Topic Summary_Ethics, Sustainability, CSR

7/27/2019 Topic Summary_Ethics, Sustainability, CSR

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Contemporary OB in Action: Topic Summary: Corporate social responsibility, sustainability, and

ethics

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Topic Summary: corporate social responsibility, sustainability and ethics

Topic Summary Learning Goals

1) Define why corporate social responsibility and sustainability are relevant fororganizational behavior

2) Discuss the differences between the shareholder and stakeholder perspectives.3) Explain the business case and ethical mandate case for corporate social

responsibility and sustainability.

4) Describe the triple bottom line, corruption, and integrity and how they factorinto corporate social responsibility.

Key terms

Applied ethicsBenefit Corporation

Corporate social responsibilityCorruption

EthicsGeneral ethics

Globalization impact on ethicsHuman sustainability

IntegrityInstrumental values

MoralsNormative ethics

OmbudsmanPay to play schemes

Shareholder value approachStakeholder approach

SustainabilityTerminal values

Triple bottom lineValues


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Corporate Social Responsibility

This topic summary reviews social responsibility, which has become an important

consideration for all types of organizations. For-profit enterprises, not for profit, as well

as governmental organizations show increased awareness of the impact of their activities

on society and the environment. Two major considerations go into an organizations

actions around corporate social responsibility (CSR) and sustainability:

1) The business case approach which emphasizes strategy, stability and survival2) The ethical mandate approach which emphasizes values, ethics and integrity

Corporate social responsibility

Corporate social responsibility (CSR) refers to the expectations society holds of

an organization and how the society chooses to uphold the organization to those

expectations. Although it is popular to say that a companys primary responsibility is to

make a profit, there are other expectations for companies in addition to making profits.

Organizations have responsibilities to society, the environment, the community in which


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they operate, and to their employees.1 This diverse set of goals are called the triple bottom

line which includes 1) on economic viability including profits; 2) environmental concern

which focus on minimal impact on the natural environment; and 3) concern for the health

of its community which includes fair treatment of employees.2 Essentially, calls for

greater corporate social responsibility suggest that all organizations, and corporations in

particular, have a responsibility to consider their impact on society that goes beyond

simply following the rule of law. Sustainability is referred to as the set of voluntary

actions that an organization takes to demonstrate its environmental and social

responsibilities.

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When an organization takes action in order to minimize its impact on

the natural environment and takes care to insure the long-term maintenance of the

environment, we call this environmental sustainability.

Environmental sustainability

In 1968, an ecologist by the name of Garret Hardin published an essay in

Science magazine4 that described a situation that has come to symbolize the

current state of the environment and the way it was managed. He a time when

all the cattle owners who lived in a small villager shared a common grazing area called

the commons. In these conditions, each owner had an incentive to maximize his number

of cattle because he had no restriction on the amount of grass his cattle could eat. But

there was a problem. If all the cattle owners took advantage of this incentive, then soon

the entire pasture would be overrun with cattle and the common land would no longer be

sufficient to sustain the cattle. This scenario, where common resources are shared, but the

incentive to exploit these common resources for individual gain, has become known as

the tragedy of the commons.Organizations have become more aware of their impact on


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the environment and have begun to realize how their own actions look similar to the

cattle ranchers who try to take advantage of the shared resources. Due to this growing

concern about the impact that on the environment, organization have begun to

demonstrate their concern for preservation of the natural environment. Examples of

organizational actions that show responsible use of resources include recycling, use of

renewable resources, minimizing use of hazardous chemicals, and water and energy

conservation efforts.

