Chapter 6

Ethics and Corporate Social Responsibility

6.1

Learning Objectives
After reading this chapter, you should be able to:
 State the importance of ethics for employees and organizations  Describe four forces that influence the ethical behavior of individuals and corporate social responsibility  Describe three approaches that people use when making ethical judgments  Explain how the concerns of stakeholders influence managers’ ethical decisions  Describe how individuals and organizations can contribute to improving ethical conduct at work

6.2

Forces That Shape Ethical Conduct
Societal Norms and Culture Laws and Regulations Organizational Practices and Culture Individual Perspective

Ethical Conduct: •Individuals •Organizations
Adapted from Figure 6.1

6.3

Ethical Models

Utilitarian
IDEAL Outcome

Justice

Moral Rights

6.4

Stakeholders of the Organization
Customers
Owners

Employees

Unions

Suppliers

Government Strategic partners

Local Community Society in General
Adapted from Figure 6.2

6.5

Stakeholders’ Concerns
Stakeholder Group

Examples of Concerns
 

Owners and Investors

Financial Soundness
Consistency in meeting shareholder expectations Sustained profitability Average return on assets over fiveyear period Timely and accurate disclosure of financial information

 

6.6

Stakeholders’ Concerns (cont.)
Stakeholder Group

Examples of Concerns

Customers

Product/service quality, innovativeness, and availability

Responsible management of defective or harmful products/services
Safety records for products/services

  

Pricing policies and practices
Honest, accurate, and responsible advertising

6.7

Stakeholders’ Concerns (cont.)
Stakeholder Group

Examples of Concerns

Employees

Nondiscriminatory, merit-based hiring and promotion


Diversity of the workforce
Wage and salary levels and equitable distribution

Availability of training and development
Workplace safety and privacy

6.8

Stakeholders’ Concerns (cont.)
Stakeholder Group

Examples of Concerns

Society

Environmental issues

Environmental sensitivity in packaging and product design Recycling efforts and use of recycled materials Pollution prevention Global application of environmental standards

• •

6.9

Stakeholders’ Concerns (cont.)
Stakeholder Group

Examples of Concerns

Society

Community involvement

Percentage of profits designated for cash contributions Innovation and creativity in philanthropic efforts Product donations Availability of facilities and other assets for community use Support for employee volunteer efforts

• •

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