Topic 4 X Ethics and

Social
Responsibility
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Identify ethical and unethical conduct/practices;
2. Explain the six factors that influence the inclination to make
ethical decisions;
3. Describe the levels of moral development that influences ethical
decision making; and
4. Apply the seven principles of ethical decision making.

X INTRODUCTION
If environment and organisational culture can be linked to the efficiency of an
organisation, ethics and social responsibility are also closely connected with its
effectiveness. Effectiveness means the completion of duties that could achieve all
the objectives of an organisation. The organisation may be efficient but not
necessarily effective. LetÊs take a look at university students. A student is said to
be efficient when he undertakes many courses at one go in a semester and
achieves excellent results in every course undertaken. In reality, that success may
not be because of his intelligence but due to efficiency in copying during
examinations. Although successful, it cannot achieve the objective or philosophy
behind the examination, which is to absorb the knowledge learned. Therefore, we
could say that the student is efficient but not effective in his implementation.

It is the same with an organisation. In order to achieve its objectives and mission,
for it to become a company that is developed, competitive and able to achieve
greater profits, a company may seek shortcuts to get faster results. For example,
it might bribe to win over a bigger market share or damage the environment by
 TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY W 51

disposing factory waste into rivers or seas to save production costs and thereafter
increasing its profit. This, however, violates the ethics of an organisation or
company.

4.1 WHAT ARE ETHICAL AND UNETHICAL

CONDUCTS?
Actually, this is a big dilemma in ethics. There is no clearly defined standard that
can be followed by the worldÊs society in the issue of ethics. Most of it largely
depends on the local culture and values.

It is the same for ethical conduct.

Ethical conduct is conduct that is verified by the principles of societyÊs

acceptance of whether it is right or wrong.

For example, it is considered unethical for the Maju Sdn Bhd company to invest
in other companies that are involved in dealings banned by Islam such as
Carlsberg and Sports Toto. Businesses that give loans which involve interests are
deemed unethical as well.

The storage of information is another aspect where a manager has to be ethical.

The manager needs to deal with sincerity and truth in matters involving
information and if necessary, protect the information obtained from being leaked
to competitors.

4.2 TENDENCY IN ETHICAL DECISION

MAKING

SELF-CHECK 4.1

In your opinion, does a manager who is respected need to have noble

ethical values?

In the daily operations of an organisation, a manager cannot avoid situations

which require ethical decision making. Even though all sorts of dilemmas will be
faced by the manager, he must still make ethical decisions in order to continue
52 X TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY

the effectiveness of the organisation. The manager would not be able to overcome
all the problems related to his ethical decisions in bulk. The difference between a
decision in one situation and the decision in another situation is termed as ethical
tendency which means the attentiveness of a person towards particular ethical
issues.

When faced with an issue that has high ethical tendency, the manager needs to be
very cautious about the effects of his decision on other people. He has to direct
the decision towards something that is ethical or moral apart from only the
economic decision. Furthermore, he must be attentive in doing the right thing.

Ethical tendency depends on six factors:

Figure 4.1: Tendency factors in making ethical decision

(a) Magnitude of Consequences

The magnitude of consequences is the overall benefit or loss that is caused
by the ethical decisions. If more people experience loss or the adversity to
all of them is bigger, then the bigger the consequences of the problem. For
example, if a person abuses drugs, he will definitely suffer and his life will
be ruined. Therefore, drug abuse is banned and considered unethical by
most societies.

(b) Society Collaboration

In society collaboration, the majority of people in a society will determine
whether a practice is ethical or unethical. For example, in Malay society, it
is considered shameful for a woman to wear a swimsuit or short pants. She
would be seen as unethical and immoral. This might not happen in another
society even if they live in the same place as the Malays.

(c) Probability of Effect

Probability of effect is the chance of something happening that will
subsequently cause adversity towards other people. For example, smoking
 TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY W 53

brings bad health to a smoker. Research has been carried out to confirm
this. Most of them will suffer. However, not all of them will face this
situation, maybe there will be other side effects. Nevertheless, based on this
factor, a smoker will be labelled as someone who is unethical and immoral.