Human sustainability

Another approach to sustainability focuses on broader concern for human factors

such as the need for medical insurance, working conditions, work life balance, stress, and

inequality.Human sustainability or social sustainability is the voluntary actions that an

organization takes to focus on the well being of people within the organization and those

who belong to the greater community in which it operates. Organizations can choose to

focus on both environmental sustainability and human sustainability or choose to focus

on one area over another. For example, Wal-Mart, the largest employer in the United

States has developed a focus on environmental sustainability, while at the same time, it

paid its employees 15% lower than other retailers. In addition, 46 % of children whose

parents worked at Wal-Mart remained uninsured.5

Advocates of human sustainability are often concerned with unfairness and the

concern that many organizations take advantage of workers, suppliers and customers for

the benefit of the company. For example, where organizations charge high fees for

certain transactions or engage in lending that overburdens the borrower or failing to pay

health insurance to workers. Other proponents of human sustainability offer that


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organizations have the knowledge and resources to effect social change in their

communities and should do so. In this instance, and organization operating in a

developing country might offer education programs to develop the basic skill set of their

workers.

With growing globalization, organizations increasingly have access to new pools

of labor in developing countries. Many companies are attracted to these labor pools

because they can pay these workers a fraction of the wage of a worker in a developed

country like the US, developing countries dont hold organizations to the same work

standards such as allowing for breaks, time off, and clean working conditions, and

because workers are less likely to object to poor working conditions. Critics have argued

that in fact, most workers choose to work under certain conditions and that these

conditions provide better options than the worker would otherwise have.6

The Role of Organizational Behavior: Shareholder vs. Stakeholder

Both arguments for CSR and sustainability hold merit in studies of contemporary

organizational behavior. Ethical scandals have been widely reported. While the actually

causes of these ethical lapses are varied, business schools and their students have not

been immune to criticism. Some of the blame for these scandals has been assigned to

higher education. Some critics have specifically pointed to the fact that business schools

in particular ignore the human and environmental concerns and instead focus on profits.

Because of this, students have an inadequate understanding of the need for organizations

to do more than what is legally mandated. Some observers believe that the values taught

by business schools as a primary driver of ethical lapses by organizations. One commonly

cited problem, thought to encourage unethical behavior is the predominance of the


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shareholder value perspective in education. Perhaps the most commonly cited advocate

of shareholder value perspective is economist Milton Freedman. He wrote that:

"The Social Responsibility of Business Is to Increase Its Profits. There 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"7

Increasing shareholder value essentially means increasing the price of the stock.

The predominance of the shareholder approach, according to the critics, focuses on the

pursuit of self-interest at the expense of other values. The predominance of shareholder

value and its focus on shareholders at the expense of other groups who benefit or are

harmed, shows the influence that economic thought has had on thinking in business

schools. Courses in organizational behavior have begun to expand discussions from only

focusing on the business case for CSR to identify a more complete understanding of an

organizations responsibilities, including the ethical mandate to shareholders.

Critics of higher education often cite a study conducted by the Aspen institute. It

surveyed 2,000 masters level business students and found that those who believed that

maximizing shareholder value was the primary responsibility of a corporation increased

from the time they entered school to the time the completed their first year. This trend

may be changing, however, as more students report that companies should value

customers, another stakeholder group, above shareholders.8


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Dissatisfaction with the Shareholder model

The contemporary movement for a more complex argument for CSR grows out of

dissatisfaction with narrow definitions of business offered by Milton Fridman.9The

specific calls for CSR vary from concern for the environment associated with

sustainability, calls for corporations to consider their impact and their potential

exploitation of developing countries, or for corporations to consider following higher

ethical standards, or even the more radical notion that capitalism itself should be

transformed.

Stakeholder approach

An important challenge to Milton Friedmansshareholderapproach can be found

in the idea of a stakeholder approach.9 The arguments for CSR emerges primarily from

pressure from stakeholders such as the community, employees, regulators, customers,

suppliers, as well as shareholders.10As interest in alternative forms of corporations arise,

many corporations are reevaluating their impact on the environment, communities in

which they do business, their employees, and the larger society. One alternative approach

is the benefits corporation or a flexible purpose corporation, which is a legal entity that

holds a corporation legally accountable for a broader set of stakeholders than simply

shareholders. Although only a few states recognize Benefits Corporations, there is

growing interest in this form of business. Under a Benefits Corporations charter,

company directors must consider not only profits of the businesses, but will consider the

companys broader impact as well.11 Researchers remain skeptical and argue that

organizations efforts at corporate social responsibility are no more than public relations

stunts designed to hide corporate goals which involve unrelenting pursuit of profits and


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economic driven activities.12 Some universities have responded by encouraging their

students to sign codes of ethics or asking students to promise they will do well when they

enter the work world.

