Management of Business HOMEWORK (URGENT!!!)

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Principles of Management

Topic 03 – Implementing Ethics and Corporate Social Responsibility

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Topic 03 – Learning Outcomes

1. Understand ethics and business ethics.

2. Review ethical issues in business.

3. Apply the four key ethical criteria that managers and employees should use when making business decisions.

4. Recognize morally challenging situations where ethical decisions should be made.

5. Identify important categories of stakeholders for approaches to corporate social responsibility.

6. Review benefits and challenges of corporate social responsibility.

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Ethics

Principles that explain what is right or wrong, good or bad, and what is appropriate or inappropriate in various settings.

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Business Ethics

Standards or guidelines for the conduct and decision making of employees and managers

Business ethics

is about being honest to your customers, society, employer, and employees. Source: https://businesszeal.com/importance-of-business-ethics

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Ethical Issues in Business

• Enron – corporate fraud • McDonalds – Big Mac • Sanlu –baby milk formula • Nike – “sweatshops” • Coca-Cola • Volkswagen – illegal software designed to mask emissions

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Skills for Managing Ethics and Corporate Social Responsibility

Ethical decision-

making skills

Analyzing stakeholder

concerns

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Ethics Approaches

• Decisions should be made on the basis of what is good for the greatest number of people

Utilitarianism

• Personal self-interests should be promoted as long as they do not harm others

Individualism

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Ethics Approaches (Cont’d)

• The belief that each person has fundamental human rights that should be respected and protected

Rights Approach

• Treating all people fairly and consistently in decision making • Distributive justice • Procedural justice

Justice Approach

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Ethics Approaches (Cont’d)

Class Activity1

Rights approach

Individualism approach

Justice approach

Utilitarianism approach

LibertarianEgalitarian

Community matters

Individuals matter

How much do individuals matter?

Economic freedom

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Business Transmission of Ethics

Refer to your notes on example of code of ethics.

Code of ethics

A written set of guidelines issued by an organization to its workers and management to help them conduct their actions…

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Business Transmission of Ethics (Cont’d)

Refer to your notes on example of corporate credo.

Corporate credo

A set of fundamental beliefs / mission statement or guiding principles

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Business Transmission of Ethics (Cont’d)

Refer to your notes on example of ethical policy statements.

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Managing & Sustaining Ethics

• Messages from top executives • Discussion of codes of ethics

Ethics Training

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Managing & Sustaining Ethics (Cont’d)

• A division or department to oversee the guidelines: • Ethics officer or Ethics committee

Ethical Structures

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Managing & Sustaining Ethics (Cont’d)

• Protect the employees who report unethical behavior in the company

Whistleblower Policies

Class Activity2

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Corporate Social Responsibility The duty a company has to conduct its affairs ethically in a manner that benefits both employees and the larger society

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Stakeholder Theory - CSR

External Stakeholders

Suppliers Society

Government

Creditors

Shareholders Customers

Internal Stakeholders

Employees

Managers

Owners

Company

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Benefits of CSR

Improved financial

performance

Enhanced brand image &

reputation

Increased sales and customer

loyalty

Increased ability to attract

and retain employees

Easier access to capital

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Challenges of CSR

It requires higher costs

It can create shareholder resistance

It promotes greenwashing

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Approaches to CSR

Class Activity3

Confrontation approach

Damage control approach

Accommodation approach

Proactive approach

Social Responsibility

Low High

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