SOCIAL RESPONSIBILITY TO THE ENVIRONMENT

(Armacell’s Environmental Protection Guidelines)

Our aim is to gear all business activities towards protecting and conserving nature. Our environmental
policy is based on the following principles:

1. Manufacturing only products that pose no risk to the environment when they are used as intended
by customers and consumers.
2. Supplying information on the correct storage, use and disposal of our products.
3. Conserving natural resources by using raw materials and energy responsibly.
4. Using environmentally-friendly technology in research and production. By doing so, we increase
safety in the workplace and protect our communities and the environment.
5. Avoiding and reducing waste; using recycling and environmentally-friendly disposal systems.
6. Reducing risks to soil, air and water to the greatest extent possible

Social Responsibility to Community

1. To solve problem of unemployment

2. To develop infrastructure of country
3. To help in natural calamities
4. Taking appropriate steps to prevent environmental pollution & to preserve the ecological balance
5. Rehabilitating the population displaced by the operation of the business.
6. Taking steps to conserve scare resources & developing alternatives where ever possible
7. Improving efficiency of business operations
8. Contributing to R &D
9. Development to backward areas

Social Responsibility to Shareholders

1. Safeguard the capital of shareholders.

2. Provide a reasonable dividend.
3. Transparency and access to required information.

Social Responsibility to Government

1. To pay taxes, duties in time

2. To cooperate with government in their social policies and programmes
3. To obey all laws and acts

Social Responsibility to Global Business environment

1. To adhere to the conditions of such a global environment

2. To satisfy global customer needs

BARRIERS TO SOCIAL RESPONSIBILITY

1. Urge for profiteering

2. Desire for excessive accumulation of wealth
3. Low profitability
4. Frequently changing government mechanism
5. Need for tackling other important internal issues .
6. Recession and depression

ETHICAL DECISION-MAKING PROCESESSES

Ethics Screen – consist s of several select standards against which the proposed course of action is
to be compared. The idea is that unethical alternatives will be “screen out” and ethical ones will be
“screened in.”

Conventional Approach Principles approach Ethical Tests Approach

Standards/Norms Ethical principles Ethical Tests
● Personal ● Justice ● Common Sense
● Organizational ● Rights ● One’s Best Self
● Societal ● Utilitarianism ● Public Disclosure
● International ● Golden Rule ● Ventilation
● Virtue ● Purified Idea
● Caring ● Gag Test

CODES OF CONDUCT “Code of Ethics” – is the single most important element of your ethics and
compliance program. It sets the tone and direction for the entire function. It introduces the concept of
ethics and compliance and provides and overview of what your mean when you talk about ethical
business conduct ( Joan Dubinsky) Ethics Officer at IMF)

HOTLINES are the most frequent way employees blow the whistle on fraud or related infractions.

Business Ethics Training – is an essential component of ethics program, by way of educating the
employees on the company’s standards and policies through publications and training.

Goals:
➢ To learn the fundamentals of business ethics.
➢ To learn to solve ethical dilemmas.
➢ To learn to identify causes of unethical behavior
➢ To learn about common managerial ethical issues.
➢ To learn whistle-blowing criteria and risks.
➢ To learn to develop a code of ethics and execute an internal ethical audit.

Ethics Audit – are mechanisms or approaches by which a company may assess or evaluate its ethical
climate or programs, intended to carefully review such ethics initiatives to determine their
effectiveness and results.
CORPORAE TRANSPARENCY – refers to a quality, characteristics, or state in which activities,
processes, practice and decisions that takes place in companies become open or visible to the
outside world.

Transparency is the degree to which an organization:

➢ Provides public access to information.

➢ Accepts responsibility for its actions.
➢ Makes decisions more openly
➢ Establishes incentives for leaders to uphold these standards.
ETHICS ISSUES ARISES AT DIFFERENT LEVELS

PERSONAL LEVEL – these are challenges we face which includes situations we face in our personal
lives that are generally outside the context of our employment.
Sample questions:
1. Should I cheat on my income tax return by overinflating my charitable contributions?
2. Should I tell the professor I need this course to graduate this semester when I really don’t?

