FOM Revision Slides 2

Ethics and Social

Responsibility

Ethics
The study of what constitutes
right/wrong behaviour, through the use
of inner, guiding moral principles,
values, and beliefs to analyse a
situation
Thus, ethics provide standards of
behaviour
2 types
Duty-based (based on religious beliefs)
Outcome-based (based on desirability of results)

Approaches for ethical

decision-making
Utilitarian moral behaviour
produces greatest good for greatest
number of people
Individualism acts are moral if they
promote the individuals long term
interest
Moral-rights humans have
fundamental rights that cannot be
taken away

Approaches for ethical

decision-making
Practical decisions based on
prevailing standards, taking into
account society and all stakeholders
Justice decisions based on
standards of equity, fairness, and
impartiality
Distributive
Procedural
Compensatory

Factors that affect a managers

choices

Personality traits
Personal needs
Family influence
Religious background

Managing company ethics

elements
Code of ethics formal statement of
companys values regarding social
issues and ethics
Ethical structures (systems,
positions, and programs) e.g. ethics
training
Whistle-blowing employee
disclosure of illegal, immoral, or
illegitimate practices

Managing company ethics actions

Ethical code of conduct establish standards of
behaviour
Ethics training creates awareness and
clarification of ethics code
Ethics committee and chief ethics officers
educate and counsel, and hear about
wrongdoing
Ethics hotlines and support of whistle-blowers
to resolve ethical dilemmas
Ethical leadership to demonstrate integrity and
be role models for ethical conduct

Social responsibility
The duty of an organisation to care
for the interests of the society it
conducts its business in
Consumers expect this

Corporate Social Responsibility

(CSR)
What?
Company making choices that contribute to
society and stakeholders

Stakeholders
Internal - employees
External
Stockholders, partners
Customers, creditors, communities
NGOs, human rights organisations, governments,
special interest groups, trade unions

Sustainability
Sustainability economic
development that generates
wealth and meets the needs of
the current generation while
preserving the environment for the
needs of future generations

Managers Approaches to Social

Responsibility
Obstructionist SR is outside companys
self interest. Company focuses on economic
gains.
Defensive contributes minimum effort
toward SR in an effort to obey the law
Accommodative does more than required
by the law to contribute toward SR
Proactive leads in identifying and
responding to social problems using the
organisations resources