(d) Immediate Time Forecast

It is the time interval between an action and its effect or consequences of the
action. Immediate time forecast is much stronger if the effects are quickly
felt. An example here is the issue of environment pollution. If a person
throws rubbish everywhere in small quantities, the bad results that will be
experienced will be slow compared to a person that throw lots of rubbish
everywhere. Therefore, throwing rubbish in small quantities is not
considered as unethical.

(e) Approximation of Effect

The meaning of this fifth factor is social, psychological, cultural and
physical gap between the decision makers and the person or people who
will be affected by that action. For example, an employee who had been
discriminated against due to favouritism by the leader before this will be
more attentive and view the issue as unethical and this must be resolved
immediately. It is different with an employee who has always been
rewarded and given special treatment by the organisation. He will
definitely treat the issue as ethical and not wrong.

(f) Impact of Concentration

Impact of concentration is the loss or benefit that will happen to the average
human. An example here is malpractice towards one thousand people is
considered to provide a bigger impact concentration than the effect of
malpractice on one hundred people. In other words, according to this
principle, the misconduct on a hundred people is considered more ethical
than against a thousand people.

4.3 MORAL DEVELOPMENT

A psychology expert, Lawrence Kohlberg (William, C; 2000), stated that each
ethical decision made by people depends on the level of moral development in
that person. He outlined three phases in moral development. Each phase is
divided into two levels.

Phase one is the level of pre-conventional moral development. This is the first
level of moral development, which is when people make decisions based on their
own self-interest. As shown in Table 4.1, phase one is divided into two levels:
level one, punishment and loyalty; and level two, exchange tools.
54 X TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY

Table 4.1: Phase One in Moral Development

Level Explanation

ONE PUNISHMENT This level states that a person does not want to commit an
offence as he does not want to be charged for the specified
AND
punishment. The loyalty to a regulation is based on the
LOYALTY fear of the consequences and not due to the understanding
on the philosophy behind the punishment. For example, a
schoolboy does his homework because he is afraid he will
be caned if he does not.

TWO EXCHANGE This level states that a decision to comply with

something is made because of the understanding to
TOOLS
achieve its own self-interest and not wanting to deny
the rights of other people. For example, a person will
not steal as he knows how difficult it will be if someone
else were to do the same to him. Therefore, he will not
steal because he does not want other people to do the
same thing to him.

Phase two is the level of conventional moral development. People at this level
will make decisions with the aim of complying with societyÊs anticipation. In
other words, this level is the level when people make decisions that are
appropriate with the expectations of society. As shown in Table 4.2, phase two is
divided into two levels, where the first level is the level of good boys or girls and
the second level is the instructions and regulations.

Table 4.2: Phase Two in Moral Development

Level Explanation

ONE GOOD BOYS/ This level states that a person will become good by not
GIRLS doing anything that conflicts with ethics as the person
wants to be perceived as good, praised and be
respected by society. It is a norm in this world that
people will praise the good and condemn the bad,
hence because of this concept, a person will oblige. For
example, a person will not consume liquor or go to
nightclubs as he is afraid of being condemned by
society but if there is a chance and it is protected from
societyÊs knowledge, he might do it.
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TWO INSTRUCTIONS A person will do something that is only allowed by

AND regulations as he respects that institution and wishes
REGULATIONS to avoid its failure. He trusts the instructions and
regulations that will guarantee the security and
integrity of society. For example, he does not want to
disobey the red traffic light as he knows that if all road
users did not abide by traffic regulations, the traffic
situation will become hectic and chaotic. No
regulations means no facilities and peace in the society,
moreover there will be no difference between humans
and animals.

Phase three is the level of post-conventional moral development where people

make decisions based on the principles that have been accredited or trusted.
Those who are at this level will use internal ethical principles to overcome ethical
dilemmas. As shown in Table 4.3, it explains the two levels that can be found in
phase three of moral development. The first level is the level of legal contract and
second level is the universal principle.

Table 4.3: Phase Three in Moral Development

Level Explanation

ONE LEGAL At this level, a person will only take action on a

CONTRACT subject based on the principles he holds. For
example, if the person is of socialist understanding,
he will hold this principle to ensure that any subject
is for the welfare of everyone and not only for a
certain individual. He will maintain and hold this
principle and will not conform to other principle
even though the other principle is currently being
practised.

