...Chapter 5 Social responsibility and Managerial Ethics WHAT IS SOCIAL RESPONISBILITY? Two views of social responsibility The classical View * The classical View says that management’s only social responsibility is to maximize profits. * Management’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). * Expanding the firm’s resources on doing “social good” unjustifiably increases costs that lower profits to the owners and raises prices to consumers. The Socioeconomic View * The Socioeconomic View is the view that management’s only social responsibility goes beyond making profits to include protecting and improving society’s welfare. * Management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare * Corporations are not independent entities responsible only to stockholders. * Firms have a moral responsibility to larger society to become involved in social, legal, and political issues. * “To do the right thing” Comparing the Two Views * A stage 1 manager is following the classical view of social responsibility and obeys all laws and regulations while caring for stockholders’ interests. * At stage 2 managers expand their responsibility to another important stakeholder group – employees. Because they want to attract, keep, and motivate good employees, stage 2 managers...
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...International Journal of Management Reviews (2007) doi: 10.1111/j.1468-2370.2007.00215.x XXXX utilitarian, ORIGINAL XXX International Publishing Management theories IJMR 2007managerial and relational Reviews of corporate social responsibility © Blackwell Journal of Ltd 2007 1460-8545 Oxford, UK ARTICLES Blackwell Publishing Ltd Utilitarian, managerial and relational theories of corporate social responsibility Davide Secchi Concepts and theories of corporate social responsibility (CSR) have been examined and classified by scholars since the mid-1970s. However, owing to the evolving meaning of CSR and the huge number of scholars who have begun to analyze the issue in recent years fresh efforts are needed to understand new developments. Since there is a great heterogeneity of theories and approaches, the task remains a very hard one, mainly because heterogeneity derives from multi-disciplinary diversity. The criterion for selection is to consider the role that theorists confer to the firm. Following this idea, three groups of theories have been discerned: (1) the utilitarian group, in which the corporation is intended as a maximizing ‘black box’ where problems of externalities and social costs emerge; (2) the managerial category, where problems of responsibility are approached from inside the firm (internal perspective); (3) relational theories, or those in which the type of relations between the firm and the environment are at the center of the analysis. The three perspectives...
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...Developing an Ethical Business Environment: A Report to Executive Management Introduction Ethics and business rules always go together. The fact that business policing is based upon the different measures of complete recognition of social norms and social limitations, ethics is indeed a large part of the ways by which business organizations try to strive to be able to become more effective within their operational engagements with regards their aim of being able to influence the society as well. It is indeed certain that the rules and regulation that a business puts up should be able to meet certain standards of social compromises. Any business organization could not afford to be questioned simply because of the fact that the business procedures that they are adapting to are not meeting the set standards for business organizations. (Kuhn, 2005, 12) To be able to have a clearer view of the matter being reported herein, it is first most importantly to be given attention to as to how management is indeed in relation with the actual application of ethical standards within the society. To be able to do this, there are three major points to consider. The said points are as follows: • The effect of organizational culture on ethical operation • The roles and responsibilities of executive management in fostering an ethical operating environment • The impact of ethical standards as they are used in business operations Through the consideration given to these particular...
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...Chapter 5 Social Responsibility and Ethics How important is it for organizations and managers to be socially responsible and ethical? In this chapter, we’re going to look at what it means to be socially responsible and ethical and what role managers play in both. Focus on the following learning outcomes as you read and study this chapter. LEARNING OUTCOMES 5.1 Discuss what it means to be socially responsible and what factors influence that decision. 5.2 Explain green management and how organizations can go green. 5.3 Discuss the factors that lead to ethical and unethical behavior. 5.4 Describe management’s role in encouraging ethical behavior. 5.5 Discuss current social responsibility and ethics issues. SPOTLIGHT: Manager at Work Chapter 5 presents contemporary concepts of managerial ethics and social responsibility to help your students explore and appreciate the critical role of these issues in today’s complex business environment. In the opening case, “A Manager at Work,” we see firsthand the complications that arise when companies are caught in the middle of unethical and illegal allegations. The case revolves around allegations of attempted bribery by three Renault executives. After an investigation, all three of the employees were dismissed, but the story doesn’t end there as the Paris prosecutor in charge of the case later dismissed the charges for lack of evidence. Renault would eventually backtrack on the firing of the executives, rehiring all three...
