Professional Documents
Culture Documents
and Ethics in
Strategic
Management
Chapter 3
Prepared by:
Halla AlQuhafi
Supervisor:
Dr. Alaa Alrouad
Learning Objectives
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Learning Objectives
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Social Responsibilities of Strategic Decision
Makers
Social Responsibility
proposes that a private corporation has
responsibilities to society that extend beyond
making a profit
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Friedman’s Traditional View of Business
Responsibility
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Carroll’s Four Responsibilities
of Business
1. Economic responsibilities
produce goods and services of value to society so
that the firm may repay its creditors and increase
the wealth of its shareholders
2. Legal responsibilities
defined by governments in laws that management
is expected to obey
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Carroll’s Four Responsibilities
of Business
3. Ethical responsibilities
follow the generally held beliefs about behavior in
a society
4. Discretionary responsibilities
purely voluntary obligations a corporation
assumes
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Responsibilities of Business
Figure 3-1
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Responsibilities of a Business Firm
Social capital
the goodwill of key stakeholders, that can be used
for competitive advantage
opens doors in local communities
enhances reputation with consumers
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Benefits of Being
Socially Responsible
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Characteristics of Sustainability
Environmenta
l
Social Economic
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Corporate Stakeholders
Stakeholders
have an interest in the business and affect or are
affected by the achievement of the firm’s
objectives
Enterprise strategy
an overarching strategy that explicitly articulates
the firm’s ethical relationship with its stakeholders
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Stakeholder Analysis
Stakeholder analysis
the identification and evaluation of corporate
stakeholders
usually done in a three-step process
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Stakeholder Analysis
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Stakeholder Analysis
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Stakeholder Analysis
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Stakeholder Input
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Reasons for Unethical Behavior
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Moral Relativism
Moral relativism
claims that morality is relative to some personal,
social or cultural standard and that there is no
method for deciding whether one decision is
better than another
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Moral Relativism
Naïve relativism
based on the belief that all moral decisions are
deeply personal and that individuals have the
right to run their own lives
Role relativism
based on the belief that social roles carry with
them certain obligations to that role
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Moral Relativism
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Kohlberg’s Levels of Moral Development
Preconventional level
concern for one’s self
Conventional level
considerations for society’s laws and norms
Principled level
guided by an internal code of ethics
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Encouraging Ethical Behavior
Code of Ethics
specifies how an organization expects its
employees to behave while on the job
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Encouraging Ethical Behavior
A code of ethics:
1. clarifies company expectations of employee
conduct in various situations
2. makes clear that the company expects its
people to recognize the ethical dimensions in
decisions and action
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Encouraging Ethical Behavior
Whistleblowers
employees who report illegal or unethical
behavior on the part of others
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Guidelines for Ethical Behavior
Ethics
the consensually accepted standards of behavior for an
occupation, trade or profession
Morality
one’s rules of personal behavior based on religious or
philosophical grounds
Law
the formal codes that permit or forbid certain
behaviors and may or may not enforce ethics or
morality
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Guidelines for Ethical Behavior
Utilitarian approach
proposes that actions and plans should be judged
by their consequences
Individual rights approach
proposes that human beings have certain
fundamental rights that should be respected in all
decisions
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Guidelines for Ethical Behavior
Justice approach
decisions must be equitable, fair and impartial in
the distribution of costs and benefits to
individuals or groups
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Guidelines for Ethical Behavior
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Guidelines for Ethical Behavior
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Thank you!
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