TWO UNIVERSAL According to this principle, a person will do

PRINCIPLE something ethical and will discard something
unethical only because he believes in the validity of
this universal moral principle and has a personal
commitment towards this principle. This means that
he is sincere and noble in complying with the
subject and not because of force or fear. If necessary,
he will dare to bear any risk in order to defend that
principle.
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The summary model of moral development can be seen in Figure 4.2 below.

Figure 4.2: Moral development model

SELF-CHECK 4.2

Do you know what are the principles required of people before they
make an ethical decision?

4.4 PRINCIPLES IN MAKING ETHICAL

DECISIONS

SELF-CHECK 4.3

Referring to the model on moral development which you had learned

earlier, have there been instances when your decision making or
conduct exceeded the ethics of moral development?
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Apart from the tendency to make ethical decisions and level of moral
development, the ethical principles used by a manager also affects the way he
resolves a certain ethical dilemma. However, no one ethical principle is said to be
appropriate. All of it depends on the situation. A general element in ethical
principles is to encourage managers and employees to attract the interest of other
people to take into account the ethical decisions that have been made.

In the principle of long-term individual benefit, a person will not take any action
that will not give him long-term benefits or long-term interest to his organisation.
A simple example is a lazy boy who is only interested in lots of free time, can
skip school in order for him to enjoy all the comforts but in the long term, he will
destroy his future.

Principle of personal respect states that a person will not do something that is
against the noble values of society as he does not like to see it being reported in
the media. By using this principle, a person will try to refrain from any unethical
conduct as he is afraid that his immorality will be exposed publicly and not
because he hates the issue. For example, a person will not conduct any breach of
trust as he is afraid that he may be prosecuted later, his photograph will be
published in all newspapers and other media and this will be shameful for him.
However, if he felt that he could escape from the problem, he would do it.

The third principle is known as principle of religious beliefs. This principle states
that a person will not do anything that is against his religious beliefs. This is
meant to instil noble values and societal values. For instance, a person will not
gamble due to his strong religious belief that gambling is illegal and not allowed.
For that reason, it is unethical to be practised.

The next principle is the principle of government requirements. According to this

principle, a person will not do anything that contravenes the law as the law
represents the minimum moral standard to society. Therefore, a person will not
act to contravene the law. By applying this principle, a person, for instance, will
not duplicate the copyright of another person as the law forbids this conduct. If
such a law does not exist, then he will feel that this conduct is legitimate and will
not feel guilty.

Principle of utilitarian interest is the principle that a person will not perform any
conduct that does not bring the best level of benefit to society. Instead, he will do
things that are in the best interests of society. Generally, this principle stands on
the principle of majority and minority. This may be a weakness as not all things
that are supported by the majority are good and not all things that are not
supported by them are bad. For instance, in a society that provides special
facilities to the disabled group are a necessity and conduct that is most ethical
even though these people are from a minority group. They require additional
58 X TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY

assistance due to their physical condition that is very different from the normal
group. Nonetheless, this is something that is against this principle.

The principle of individual rights is also known as the principle of human rights.
This principle states that a person cannot behave in a way that may infringe the
rights of another person. Humans are unique creatures. Apart from feelings, they
also have thoughts, strengths and different needs. These must be respected.
Therefore, a person who holds this principle to determine an ethical conduct will
not force another person to accept something that had been determined by
another person. This means that if he feels that the subject is correct according to
its consideration or justification, then he will hold on to it and to others that hold
the values that he thinks are right. For example, if an organisation is of the
opinion that its employees do not need to wear formal clothes in the workplace
and male labourers working in hot places can go about shirtless, this is perceived
as ethical by the organisation. Nevertheless, this opinion might be different for
those in another organisation as they might perceive this conduct as unethical.

The last principle is the principle of equitable distribution. This ethical principle
states that a person will not perform an action that is harmful to the minority in a
society, such as the poor, uneducated and unemployed. This principle is formed
with the purpose of protecting them. This principle emphasises equality rather
than equally. Based on this principle, the basic taxation for the payment of tax is
different from one individual to another based on their income. This is done to
establish a fixed rate that is more ethical in engaging the rights of a person. For
example, those who have higher income will be imposed higher taxes. Those
who are poor will not need to pay anything; instead, they will receive subsidies
from the tax collections. This is said to be ethical even though it gives the
impression of discrimination. The rationale behind this principle is to emphasise
equality and not equally.