Corporate Social Responsibility and Sustainability: A Business Case

Several perspectives offer a business case for organizations to promote corporate

social responsibility. These include organizational strategy, stability and survival.

Organizational Strategy

Some people have argued that greater social responsibility can be a good

organizational strategy because it aligns the organizations social efforts with its overall

mission. Strategy professor Michael Porter offers a remedy to address the perception that

corporate social responsibility is simply a faade. He argues that a corporations efforts at

social responsibility should be aligned with its corporate strategy.13 An example that

Porter provides is when a multinational corporation that does business in Africa, and

works to solve the AIDS problem as part of its strategy. This multinational corporation

will be able to have access to the African workforce, and it has a business case to work to

alleviate the AIDS crisis, because lowering the rate of AIDS infections expands the pool

of healthy labor for the corporation.

Organizational stability and survival

Another important perspective that makes a business case for considering social

responsibility in organizations comes is the organizational stability and survival

argument. When organizations fail to pay attention to their impact on the human and

natural environment, they can find themselves at risk. There are several examples where

ethical lapses have resulted in the total collapse of the organization. For example, Barings


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Bank in 1995, Britains oldest commercial bank, collapsed due to the risk behavior of one

of its employees. Arthur Anderson, one of the most respected and largest accounting

firms in the world, went out of business due to its perceived complicity misrepresenting

financial statements at Enron, one of the biggest bankruptcies of all times. Other issues

related to organizational survival and stability focus on product safety, health and safety,

environmental concerns.14

Corporate Social Responsibility and Sustainability: An Ethical Mandate

A business case perspective is not enough to justify corporate social responsibility

in organizations. Many see CSR as an ethical mandate where organizations should be

concerned with ethics, values and integrity.

Ethics

Ethics is the general study of behaviors and judgments. Ethics is an attempt to

describe the rational for engaging in certain behaviors and about the appropriateness of

these behaviors and rational. According to one ethicist, Discussions of ethics begin

when people find their code of prevailing rules [provide] unsatisfactory for explain

events.15 Discussions of ethics fall into three basic categories:

General ethics seeks to describe general moral standards. Of particular interest arethe origins of these standards and what they suggest about the culture that follows

them.

Normative ethics is an attempt to find universal principles about what is

appropriate and inappropriate behavior to measure right from wrong.


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Applied ethics focuses on areas of interest and how to make practical judgmentsabout moral issues where there is either great disagreement about what constitutes

right and wrong or where right and wrong are not at all clear.

Concerns about ethics are not with businesses alone. Governments too can be the

source of concern. One commonly used tactic seen in government is a so calledpay-

to-play scheme where an organization pays a government official in order to gain

access to influential officials or win a contract with the government.

Globalization

One reason that interest in corporate social responsibility from an ethical mandate

approach has increased is the result of globalization. Increased globalization offers

organizations the ability to dodge undesirable regulations in one jurisdiction and set up

operations in another jurisdiction where they can dodge oversight. As such, nations have

less ability to impose regulations that may support human rights values, environmental

values or cultural values. Companies can avoid ethical and legal implications of corrupt

or questionable business practices by moving operations to countries that have laws that

prove more favorable to business.16

Since, ethics cannot always be enforced, organizations have to define

and create standards of moral behavior, judgment and decision making as part of their

organizational culture. What people value in an organization impacts this culture as well.

Values

Values are distinct from ethics, although ethics and values may be interrelated in

some cases. Values describe an individual or organizations beliefs. Where ethics are

generally more about distinguishing right from wrong, values describe a broad set of


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priorities around what is important. Ethics follow rules and since ethics can be tied to

rules, there are formal approaches to defining ethics and ethics codes in organizations.

