Class #4 - Chapter 4

Values are broad beliefs about what is appropriate behaviour.

Terminal values are preferences about desired end states.

Instrumental values are preferences regarding the means to desired ends.





In the utilitarian view, ethical behaviour delivers the greatest good to the most people.

In the individualism view, ethical behaviour advances long-term self-interests.



Distributive justice is concerned that people are treated the same regardless of personal
characteristics.

Interactional justice is the degree to which others are treated with dignity and respect.

Commutative justice is the degree to which an exchange or a transaction is fair to all parties.

Cultural relativism suggests there is no one right way to behave; ethical behaviour is
determined by its cultural context.

Universalism suggests ethical standards apply absolutely across all cultures.

Ethical imperialism is an attempt to impose ones ethical standards on other cultures.




An ethical dilemma is a situation that offers potential benet or gain and is also unethical.

Discriminationdenying promotion or appointment to a job candidate because of the
candi-

dates race, religion, gender, age, or other non-job-relevant criterion.

Sexual harassmentmaking a co-worker uncomfortable because of inappropriate
comments or actions regarding sexuality; requesting sexual favours in return for favourable
job treatment.

Conflicts of interesttaking a bribe or kickback or extraordinary gift in return for making
a decision favourable to the gift giver.

Customer confidencegiving to another party privileged information regarding the
activities of a customer.

Organizational resourcesusing official stationery or a company e-mail account to
communicate personal opinions or make requests from community organizations.

Ethics intensity or issue intensity indicates the degree to which an issue or situation is
recognized to pose important ethical challenges



An ethical framework is a personal rule or strategy for making ethical decisions.




Whistleblower Protection

Agnes Connolly pressed her employer to report two toxic chemical accidents.

Dave Jones reported that his company was using unqualified suppliers in the construction
of a nuclear power plant.

Margaret Newsham revealed that her firm was allowing workers to do personal business
while on government contracts.

Herman Cohen charged that a humane society was mistreating animals.

Barry Adams complained that his hospital followed unsafe practices.

A whistleblower exposes the misdeeds of others in organizations.

Ethics training seeks to help people understand the ethical aspects of decision-making and
to incorporate high ethical standards into their daily behaviour.

A code of ethics is a formal statement of values and ethical standards.An immoral manager
chooses to behave unethically.

An amoral manager fails to consider the ethics of her or his behaviour.

A moral manager makes ethical behaviour a personal goal.

Ethics mindfulness is enriched awareness that leads to consistent ethical behaviour.



Social entrepreneurship has a mission to solve pressing social problems.

Examples of social entrepreneurship:

- David Suzukis (Figure 4.9) commitment to educating and promoting environmental
sustainability led him to start the David Suzuki Foundation in 1990. today, the foundation
focuses on working with government, business and individuals to conserve our
environment by providing science-based education, advocacy and policy work, and acting
as a catalyst for the social change that todays situation demands.

Rick Hansen began the Rick Hansen Foundation 25 years ago in his quest to make the
world accessible to those with disabilities. Since its inception, the foundation has raised
over $200 million for spinal cord injury research and quality of life programs.

Corporate social responsibility is the obligation of an organization to serve its own interests
and those of society.

Organizational stakeholders are directly affected by the behaviour of the organization and
hold a stake in its performance.




Perspectives on Corporate Social Responsibility

The classical view of CSR is that business should focus on prots.

The socio-economic view of CSR is that business should focus on broader social welfare as
well as prots.

The virtuous circle occurs when CSR improves nancial performance, which leads to more
CSR.

A social responsibility audit assesses an organizations accomplishments in areas of social
responsibility.

Evaluating Corporate Social Performance

Criterias :
1. Is the organizations economic responsibility metis it profitable?

2. Is the organizations legal responsibility metdoes it obey the law?



3. Is the organizations ethical responsibility metis it doing the right things?

4. Is the organizations discretionary responsibility metdoes it contribute to the broader
community?

Social Responsibility Strategies



An obstructionist strategy avoids social responsibility and reects mainly economic
priorities.

A defensive strategy seeks protection by doing the minimum legally required.

An accommodative strategy accepts social responsibility and tries to satisfy economic, legal,
and ethical criteria.

A proactive strategy meets all the criteria of social responsibility, including discretionary
performance.

Corporate governance is the oversight of top management by a board of directors.