Some management experts have summarised all these principles into three basic
principles, which are illustrated in Figure 4.3.
 TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY W 59

Figure 4.3: Basic principles and advance ethics

EXERCISE 4.1

Essay Questions

1. Give three steps that are normally used to reinforce ethical

culture.

2. Give four types of reactions on social responsibility that are

usually conducted by a company in its effort to respond to
societyÊs demands.

4.5 STEPS TO REINFORCE ETHICAL CULTURE

ACTIVITY 4.1

„Those who live in rural areas are more ethical compared to those who
live in the city.‰ Do you agree with this statement? What are the factors
that might influence this statement? Discuss this with your friends.
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4.5.1 Employing Ethical Employees

In our daily lives, to look for someone who is really honest and trustworthy, in
other words ethical, is very difficult. Research found that women are more ethical
than men and rural people are more ethical than those who live in big cities.
However, in order to employ those who are really ethical requires a certain
approach.

One of the methods to increase the chances of recruiting ethical employees is by

conducting a test on the candidates who will be employed. The test is called open
sincerity test. It is a written test that estimates the honesty of the potential
employee by directly evaluating his opinions and comments on theft or
punishment for unethical behaviour. However, this method is not 100% effective
as those who are unethical will reply positively towards cultural ethics as they
want to succeed in the interview and obtain employment. It is after working for
some time that the true attitude and character of a person will be seen.

The second method is by using the sincerity test based on personality. It is a

written test that indirectly estimates the honesty potential of an employee by
measuring psychological features such as dependability and awareness.

4.5.2 Ethical Work Code

ACTIVITY 4.2
List the ethical work codes that are found in your workplace. Have
these ethical work codes been fully adopted? If you are not working,
what do you understand by ethical work code in an office?

Besides recruiting employees who are ethical, there are also other ways to
reinforce an ethical culture. Currently, every organisation has its own ethical
work code. However, two issues must be emphasised if an ethical work code
needs to be developed to encourage results and ethical conduct. Firstly, the
company must promote the ethical code to the employees in the company as well
as those outside the company.

Secondly, besides disseminating the ethical code, the company must also develop
the standard and procedures that are specific towards the ethical practice in the
companyÊs business.
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4.5.3 Ethical Training

One of the objectives of ethical training is to develop the awareness of employees
on ethics. It means helping employees to identify the issues considered ethical
and to avoid rationalising unethical conducts.

The second objective is to determine the credibility of an employee. The third

objective is to educate employees on a practical model of making ethical
decisions. A basic model will help them to think of the consequences of their
choices for other people and how they should consider choices that have
different results.

4.5.4 Ethical Environment

ACTIVITY 4.3
The ethical code of some professions or organisations forbids employees
from disclosing internal company information to external parties.
However, there are untrustworthy employees who disclose or sell a
companyÊs confidential information to outsiders. In your opinion, apart
from taking legal action, what are the actions that can be taken against
such employees?

One way that could enliven the ethical environment is by example of senior
management. If the senior management is ethical at all times, the subordinates
will follow in their footsteps and respect all their actions. This is in line with the
slogan of „leadership by example.‰ However, if they only voice their intentions
but act in the opposite way, the subordinates will be appalled with the proposal.

The second method is to conduct ethical programmes. These programmes can be

conducted at a particular time periodically. If this programme is often put
forward, it can help to develop an ethical culture among its employees.

The last method is to have a reporting system that encourages managers or

employees to report any potential conduct that contravenes the specified ethics.
„Whistleblowing‰ is a type of action that exposes the misconduct of other
employees to the management or authorities. It is a very difficult to be done by
someone. The „whistleblower‰ may be afraid that he will be punished instead of
the unethical person. Moreover, another factor that greatly discourages the
„whistleblower‰ is that the company may not take action on his complaints.
62 X TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY

4.6 WHAT IS SOCIAL RESPONSIBILITY?

SELF-CHECK 4.4

What do you understand by the term „social responsibility‰?

Social responsibility is an obligation of the company to conform to policies,

make decisions and take appropriate actions that benefits the society.

However, as there is no strong debate that states to whom and what the company
is responsible for, it is difficult for a manager to know what is perceived as the
conduct of corporate responsibility to the society.

