Principle of management essay
prabodhb
EthicsSocialResponsibility.pdf
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Ethics and Social Responsibility
https://tinyurl.com/ch4MGT305
Take the Poll!
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Learning Objectives In this lesson, we will cover: Stakeholders Corporate Social Responsibility
Ethics ◦ Stakeholders ◦ What Ethics is not ◦ Perspectives (Views) on Ethics
Links within this Lesson • Milgram Experiment (set to start 38 seconds in; end at 9 minutes)
https://youtu.be/Xxq4QtK3j0Y?t=38s • Asch Experiment:
https://youtu.be/NyDDyT1lDhA • Budweiser Commercial:
https://youtu.be/6EmIDqGOX44 • Texas Bathroom Bill:
http://www.nbcdfw.com/news/local/Bathroom-Bill-6p-010517_Dallas-Fort- Worth-409837835.html
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Where we’ve been and where we’re going
Strategy People
Stakeholders and Ethics
_________________ oThe people and groups that supply a company with its
productive resources and so have a claim on and stake in the company
oCan be split into two general groups o___________: employees, managers, owners o___________: indi
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Types of Company Stakeholders
Types of Company Stakeholders Stockholders(public)/Owners(private)
• Want to ensure that managers are behaving ethically and not risking investors’ capital by engaging in actions that could hurt the company’s reputation
• Want to maximize their return on investment
Managers • Responsible for using a company’s financial capital and human resources to
increase its performance • Have the right to expect a good return or reward by investing their human
capital to improve a company’s performance • Frequently juggle multiple interests
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Types of Company Stakeholders
Employees • Expect to receive rewards consistent with their performance • Companies can act ethically toward employees by creating an
occupational structure that fairly and equitably rewards employees for their contributions
Suppliers and Distributors • Suppliers expect to be paid fairly and promptly for their inputs • Distributors expect to receive quality products at agreed-upon prices
Types of Company Stakeholders Customers
• Some consider them the most critical stakeholder (debatable) • Company must work to increase efficiency and effectiveness in order to create
loyal customers and attract new ones
Community, Society, and Nation • Community •Physical locations like towns or cities in which companies are located •Provides a company with the physical and social infrastructure that allows it
to operate • A company contributes to the economy of the town or region through salaries,
wages, and taxes
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Stakeholders, CSR, Ethics
When managers face issues of
• Corporate Social Responsibility • Ethics
Stakeholders are impacted!!!
What Is Social Responsibility? _____________________ • refers to the expectation that business firms should serve both
society and the financial interests of the shareholders. • Ethics is about the individual; social responsibility is about the
firm.
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Corporate Social Responsibility (CSR)
© 2007 PRENTICE HALL, INC. ALL RIGHTS RESERVED. 5–14
Corporate Social Responsibility (CSR) The ____________ View oManagement’s only social responsibility is to maximize
profits (create a financial return) by operating the business in the best interests of the stockholders (owners of the corporation).
oSpending the firm’s resources on doing “social good” unjustifiably increases costs that lower profits to the owners and raises prices to consumers.
Classical View Shareholder Theory Stockholder Theory
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Classical View of the Firm:
Classical View Shareholder Theory Stockholder Theory
oThe Primary goal of business is profit maximization, not spending shareholder money for the general social interest
oFirms should be active socially only when doing so enhances profits.
oManagers don’t know what’s in the best interest of society and they shouldn’t spend shareholder resources on such endeavors.
oFirms don’t need to “give back” because they already serve society by providing needed products, jobs, and tax revenues.
Milton Friedman (economist) stated:
CSR CONs
oThere is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
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Modern Examples of the Classical View
© 2007 PRENTICE HALL, INC. ALL RIGHTS RESERVED. 5–18
SocioEconomic View of the Firm The _________________ View oManagement’s social responsibility
goes beyond making profits to include protecting and improving society’s welfare.
oCorporations are not independent entities responsible only to stockholders.
oFirms have a moral responsibility to larger society to become involved in social, legal, and political issues.
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Corporate Social Responsibility (CSR) The triple bottom line is the notion that firms must maintain and improve social and environmental performance in addition to economic performance.