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...A Question of Managerial Ethics Cretia Ludwigson Keiser University Dr. Randy Kuhn Accounting for Decision Makers ACG5075 September 15, 2013 A Question of Managerial Ethics The ethical situation that Moyer found himself in is undoubtedly one that is encountered by many managers. In this short discussion, it will be argued that Moyer is facing a dilemma of corporate social responsibility. When Moyer discovered that the underground oil tanks are likely leaking into the ground and would need to be replaced, he was faced with basically three options. He could: 1) Do nothing, continue to pay the higher cost on oil consumption, simply waiting out the couple of years until the mall has to be torn down, 2) Take action on what he knows about the leak, including replacing the tanks and any pollution cleanup, or 3) Propose that the mall be shut down earlier than planned, and perhaps instead to negotiate the early sale and turning over of the land for building the stadium, with full disclosure of the probable leakage problem. Corporate social responsibility “entails balancing the objective of profitability with the objective of giving proper attention to issues such as environmental sustainability and energy conservation, and avoiding actions that would lower the quality of life in the communities in which a company operates and sells its products or services” (Easton, Halsey, McAnally, Hartgraves and Morse...
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...Discussion Board 1/Week 1 Business Ethics To imply the ethical and spiritual perspective and keenly advise Benji Watson on accepting or refusing the contract offered by New Gen Health Sciences, it is imperative to define the parameters of Christian spirituality and ethics. As Christian, we are guided by many Commandments and teachings and examples set by many prophets, noble men, and many parables from Jesus, where upholding higher moral and ethical standard for the good of others, not self, was dear to him. In Luke 10: 29-37, Jesus told the story of the Good Samaritan, a traveler from Jerusalem attacked and mocked by bandits. Two individuals, presented with the similar fate, were the least expected person to turn away and ignored the wounded person, by walking away and leaving the man stranded. Another important aspect to draw from the Christian spirituality mindset to advise Benji Watson, comes from Matthew 7: 12, commonly known as the Golden Rule. In this text, it is written that you do unto others as you would expect them to do unto you. Using the ethical perspective to advise Benji Watson, understanding of ethics, particularly business ethics, must be brought to bear. Ethics, in simplification is the study of good and bad behavior; whereas business ethics, a detachment of ethics, is what makes up good and bad behavior as related to business activities and values. From the definition of business ethics, we are left to decide what constitute the ambiguous terms...
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...enterprises, of Enron, etc.) play(ed) high-risk games at the cost of the organization; they plunder(ed) the assets of employees and shareholders as well. If they win, they take all the gain; if they lose, they call for the taxpayer’s money because their organizations are too big to fail. They never think about stinting with their bonuses even if the taxpayers have to save the organization they work for because otherwise these same managers would leave it and so dispossess it of their skills and competence which, so they think, are badly needed to set it afloat again. Objective and Targeted Audience Jackall’s detailed sociological study of the managerial world is not written for a particular target group. As Jackall has clarified throughout a recent interview,1 his study is “part of a larger project. This is a long-term examination of the social, institutional, cultural, moral, and epistemological foundations of modern American society (Interview, p. 8).” If one wants to nominate an audience as the target group of the first edition, then it is perhaps identified best by the answer to the question: “How does bureaucracy shape moral consciousness?” (Interview, p. 1). This question, however, seems to...
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...Ethics Behavior and Social Responsibility International Accounting Member of Group : 1. Rahmawati Yulistya C1I015026 2. Muhamad Ilham Akbar C1I015012 3. Astria Wulan P C1I015013 4. Siffa Sandi Sasmita C1I015025 5. Cita Husna Raisya C1I015026 6. Wulan Nilam Sari C1I015031 7. Karina Aprilia W C1I015037 8. Riyan Ardiyana C1I015043 Jenderal Soedirman University Faculty of Economics and Business I. Introduction I. Background Ethics Behavior and Social Responsibility Ethical behavior is that which is morally accepted as “good” and “right”. And opposed to “bad” and “wrong”. Social responsibility is a moral principle of an entity, be it an organization or individual, to act towards betterment of society at large. It is a duty that every firm and individual should perform so as to maintain the balance between the environment and economy. Their actions should lead towards sustainable development so as to safeguard the interests of the coming generations and at the same time fulfilling the needs of present population. The responsibility can be active, by performing activities that directly advance social goals, or passive, by avoiding any engagement in socially harmful act. Organizations can manage ethics in their workplaces by establishing an ethics management program. Brian Schrag, Executive Secretary of the Association for Practical and Professional Ethics, clarifies. “Typically, ethics programs convey corporate values...