Values focus on the choices that are made. Typically, values are considered within a

system of beliefs know as a values system.

Values Clarification

Values clarification is the process of clarifying or become more aware of ones

own individual values. Values clarification involves understanding and evaluating ones

own values where the goal is to increase self-awareness and confront inconsistencies or

uneasiness with ones own values.

The values clarification process is useful to understand

person and organizational fit and person and job fit. If an individuals values are in

conflict with the values in the organization or even the requirements of a job, it may not

be an optimal work situation.

The Rokeach values survey offers a list of two sets of values terminal, or values

that serve as goals to be achieved, and instrumentalvalues, values that serve in the

process of achieving those values.17 Terminal values are the destination we hope to

achieve and Instrumental values describe our internal motives and how we attempt to

achieve certain outcomes in life.


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Table: Terminal and Instrumental Values

Terminal Values Instrumental Values

A comfortable and prosperous life Ambitious

An exciting life (Stimulating) Broad-minded

A sense of accomplishment (last contribution) Capable

A world at peace (free from war and conflict) Cheerful

A world of beauty (beauty of nature and the arts) Clean

Equality (Brotherhood, equal opportunity) Courageous

Salvation (eternal life, saved) Forgiving

True friendship (close companionship) Helpful

Honest

Imaginative

Values Orientation

Another values orientation framework describes the values systems in Western

Culture. This framework falls into three distinct categories: pragmatic, intellectual, and

human values.18

This framework suggests that peoples values from a Western Culture

can be sorted into three categories. Values orientation clarification helps people integrate

their values with others. An example of this conflict might occur if an employee (who

held to a human value of loyalty) was asked by her boss (who held to a pragmatic value

of cost saving) to fire an employee. This conflict could be resolved as both the employee

and boss express their values and work together toward a common goal.


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Table: The values categories of Western culture

Pragmatic Intellectual Human

usefulness and utility of an

idea.

rationalism and strengths of

ideas in the abstract

specific close personal

relationships such as family,

friends and acquaintances and how

things impact these relationships.

Values in this category

emphasize effort, the desire to

maximize output, with a focus

on measurement of output and

ways to determine relative

value across different

perspectives.

Values in this category

emphasize the intellectual

value and emphasize

perception of reality and a

set of concepts that explain

it. The intellectual values

orientation relies on logical

coherence, contextual

relevance, and meaning and

a well thought out

argument.

Values in this category emphasize

loyalty and consistency as they

relate to personal relationship.

Morals

Morals, like values, are individual or collective sets of preferences, but are more likely

to be judged as right or wrong. Morals are often thought of as the inner direction of


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ethics19 Morals describe an individuals rule around what is acceptable (right) versus

unacceptable (wrong).

Organizational Integrity

Organizational corruption occurs when an entire system engages in unethical

behavior. Whereas ethical lapse and moral decisions are often isolated events that can be

attributed to the actions of individuals, corruption implies the system itself is bad and that

unethical behavior cannot be attributed solely to an individual or individuals. Like ethics,

what is considered corrupt practices differs across countries and cultures. Corruption

often is associated with the illegitimate use of power in organizations. One way to think

about corruption is through a metaphor. This metaphor is that corruption is a disease that

must be cured and absence of corruption is a healthy, functioning organization. Another

challenge with defining corruption is that practices that constitute corruption differ across

cultures and countries have not only different practices but also different laws that define

and govern corruption.20

The idea of integrity has been offered as an alternative to the negative focus on

corruption.21 Organizations that demonstrate integrity track their risk relative to ethical

lapses by employees, have oversight, a culture of compliance and have a system in place

to report ethical breaches as they occur. Carter, a researcher at Yale, gives three criteria

for an organizational culture of integrity:

1. People in the organization clearly understand what is right and what is wrong;

2. People in the organization act on what they discerned to be right, even at personalcost; and

3. People openly link actions to understanding of right and wrong.22


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One system that organizations put into place to increase integrity is an

organizational ombudsman. An ombudsman is a person or group or people where

employees can go if they believe they have seen an unethical practice or a practice that is

not consistent with the organizations values. The ombudsman is then responsible for

following up on the concern and investigating to see if there is a problem. The

ombudsman may be an employee of the organization, or work outside the organization.

