Professional Documents
Culture Documents
tenth edition
Stephen P. Robbins
Mary Coulter
Chapter
Social Responsibility
Social Responsibility: the managers duty to nurture, protect and enhance the welfare of stakeholders.
Obstructionist response: managers choose not to be socially responsible. Defensive response: managers stay within the law but make no attempt to exercise additional social responsibility i.e Social Obligation Accommodative response: managers realize the need for social responsibility. Also called social responsiveness Proactive response: managers actively embrace social responsibility. 52
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A general conclusion is that a firms social actions do not harm its long-term performance.
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Market Approach
Firms respond to the preferences of their customers for environmentally friendly products.
Stakeholder Approach
Firms work to meet the environmental demands of multiple stakeholdersemployees, suppliers, and the community.
Activist Approach
Firms look for ways to respect and preserve environment and be actively socially responsible.
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Exhibit 54
Green Approaches
Source: Based on R.E. Freeman. J. Pierce, and R. Dodd. Shades of Green: Business Ethics and the Environment (New York: Oxford University Press, 1995).
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Managerial Ethics
Stakeholders: people or groups that have an interest in the organization.
Stakeholders include employees, customers, shareholders, suppliers, and others. Stakeholders often want different outcomes and managers must work to satisfy as many as possible. Ethics guide people in dealings with stakeholders and others, to determine appropriate actions. Managers often must choose between the conflicting interest of stakeholders.
Ethics
Principles, values, and beliefs that define what is right and wrong behavior
It is difficult to know when a decision is is a good test: ethical. Here
Managerial ethics: If a manager makes a decision falling within usual standards, is willing to personally communicate the decision to stakeholders, and believes friends would approve, then it is likely an ethical decision.
Ethical Models
Social Ethics: Legal rules, customs
Ethical Origins
Societal Ethics: standards that members of society use when dealing with each other.
Based on values and standards found in societys legal rules, norm, and mores. Codified in the form of law and society customs. Norms dictate how people should behave.
Strong beliefs in one country may differ elsewhere. Example: bribes are an accepted business practice in some countries.
Ethical Origins
Professional ethics: values and standards used by groups of managers in the workplace.
Applied when decisions are not clear-cut ethically. Example: physicians and lawyers have professional associations that enforce these.
If behavior is not illegal, people will often disagree on if it is ethical. Ethics of top managers set the tone for firms.
Ethical Decisions
A key ethical issue is how to disperse harm and benefits among stakeholders.
If a firm is very profitable for two years, who should receive the profits? Employees, managers and stockholders all want a share. Should we keep the cash for future slowdowns? What is the ethical decision?
What about the reverse, when firms must layoff workers. Final point: stockholders are the legal owners of the firm!
Ethical Decisions
Some other issues managers must consider.
Should you hold payment to suppliers as long as possible to benefit your firm?
This will harm your supplier who is a stakeholder. This may decrease the stockholder's return.
Should you buy goods from overseas firms that hire children?
If you dont the children might not earn enough money to eat.
Managers are responsible for protecting and nurturing resources in their charge.
This is a valuable asset to any manager! Reputation is critical to long term management success. All stakeholders are judged by reputation.
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Exhibit 58
Human Rights
Principle 1: Support and respect the protection of international human rights within their sphere of influence. Principle 2: Make sure business corporations are not complicit in human rights abuses.
Labor Standards
Principle 3: Freedom of association and the effective recognition of the right to collective bargaining. Principle 4: The elimination of all forms of forced and compulsory labor. Principle 5: The effective abolition of child labor. Principle 6: The elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Support a precautionary approach to environmental challenges. Principle 8: Undertake initiatives to promote greater environmental responsibility. Principle 9: Encourage the development and diffusion of environmentally friendly technologies. Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
Source: Courtesy of Global Compact.
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Exhibit 59
Codes of Ethics
Cluster 3. Be Good to Customers 1. Convey true claims in product advertisements. 2. Perform assigned duties to the best of your ability. 3. Provide products and services of the highest quality.
Cluster 1. Be a Dependable Organizational Citizen 1. Comply with safety, health, and security regulations. 2. Demonstrate courtesy, respect, honesty, and fairness. 3. Illegal drugs and alcohol at work are prohibited. 4. Manage personal finances well. 5. Exhibit good attendance and punctuality. 6. Follow directives of supervisors. 7. Do not use abusive language. 8. Dress in business attire. 9. Firearms at work are prohibited.
Cluster 2. Do Not Do Anything Unlawful or Improper That Will Harm the Organization 1. Conduct business in compliance with all laws. 2. Payments for unlawful purposes are prohibited. 3. Bribes are prohibited. 4. Avoid outside activities that impair duties. 5. Maintain confidentiality of records. 6. Comply with all antitrust and trade regulations. 7. Comply with all accounting rules and controls. 8. Do not use company property for personal benefit. 9. Employees are personally accountable for company funds. 10. Do not propagate false or misleading information. 11. Make decisions without regard for personal gain.
Source: F. R. David, An Empirical Study of Codes of Business Ethics: A Strategic Perspective, paper presented at the 48th Annual Academy of Management Conference, Anaheim, California, August 1988.
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