The ethical and Social context of Management What is ethics?

lIndividuals

personal beliefs regarding what is Right and Wrong or Good and Bad

Three important aspect of Ethics

lEthics

are defined in the context of Individual-- people have ethics, organization do not lEthical behavior may vary from one person to another lUsually ethical behavior refers to the behavior that conforms to generally accepted social norms

Formation of Individual

Ethics
lFamily

Influence lPeer Influence lLife Experience lPersonal Values and Morals lSituational Factors

What is Managerial Ethics?

lStandards

or behavior that guide individual managers in their work

Three areas of special concern for managers

(1) How the Organization treats its employees -Hiring and firing -Wages and working condition -Privacy

Three areas of special concern

for managers
(2) How employees treat the organization -Conflict of interest -Secrecy -Honesty and expense account

Three areas of special concern for managers

(3) How the organization treats economic agents -Customers -Competitors -Stockholders -Suppliers -Dealers -Unions

Read!!
Ethics in an Organizational context Page.108

Social responsibility and Organization

lThe

set of obligations an organization has to protect and enhance the societal context in which it function

Areas of social responsibilities

constituents People and organizations who are directly affected by the behavior of an organization and who have a stake in its performance
lOrganizational

Stakeholders
Examples:

-Customers, -Local community, -Trade associates, -Suppliers, -Investors -Creditors Etc.

Areas of social responsibilities

Environment Land, river, streams, air, trees etc. are the part of the natural environment
lNatural

Areas of social responsibilities

Social Welfare Charities, Donations
lGeneral

Arguments for social responsibility

lOrganizations

create problems like-

-Water pollution -Air pollution -Resources depletion Therefore they should address those problems.

Arguments for social responsibility

lCorporations

are citizens in our

society lBusiness often has the resources necessary to solve the problem lBusiness is a partner in our society along with the Government and the general people

Arguments against social responsibility

lPurpose

of business is to generate profit for the owners

lInvolvement

in social programs gives business too much power lThere is potential for conflict of interest lBusiness lacks the expertise to manage social programs

Organizational Approaches to SR
lSocial

Obstruction lSocial Obligation lSocial Response lSocial Contribution

Government and Social Responsibility

How Government Influence Organization? lDirect Regulation lIndirect Regulation

Government and Social

Responsibility
How Organization influence Government? lPersonal Contact lLobby lFavors

Managing Social Responsibility

Formal Organizational dimension lLegal Compliance lEthical Compliance lPhilanthropic Giving

Managing Social Responsibility

Informal Organizational dimension lOrganizational leadership and culture

lWhistle

Blowing