The ombudsman allows the organization to:

Build awareness of what constitutes ethical and unethical behavior, andunderstand the ethical implications of decisions

Clarify values of the employee and the organization Develop structural supports such as an ethical ombudsman who listens to

whistleblowers, institute clear rules to follow when ethical issues arise,

Foster a culture of openness and trust Include strict oversight and compliance by third parties


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OB Feature: Why is making ethical decisions difficult?

Ethical decisions are often difficult to make. Ethical decision making often

requires unsatisfactory choices, rational-economic models are not sufficient to solve a

problem, the ethical rules are often confusing and ambiguous, and we live in a society,

world with multiple competing values systems. When a decision has ethical implications

and some or all of these exist, a person is said to be in n ethical dilemma, described as a

situation where taking an action requires taking into account multiple ethical

considerations.

Leadership often requires taking decisive actions in ambiguous situations. While

leaders must weigh options and make choices, many times those choices are between

competing but equally important demands. This requires not only taking action, but also

being able to provide compelling reasons for those actions.

Competing values Difficult to ascertain correct answer What may be viewed as right by one group is wrong by another (moral

incommensurability)

require making difficult and often unsatisfactory decision often rational-economic models are not sufficient to solve a problem confusing and ambiguous outcomes live in a society, world with multiple competing values system

Some have argued that ethical decisions are difficult because most decisions often

involve an ethical dilemma, a complex situation where two or more competing choices.

When a person faces an ethical dilemma, no choice is completely desirable.Applied


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ethics helps people in organizations make decisions when they are faced with an ethical

dilemma. Applied ethics guides leaders and managers as they integrate ethics into their

day-to-day behavior as they try to determine what is appropriate and inappropriate

behavior. Applied ethics offers five distinct tests to a behavior. Each test is a question

that a person should ask themselves before or during the ethical decision making process.

New York Times test. Ask your self: How would I feel if my actions were printedin the front page of the New York Time for everyone to read? This questions

helps you determine how your actions would appear to the average person. If you

answer the question, No, I would not like this on the front page of a major news

paper because I would be embarrassed or ashamed, then you should not do the

action.

The compliance test. This compliance test asks you. Would my actions break anyregulations or written policies? If you actions break regulations or policies, then

you should not participate in the activity.

The legal test. The legal test asks a similar question to the compliance test but itasks whether or not you are breaking any laws. You should ask, does my action

break any laws?

The culture test. The culture test asks are my actions consistent with the culture inwhich I work or among my coworkers. What would my peers say? In many cases

your actions may not break a law, a regulation, or a specific company policy, but

it may threaten the culture of the organization nonetheless.

The values test. The values test asks: How does this relate to my values? Will I beable to live with myself if I engage in these actions?

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Applied ethics also looks at the governance structure of organizations to see if

certain types of governance structure make more or less ethical decisions. The role of

corporate governance has been of increasing interest in light of several high profile

ethical challenges by members of boards of directors at major companies.

What to do to improve your values ethical decision making

Recognize and describe personal values and their influence on decisionmaking

Account for multiple competing demands inherent in decision making Develop a Personal Ethic of Leadership


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OB at work: Mike McLaughlin shows how corporate social responsibility is the

business of every employee

Mike McLaughlin spends time each day considering the health and well being of

his customers, his employees, and his community. In the morning, he analyzes the impact

a new product may have on the environment. In the afternoon he speaks with a supplier

that might adopt a new farming practice to boost yield. How does this effect his

companys aspiration for organic products? Before he heads home, he sits down with one

of his employees to discuss staffing. It turns out that the company is sponsoring the

employee to perform volunteer work for the community, while still on the companys

payroll and a short-term replacement may be needed.

