ETHICS AND SOCIAL

RESPONSIBILITY
MANAGEMENT 101 CONCEPTS AND
DYNAMICS OF MANAGEMENT

SESSION OBJECTIVES
At the end of the session, the students should be able

to:

Define ethics and social responsibility

Explain ethical dilemma
Explain the factors affecting employee ethics
Explain the different ethical decision-making approaches
Discuss the importance of social responsibility to
organizations
Discuss the two views of social responsibility

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.
Managers at all levels, in all areas, in all sizes, and in all
kinds of organizations will face ethical issues and
dilemmas
Ethical dilemma a situation that arises when all
alternative choices and behavior have been deemed
undesirable. There are potentially negative consequences
making it difficult to distinguish right and wrong.

ETHICS
There is no such thing as business ethics; there is

only ethics whether we are in business or not.

Integrity is a package deal; either you have it or
you dont.
Good ethics is sometimes good business but

sometimes its not.

Three Domains of Human Action

Domain of Certified Law

Domain of Ethics

Domain of Free Choice

(Legal Standard)

(Social Standard)

(Personal Standard)

Amount of
Explicit Control
High

Low

FACTORS THAT AFFECT EMPLOYEE ETHICS

Individual
Characteristics
Ethical
Dilemma

Stage of Moral
Development

Issue
Sensitivity

Moderators

Structural
Variables

Ethical/Unethical
Behavior

Organizational
Culture

Levels of Personal Moral Development

Individual Characteristics
Values

Represent basic convictions about what is right and

wrong
Developed even at a young age
Broad and cover wide range of issues

Individual Characteristics
Personality
Ego strength personality measure of the strength of a

persons convictions.
High ego strength less likely to act unethically;
follow convictions; do what they think is right.
Locus of control personality attribute that measures the
degree to which people believe they control their fate.
Internal locus of control people control their own
destinies
External locus of control what happens to people is
due to luck or chance

Structural Variables
Organizational mechanisms that influence ethics

Formal rules and regulations that minimize ambiguity and

remind employees of what is ethical.
Use of goals
Performance appraisal systems
Reward allocation procedures

Organizations Culture
Strong culture with high ethical standards is

more likely to influence ethical behavior within

an organization.
Reflect what the organization stands for and
what it believes in

Values-based management: the organizations values

guide employees in the way they do their jobs

Issue Intensity

Ethical Decision-Making Approaches

Utilitarian Approach
Individualism Approach
Moral Rights Approach
Justice Approach

Ethical Decision-Making Approaches

Utilitarian approach moral behavior produces the

greatest good for the greatest number

Individualism approach acts are moral when they lead to
an individuals best long-term interests which will
ultimately lead to the common good.
Moral rights approach- moral decisions are those that best

maintain the rights of those people affected by them.

An ethical decision is one that avoids interfering with the

fundamental rights of others

Ethical Decision-Making Approach

Moral Rights Issues

Right of Free Consent

Right to Privacy
Right of freedom of conscience
Right of free speech
Right to due process
Right to life and safety

Ethical Decision-Making Approach

Justice Approach moral decisions must be

based on standards of equity, fairness and

impartiality

Managing Company Ethics

Hire ethical individuals - honest, have integrity, they

strive for a high level of moral development

Maintain ethical leadership- provide the necessary
actions, commit to ethical values and help others to
embody those values
Design organizational structure, which embodies a code
of ethics, and methods to implement ethical behavior
Have ethics audits systematic efforts to determine
conformance to the ethical policies of the organization.

Social Responsibility
Organizations obligation to make choices and

take actions that will contribute to the welfare

and interests of society and organization

Being a good corporate citizen

Difficulty in understanding social responsibility

deals with responsibility to whom?

Social Responsibility
Classical view managements social

responsibility is to maximize profit. This is also

called social obligation.
Managements primary social responsibility is to
operate the business in the best interests of the
stockholders.
(Milton Friedman)

Social Responsibility
Socio-economic View view that managements

social responsibility includes not only economics

but also the protection and improvement of
company welfare.

Social responsiveness a company engages in social actions

in response to some popular and social needs.
Social responsibility businesss intention to do the right
thing and act in ways that are good for the society. This
goes beyond what it is obligated to do or what is popular.

GREEN MANAGEMENT
A form of management wherein managers consider

the impact of their organization on the natural

environment.

Three approaches on going green:

Legal (light green approach) doing what is required legally.

(lowest degree of environmental sensitivity)
Market approach responding to the preferences of customers.
Stakeholder approach organizations work to meet the
environmental demands of multiple stakeholders such as
employees, suppliers, and the larger community.
Activist (dark green) approach - activities lead to the protection
of earths natural resources, (highest degree of environmental
sensitivity)

References

Robbins, Stephen & Mary Coulter. Introduction to Management. 9th ed.

Prentice Hall. 2007.

Bateman. Thomas & Scott A. Snell. Management: Leading and Collaborating
in a Competitive World. 7th edition. 2007. McGraw Hill.
Daft, Richard L. Management. 6th edition. 2003. Thomson Learning.
Bartol, Kathryn M. & David C. Martin. Management. 3rd edition. 1999.
McGraw Hill.