Subject: Principles of Management

Research Assignment
On
Ethical & Social Environment of an organization

Submitted To:
Miss Farah khan
Visiting Faculty Lecturer.

Submitted By:
Shah Junaid
ID# 9722
MBA (Fall-2010)

Business Administration Department

Peshawar Campus

CONTENTS

1. Introduction to Ethic..Page 3
I. Ethic meaning
II. Ethic Definition
III. Common miss concern about ethic
2. Formation of ethic..... Page 4
3.Ethic and management of organizationPage 5,6
I. How org treat employees
II. How employees threat org
III. How organization treat other economic agent
4. Ethic in organization context Page 7
5. Managing ethical behaviors Page 8
6. Social context of management Page 9
I. The stockholder
II. The natural environment.
III. Society
7. How business and govt influence each other...page 10, 11
1) How Government Influence Organization
2) How Organization Influence Govt
8. How organization Mange their social responsibilityPage12,13
1) Formal dimension of managing social responsibility:
2) Informal dimension of managing of social responsibility

9 Reference .Page 13

What is ethic?

Meaning of World Ethic:

The word ethics is derived from the Greek work ethos, which refers to
the character and sentiment of the community, and standards of
behavior.

What is ethic?

Ethic is complex of percepts held or rules of conduct followed by an

individual or group
Or Simple Ethic is the standard of behaviors which promotes welfare and
the good.
Business Ethic:
Business ethic is the study of standard is business behaviors which
promotes human welfare and the good.

What is ethic about?

How we behave, standard in day-by-day life.

Relation how to treat others things exclude from ethic.

Common Miss Concern about Ethic:

I.
II.
III.
IV.
V.

Not just feeling or conscience

Not the same as religious
Not just following the law
Not following What ever body does
No technology or science- what can be done?

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Formation of ethic
Three Level of ethic
1. How we act as a individuals
2. How we structure our organization and their work
3. How we structure our law and our society, our system.

Formation of ethic:
Every person has a set of values, which determines ethical standard for
that person.
These standard has actually adopt by the society in which
that person grown. The society values, the teacher, the peer and other
factor that determents ethic.
Other factors that determents the ethic of some one are:
1) Life experience of through that person has been passes.
2) Situational factors like the current situation in which that
person is.

Ethic and Organization management

Managerial Ethic
Managerial ethic is the standard of behaviors that guide a individual manager in
their work place.
Bellow is the three areas given that can affect the managerial work and
decision. These areas include:
1. How organization treats its employees.
2. How the employees treats the organization
3. How employs and organization treats other economic agents.
1. How organization treats its employees:
Of the important area of managerial ethic is the treat of employees by the
organization.
This area in clued
I. Hiring and firing of the employees should be on the
individual based on ability and merit.
II. Wages and working condition should be base on the
certain rules and regulation.
III. Employees privacy include illness and others personal
record.
2. How employees treat the organization:
Numerous ethical issues stem from how the employees treat the organization
Such issues include:
I. Conflict of interest:
No, match the interest of employees with organization. Employees want
and think own self.
II. Secrecy :
Not out the secrets of organization to the external environment or out side
within the organization.
III. Honesty :

Ethic and Organization management

Employees should be honest regarding using organization property like

making personal calls from the organization telephone or by using the
company sources.
3. How employees and the organization treats other economic agents:
Managerial ethic also came into the play in the relation between the firm and
its employees with other economic agents. An organization should fairly and
honestly treats their economic agents
.
These economic agents include Stockholder, Supplier, dealer, competitors
etc.

Ethic in organization context

Ethic in organization context

As we know ethic is an individual phenomenon, all the individual organization,
the management, employees and itself, the org environment makes ethic for
organization.
Organization and ethic:
Organization effect the ethical standard of employees in organization such
organization management permits those ethical standard, which are in the
fever. Some organization openly permits the unethical business practices.
Manager and Ethic:
Manager also allows unethical practices if they are in the interests of
organization. Such activity contributed to the organization to the
organizational cultural.
Organization environment and ethic:
Organizational environment is also contributed ethical and unethical
behaviors for organization. Highly competitive business organization makes
baring more pressure for a manager to achieve high performance. in order to
achieve high performance ,a manager uses different ways include ethical and
un ethical ways on its subordinates.

Managing ethical behaviors

Managing ethical behaviors:
It is fact that ethical standard has a great impact on any organization, for that
reason many organization has establish its own ethical standard and even
ethical comities, that that maintain and promotes these ethical standard .
Ethical standard establishment start fro the top management, who establish
the organization culture and define what will and ho will not be acceptable
behaviors. For which they arrange different events and training programmed.
Some organization formulize their ethical standard by preparing guidelines
ethical code that how the organization employees treats the economic agents.
Unpleasant effect of ethic: Some time these code of ethic and guide lines some
time failed epically when the code of ethic are against the employees choice in
such cases they give un pleasant out come in the fever of organization.
In order to avoid such effect of ethic code, the experts suggest three steps
model for establishing code of ethic. Which are:
1) Gather the relevant factual information
2) Determine most appropriate moral values
3) Makes an ethical judgment based on the rightness or wrongness of the
propose activity or policy.

