behavior:
 Legal behavior is not necessarily ethical
behavior.
 Personal values help determine
individual ethical behavior.

Study Question 1: What is ethical behavior?Study Question 1: What is ethical behavior?
 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

 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

 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

Four views of ethical behavior
Management 11e/ Chapter 3 8

 Cultural issues in ethical behavior:
 Cultural relativism
 Ethical behavior is always determined by cultural
context.
 Universalism
 Behavior unacceptable in one’s home
environment should not be acceptable anywhere
else.
 Ethical imperialism
 Imposing one’s ethical standards on others.

The extremes of cultural relativism and ethical imperialism in
international business ethics.
Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,”
Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.

 Sources of information on ethical behavior:
 Institute for Global Ethics at www.globalethics.org
and on Facebook at
http://www.facebook.com/pages/Rockland-ME/Institute-fo
 Ethics Resource Center at www.ethics.org

Study Question 2: How do ethical dilemmas complicate the workplace?
 An ethical dilemma
 occurs when choices, although having
potential for personal and/or organizational
benefit, may be considered unethical.

 Ethical dilemmas include:

Checklist for ethical dilemmas

 Influences on Ethical Decision Making
 Ethical framework
 Provides personal rules or strategies for ethical
decision making
 Includes personal values
 Honesty
 Fairness
 Integrity
 Self-respect

Kohlberg’s stages of individual moral development

 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

 Organizational Culture Influence
 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?

Study Question 2: How do ethical dilemmas complicate the workplace?Study Question 2: How do ethical dilemmas complicate the workplace?
 External environment

 Ethical behavior can be rationalized by
convincing yourself that:
20Management 11e/ Chapter 3

Study Question 3: How can high ethical standards be maintained?
 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.

 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

 Moral Management
 Managers behave in one of three ways

How can high ethical standards be maintained?
24

 Areas often covered by codes of ethics:

 Whistleblowers
 Expose misdeeds of others to:
 Preserve ethical standards
 Protect against wasteful, harmful, or illegal acts
 Laws protecting whistleblowers vary

 Barriers to whistleblowing include:
 Strict chain of command
 Strong work group identities
 Ambiguous priorities

 Organizational methods for overcoming
whistleblowing barriers:
 Ethics staff units who serve as ethics
advocates
 Moral quality circles

 Social entrepreneurship:
 a unique form of entrepreneurship that seeks
novel ways to solve pressing social problems
at home and abroad
 Housing and job training for homeless
 Bringing technology to poor families
 Improving literacy among
disadvantaged youth
 Offering small loans to start
minority-owned businesses

Study Question 4: What is social responsibility and corporate governance?
 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.

 Stakeholder Management
 Stakeholders
 persons, groups, and other organizations directly
affected by the behavior of the organization and
holding a stake in its performance.

 Typical organizational
stakeholders

Study Question 4: What is social responsibility and corporate
governance?
 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.

Study Question 4: What is social responsibility and governance?

Criteria for evaluating corporate social performance.

Study Question 4: What is social responsibility and corporate
governance?
 Strategies for pursuing social
responsibility:

Four strategies of corporate social responsibility—from
obstructionist to proactive behavior.

 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.

 How government influences
organizations:
 Common areas of government regulation of
business affairs:
 Occupational safety and health
 Fair labor practices
 Consumer protection
 Environmental protection

Chapter 3 Case
 Patagonia: Turning a profit without losing
your soul

Ethical Behavior and Social Responsibility

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