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Ethics and Social Responsibility
Chapter5
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Ethics and Social
Responsibility
Ethical values
Social responsibility
Fundamental approaches to ethical issues
Chapter 5
Topics
Managerss Challenge: Timberland
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Ethics
The code of moral principles and values that govern
the behaviors of a person or group with respect to what
is right or wrong
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Three Domains of Human Action
Amount of
Explicit ControlHigh Low
Domain of Certified Law
(Legal Standard)
Domain of Ethics
(Social Standard)
Domain of Free Choice
(Personal Standard)
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Ethical Dilemma
! situation that arises when all alternative
choices or behaviors have been deemedundesirable because
potentially of negative ethical conse"uences#
ma$ing it difficult to distinguish right from
wrong
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riteria !or
Ethical Decision "a#in$
Most ethical dilemmas involve
Conflict between needs of the part % whole& 'ndividual versus the organi(ation
& )rgani(ation versus society as a whole
Managers use normative strategiesto guide
their decision ma$ing & norms and values
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Ethical Decision "a#in$ Approaches
*tilitarian !pproach
'ndividualism !pproach
Moral&+ights !pproach
,ustice !pproach
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'tilitarian Approach
- Moral behavior produces the greatest good for the greatest number
- Critics fear a ./ig /rother0 approach and as$ if the common good iss"uee(ing the life out of the individual
- E1ample 2 )regons decision to e1tend Medicaid to 344#444 previously
ineligible recipients by refusing to pay for high&cost# high&ris$
procedures
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)ndi*idualism Approach
- !cts are moral when they promote the individuals
best long&term interests# which ultimately leads to thegreater good
- 'ndividual self&direction paramount
- 'ndividualism is believed to lead to honesty % integrity
since that wor$s best in the long run
- E1amples:Top e1ecutives from 6orldCom# Enron#
Tyco demonstrate flaws of approach
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"oral-Ri$hts Approach
Moral decisions are those that best
maintain the rights of those peopleaffected by them
!n ethical decision is one that avoids
interfering with the fundamental rights ofothers
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Si. "oral Ri$hts
". The right of free consent". The right of free consent
7 The right to privacy7 The right to privacy
8 The right of freedom of conscience8 The right of freedom of conscience
3 The right of free speech3 The right of free speech
5 The right to due process5 The right to due process
9 The right to life % safety9 The right to life % safety
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/ustice Approach
Moral ecisions must be based on standards
of e"uity# fairness# impartiality
Three types of ,ustice !pproaches:
istributive ,ustice
;rocedural ,ustice Compensatory ,ustice
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Distributi*e /ustice
ifferent treatment of people should not be
based on arbitrary characteristics
'n case of substantive differences# people
should be treated differently in proportion tothe differences among them
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0rocedural /ustice
+ules should be clearly stated
+ules should be consistently and
impartially enforced
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ompensatory /ustice
- 'ndividuals should be compensated for thecost of their in
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!actors Affectin$ Ethical hoices
The Manager
=evels or stages of moral
development> ;re&conventional
> Conventional
> ;ost&conventional
The )rgani(ation
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1e*els of 0ersonal "oral
De*elopment
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The r$aniation
+arely can ethical or unethical corporate actions be
attributed solely to the personal values of a single
manager
?alues adopted within the organi(ation are highly
important
Most people believe their duty is to fulfill obligationsand e1pectations of others
E1periential E1ercise: Ethical 6or$ Climates
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Social Responsibility
)rgani(ations obligation to ma$e
choices and ta$e actions that willcontribute to the welfare and
interests of society and organi(ation
/eing a good corporate citi(en
ifficulty in understanding 2 issuescan be ambiguous with respect to
right and wrong
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r$aniational Sta#eholders
!ny group within or outside the organi(ation
that has a sta$e in the organi(ationsperformance
Each sta$eholder2 @as a different criterion of responsiveness
2 @as a different interest in the company
Monsanto
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En*ironmental Responsibility
ommitment
!ctivist
!pproach
Sta$eholder
!pproach
Mar$et !pproach
=egal !pproach
The Shades of
Corporate Areen
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Total orporate Responsibility
Economic
+esponsibility
=egal
+esponsibilityEthical
+esponsibility
iscretionary
+esponsibility
Ethical ilemma: Should 6e Ao /eyond the
=awB
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The Ethical r$aniation
- Ethical individuals honest# have integrity# strive for a
high level of moral development
- Ethical leadership provides the necessary actions#
committed to ethical values and helps others to embody
those values
-
)rgani(ational structure embodies a code of ethics#and methods to implement ethical behavior
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Ethics and the e or#place
Telecommuting# virtual wor$# and fle1ible hours &Success of new programs depends on mutual trust
'T provides opportunities for monitoring
Companies that ma$e an unwavering
commitment to maintaining high standards ofethics and social responsibility will lead theway toward a brighter future for bothbusiness and society