Social context of management

Social context of management:
For a manager making decision for organization the look to the different
dimension of the society .thus we ca say that a organization influences by the
different environmental dimension in which that organization operate.
Social responsibility of an organization:
A social responsible organization is that one which looks to the society welfare a
long to its own interest.
Areas of social responsibilities
For an organization, the areas of social responsibilities include:
IV. The stockholder
V. The natural environment.
VI. Society
I. The stockholder:
The stockholder is the peoples or organization that directly affects ed by the
practices of an organization
Stick holder of a organization include:
Customer: A responsible organization always treats their customer fairly and
honestly.
Employees: A social responsible organization deals fairly with their
employee, such organization look them a part of organization and look after
their al human rights.
Investor: One of the major responsibility of organization to provide the
appropriate and true information to the shareholder.
II. The natural environment:
A critical area for a social responsible organization is to look to the
environment in which that organization operate, especially when that
organization concern with manufacturing.
Such organization wills not pollutants the environment by its production
function.

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III.

Social welfare:

A social responsible business organization also promote the general welfare of

the society such organization contribute their full efforts not own self but also
supporting other organization that work for the society development.
How business and Govt influence each other
How Business organization And Government Influences Each Other.
In general, environment the business organization and government has direct
relationship with other. For example Government influence the business
organization to work for the society interest .While other hand such organization
show resistance these rules and regulation.
Shortly there are a number of ways by
which business and Governament influence each other.
1) How Government Influence Organization:
Government influences their duty of social responsibility by direct and in direct
ways/channels.
Direct Regulation:
Establishing law and other rules and regulation, that direct influence the
organization. these regulation include what type business should or should not be
allowed to do in order to implement and maintain these rules ,regulation
Government create special agencies which carry the power often fine all those
who violate regulation.
Example of such agencies : Environmental Protection
agency which handle environment issues. Security exchange commission
Which handle inverter related issues.
Indirect Regulation:
Government influences the organization to perform the duty of its social
responsibility by taking /collecting taxes. Others form of such influences includes
passing some law that if organization sends capital to the train unemployed, they
can tax relaxation. The main incentive behind this is to provide training facilities
for their employees.
2) How Organization Influence Government
A organization influence the government in many different ways, some particular
ways are given bellow:

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I. Personal contacts:
Many business organization executive and political leader during their
traveling came into contact from this contact lather often they influence
government and takes benefit from it for there business.

How business and organization influence each other

II. Lobbying:
This use of person or group to formally represent a company or group of
company to influence the political bodies before passing laws .lobbying is an
effective way to influencing the government.
III. Political action committee:
These committees are made by business organization in order to donations
to political campaigns. By donation, these make them to heir their problems.
IV. Favors:
Favors are legal tactic that are use by organization in order to gain support.

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How organization Manage their social responsibility

How an organization manage their social responsibility
The awareness of public about the organization is now days increase due to
its importance now it is important to establish a style of its social responsibility.
However, who it to establish, it is a major challenge that required Planning,
decision making, Consideration and evaluation, which may be accomplish
through formal and informal dimension of social responsibilities.
1)Formal dimension of managing social responsibility:
Formal means plan these dimension of managing social responsibility are
planned activities of organization. Which include?
I.
Legal compliance:
II.
Ethical compliance
III.
Philanthropic giving
I. Legal compliance:
Local, state, and international laws makes legal compliance for an
organization. The legal compliance task is associated with different manager
(according to their function) with in same organization as Human resource
executive is responsible for ensuring compliance with regulation concerning
hiring ,pays, work safety ,health. Similarly top finance executive oversees
with securities and banking regulation.
II. Ethical compliance It means that the context to which the member of
organization follow basic ethical standard of behaviors .Organization
gives more importance to this area and provide a good standard of ethic by
training ,guidelines and developing code of ethic.
III.

Philanthropic giving:
Philanthropic means giving funds or gifts for charities purpose. These
business organizations gives some percentage of its taxable income to

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charity and social programmed. The organization of receiving may be
international or local.
3) Informal dimension of managing of social responsibility
It includes:
I. Organization culture and leadership
II. Whistle blowing
How organization Manage their social responsibility

I.
Organization culture and leadership:
On the basis of leadership practices and organization culture , we can define
the position of a social responsible organization that adopt by its member.
II.

Whistle blowing:
Whistle means the disclosure by employees of illegal or unethical conduct on
the part of others with the organization. The response to such causes
represents the standard of its social responsibility.
The whistle blower first report the incident to boss, if nothing is don ,the
whistle blower may go forward until this matter reach to the top
management .Unstill person can reach to the concern regulatory authority or
can approach to the media.

R e f e r e n c e:
Book
Management ( By Griffen 8th edition)

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