Chapter 5

Ethics and Social

Responsibility

Elmalyn P. Bernarte
MAED
Ethics and Social Responsibility
Chapter 5 Topics
Managerial Ethics
Criteria for Ethical Decision Making
Factors Affecting Ethical Choices
Social Responsibility
Ethics Sustainability and Natural Environment
Evaluating Corporate Social Performance
Managing Ethics and Social Responsibility
 Ethics
The code of moral principles and
values that govern the behaviors
of a person or group with respect
to what is right or wrong.
 Three Domains of Human
Action
Text

Domain of Codified Law Domain of Ethics Domain of Free Choice

(Legal Standard) (Social Standard) (Personal Standard)

Amount of

Explicit Control
High Low
 Ethical Dilemma
Arises in a situation concerning
right or wrong when values are in
conflict and right and wrong
cannot be clearly defined.
 Criteria for
Ethical Decision
Making
4 Ethical Decision Making Approaches

Utilitarian Approach
Individualism Approach
Moral-Rights Approach
Justice Approach
 Utilitarian Approach
Moral behavior produces the greatest
good for the greatest number
The decision maker is expected to
consider the effect of each decision
alternative on all parties and select the
one that will optimize satisfaction for
the greatest number of people
 Individualism Approach
Acts are moral when they promote the
individual's best long-term interests,
which ultimately leads to the greater
good
Individual self-direction paramount
Individualism is believed to lead to
honesty & integrity since that works
best in the long run
 Moral-Rights Approach
Moral decisions are those that best
maintain the rights of those people
affected by them.
An ethical decision is one that avoids
interfering with the fundamental rights of
others
 Six Moral Rights to be Considered
in Decision Making
1. The
1. The right
right of
of free
free consent
consent
2.
2. The
The right
right to
to privacy
privacy
3.
3. The
The right
right of
of freedom
freedom of
of conscience
conscience
4. The right of free speech
5.
5. The
The right
right to
to due
due process
process
6.
6. The
The right
right to
to life
life &
& safety
safety
 Justice Approach
Moral Decisions must be based on
standards of equity, fairness,
impartiality
Three types of Justice Approaches:
Distributive Justice
Procedural Justice
Compensatory Justice
Distributive Justice
Different treatment of people should not
be based on arbitrary characteristics
In case of substantive differences, people
should be treated differently in proportion
to the differences among them
Procedural Justice
Rules should be clearly stated

Rules should be consistently and

impartially enforced
 Compensatory Justice
Individuals should be compensated for the
cost of their injuries by the party responsible

Individuals should not be held responsible

for matters they have no control over
 Factors Affecting Ethical Choices

The Manager
- Brings specific personality and behavioral traits to the job
- Involves personality characteristics, managers level of
moral development
Levels or stages of moral development
Pre-conventional
Conventional
Post-conventional
Levels of Personal Moral Development
 The Organization
Rarely can ethical or unethical corporate
actions be attributed solely to the
personal values of a single manager
Values adopted within the organization
are highly important
Most people believe their duty is to fulfill
obligations and expectations of others

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Other aspects of the organization that
impact on ethical values and manager
decision making
Explicit rules and policies
The reward system
The extent to which the company cares
about its employees
The selection system
Emphasis on legal and professional
standards
Leadership and decision process
 Social Responsibility
Organizations obligation to
make choices and take actions
that will contribute to the welfare
and interests of society and
organization
Being a good corporate citizen
Difficulty in understanding
issues can be ambiguous with
respect to right and wrong
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 Organizational Stakeholders

Any group within or outside the

organization that has a stake in the
organizations performance
Each stakeholder
Has a different criterion of
responsiveness
Has a different interest in the company
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 The Ethics Sustainability and the Natural
Environment

Companies actively search

Activist for ways to conserve the
The Shades of Approach Earths resources
Corporate Green
Companies attempt to answer Stakeholder
environmental concerns Approach

Market Approach
A growing awareness of and sensitivity to
environmental concerns, to satisfy customers
Legal Approach
A company does only what is necessary to satisfy
legal requirements
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 Evaluating Corporate Social
Responsibility

Economic Legal Ethical Discretionary

Responsibility Responsibility Responsibility Responsibility

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Total Corporate Responsibility
 Managing Company Ethics
and Social Responsibility
Ethical individuals = honest, have integrity,
strive for a high level of moral development
Ethical leadership = provides the necessary
actions, committed to ethical values and
helps others to embody those values
Organizational structure = embodies a code
of ethics, and methods to implement ethical
behavior

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Thank you!!