CHAPTER SOCIAL RESPONSIBILITY & ETHICS IN MANAGEMENT © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Lecture outline • Organisational social responsibility • Organisational social responsiveness • Managing an ethical organisation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational social responsibility ‘The obligation of an organisation to seek actions protecting and improving society’s welfare along with its own interests.’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational social responsibility Major perspectives: • Invisible hand A view holding that the entire social responsibility of a corporation can be summed up as ‘make profits and obey the law’ • Hand of government A view holding that the interests of society are best served by having the law and political process guide the corporation’s activities © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational social responsibility Major perspectives: • Hand of management A view stating that corporations and their managers are expected to act in ways that protect and improve society’s welfare as well as make profit © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational social responsibility Hand of management Incorporates these arguments: • Anti-freeloader argument • Capacity argument • Enlightened self-interest argument © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Social responsibilities of managers • Economic and legal Responsibility to make a profit and obey the law (invisible hand, hand of government, hand of management) • Ethical and discretionary Ethical behaviour expected by society (invisible hand, hand of government) Difficult to determine, identify © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Social stakeholders • • • • • Shareholders Employees Customers Local community Society © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Social stakeholders Employees Shareholders The organisation Customers International community Society (regional & national) Local community © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Does social responsibility pay? • Evidence is mixed • Strategically beneficial • Likely, profit  socially responsible management • Shareholders sensitive to extent it affects profit © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 10 Organisational social responsiveness ‘A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility.’ Two aspects: • Monitoring social demands and expectations • Internal social response mechanisms © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 11 Monitoring social demands/expectations • • • • • Social forecasting Opinion surveys Social audits Issues management Social scanning © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 12 Internal social response mechanisms • • • • • Individual executives Temporary task forces Permanent committees Permanent departments Combination approaches © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 13 Being an ethical manager ‘The difficulties and concerns with business ethics raises three important issues about being a manager.’ • Types of managerial ethics • Ethical guidelines for managers • Ethical career issues © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 14 Types of managerial ethics • Immoral management Lacks ethical principles, concern for profit only • Amoral management Ignores or oblivious to ethical issues • Moral management Conscious attention to ethical standards and issues © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 15 Ethical guidelines for managers • • • • • • • Obey the law Tell the truth Show respect for people Stick to the Golden Rule Above all, no harm Participation not paternalism Responsibility requires action © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 16 Ethical career issues • Assessing values and protecting yourself – Seek advice and support from trusted sources – Take action to change what you see as not being ethical – Take actions to protect yourself • Anticipating ethical conflicts – Pre-employment checks: Is this an ethical company? – Is the industry marked by patterns of unethical behaviour? – Avoid ethical compromises © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 17 Managing an ethical organisation Situational factors influencing ethical behaviour: • External factors Competitiveness, high/low opportunities for success, dependency on other organisations • Internal factors Push for high performance, labour unrest, delegation, quests for innovation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 18 Managing an ethical organisation Increasing awareness of diversity Top-management commitment Codes of ethics Ethics committees Ethics audits Ethics hotlines Ethics training © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Organisational social responsibility – Major perspectives: invisible hand, hands of government and management – Social responsibilities of managers – Social stakeholders: shareholders, employees, customers, local and international community, society – Does social responsibility pay? Evidence mixed • Organisational social responsiveness Monitoring social demands and expectations: forecasting, opinion surveys, social audits, issues management, social scanning, Internal social response mechanisms © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20 Lecture summary • Being an ethical manager – Types of managerial ethics: immoral, amoral, moral – Ethical guidelines for managers – Ethical career issues: assessing & anticipating ethical conflicts • Managing an ethical organisation – Situational factors influencing ethical behaviour external and internal – Mechanisms for ethical behaviour © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 21 [...]... mixed • Organisational social responsiveness Monitoring social demands and expectations: forecasting, opinion surveys, social audits, issues management, social scanning, Internal social response mechanisms © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20 Lecture summary • Being an ethical manager – Types of managerial ethics: immoral, amoral, moral – Ethical guidelines for managers – Ethical career issues:...Organisational social responsiveness A term referring to the development of organisational decision processes where managers anticipate, respond to and manage areas of social responsibility. ’ Two aspects: • Monitoring social demands and expectations • Internal social response mechanisms © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 11 Monitoring social demands/expectations • • • • • Social forecasting... committees Ethics audits Ethics hotlines Ethics training © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Organisational social responsibility – Major perspectives: invisible hand, hands of government and management – Social responsibilities of managers – Social stakeholders: shareholders, employees, customers, local and international community, society – Does social responsibility pay?... raises three important issues about being a manager.’ • Types of managerial ethics • Ethical guidelines for managers • Ethical career issues © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 14 Types of managerial ethics • Immoral management Lacks ethical principles, concern for profit only • Amoral management Ignores or oblivious to ethical issues • Moral management Conscious attention to ethical standards... forecasting Opinion surveys Social audits Issues management Social scanning © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 12 Internal social response mechanisms • • • • • Individual executives Temporary task forces Permanent committees Permanent departments Combination approaches © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 13 Being an ethical manager ‘The difficulties and concerns with business ethics. .. advice and support from trusted sources – Take action to change what you see as not being ethical – Take actions to protect yourself • Anticipating ethical conflicts – Pre-employment checks: Is this an ethical company? – Is the industry marked by patterns of unethical behaviour? – Avoid ethical compromises © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 17 Managing an ethical organisation Situational factors... factors influencing ethical behaviour: • External factors Competitiveness, high/low opportunities for success, dependency on other organisations • Internal factors Push for high performance, labour unrest, delegation, quests for innovation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 18 Managing an ethical organisation Increasing awareness of diversity Top -management commitment Codes of ethics Ethics... standards and issues © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 15 Ethical guidelines for managers • • • • • • • Obey the law Tell the truth Show respect for people Stick to the Golden Rule Above all, do no harm Participation not paternalism Responsibility requires action © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 16 Ethical career issues • Assessing values and protecting yourself – Seek advice... ethics: immoral, amoral, moral – Ethical guidelines for managers – Ethical career issues: assessing & anticipating ethical conflicts • Managing an ethical organisation – Situational factors influencing ethical behaviour external and internal – Mechanisms for ethical behaviour © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 21