With all the time he spends thinking about human, organization, and

environmental sustainability, you might think he is the head of Human Resources or

perhaps even the Chief Corporate Responsibility Officer in his company, but he isnt. He

is the Vice President of Operations for a company that manufactures and sells energy bars

and other food products.

A key part of Mikes job is to ensure that the raw materials that go into those

products come from reliable sources. To ensure that the farmers and other suppliers meet

the companys high standards, his company has instituted a rigorous review process. The

standards vary by product and may include the use of organic materials, no use of

hormone supplements in animals to boost output, and trying to achieve maintaining

minimal impact on the environment. Of course, the products must also taste good and

meet customer needs. Perhaps the most important job he has is to ensure product safety.

In the food business, he argues for a dedicated focus to food safety and a focus on the


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long-term health of the business, not simply short-term profits and production. An

ethical business factors day to day decisions into the long term goals of the business, he

says.

Mike feels lucky to work for a company that considers social responsibility part

of its mission. Ive always been attracted to companies that have a strong culture

directed towards more than simply short term profits, Mike says. He likes to say that the

energy bar company is hard on results but soft on people. This kind of organizational

culture provides a great ethic for running an organization, especially a high growth

business. The company is engaged in an intense effort to do good, do well, and is

passionate about its brand, he notes.

Many organizations focus on one bottom line: profits. A few inspired companies

may focus on the triple bottom line consisting of profits, community, and environment.

The energy bar company focuses on five bottom lines, what the company calls The Five

Aspirations. These include an aspiration for business, for the brand, for its people, for

the planet, and for the community. In fact, each of these five aspirations are measured and

factored in when bonus time comes around. The important thing from a management or

leadership perspective, says Mike, is to confront all five aspirations in every decision I

make, but to realize that not all aspirations will be achieved in every decision.

This may seem like a surprising set of goals for a company whose intention is to

make money. The company represents a small, but growing trend among businesses that

see themselves as playing a larger role in society and the environment. The mission

moves beyond the simply goal of making profits. Mikes employer has joined with other

companies in the region that hold similar values. The collaboration focuses the efforts of


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up to 20 companies on something of importance and might include cleaning up the

oceans or building affordable housing. These companies and the mindset of their

employees are representative of a new mindset among businesses that adopt practices of

corporate social responsibility.

Whether identifying new suppliers of protein, ensuring the safety of his products,

supporting the community through volunteer activities performed on company time, or

further considering the impact on the planet, Mike McLaughlin represents a new kind of

company leader whos concern goes beyond profits, to building a better world.


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Spotlight on Research: Does goal setting lead to unethical behavior?

Can people in organizations be so motivated to achieve a goal that the goal

encourages them to engage in unethical behavior? Recent research reveals that, under

certain circumstances, goals can motivate unethical behavior. A group of researcher had

noticed a trend in organizations. Some organizations were so focused on achieving short-

term goals, that they set policies that motivated unethical behavior. For example, one case

found that Searss auto repair shops routinely overcharged their customers, conducted

unnecessary work, and often delivered less than acceptable work. The motivating force: a

$147 per hour sales goal. It seemed that sales goals overshadowed other factors like

customer service, quality, and honesty. But were goals really to blame for this nationwide

problem? To find out, the researchers created an experiment controlled environment to

find the effects of goals and incentives as motivators of unethical behavior.

The researchers relied on an anagram task to first determine what was an

appropriate performance goal. In an anagram task, participants in the study are asked to

take 7 letters and create as many words as they possibly can using these letters. For

example, if given the letters a, t, c, m, e, r, o, the participants in the study might create

words such as to, at, come, . . .

For the study, the participants were divided into three groups. Researchers

provided each of the three groups with different instructions. Group one was told simply

to do your best. For the second group, researchers set the goal for each participant to

make nine words from the list of 7 letters. A third group was given the same goal as

group 2, make nine words, but this group was given $2 each time they achieved the goal.

Each group went through several rounds of anagram tasks. Prior to the experiment, each


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group was paid to participate in the experiment. Group one and two were each paid $10.

Group three was provided an envelop of $1 bills and told to take out $2 for each word

that was done correctly.