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...Foundation of Ethics: Virtue and Values Evaluate Ethical Perspectives on Social Responsibility Submitted to Northcentral University DEFINING THE CONCEPT OF SOCIAL RESPONSIBILITY Depending on whom you ask, the concept of social responsibility may mean different things. However, within an organizational culture, social responsibility refers to ethical practices that benefit the greater society and simultaneously benefits the health of the organization. The concept of social responsibility is an ideology of ethical behavior that upholds that people and stakeholders should act in the interest of the greater collective good. Typically, social responsibility addresses the ethical obligations of organizations to sustain the law, while complying with environmental and social regulations that are sustainable for economic development. Stated simply, social responsibility is management’s interest in the welfare of the society in which it conducts business. It is a concept whose inception can be traced by to Peter Drucker, known as “The Father of Modern Management.” His realization that workers should be treated as a resource was ground breaking in the corporate world. Drucker defended the concept of proper corporate social responsibility to the point of turning a social problem into economic opportunity and productivity, while creating well paid jobs performed by competent people. William A. Cohen, a Drucker graduate and author of the article What Drucker Taught...
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...Ethics and Organizational Design- A Literature Review Abstract This literature review observes the views of organizational design and business ethics as they relate to one another in business. The first portion of this paper defines organizational design and business ethics to establish their importance and also examines managerial ethics and corporate social responsibility, sources of ethical principles. The second portion pursues to explain the relationship between business ethics and organizational design and how managers shape ethics through use of value-based leadership and formal structure systems. The third portion pursues to review the importance of ethics to organizational design and the structures that support or enforce ethical behavior in organizations. The fourth portion links literature reviewed and published over the past few years together based on their reference to ethics and organizational design. The literatures are linked together based on commonalities found in the opinions of the authors relating to a spiritual perspective, ethics and corporate structure, organizational and ethical theories, and ethical strategy. Last but not least, the review concludes with a summary of the important role that ethics plays in the organizational design and structure of a business and how it applies to members of management. Keywords: business ethics, organizational design, corporate social responsibility Outline INTRODUCTION I. Organizational Design/Business...
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...120: Introduction to Ethics and Social Responsibility December 1, 2008 The Role of Corporations The recent financial crises on Wall Street command a need for higher ethical standard in business. The behavior displayed by corporate heads has caused society, as well as other business to doubt the ability of these corporations to do the right thing. Because of the day-to-day demand of organizational performance not much attention is made to address unethical corporate behavior. Although current events in the business world have drawn our attention to the wrong doings, it there was more focus the process by which corporations meet the challenges of ethical behavior it may promote the practice of higher ethical standards within the world of business. In the past, corporations had little concern for non-economic ventures. The concern for political and social environments was next to none until they became concerns of society. When corporations decided to turn their attentions to the issues that concerned society the most, such as energy and natural resources, pollution control, equal opportunity, and consumer and worker protection there was much debate as to how these businesses should respond to these issues (Bateman & Snell, 2003). These debates resulted in the concept of corporate social responsibility (CSR) which was issued in 1971 by The Committee for Economic Development, stressed the social role of business as a vital instrument for social progress in a pluralistic...
