PowerPoint Presentation

to Accompany
Management, 10/e
John R. Schermerhorn, Jr.

Chapter 4:
Ethical Behavior and Social
Responsibility

Prepared by: Jim LoPresti

University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.
 Planning Ahead — Chapter 4 Study Questions

➢ What is ethical behavior?

➢ How do ethical dilemmas complicate
the workplace?
➢ How can high ethical standards be
maintained?
➢ What is social responsibility and
governance?

Management 10/e - Chapter4 2

Study Question 1: What is ethical behavior?

➢ Ethics
⚫ Code of moral principles.
⚫ Set standards of “good” or “bad” or
“right” or “wrong” in one’s conduct.
➢ Ethical behavior
⚫ What is accepted as good and right in
the context of the governing moral
code.

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Study Question 1: What is ethical behavior?

➢ Law, values, and ethical behavior:

⚫ Legal behavior is not necessarily ethical
behavior.
⚫ Personal values help determine
individual ethical behavior.

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 Study Question 1: What is ethical behavior?

➢ Law, values, and ethical behavior:

⚫ Values
 underlying beliefs and attitudes that
help determine individual behavior
⚫ Terminal values - preferences about
desired ends; e.g., self-respect, family security,
freedom, and happiness

⚫ Instrumental values – preferences

regarding the means to desired ends; e.g.,
honesty, ambition, imagination, and self-discipline
“The academic values of integrity and honesty in your work can seem
to be less relevant than the instrumental goal of getting a good job”
5
Figure 4.1 Four views of ethical behavior.

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Study Question 1: What is ethical behavior?

➢ Cultural issues in ethical behavior:

⚫ Cultural relativism
 Ethical behavior is always determined by
cultural context.
⚫ Cultural universalism
 Behavior unacceptable in one’s home
environment should not be acceptable
anywhere else.
 Considered by some to be ethical
imperialism

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 Study Question 1: What is ethical behavior?

How international businesses can respect core or universal

values:
Respect for human dignity
• Create culture that values employees, customers, and
suppliers.
• Keep a safe workplace.
• Produce safe products and services.
Respect for basic rights
• Protect rights of employees, customers, and communities.
• Avoid anything that threatening safety, health, education, and
living standards.
Be good citizens
• Support social institutions, including economic and educational
systems.
• Work with local government and institutions to protect
environment.
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 Study Question 2: How do ethical dilemmas
complicate the workplace?

➢ An ethical dilemma
occurs when choices, although having
potential for personal and/or organizational
benefit, may be considered unethical.
➢ Ethical dilemmas include:
⚫ Discrimination
⚫ Sexual harassment
⚫ Conflicts of interest
⚫ Customer confidence
⚫ Organizational resources, etc.

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 Study Question 2: How do ethical dilemmas
complicate the workplace?

➢ Factors influencing ethical behavior include:

⚫ Situational context
 ethics intensity or issue intensity indicates the degree
to which a situation is recognized to pose ethical
challenges
⚫ The person
 Family influences, religious values, personal standards,
and personal needs.
⚫ ethical framework is a personal rule or strategy for making
ethical decisions
⚫ Kohlberg’s stages of individual moral development
 pre-conventional stage
 conventional stage

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Figure 4.3 Kohlberg’s stages

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 Study Question 2: How do ethical dilemmas
complicate the workplace?

➢ Factors influencing ethical behavior

⚫ Internal environment and the organization
 Supervisory behavior, peer group norms and
behavior, and policy statements and written rules.
⚫ External environment
 Government laws and regulations, societal norms
and values, and competitive climate in an industry.

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 Study Question 2: How do ethical dilemmas
complicate the workplace?

➢ Checklist for dealing with ethical

dilemmas:
⚫ Recognize the ethical dilemma
⚫ Get the facts
⚫ Identify your options
⚫ Test each option: Is it legal? Is it right? Is it beneficial?
⚫ Decide which option to follow
⚫ Double-check decision by asking “spotlight” questions:
 “How would I feel if my family found out about my
decision?”
 “How would I feel about this if my decision were in the
local news?”
⚫ Take action
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Study Question 2: How do ethical dilemmas
complicate the workplace?

➢ Ethical behavior can be rationalized

by convincing yourself that:
⚫ Behavior is not really illegal.

⚫ Behavior is really in everyone’s best interests.

⚫ Nobody will ever find out.

⚫ The organization will “protect” you.

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Study Question 3: How can high ethical standards
be maintained?

