Principles of business management
eliannyr317
CHAPTER2.pptxEthics and social responsibility WEEK 2 (Ch 2)
FLORIDA NATIONAL UNIVERSITY
PROFESSOR NICOLAS CUERVO
SPRING B
Understanding and practicing good business ethics is an important part of a manager’s job. Ethics is the study of moral obligation, or separating right from wrong.
Although many unethical acts are illegal, others are legal and issues of legality vary by nation.
An example of an illegal unethical act in the United States is giving a government official a kickback for placing a contract with a specific firm.
A useful perspective in understanding business ethics emphasizes moral intensity, or the magnitude of an unethical act. When an unethical act is not of large consequence, a person might behave unethically without much thought
BUSINESS ETHICS
Values are closely related to ethics. Values can be considered clear statements of what is critically important. Ethics become the vehicle for converting values into actions, or doing the right thing. For example, a clean environment is a value, whereas not littering is practicing ethics.
Many firms con- tend that they “put people before profits” (a value). If this assertion were true, a manager would avoid actions such as delaying payments to a vendor just to hold on to money longer or firing a group member for having negotiated a deal that lost money.
The concept of ethically centered management helps put some teeth into an abstract discussion of how values relate to ethics. Ethically centered management emphasizes that the high quality of an end product takes precedence over its scheduled completion.
Values and Ethics
Self-interest continues to be a factor that influences ethics, often taking the form of greed and gluttony or the desire to maximize self-gain at the expense of others. For example, when a company is losing money, is the CEO justified in maneuvering his or her way into a $20 million compensation package for that year?
Greed and gluttony are sometimes attributed to a Machiavellian personality that relates to a desire to manipulate others for personal
Sources of Unethical Decisions and Behavior-Individual Characteristics
The moral intensity of the issue is a driver of unethical behavior; many people are willing to behave unethically when the issue does not appear serious.
Visualize Gus, preparing a vat of soup at a food company. If one mosquito flies into the vat, Gus might go ahead and send the soup off for placement into cans.
However, if a swarm of hornets flew into the soup, Gus might blow the whistle even if he knew his supervisor would not be happy about stopping the line.
Another issue-related driver of unethical behavior is moral laxity, a slip- page in moral behavior because other issues seem more important at the time.
Sources of Unethical Decisions and Behavior-The Nature of the Moral Issue
Another major contributor to unethical behavior is an organizational atmosphere that condones such behavior.
A group of case histories of unethical behavior in business detected an underlying theme, a management culture that fostered ethical misdoing—or at least permitted it to happen—even when the organization espoused a code of ethics.
One such ethical lapse involved hiring undocumented immigrant workers
Sources of Unethical Decisions and Behavior-The Ethical Climate
Many people believe that firms have an obligation to be concerned about out- side groups affected by an organization. Corporate social responsibility is the idea that firms have obligations to society beyond their economic obligations to owners or stockholders and also beyond those prescribed by law or contract.
Both ethics and social responsibility relate to the goodness or morality of organizations.
Business ethics is a narrower concept that applies to the morality of an individual’s decisions and behaviors. Corporate social responsibility is a broader concept that relates to an organization’s impact on society, beyond doing what is ethical.
To behave in a socially responsible way, managers must be aware of how their actions influence the environment.
CORPORATE SOCIAL RESPONSIBILITY
The stockholder viewpoint of social responsibility is the traditional perspective. It holds that business firms are responsible only to their owners and stockholders. The job of managers is therefore to satisfy the financial interests of the stockholders. By so doing, says the stockholder view, the interests of society will be served in the long run. Socially irresponsible acts ultimately result in poor sales.
According to the stockholder viewpoint, corporate social responsibility is a by-product of profit seeking.
The stakeholder viewpoint of social responsibility contends that firms must hold themselves responsible for the quality of life of the many groups affected by the firm’s actions.
Stockholder versus Stakeholder Viewpoints
Corporate social performance is the extent to which a firm responds to the demands of its stakeholders to behave in a socially responsible manner. After stakeholders have been satisfied with the reporting of financial information, they may turn their attention to the behavior of the corporation as a good citizen in the community.
One way of measuring social performance is to analyze the company’s annual report in search of relevant statistical information. For example, you might look for data about contributions to charities, arts, education, and anti-pollution efforts.
Corporate Social Performance
