Human resource exam

1

1. Describe philosophical perspectives on the social responsibility of business.

2. Explain typical responses of businesses to the call for social responsibility, and outline the pros and cons associated with social responsibility.

3. Describe examples of how hospitality companies are socially responsible, and discuss how they might conduct a social responsibility audit.

Competencies

4. Summarize ethical issues in business, including how businesses can assess ethical behavior, recent ethical issues in American business, and ethical issues in human resources management.

Managing Hospitality Human Resources Chapter 14: Social Responsibility and Ethics Human Resources & Ethical Concerns

• Ethics – A set of rules or principles that define “what is right” and “what is wrong” as decisions are made that affect others.

• Business ethics – Refers to the practice of ethical judgment by managers as they make decisions affecting the organization.

Behavior and Ethical Concerns • Behavior (ethical)

– Actions in concert with generally accepted social concerns relating to the impact of decisions on others. • Behavior (unethical)

– Actions not in concert with generally accepted social concerns relating to the impact of decisions on others.

Human Resources & Ethical Concerns

5

• Corporate (social) responsibility – Relates to an organization’s efforts to address its

commitments to all of its constituencies including guests, employees, other businesses including suppliers, investors, and society and the community-at-large.

• Stakeholders – Groups, individuals, and organizations that are

affected by an organization; also called “constituents.”

Not all of today’s business leaders agree that corporations have a responsibility to society at large; their opinions appear to be split among three different philosophies:

Traditional philosophy Stakeholder philosophy Affirmative philosophy

Traditional Philosophy • Believes the overriding goal of business is to

maximize profits – What’s good for the business is good for society – The desire for government to maintain a “hands

off” role in business – Managers are accountable to senior leaders only

2

Stakeholder Philosophy • Contends that managers are responsible not

only to their superiors and their shareholders but also to certain groups of stakeholders – those groups and individuals who have a stake in a

company’s performance. • Reflects “enlightened self-interest”

Affirmative Philosophy • Is typified by companies that anticipate

changes in stakeholder needs and voluntarily curtail activities that may be seen as damaging to society as a whole

• Some examples: – donating leftover food to homeless shelters,

providing housing for victims of natural and other disasters, and offering educational opportunities to employees and their families

Advantages of Being Socially Responsible • Reduced operating costs • Enhanced image and reputation • Greater customer loyalty • Increased ability to attract and retain

employees • Potential avoidance of fines • Alignment with shareholder beliefs

Downside of Social Responsibility • Difficult to measure financial impact to

organization • The cost can be high to implement and

maintain • Time managers spend on social issues takes

away from efforts to keep business profitable • Lots of different issues for lots of different

people

Conduct a Social Responsibility Audit • Most companies find it useful to begin with smaller, more informal and focused audits that may be more appropriate to their immediate needs. The following are some strategies to consider

1. Determine the audit’s scope and process 2. Define and engage stakeholders 3. Identify benchmarks 4. Review documents 5. Review management systems

Different Ways to Assess Business Ethics • The three-stage approach

– Develop an understanding of general ethical principles – Develop ethical principles to apply to real business situations as they arise – Identifying cases of good examples of the applied principles

• The critical question approach – consists of asking company executives to answer broad questions about ethical conduct in their company

• Who are the authorities? What are the rules and precedents? • Is there a conflict with existing principles?

• The balance sheet approach – managers, whenever they must make an important decision, draw a line down the middle of a sheet of paper and list the ethical pros of the decision on one side of the line, the ethical cons on the other

3

Sarbanes Oxley Act • Act that requires:

– Publicly owned companies to submit an annual assessment of internal financial auditing controls to the Securities and Exchange Commission (SEC)

– External auditors report on the effectiveness of internal control systems put in place by company managers

Whistleblowers • A whistleblower is a current or former

manager or employee of an organization who reports unethical behavior on the part of the organization to people or entities that have the power to take corrective action.

• Whistleblowers in the business world are protected by federal and state “whistleblower laws”