There are two perspectives that an organisation is socially responsible for, that
are to the shareholders and stakeholders.

Figure 4.4: Social responsibility of an organisation towards the shareholders and

stakeholders

The model for shareholders is the illustration of social responsibility that states
that the main objective of the organisation is to maximise the profitability for its
shareholders.
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The model for stakeholders is the proposed theory of corporate responsibility

that states the most important responsibility for management is the responsibility
that guarantees its existence of long-term lifespan by satisfying its various
corporate stakeholders. Stakeholders comprise individuals or a group that has
stakes or legal rights over the company. As a stakeholder, they have stakes in the
conduct of the organisation. They also have a stake in the actions taken. Due to
this, they will try to influence the organisation to do something that benefits
them.

These stakeholders can be divided into two main sections:

• Main stakeholders; and
• Sub-stakeholders.

(a) Main Stakeholders

The main or primary stakeholder is any group that the company
depends upon for long-term survival. They comprise investors,
employees, customers, suppliers, government and the local community.
A manager works hard to balance the various needs of these
stakeholders. The model for stakeholders suggests that the needs of the
main stakeholders must given priority compared to the needs of the
sub-stakeholders. However, this model states that it is not necessary to
prioritise the main stakeholders over the rest as all are critical to the
long-term lifespan and success of an organisation.

(b) Sub-stakeholders
Sub-stakeholders is a group that can influence or be influenced by the
company and can affect public perception on the social responsibilities
conducted by the organisation. They comprise the local community,
interested social groups, consumer associations, environmentalists,
trade unions, common society and the mass media.

4.7 ASPECTS OF SOCIAL RESPONSIBILITY

Every organisation must be fully responsible towards society. However, what are
the aspects that the organisation must be responsible for? Social responsibilities
that need to be undertaken can be divided into four sections ă economic, legal,
ethical and consideration.
64 X TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY

Figure 4.5 illustrates the four aspects of social responsibility:

Figure 4.5: Aspects of social responsibility

(a) Economic Responsibility is the expectation that a company will profit by

producing quality products and services. This means that every ringgit that
is charged to the customer for buying the products must be matched to the
quality that had been paid for. For example, electrical items made in
Thailand are definitely different from those made in Japan. Hence, the
distributor cannot sell the products from Thailand at the same price as the
products made in Japan to increase its profits.

(b) Legal Responsibility is the anticipation that a company will abide by its
social regulations and legislations. For example, a company cannot do
something that is against the law even though it is not always being
monitored, such as the law that forbids dumping of chemical waste in a
public environment.

(c) Ethical Responsibility is the anticipation that a company will not

contravene the principles that have been accepted as right or wrong when
managing the business. An appropriate example here is when the company
tries to attract its customers by promoting cheap sales to them but in fact
deceives them by selling old stock that has been mixed with new stock in
order to clear the old stock.

(d) Consideration Responsibility is the anticipation that the company will

voluntarily play its social role that encompasses economic, legal and ethical
responsibilities. For instance, a company provides scholarship to
unfortunate members of society for further studies, sponsors live telecasts
of their favourite shows and builds bus stops or flyovers at highways.
 TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY W 65

4.8 REACTION TOWARDS SOCIAL

RESPONSIBILITY
When we talk about reactions towards social responsibility, it means how an
organisation will react or from its strategy move to respond to the stakeholders,
whether in the form of economic, legal, ethical or consideration responsibility.
The difference in strategy depends on how far a company is able to react to fulfil
social requirements. It is divided into four elements that are the reaction strategy,
defence strategy, accommodative strategy and proactive strategy.

Figure 4.6 illustrates the four elements of reaction towards social responsibility.

Figure 4.6: Reactions towards social responsibility

(a) Reaction Strategy

A strategy whereby the company chooses to react less than what is
anticipated by society and denies its responsibility to overcome a problem.
For example, when the society urges that something be done by an
organisation, the organisation tries to avoid and find excuses to escape from
the said responsibility. If possible, it would not want to admit that the issue
is a part of its responsibility.