At the end of the experiment each participant recorded his or her own success rate

on the task, essentially tallying the number of correct words they produced for each

anagram. This is where the researchers identified the unethical behavior. Because in some

cases, there was a great discrepancy between what the participants reported as their score

and what they actually scored. The results appear to be influenced by the type of goal and

the rewards.

The first group, do your best took their 10 dollars, with no goal; they were

simply paid to do the work. The second group, which was directed to meet the goal of

nine words per task were given no money. The third group, which was offered a

monetary award for meeting goals, was instructed to take out $2 for each word that met

the goal, returning the remaining money in an envelope.

As confirmed by prior research, the participants instructed to do your best

scored the lowest, the goal setting group with no incentive scored second, and the goal

setting with incentive scored the highest on actually production. However, the researchers

found no statistical difference between the actual performance between these three

groups. For statistical purposes, each group produced about the same number words. In

terms of what members from each group reported however, there were significant

differences from actual production. The table below summarizes the three groups. As can

be seen, the group instructed to do your best overstated actual production by about 10 %,

the group with a goal, but no incentive overstated by about 22 %, and the group with a


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goal and a monetary incentive overstated actual production by 30 %. The research

supported the notion that goals and incentives increase unethical behavior as

demonstrated by over-reporting of production. Interestingly, it wasnt only the group that

had a financial incentive to misrepresent their production (eg. Group 3), even the group

with no financial incentive, but who had been instructed to meet a high goal (e.g., Group

2), that misrepresented their production.

Group Instructions Reward cheating

index

How much the

group on

averageoverstated

actual

productivity

Average # ofwords perround

1 do your best $10 simply fordoing the task

10. 5 % 5.46

2 set goal ofcreating 9words perround

no paymentreceived

22.7 % 5.83

3 set goal ofcreating 9words perround

$2 per word 30.2% 6.17

The study revealed something else. Those people most likely to misrepresent their

production were those who missed the mark by just a little. In other words, the closer the

person was to accomplishing the goal, but had not reached it, the more likely they were to

misrepresent their production. The study suggests that falling just short of your goal

actually increases unethical behavior.

The study has several implications for managers. It suggests that some managerial

practices, like goal setting, can actually be harmful to the organization and to fostering an


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environment of ethical behavior. Also, managers need to consider not just about

motivating employees, but what exactly are they motivating employees to accomplish.

This research reveals that managers need to consider, more fully, the unintended

consequences of goal setting and other managerial motivation techniques.

*Based on the articles: Ordez, L.D., Schweitzer, M.E., Galinsky, A.D., & Bazerman,

M.H. (2009). Goals Gone Wild: The Systematic Side Effects of Overprescribing Goal

Setting,Academy of Management Perspectives, 23(1), 6-16 and Schweitzer, M.,

Ordez, L. D., & Douma, B. (2004). The Dark Side of Goal Setting: The Role of Goals

in Motivating Unethical Behavior. The Academy of Management Journal, 47, 422-432.

References

1From A. B. Carroll 1979. A three-dimensional conceptual model of corporate social

performance.Academy of Management Review, 4, 497-505. P. 500. Paddy

Ireland "corporate social responsibility" The New Oxford Companion to Law. by

Peter Cane and Joanne Conaghan. Oxford University Press Inc. Oxford Reference

Online. Oxford University Press. George Washington University. 29 November

2011 http://www.oxfordreference.com/views/ENTRY.html?subview=Main&entr

y=t287.e486. Campbell, John L. 2007. An institutional theory of corporate social

responsibility.Academy of Management Review, 32, 3, 946-967.

2see John Elkington 1997. Cannibals with forks: the Triple Bottom line of 21stcentury

business. Capstone. See also: http://www.johnelkington.com/TBL-elkington-

chapter.pdf.

3Marrewijk, Marcel Van 2003. Concepts and Definitions of CSR and Corporate

Sustainability: Between Agency and Communion.Journal of Business Ethics, 44


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(2/3):95 - 105. Mark Starik, Gordon Rands, Alfred Marcus, & Timothy Clark,

2010. Special issue on sustainability in management education.Academy of

Management Learning and Education, 9, 3.