Reasons why companies should focus on sustainability:
1. Cost reduction: sustainability provides a mechanism to reduce costs by focusing attention
on efficiency. Tis might be achieved by reducing waste produced, increasing recycling, or a
host of other strategies. For example, Procter & Gambles waste-out program saved the
company over $500 million and eliminated 2 million tonnes of waste.

2. Resource preservation: It is recognized that the raw materials we are all dependent upon
are being used up quicker than they can be replenished. We only need to look to the Grand
Banks of Newfoundland to recognize the problems of overfishing and the impact this has
had. However, other materials are not replenishable and when they are used they are gone
from the planet for good.

3. Legislative compliance: Governments around the world are putting in place more
regulations and standards that speak to sustainability needs. Organizations must work
closely with regulators to ensure compliance and to build commitment to ensure all are
following the rules.

4. Reputation: Being seen as a promoter of environmental and social performance is now
essential for organizations to maintain a positive reputation among stakeholders. Failing to
do so may come at a high price to the organization and to the senior management team; we
only need to look to BP and its recent oil spill in the Gulf of Mexico to appreciate this truth.
A solid reputation allows organizations to attract and retain quality employees, to
differentiate itself from competitors in the marketplace, and to attract socially
responsible capital investors and consumers. It makes sense strategically to focus on
sustainability.

5. Right initiative: There is a clear business case why organizations should embrace sustain-
ability but another reason is that it is the right thing to do. Sustainability is likely already
happening in most organizations. Whether management- or employee-driven, it is taking
hold. Is the organization willing to be a leader or a laggard when it comes to sustainability?

How to see if sustainability is important to a company?

1. Who is leading the initiative? If the CEO is leading the charge, there is a strong sense that
the company is making a serious commitment.

2. Who understands the initiative? If the board of directors and the employees know the
details of the sustainability strategy, it is likely that the cause is widely embraced.

3. What resources are allocated to sustainability? Organizations and people vote with their
wallets. How many people are assigned to this project and what resources they have to
tackle the challenge all send signals as to the importance of the program.

4. Is it holistic? Is the company being proactive or reactive? Is it talking sustainability with
all of its business partners? Is it working with industry peers? Is it involved with
sustainability networks or coalitions? Has it publicly stated measurable short-, medium-,
and long-range goals on sustainability initiatives and does it regularly report whether it is
achieving these goals?

5. Is it recognized as a sustainability leader? While awards are only one measure, they can
signal that peer groups or interest groups recognize that an organization is on the right
track. Some signals include inclusion on lists such as the Global 100 list of the most
sustainable large corporations in the world, The Sustainability Yearbook, and Business
Ethics magazines 100 best corporate citizens. These are all positive indicators that a firm is
pursuing the right sustainability initiatives.


SUMMARY OF LEARNING OBJECTIVES

1. Defne ethical behaviour.

Ethical behaviour is that which is accepted as good or right as opposed to bad or
wrong.

Because an action is not illegal does not necessarily make it ethical in a given situation.

Because values vary, the question What is ethical behaviour? may be answered
differently by different people.

The utilitarian, individualism, moral rights, and justice views offer alternative ways of
thinking about ethical behaviour.

Cultural relativism argues that no culture is ethically superior to any other; universalism
argues that certain ethical standards apply everywhere.

2. Describe how ethical dilemmas complicate the workplace.

An ethical dilemma occurs when someone must decide whether to pursue a course of
action that, although offering the potential for personal or organizational benefit or both,
may be unethical.

Managers report that their ethical dilemmas often involve conflicts with superiors,
customers, and subordinates over such matters as dishonesty in advertising and
communications, as well as pressure from bosses to do unethical things.

Common rationalizations for unethical behaviour include believing the behaviour is not
illegal, is in everyones best interests, will never be noticed, or will be supported by the
organization.

3. Explain how to maintain high ethical standards.

Ethics training can help people better deal with ethical dilemmas in the workplace.

Whistleblowers expose the unethical acts o others in organizations, even while
acing career risks for doing so.

Top management sets an ethical tone for the organization as a whole, while all managers
are responsible for acting as positive models of ethical behaviour.

Written codes of ethical conduct formally state what an organization expects of its
employees regarding ethical behaviour at work.

Immoral managers intentionally choose to behave unethically; amoral managers
disregard the ethics of their actions or decisions; moral managers consider ethical
behaviour a personal goal.

Moral managers can shift the ethics centre of gravity in organizations in a positive
direction and strengthen ethics mindfulness by others.

Social entrepreneurs pursue ethics goals in seeking novel ways to help solve social
problems.