GOOD

GOVERNANC
E AND SOCIAL
RESPONSIBIL
ITY
Organizations have ethics
too
 Organizations are made up of people
who have ethical standards; some good,
some not so good as we will see.
What should we know
about organizational
environments and social
responsibility?

What are current issues in

corporate governance?
Organizational Environments And Social
Responsibility 

• Organizations operate within conditions set by the general environment.

• The specific environment includes an organization’s stakeholders.
• Social responsibility is an organization’s obligation to best serve society.
• Social performance by organizations can be evaluated in different ways.
• Scholars argue cases for and against corporate social responsibility.
• Organizations follow different social responsibility strategies.
• Failures of ethics and social responsibility prompt calls for stronger
governance.
Organizational
Environments
General Environment
 - consists of cultural, economic, legal,
political and educational conditions
Specific Environment
 - consists of the people and groups with
which an organization interacts
Stakeholders
 - people and Institutions most directly
affected by an organization’s
performance
ORGANIZATIONAL ENVIRONMENTS 

General Environment

• Economic
Health of the economy in terms of inflation, income levels, gross domestic product,
unemployment, and job outlook
• Sociocultural
Norms, customs, and social values on such matters as human rights, trends in
education and related social institutions, as well as demographic patterns in
society
• Legal-political
Prevailing philosophy and objectives of the political party or parties running the
government, as well as laws and government regulations
• Technological
Development and availability of technology, including scientific advancements
• NaturalNature and conditions of the natural environment, including levels of public
concern expressed through environmentalism
ORGANIZATIONAL ENVIRONMENTS​

Specific Environment

The people and groups with

whom an organization
interacts.
ORGANIZATIONAL ENVIRONMENTS 

Social Responsibility

Corporate Social Responsibility Social Responsibility Audit

   The obligation of an organization to serve its own    Assesses an organization’s performance in the area of
interest and those of its stakeholders social responsibility
ORGANIZATIONAL ENVIRONMENTS 

Social Responsibility
ORGANIZATIONAL ENVIRONMENTS 
Social Responsibility
The Case “In Favor Of”
Corporate Social Responsibility
• Responsibility Increases
long-run profits
• Improves public image
• Helps avoid government
regulation
• Businesses have resources
and ethical obligations to act
responsibly
The Case “Against” Corporate
Social Responsibility
• Reduces business profits
Creates higher business
costs
• Dilutes business purpose
Gives too much social
power to business
ORGANIZATIONAL ENVIRONMENTS 

Social Responsibility

Strategies
SOCIAL RESPONSIBILITY AND GOOD GOVERNANCE

Corporate
Governance • Failures of ethics and social
responsibility prompt calls for
stronger governance.
• Weak corporate governance
can result in more government
regulation.
• Moral management builds
capacities for self-governance
in organizations.
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE

• Moral Manager
   Considers ethical behavior as a
Three personal goal
Categories of
Management  •   Amoral Manager
Morality     Is unethical but unintentionally

• Immoral Manager
    Chooses to behave unethically
Moral
Management
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE

Ethics
Mindfulness
Enriched
awareness
that leads to
consistent
ethical
behavior
Management Tips
A social responsibility audit assesses an organization’s
accomplishments in areas of social responsibility.
• Discretionary Responsibility:
Contribute to Community
• Ethical Responsibility:
Do What Is Right
• Legal Responsibility:
Obey the Law
• Economic Responsibility:
Be Profitable
THANK YOU