4Garret Hardin, 1968. The tragedy of the commons. Science Magazine, 162.

5Jeffery Pfeffer 2010. Building sustainable organizations: The human factor.Academy of

Management Perspectives, 24, 1, 34-45.

6M. Zwolinski. 2007. Sweatshops, choice, and exploitation.Business Ethics Quarterly,

17, 4, 689-727. Jeremy Snyder, 2010. Exploitation and sweatshop labor:

Perspectives and Issues.Business Ethics Quarterly, 20, 2, 187-213.7Friedman, Milton. 1993. Why government is the problem Milton Friedman: Essays in

public policy, 39. Stanford, Calif.: Hoover Institution on War Revolution and

Peace Stanford University.

8Lynnley Browing, 2003. Ethics lacking in business school curriculum study, students

say in survey.New York Times, May 20, 2003. See also Center for Business

Education. The Aspen Institute, www.apsencbe.org. In particular see document:A

closer look at business education: MBA student attitudes. May 2008. 10 See also,

David Henderson, 2001.Misguided Virtue: False Notions of Corporate Social

Responsibility. London: Institute of Economic Affairs.

9Edward R. Freeman. 1984. Strategic Management: A stakeholder approach. Boston:

Pitman. See also Mitchell, R. K. , Agle B. R. , and Wood, D. J. 1997. Toward a

theory of stakeholder identification and salience: Defining the principles of who

and what really counts.Academy of Management Review, 22, 853-886. Edward


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Freeman, Jeffrey S. Harrison, Andrew C. Wicks.Managing for stakeholders. New

Haven, CT: Yale University Press.

11 The story of Patagonia and its quest for a new corporate status can bee seen at

http://www.bloomberg.com/news/2012-01-04/patagonia-road-tests-new-

sustainability-legal-status.htmlr. For more on the B-corporations

seehttp://www.bcorporation.net/why

12Subhabrata Bobby Banerjee. 2007. Corporate Social Responsibility: The good, the bad,

and the ugly. Northhampton, MA: Edward Elgar.

13

Michael E. Porter & Mark R. Kramer. 2006. Strategy and society: The link between

competitive advantage and corporate social responsibility.Harvard Business

Review.

14 See for examples, Robert F. Hartley, 2005.Business ethics: Mistakes and successes. 1st

Edition. New York: John Wiley, & Sons. Ian I. Mitroff, 2004. Crisis leadership:

Planning for the unthinkable. New York: John Wiley, & Sons.

15William K. Frankena 1973.Ethics. 2nd Edition. Prentice-Hall, p. 13. Available at

www.ditext.com/frankena/ethics.html.

16Andreas Georg Scherer, Guido Palazzo, & Dirk Matten 2009. Introduction to the

special issue: Globalization as a challenge or business responsibility.Business Ethics

Quarterly, 19, 3, 327-347.

17M. Rokeach 1973. The nature of human values. New York: Free Press.

18Richard Boyatzis and Anne McKee, 2005. Resonate leadership. Cambridge, MA:

Harvard Business Review Press.

19Frankena, 1973.


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20For more on difference in definitions of corruption across cultures see. Donaldson,

1996. Values in tensions: Ethics away from home.Harvard Business Review, 48-

62. J. H. Davis & J. A. Ruhe, 2003. Perceptions of country corruption:

Antecedents and outcomes.Journal of Business Ethics, 43, 4, 275-288.

21D. Christopher Kayes, T. M. Nielsen, and D. Stirling 2007. Building organizational

integrity.Business Horizons, 50, 61-70. 25Michael E. Palanski, Francis J.

Yammarino, 2007. Integrity and Leadership: Clearing the Conceptual Confusion,

European Management Journal, 25, 3, 171-184.

22

Stephen L. Carter 1996.Integrity. New York: Harper Perennial.

Topic Summary_Ethics, Sustainability, CSR

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