ORGANIZATIONAL LEVEL - issues carry consequences for the company’s reputation and success
in the community and also for the kind of ethical environment or culture that will prevail on a day to
day basis at the office.
Sample questions:
1. Shout I overreport the actual time I worked on this project, hoping to get overtime pay?
2. Shout I misrepresent the warranty time on a product in order to get the sale?

INDUSTRY OR PROFESSION LEVEL - these are issues regarding the practice of profession of
which an individual is a member.
Sample question:
1. Is this safety standard we electrical engineers have passed really adequate for protecting
the consumer in this age of do-it -yourselfers?

SOCIETAL AND GLOBAL LEVELS – greatest impact can be felt through what he or she does
personally or as a member of the management team.

Right – may be thought as a claim or entitlement to something.

Moral Right – are important justifiable claims or entitlements.

Legal right – our claims bases on the law
Negative right – is the right to be left alone, to think and act free from the coercion of others.
Positive right – is the right to something .
Principle of Justice – involves the fair treatment of each person” fairness principle”
Distributive Justice – refers to the distribution of benefits and burdens in societies and organizations.
Compensatory Justice – involves compensating someone for a past injustice.
Procedural Justice “ Ethical due process” refers to fair decision-making procedure, practices or
agreements.
Ethics of Care “ principle of caring” – refers to the care perspective particularly customers and
employees in caring ways.
Virtue Ethics – is a system of thought that is centered in the heart of a person – the manager, the
employees, the customers etc.
Servant leadership is an approach to ethical decision making – based on the idea that serving other
is the first priority. It begins with the natural feeling that one wants to serve , to serve first.

Characteristics of a Servant Leaders ( Greenleaf)

1. listening 6. foresight
2. Empathy 7. conceptualization
3. Healing 8. commitment
4. Persuasion 9. stewardship
5. awareness 10. Building community
Ethical test – no single test is recommended as a universal answer to the questions.
Types of Ethical Tests:
➢ Test of common Sense – simple using your common sense in making decision.
➢ Test of One’s Best Self – this test requires the individual to pose the question. Is this action or
decision I’m getting ready to take compatible with my concept or myself at my best?
➢ Test of Making something Public ( Disclosure Rule) – “How would I feel if others knew that I
was doing this?
➢ Test of Ventilation – is to expose your proposed action to others and get their thoughts on it
before acting.
➢ Test of Purified Idea – that is made acceptable- when a person with authority says or implies it
is appropriate.
➢ Test of big four – these are four characteristics of decision making that may lead you astray or
toward the wrong course of action.
Greed – is the drive to acquire more and more in your own self-interest.
Speed – refers to the tendency to rush things and cut corners because your are under the
pressure of time.
Laziness – may lead you to take the easy course of action that requires the least amount of
effort.
Haziness – may lead you to acting with out a clear idea of what is going on.
➢ Gag Test.- “ joke to be more humorous than serious .

MANAGING ORGANIZATION ETHICS

This raises the questions of how organizational and managers should deal with, understand
and shape business ethics through action taken, policies established and examples set.
Moral Climate -
FACTORS AFFECTING THE ORGANIZATION’S MORAL CLIMATE

➢ Behaviors of superiors was ranked as the number one influence on unethical behavior in all
three studies. In other words, the influence of bosses is powerful.
➢ Behavior of one’s peers was ranked high in two of the three studies. People do pay attention
to what their peers are doing and expecting.
➢ Industry of Professional Ethical Practices ranked in the upper half in all three studies.
These context factors are influential.
➢ Personal financial need ranked last in all three studies, but let’s not assume it does not
matter.

Pressures Exerted on employees by superiors – one major consequence of the behavior of

superiors and peers is that pressure is placed on subordinates and/or other organizational
members to achieve results, and this often requires that they compromise their ethics.

IMPROVING THE ORGANIZATION’S ETHICAL CULTURE

BEST PRACTICES FOR IMPROVING AN ORGANIZATION’S ETHICSL CULTURE

( 3 KEY ELEMENTS MUST EXIST)

1. The continuous presence of ethical leadership reflected by the board of directors, senior
executives and managers.

2. The existence of a set of core ethical values infused throughout the organization by way of
policies, processes and practices, and

3. A formal ethics program which includes a code of Ethics, Ethics Training and Ethics officer.