Carroll’s four Responsibilities of a Business Firm
o Firms have a responsibility to “give back” to the community
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Modern Examples of the Socioeconomic View
Modern Examples of the Socioeconomic View
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https://youtu.be/6EmIDqGOX44
PRO or CON – You Decide
Ethics: Key Definitions
o Workplace Ethics o Business Ethics o Organizational Ethics o Managerial Ethics
Many names, same general concept
• __________________ oThe inner-guiding moral principles, values,
and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behave
• ___________________ o Ethics (same as above) in a business context o proper business policies and practices regarding
potentially controversial issues
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The Nature of Ethics
Our ethics are (usually) fine until an ethical dilemma arises!
• __________________ oThe quandary people find themselves in
when they have to decide if they should act in a way that might help another person or group even though doing so might go against their own self-interest
Integrating Ethics into Decision Making
We’re basically referring to an individual’s (manager’s) responsibility to make business decisions that are ______, ______, ______, and ______.
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Integrating Ethics into Decision Making Agreeing on what is “legal” and “honest” may not be difficult. Agreeing on what is “moral” and “fair”
can be a difficult task!
Integrating Ethics into Decision Making
Therefore, the goal is to make you aware of your reasons (motivations) for making your decisions.
Ethics implies making a choice between decision-making rules. However, there are no absolute or indisputable rules or principles that can be developed to decide if an action is ethical or unethical
Example: When choosing between two suppliers, do you choose the cheapest or the highest quality?
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Behavioral Ethics
https://youtu.be/ivihrQAQui0
As French playwright Jean-Baptiste Moliere wrote, “It’s not only for what we do that we are held responsible, but for what we do not do.”
Values: The foundation for our Ethics • __________________ oimportant and lasting beliefs or ideals
shared by the members of a culture about what is good or bad and desirable or undesirable
oRelatively stable life goals, reflecting what is important to the person
So, an ethical dilemma occurs when a situation arises in which two or more potentially "right" values are in conflict. Each person or organization will hold certain values higher than another.
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Values: The foundation for our Ethics So, an ethical dilemma occurs in situations where two or more potentially "right" values are in conflict. Each person (or organization) will hold certain values higher than another.
Do you tell your parents about your sister’s drug problem?
honestyloyalty
Our Ethics are often Shaped by….
____________ ____________
____________ ____________
____________
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Ethics is not the same as…
Our Feelings Our Religion
The Law Culturally Accepted
Norms
Science
All of these inform our decisions, but….
1. Following them doesn’t necessarily mean you’re ethical
2. Not following them doesn’t mean you’re not ethical
What Ethics is not Ethics is not the same as feelings.
–Feelings provide important information for our ethical choices.
–Some people have highly developed habits that make them feel bad when they do something, but many people feel good even though they are doing the same thing.
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What Ethics is not Ethics is not confined to religion.
–Most religions advocate high ethical standards and demand (encourage) ethical behavior.
–Many people without a religious background follow the same ethical principles and behaviors as religious individuals.
What Ethics is not Ethics is not synonymous with the law. ◦ A good system of law does incorporate
many ethical standards, but law can deviate from what is ethical.
◦ Law may have a difficult time designing or enforcing standards in some important areas, and may be slow to address new problems.
o A good system of law does incorporate many ethical standards (murder), but law can deviate from what is ethical (past civil rights and voting laws).
o Most kinds of lying are perfectly legal, but lying is generally recognized as being unethical;
o Breaking promises is generally legal, but is widely thought of as unethical;
o Cheating on your husband or wife or boyfriend or girlfriend is legal, but unethical
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Ethics is not about following culturally accepted norms. • Standards of behavior in society can deviate from
what is ethical. • An entire society can become ethically corrupt.
“We are adults, we no longer act this way. We’re not as easily influenced by people….”
What Ethics is not “But Dad, all my friends are going….”
This is an illustration of the setup of a Milgram experiment. The experimenter (E) convinces the subject ("Teacher" T) to give what are believed to be painful electric shocks to another subject, who is actually an actor ("Learner" L). Many subjects continued to give shocks despite pleas of mercy from the actors.