(b) Defence Strategy

A social reaction whereby a company chooses to acknowledge its
responsibilities towards the problems but does less than what is expected
by society. For example, when the society urges for a problem to be
overcome by the organisation, it will only listen to all the complaints and if
action is taken, only the minimum will be done or not done sincerely.
66 X TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY

(c) Accommodative Strategy

A social reaction strategy whereby the company chooses to acknowledge its
responsibility towards a problem and does what is requested by society in
order to resolve the matter. This of course will fulfil the overall
requirements of the society and make them satisfied with the services
provided.

(d) Proactive Strategy

A social reaction strategy whereby the company knows its responsibilities
towards a problem before it happens and has done more than what had
been highlighted by society. This strategy is the best strategy for the society
but at the same time, the company needs to prepare huge expenses for this
purpose.

EXERCISE 4.2

TRUE (T) or FALSE (F) Statements

1. Ethical conduct is a conduct that abides by the principle of

acceptance for the organisation on right and wrong.

2. Unethical influences from management influence its employees

whether intentionally or unintentionally.

3. Although matured, the level of moral maturity can change

depending on the individual or the factors of the situation.

4. Two categories in the stakeholder group are business stakeholders

and non-business stakeholders.

5. Stakeholder is an individual or a group that has a legitimate stake

in the conduct of a company.

Multiple Choice Questions

1. Principle of ___________ means that a person will not do

something that is not honest, transparent and right as he will feel
unhappy if it is reported in the mass media.

A. long-term individual interest

B. personal respect
C. religious belief
D. utilitarian interest
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2. Which of the following is NOT one of the three factors that influence
ethical decisions?

A. Ethical determinants of a decision

B. Morals development of a manager
C. Ethical principles that are used to resolve problems
D. Obvious honesty of a decision

3. Which of the following is NOT TRUE about ethical conduct?

A. Ethical conduct mirrors the development of customs and morals.

B. Ethical conduct causes the questioning of right or wrong in
behaviour.
C. Ethical conduct is modified by self values of a person.
D. Ethical conduct is not influenced by emotions.

4. Something that is deeply and permanently supported by an individual

or group refers to __________.

A. legislation
B. regulation
C. experience
D. values

5. It is difficult for us to determine accurately the financial value of moral

employees, work culture and job satisfaction. This problem is usually
related to the critics of which approach?

A. StakeholdersÊ rights approach

B. Human rights approach
C. Equitable approach
D. Utilitarian approach

• Ethics and social responsibility are important to ensure the effectiveness of an

organisation.
• Ethics is the principle of morals and values that define whether something is
right or wrong to an individual or group.
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• Ethical tendency depends on six main factors ămagnitude of consequence,

society collaboration, probability result, immediate time forecasts,
approximation of impact and impact concentration.
• Lawrence Kohlberg, a psychology expert, created a new theory in the moral
development that discussed the issue of ethics based on the level of moral
development of a person.
• These levels progress in three phases ă pre-conventional, conventional and
post-conventional.
• Each of these phases is divided into two levels.
• The first phase is divided into Punishment and Loyalty and Exchange Tools
while phase two is divided into Good Boy/Girl and Instructions and
Regulations. Phase three is divided into Legal Contract and Universal
Principles.
• In forming ethical principles, there are several principles that can be
considered.
• Among these principles are the principle of long term interest, personal
respect, religious belief, government requirements, utilitarian interests,
individual rights and equitable distribution.
• In brief, these principles can be divided into three main principles ă
utilitarian, human rights and equitable.
• To reinforce the ethical culture among employees, several steps were
identified.
• These steps are to only employ those who are ethical to work, establish
ethical work codes, conduct ethical training and enliven the ethical
environment.
• Social responsibility is the obligation of a company to fulfil its policies and to
make decisions and take actions that benefit the society.
• There are two perspectives where the organisation is socially responsible that
is the model of shareholder and stakeholder.
• The social responsibility aspect can be seen in four main aspects ă economic,
legal, ethical and consideration.
• The companyÊs reaction towards its responsibilities can be summarised into
four main strategies ă reaction, defence, accommodative and proactive.
 TOPIC 4 ETHICS AND SOCIAL RESPONSIBILITY W 69

Accomodative strategy Principle of human rights

Ethical conduct Principle of utilitarian interest
Ethical decision making Proactive strategy
Exchange tools Punishment and loyalty
Principle of equitable distribution