Chapter 4

QUALITY
MANAGEMENT,
ETHICS, AND
CORPORATE SOCIAL
RESPONSIBILITY
ETHICS
o Ethics is about doing the right thing within a moral framework. In
other words, it is the practical application of morality. What is
ethical in a given situation is decided by applying the values that
comprise the prevailing moral framework
Organizational Factors That Contribute to
Unethical Behavior
o Failing to make ethics part of the organizations core values.
o Failing to set a consistent positive example.
o Putting personnel in ethical “corners.”
o Failing to adopt, deploy, and enforce a corporate code of
ethics.
o Applying unrealistic pressure.
o Failing to reward ethical behavior.
TRUST AND TOTAL QUALITY
o The total quality approach cannot be successfully
implemented in an organization that fails to subscribe to
high standards of ethical behavior. This is because ethical
behavior builds trust, and trust is an essential ingredient
in total quality.
o People who trust each other will be able to get along and
work well together even in the worst of circumstances
o If the trust that results from ethical behavior is so
important to total quality, then it follows that modern
managers need to be good trust builders
 Elements of Total Quality That Depend on Trust
04
01 02 03

COMMUNICATION INTERPERSONAL CONFLICT PROBLEM

RELATION MANAGEMENT SOLVING

TEAMWORK EMPLOYEE CUSTOMER

INVOLVEMENT FOCUS
& EMPOWERMENT
VALUES AND TOTAL QUALITY
o Values are those deeply held beliefs that form the very
core of who we are. A person’s conscience or internal
barometers based on his or her values. Our values guide
our behavior. This statement also applies to organizations.
An organization will not produce a quality product or
provide a quality service unless the organization values
quality.
o Ethical behavior begins with values. Values that lead to
ethical behavior include fairness, dependability, integrity,
honesty, and truthfulness.
INTEGRITY AND TOTAL QUALITY
o Another aspect of ethical behavior is integrity. Integrity, as a personal
and organizational characteristic, combines honesty and
dependability. When an individual or an organization has integrity,
ethical behavior automatically follows

RESPONSIBILTY AND TOTAL QUALITY

o Part of ethical behavior is accepting responsibility.
This is critical in the modern workplace because
employees are drawn from a society that, as a rule,
shuns responsibility—which is why ours has become
such a litigious society.
MANAGER’S ROLES IN ETHICS
o This fact defines the manager’s and the professional’s role Black-and-White Approach
with regard to ethics in an organization. Managers and  With the black-and-white approach, right is
professionals in organizations are responsible for right, wrong is wrong, and conditions are
following through and actually exemplifying ethical irrelevant.
behavior. They are responsible for establishing high
ethical standards, setting a consistently positive example
of exceeding those standards, and acting immediately
when they observe unethical behavior. Full-Potential Approach
 With the full-potential approach, decisions
made are based on how they will affect the
Best Ratio Approach ability of those involved to achieve their full
 The best-ratio approach is a pragmatic approach potential. The underlying philosophy is that
people are responsible for realizing their
based on the belief that people are basically
full potential within the confines of
good, that in the right circumstances they will
morality.
behave ethically, and that under certain
conditions they can be driven to unethical
behavior.
ORGANIZATION’S ROLE IN ETHICS
o Organizations have a corporate responsibility for
promoting and encouraging ethical behavior among their
personnel. The organization’s responsibilities are to: (1)
create an ethical environment in which stakeholders
know that they will be supported when making ethical
choices and (2) ensure that all people in positions of
authority in the organization set an example of living up
to the highest ethical standards

HANDLING ETHICAL DILEMMAS

o Every manager will eventually confront an ethical
dilemma. When this happens, the manager’s
response is very important.
 Codes of Business Conduct
o organizations should develop codes of business
conduct written from a positive perspective that
encourage employees to do the right thing.

When providing ethics training, it is

so important to observe the following rules of thumb:

Encourage two-way communication. “Broadcasting” to

people about rules, regulations, and policies is ineffective
as a training strategy.
Make the training practical. People need to see how
the training applies specifically to them.
Avoid dogmatic statements. People are typically turned
off by dogma. Rather, it is better to present and discuss
ethical principles and then allow participants to decide
how they apply.
Code of Business Conduct
INTERNATIONAL SERVICE CORPORATION
The owners and management of International Service
Corporation (ISC) are committed to the highest ethical
standards in the conduct of the company’s business. All
employees at all levels are expected to conduct their dealings
with customers, suppliers, colleagues, and each other with
honesty and integrity. At ISC, the ethical way is the right way.
When making decisions, ISC personnel will endeavor to
achieve fairness to all stakeholders. Our reputation is our
most important strategic advantage in the global marketplace
EXAMPLE OF CODE OF BUSINESS CONDUCT
 MODELS FOR MAKING ETHICAL
o DECISIONS
Ethics as a concept exists within a framework defined by organizational values. Just as the values
of organizations can differ, so can the decision-making models used for determining the ethical
course of action in a given situation. This section briefly describes several such models that can
be used for making ethical decisions.

Categorical imperative model Doctrine of the mean model

 The categorical imperative model is also
known as the black-and-white model. With
this model, right is right, wrong is wrong, and
there are no gray areas.
Full-disclosure model
 With this model, the functional criterion is a
simple question: Could the organization
explain its actions to the satisfaction of a
broad cross-section of stakeholders? Only
when this question can be answered in the
affirmative is an action considered ethical.
This model has the advantage of applying the
values of stakeholders in deciding what is
ethical.
 In this model, the mean refers to the average or middle point
between two extremes. Translated for practical application,
this model suggests that in any situation, a moderate
middle-ground option is likely to be an ethical option. Said
another way, this model suggests that moderation is ethical.
Golden Rule model
 This model is based on the Golden
Rule: “Do unto others as you would have them do unto
You”
Market-ethic model
 This model is based on the belief that any legal action that
promotes profitability is ethical. Proponents of this model
profess that the purpose of a business is to make a profit.
 MODELS FOR MAKING ETHICAL
DECISIONS
Organizational ethic model.
 This model is based on loyalty to the
organization.
Equal freedom model
 The underlying principle of this model is that
organizations have the freedom to behave as
they wish unless their actions infringe on the
rights of stakeholders.
Proportionality ethic model
 This model is based on the assumption that the
world is so complex that decisions are seldom
clearly right or wrong. Consequently, the best an
organization can do is to make sure that the good
outweighs the bad when making decisions.
Professional ethic model
 This model is based on the principle of peer review. It
states that a decision is ethical if it can be explained to
the approval of a broad cross section of professional
peers.
 CORPORATE SOCIAL RESPONSIBILITY DEFINED
The material presented so far in this chapter has dealt primarily with the behavior of individuals in organizations
and the ethical ramifications of that behavior. This section deals with the issue of corporate behavior and its
attendant ethical ramifications.
Business scandals tend to undermine the credibility of businesses in general by eroding public trust and
confidence.
The ISO defines CSR as follows:
CSR is a balanced approach for organizations to address
economic, social and environmental issues in a way that
aims to benefit people, communities and society.

Key elements of CSR include the ethical aspects of the following business and workplace issues:
1. Human rights
2. Occupational safety and health
3. Business practices (fair or unfair)
4. Governance
5. Environmental management
6. Consumer relations
7. Marketplace activities
8. Community involvement
9. Social development
Thank you ！

REPORTED BY:
FRANCISCO, JOYCE ANN
DE JESUS, ANTONETTE
ESTRELLA, JEIZEL