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...CHAPTER 4 CHAPTER OUTLINE What Is Managerial Ethics? Criteria for Ethical Decision Making Utilitarian Approach Individualism Approach Moral Rights Approach Justice Approach Factors Affecting Ethical Choices The Manager The Organization What Is Social Responsibility? Organizational Stakeholders The Ethic of Sustainability and the Natural Environment Evaluating Corporate Social Performance Economic Responsibilities Legal Responsibilities Ethical Responsibilities Discretionary Responsibilities Managing Company Ethics and Social Responsibility Ethical Individuals Ethical Leadership Organizational Structures and Systems Ethical Challenges in Turbulent Times Economic Performance Social Entrepreneurship Managerial Ethics and Corporate Social Responsibility LEARNING OBJECTIVES After studying this chapter, you should be able to do the following: 1 2 3 4 5 6 7 Define ethics and explain how ethical behavior relates to behavior governed by law and free choice. Explain the utilitarian, individualism, moral rights, and justice approaches for evaluating ethical behavior. Describe how individual and organizational factors shape ethical decision making. Define corporate social responsibility and how to evaluate it along economic, legal, ethical, and discretionary criteria. Describe four organizational approaches to environmental responsibility, and explain the philosophy of sustainability. Discuss how ethical organizations are created through ethical leadership and organizational...
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...MAY 2012 OUMM 3203 PROFESSSIONAL ETHICS MATRICULATION NO: : 861215566517001 IDENTITY CARD NO: : 861215-56-6517 TELEPHONE NO: : 017-2542131 E-MAIL ADDRESS : VICKY_BUISS@YAHOO.COM LEARNING CENTRE : PPNS ETHICAL PROBLEMS IN MANAGEMENT “A man without ethics is a wild beast loosed upon this world” Albert Camus “Ethics is the activity of man directed to secure the inner perfection of his own personality” Albert Schweitzer INTRODUCTION 1. General. Management in general is a command function that requires detail and in depth research, planning, coordination, validation and implementation to ensure the desired Vision, Mission and Objectives of an organization is achieved both effectively and collectively. Therefore, management is an important tool towards the success and sustainability of any organization. As such, the need to have a clear understanding on the true meaning of management and other related subject matters in relation to this paper is as follows: a. Management. ‘Management’, generally means the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management in its broad sense comprises of planning, organizing, staffing, leading or directing and controlling. b. Ethics. ‘Ethics’ also known as ‘Moral Philosophy’ can be defined as the principles of morally acceptable conduct of individuals. Ethics also means an individual’s personal...
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...Nuisance or Threat? TAMEIKA ABRON Security 315 March 9, 2012 Dr. Thomas Dilbert FARC. Nuisance or Threat? Early twentieth century Colombia was fraught with political and social injustice. The majority of individuals aligned with either the Conservative Party or the Liberal Party. The country had mainly two notable socio-economic classes. Colombia’s ruling party, at that time, was considered an oligarchy. The small group of wealthy people governing the nation did so with the interest of the wealthy in mind. Members of the wealthy socio-economic class were largely landowners. Peaseants worked the land for poor wages, many for generations. structure; defining the Corporate Public Policy. Our text defines the concept of CSR as, requiring the individual to consider his/her actions in terms of a whole social system, and holds him/her responsible for the effects of those acts anywhere in that system. These are essential concepts that are often absent from a managerial standpoint. Corporate Social Responsibility should exist within every company's infrastructure; however, social integrity is not something that is often at the forefront of modern day business dealings. Ethics, business, and society must work in concert to provide sustainable products and services that have the least negative impact. Ethics are a necessary and critical ingredient in any successful organization. Maintaining an ethical climate requires a moral and conscientious outlook by all personnel in the company...
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...“What is "business ethics"?” Peter F. Drucker Drucker’s work takes a look at what is business ethics and what is not business ethics as it pertains to some of the major approaches taken by philosophers throughout time. No matter what the place in time the code of ethics as it pertains to Western tradition is based solely on one principle. That principle is “There is only one code of ethics, that of individual behavior, for prince and pauper, for rich and poor, for the mighty and the meek alike.” Drucker P. F. (1981). Given this principle what is business ethics or even ethics at all with given the implications that behavior which is neither immoral nor illegal for an individual would be immoral or illegal if committed by business? There seems to be a lack of compatibility with what ethics is supposed to be and business ethics. For example a person handing his money over to a mugger threatening physical harm isn’t considered unethical although the mugger is a criminal but in the business world paying off union racketeers to prevent disruption is considered to be unethical practice. The confusion around ethics in general and business ethics continues when we start looking at other business systems outside of the United States. Take for example the Japanese and German who consider the appointing of a counselor who was previously a distinguished civil servant based on the recommendation of his colleagues is essential to the public interest. However, if this practice were to...
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