Photo Source: http://en.wikipedia.org/wiki/Image:Milgram_Experiment_v2.png
Watch YouTube Video
What Ethics is not: The Milgram Experiment
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This is a sample item from the Asch study. Participants were asked one by one to say which of the lines on the right matched the line on the focal line on the left. While A is an exact match, many participants conformed when others unanimously chose B or C.
Focal Line A B C
“But, Prof. Williams, these two examples aren’t business- related. This wouldn’t happen in an organization….”
Watch YouTube Video
What Ethics is not: The Asch Experiment
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Ethics is not science. o Social and natural science can provide
important data to help us make better ethical choices. But science alone does not tell us what we ought to do.
o Science may provide an explanation for what humans are like. But ethics provides reasons for how humans ought to act.
o And just because something is scientifically possible, it may not be ethical to do it.
What Ethics is not
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Learning Ethics Many of you may not agree with these. You may believe ethics is exactly these things.
Our Feelings Our Religion
The Law Culturally Accepted
Norms
Science
Learning Ethics Many of you may not agree with these. You may believe ethics is exactly these things.
Our Feelings Our Religion
The Law Culturally Accepted
Norms
Science
Actually, that’s predictable!
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Learning Ethics: Kohlberg’s Moral Stages
Watch Video
Learning Ethics: Kohlberg’s Moral Stages
Watch Video
Peer pressure
Follow rules
Self-interest
Fear
Universal principles
It’s complicated…
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Learning Ethics: Kohlberg’s Moral Stages
oPeople need to experience life and take part in ethical situations to be able to process at higher levels.
oHow a person responds to, and justifies, different dilemmas would signify that he or she is capable of reasoning at a certain level.
Remember these when we look at responses to the survey!
Learning Ethics: Social Intuition oA newer way of thinking about our
approach to ethical dilemmas oWhile Kohlberg gives a rational
model for ethical decision making, Haidt believes it is non-rational
oIntuition (gut feeling) provides an instantaneous, emotional reaction to a morally charged situation (trigger)
oWe then try to explain our feeling (reasoning)
oWhen social justification is needed we build a case, putting forth arguments for why it’s wrong. When all arguments are exhausted, we simply say, “I can’t explain it, I just know it’s wrong.”
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Basic Perspectives (Views) on Managerial Ethics
________ ________
________ ________
________ ________
Behavioral Ethics The Utilitarian view:
◦ Anticipated outcomes and consequences should be the only considerations when evaluating an ethical dilemma.
◦ Consequences are important; tries both to increase the good done and to reduce the harm done.
◦ The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affected – STAKEHOLDERS!
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The Self-Interest view: o Benefits of the decision-maker(s) should be the primary
considerations. o The ethical corporate action, then, is the one that
produces the greatest good for me
When in doubt, do what’s best for yourself
Behavioral Ethics
Behavioral Ethics • Beginning Fall 2016, students can carry concealed
handguns into classrooms, dormitories and other buildings:
• Supporters say it will make college campuses safer by allowing licensed gun owners to defend themselves & others should a mass shooting occur
• Supporters say we have a right to bear arms, and this includes all public places. The University is a public setting.
• Opponents say the notion that armed students would make a campus safer is an illusion that will have a chilling effect on campus life
The Rights view: Humans have a dignity based on their
ability to choose freely what they do with their lives
The ethical corporate action, then, is the one that protects basic individual rights.
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Behavioral Ethics The Justice view:
◦ All decisions will be made in accordance with pre-established rules or guidelines.
◦ The ethical corporate action, then, is the one that follows the rules/laws.
• Beginning Spring 2020, we became a tobacco and e-cigarette (“vape”) free campus.
I don’t smoke because it’s against the rules I wear my seatbelt because it’s the law
Behavioral Ethics
The Integrative Social Contracts (Common Good) view: ◦ Decisions should be based on existing norms of
behavior, including cultural, community, or industry factors.
◦ The ethical corporate action, then, is the one that follows accepted practices.
The Deontological view: ◦ Decisions should be based on personal or religious
convictions. ◦ The ethical corporate action, then, is the one that
aligns with your belief system.
