MANAGING SOCIAL

RESPONSIBILITY
AND ETHICS

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INC. 6-1
 LEARNING OBJECTIVES
1. Discuss what it means to be socially responsible and what
factors influence that decision.
2. Explain green management and how organizations can go
green.
3. Discuss the factors that lead to ethical and unethical
behavior.
• Develop your skill at creating trust in work groups.
4. Describe management’s role in encouraging ethical
behavior.
 Know how to make good decisions about ethical dilemmas.
5. Discuss current social responsibility and ethics issues.

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 FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY
• Social Obligation – the obligation of a
business to meet its economic and legal
responsibilities and nothing more.
• Classical view – the view that management’s
only social responsibility is to maximize
profits.

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 FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY (CONT.)
• Socioeconomic view – the view that
management’s social responsibility goes beyond
making profits to include protecting and
improving society’s welfare.
• Social responsiveness – when a firm engages
in social actions in response to some popular
social need.

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 FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY (CONT.)
• Social responsibility
– a business’s
intention, beyond its
legal and economic
obligations, to do the
right things and act in
ways that are good for
society.

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 SHOULD ORGANIZATIONS
BE SOCIALLY INVOLVED?
 Social Screening – applying social criteria
(screens) to investment decisions.
• SRI funds usually will not invest in
companies involved in liquor, gambling,
tobacco, nuclear power weapons, price
fixing, fraud, or in companies that have
poor product safety, employee relations,
and environmental track records.

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 SHOULD ORGANIZATIONS
BE SOCIALLY INVOLVED?

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 EXHIBIT 6-1
ARGUMENTS FOR AND AGAINST SOCIAL
RESPONSIBILITY

For Against

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 EXHIBIT 6-1
ARGUMENTS FOR AND AGAINST SOCIAL
RESPONSIBILITY

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 GREEN MANAGEMENT AND
SUSTAINABILITY
• Green Management – managers consider
the impact of their organization on the
natural environment.

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 EXHIBIT 6-2
GREEN APPROACHES

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 HOW ORGANIZATIONS GO GREEN
• Legal (or Light Green) Approach –
firms simply do what is legally required by
obeying laws, rules, and regulations
willingly and without legal challenge.

• Market Approach – firms respond to the

preferences of their customers for
environmentally friendly products.

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 HOW ORGANIZATIONS GO GREEN
(CONT.)
• Stakeholder Approach – firms work to
meet the environmental demands of
multiple stakeholders — employees,
suppliers, and the community.

• Activist Approach – firms look for ways to respect and

preserve the environment and be actively socially responsible.

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 HOW ORGANIZATIONS GO GREEN
(CONT.)
• Stakeholder Approach – firms work to
meet the environmental demands of
multiple stakeholders — employees,
suppliers, and the community.

• Activist Approach – firms look for ways to

respect and preserve the environment and
be actively socially responsible.

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 MANAGERS
AND ETHICAL BEHAVIOR
 Ethics – principles, values, and beliefs that
define right and wrong behavior.
• Many decisions managers make require
them to consider both the process and
who’s affected by the result.

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 EXHIBIT 6-3
FACTORS THAT DETERMINE ETHICAL
AND UNETHICAL BEHAVIOR

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 FACTORS THAT DETERMINE ETHICAL AND
UNETHICAL BEHAVIOR
 Stages of Moral Development
– Preconvention level – a person’s choice between right
or wrong is based on personal consequences.

– Conventional level, ethical decisions rely on living up

to the expectations of others.

– Principled level, individuals define moral values apart

from the authority of the groups or society in general.

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 EXHIBIT 6-4
STAGES OF MORAL DEVELOPMENT

Universal Ethical Principle

Social Orientation

Law & Order Morality

The Good Boy/Girl Attitude

What’s in it for me?

How can I avoid Punishment?

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 EXHIBIT 6-4
STAGES OF MORAL DEVELOPMENT

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 FACTORS THAT DETERMINE ETHICAL AND
UNETHICAL BEHAVIOR (CONT.)
Individual Characteristics
– Values – basic convictions about what is right
and wrong.
– Ego Strength – a personality measure of the
strength of a person’s convictions.
– Locus of Control – a personality attribute
that measures the degree to which people
believe they control their own fate.

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 FACTORS THAT DETERMINE ETHICAL AND
UNETHICAL BEHAVIOR (CONT.)
Organization’s Culture
– Organization’s culture consists of the shared
organizational values. These values reflect what the
organization stands for and what it believes in as well
as create an environment that influences employee
behavior ethically or unethically.
– Values-based management – the organization’s
values guide employees in the way they do their jobs.

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 ENCOURAGING ETHICAL BEHAVIOR

• Employee Selection – an opportunity to

learn about an individual’s level of moral
development, personal values, ego strength,
and locus of control.
• Code of ethics – a formal statement of an
organization’s primary values and the ethical
rules it expects its employees to follow.

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 SOCIAL RESPONSIBILITY AND ETHICS
ISSUES IN TODAY’S WORLD (CONT.)
 Ethical Leadership – managers must
provide ethical leadership. What managers do
has a strong influence on employees’
decisions whether to behave ethically.
• Protection of Employees Who Raise Ethical
Issues:
– Whistle-Blower – individuals who raise ethical
concerns or issues to others

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