IE 001

Engineering
Management

Social
Responsibility

SOCIAL RESPONSIBILITY
INTENDED LEARNING OUTCOMES:
1. Discuss what it means to be socially responsible an
d what factors influence that decision.
2. Explain green management and how organizatio
ns can go green.
3. Discuss what ethics is and its views.
4. Discuss the factors that lead to ethical and unethic
al behaviors.
5. Describe managements role in encouraging ethical
behavior.
6. Discuss current social responsibility and ethical issu
es.

SOCIAL RESPONSIBILITY
What is Social Responsibility?
- as a businesss obligation, beyond that required
by law and economics, to pursue long-term goa
ls that are good for society.

SOCIAL RESPONSIBILITY
What is Social Responsibility?
A) Classical View
- Managements role is to maximize profits for
the benefit of the stockholders
- Doing social good unjustifiably increases cost
s
B) Socioeconomic View
- Managements social responsibility goes beyon
d
making profits but also protect and improve
societys welfare
- Corporations are not only responsible to stockholders but also to larger society to do the

SOCIAL RESPONSIBILITY
Approaches to Social Responsibility:

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Arguments FOR & AGAINTS Social Responsibility

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What is Green Management?
- when managers consider the impact of their or
ganization on the natural environment.

How do Organizations Go Green ?

- Some companies do no more than what is requ
ired by law that is, they fulfill their social oblig
ation.
- Others have radically changed their products an
d even their production processes.

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Green Approaches Shades of Green

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Evaluating Green Management Actions:
1. Global Reporting Initiative
2. ISO 14000 (Environmental Management) Stan
dards
3. Global 100 Most Sustainable Corporations in t
he World

MANAGERIAL ETHICS
What is Values-based Management?
- an approach to managing in which managers e
stablish, promote, and practice an organization
s shared values.

What are Shared Values?

- explicit or implicit fundamental beliefs, concept
s, and principles that underlie the culture of an
organization, and which guide decisions and be
havior of its employees, management, and me
mbers.1
Source: 1businessdictionary.com

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Purposes of Shared Values:

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Exhibit 1 Stated Values of Organizations2

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Questions???
1. Is it ethical for a sales representative to bribe a
purchasing agent as an inducement to buy?
2. Would it make a difference if the bribe came o
ut of the sales reps commission?
3. Is it ethical for someone to use a company car f
or private use?
4. How about using company e-mail for personal
correspondence or using the company phone t
o make personal phone calls?
5. Is it ethical to accept gifts from your companys
suppliers during holidays like Christmas?

MANAGERIAL ETHICS
What is Ethics?
- refers to the rules, principles, values and beliefs
that define right and wrong conduct and behav
ior.

Four (4) Views of Ethics:

1.
2.
3.
4.

Utilitarian view
Rights view
Theory of justice view
Integrative social contracts theory

MANAGERIAL ETHICS
Utilitarian View
Greatest good is provided for the greatest
number
Encourages efficiency and productivity and is
consistent with the goal of profit maximizati
on

Rights View
Respecting and protecting individual liberties
and privileges
Seeks to protect individual rights of
conscience, free speech, life and safety, and
due process

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The Theory of Justice
Organizational rules are enforced fairly and
impartially and follow all legal rules and
regulations
Protects the interests of underrepresented
stakeholders and the rights of employees

Integrative Social Contracts Theory

Ethical decisions should be based on existing
ethical norms in industries and communities
Based on integration of the general social
contract and the specific contract between
community members

MANAGERIAL ETHICS
The Theory of Justice
Organizational rules are enforced fairly and
impartially and follow all legal rules and
regulations
Protects the interests of underrepresented
stakeholders and the rights of employees

Integrative Social Contracts Theory

Ethical decisions should be based on existing
ethical norms in industries and communities
Based on integration of the general social
contract and the specific contract between
community members

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Factors That Determine Ethical &
hical Behavior:

Unet

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Factors that Affect Employee Ethics:
1.
2.
3.
4.
5.

Stages of moral development

Individual characteristics
Structural variables
Organizational culture
Issue Intensity

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I) Stages of moral development
- Research divides moral development into 3 leve
ls, each having 2 stages:
a. preconventional level - a persons choice
between right or wrong is based on personal
consequences from outside sources, such as
physical punishment, reward, or exchange of
favors.
b. conventional level - ethical decisions rely on
maintaining expected standards and living up
to the expectations of others.

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c. principled level - individuals define moral
values apart from the authority of the groups
to which they belong or society in general.

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Stages of Moral Development:

Based on L. Kohlberg, Moral Stages and Moralization: The Cognitive-Development Approach, in T.

Lickona (ed.), Moral Development and Behavior: Theory, Research, and Social Issues (New York: Hol
t, Rinehart & Winston, 1976), pp. 3435.

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II) Individual characteristics
a. Values are basic convictions about what is
right or wrong on a broad range of issues.
b. Personality two personality variables have
been found to influence an individuals actio
ns
according to his/her beliefs about what is
right or wrong.
Ego strength measures the strength of a
persons convictions.
Locus of control measures the degree to
which people believe they control their
own life.

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III) Structural variables
- Organizational characteristics and mechanisms
that guide and influence individual ethics:
a) Performance appraisal systems
b) Reward allocation systems
c) Behaviors (ethical) of managers

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IV) Organizational culture
- Cultures high in risk tolerance, control, and con
flict tolerance are most likely to encourage high
ethical standards
- Weak cultures have less ability to encourage hig
h ethical standards
V) Issue intensity
- How important is the ethical issue to an individ
ual

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Issue Intensity

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How Managers Can Improve Ethical
avior in an Organization:
1.
2.
3.
4.

Beh

Hire individuals with high ethical standards.

Establish codes of ethics and decision rules.
Lead by example.
Delineate job goals and performance appraisal
mechanisms.
5. Provide ethics training.
6. Conduct independent social audits.
7. Provide support for individuals facing ethical di
lemmas.

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What is a Code of Ethics?
- A formal statement of an organizations primar
y values and the ethical rules it expects its empl
oyees to follow.
Be a dependable organizational citizen
Dont do anything unlawful or improper that
will
harm the organization
Be good to customers

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Effective Use of Code of Ethics?
Develop a code of ethics to guide decision maki
ng
Communicate the code regularly
Have all levels of management show commitme
nt
to the code
Publicly reprimand and consistently discipline
those who break the code

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Ethical Leadership:
Managers must be good role models by:
Being ethical and honest at all times
Telling the truth
Admitting failure and not trying to cover it up
Communicating shared ethical values to empl
oyees through symbols, stories, and slogans
Rewarding employees who behave ethically a
nd punishing those who do not
Protecting employees (whistleblowers) who b
ring to light unethical behaviors or raise ethical iss
ues

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The Value of Ethics Training:
Training can make a difference in ethical
behaviors
Training increases employee awareness of ethic
al issues in business decisions
Training clarifies and reinforces the standards of
conduct
Employees are more confident of support when
taking unpopular but ethically correct stances