➢ Whistleblowers

⚫ Expose misdeeds of others to:

 Preserve ethical standards
 Protect against wasteful, harmful, or
illegal acts

⚫ Laws protecting whistleblowers vary

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Study Question 3: How can high ethical standards
be maintained?

➢ Barriers to whistleblowing include:

⚫ Strict chain of command
⚫ Strong work group identities
⚫ Ambiguous priorities

➢ Organizational methods for

overcoming whistleblowing barriers:
⚫ Ethics staff units who serve as ethics
advocates
⚫ Moral quality circles

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Study Question 3: How can high ethical standards
be maintained?

➢ Ethics training:
⚫ Structured programs that help
participants to understand ethical
aspects of decision making.
⚫ Helps people incorporate high ethical
standards into daily life.
⚫ Helps people deal with ethical issues
under pressure.

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Study Question 3: How can high ethical standards
be maintained?

➢ Codes of ethics:
⚫ Formal statement of an organization’s values
and ethical principles regarding how to behave
in situations susceptible to the creation of
ethical dilemmas.
➢ Areas often covered by codes of
ethics:
⚫ Bribes and kickbacks
⚫ Political contributions
⚫ Honesty of books or records
⚫ Customer/supplier relationships
⚫ Confidentiality of corporate information

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Study Question 3: How can high ethical standards
be maintained?

➢ Ethical role models:

⚫ Top managers serve as ethical role models.

⚫ All managers can influence the ethical behavior

of people who work for and with them.
⚫ Excessive pressure can foster unethical
behavior.
⚫ Managers should be realistic in setting
performance goals for others.

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Study Question 3: How can high ethical standards
be maintained?

➢ Social entrepreneurship:
⚫ a unique form of entrepreneurship that seeks novel
ways to solve pressing social problems at home and
abroad
 Housing and job training for homeless

 Bringing technology to poor families

 Improving literacy among disadvantaged youth

 Offering small loans to start minority-owned

businesses

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Figure 4.4 How can high ethical standards be
maintained?

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 Study Question 3: How can high ethical standards
be maintained?

➢ Criteria for evaluating corporate social

performance:
➢ Social responsibility audit – assesses
organization’s accomplishments in areas of CSR
⚫ Is the organization’s …
 Economic responsibility met?
 Legal responsibility met?
 Ethical responsibility met?
 Discretionary responsibility met?

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 Study Question 3: How can high ethical standards
be maintained?

➢ Strategies for pursuing social

responsibility:
⚫ Obstructionist — meets economic
responsibilities.
⚫ Defensive — meets economic and legal
responsibilities.
⚫ Accommodative — meets economic, legal,
and ethical responsibilities.
⚫ Proactive — meets economic, legal, ethical,
and discretionary responsibilities.

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Study Question 3: How can high ethical standards
be maintained?

➢ Perspectives on social
responsibility:
⚫ Classical view—
 Management’s only responsibility is to
maximize profits.
⚫ Socioeconomic view—
 Management must be concerned for the
broader social welfare, not just profits.

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Study Question 4: What is social responsibility and
governance?

➢ Corporate social responsibility and

governance:
⚫ Looks at ethical issues on the
organization level.
⚫ Obligates organizations to act in ways
that serve both its own interests and
the interests of society at large.

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 Study Question 4: What is social responsibility and
governance?

➢ Arguments ➢ Arguments in favor

against social
responsibility:
⚫ Reduced business
profits
⚫ Higher business costs
⚫ Dilution of business
purpose
⚫ Too much social
power for business
⚫ Lack of public
accountability
of social
responsibility:
⚫ Adds long-run profits
⚫ Improved public image
⚫ Avoids more
government regulation
⚫ Businesses have
resources and ethical
obligation

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Figure 4.5 Criteria for evaluating corporate social
performance.

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Figure 4.6 Four strategies of corporate social
responsibility—from obstructionist to proactive
behavior.

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Figure 4.7 Centrality of ethics and social responsibility
in leadership and the managerial role.

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Ethical issues example in Astronomy

 Light polution
⚫ hinders people from observing and
enjoying the beauty of the sky
⚫ waste of energi
⚫ Disturb lifecycle, circadian rythm
 Satellite swarm
⚫ disturb astronomical observations

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 Astronomical images disturbed by
starlink satellite

Credit: DELVE
Survey/CTIO/AURA/NSF
Image source :
https://www.universetoda
y.com/144659/stalking-
starlinks-darksat/

Management 10/e - Chapter4 31

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