Managerial Ethics and Corporate Social Our people are our Responsibility greatest asset

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WHAT IS ETHICS? refers to the well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness or specific virtues.

branch of philosophy that involves Click to edit Master subtitle style systematizing, defending and recommending concepts or right and wrong behavior.

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It is the moral principles which determine the RIGHTNESS and WRONGNESS of particular acts or activities.

Lax and Sebenius (1986), regarding ethical issues as inescapable, present a series of questions to help managers decide what is ethical: you want someone to do it to 1. Would
you? To a member of your family? 2. Are there alternatives that rest on firmer ethical ground? 3. Are you following rules that are mutually understood and accepted? (In poker, for example, everyone understands that bluffing is part of the game.) 4. Are you comfortable discussing and defending your action? (Would you want your colleagues and friends to be aware of it? Your spouse, children, or parents? Would you be comfortable if it were on the front page of your local newspaper?) 5. Would you want everyone to act that way? Would the resulting society be desirable? (If you were designing an organization, would you want people to act that way? Would you teach your children to do it?) 5/23/12

Factors Affecting Ethical Choices

The Manager
Level or stage of moral development Learned Ethics

The Organization
Systems Culture

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Moral Development
Preconventional Level = concerned with external rewards and punishments Conventional Level = conform to the expectations of peers and society Postconventional (Principled) Level = individuals develop a personal, internal set of standards and values. (About 20% of adults) 5/23/12

The Organization
Systems
Explicit rules and policies Reward system

Culture
Common Values Traditions

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Social Responsibility
a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards,of CSR is to embrace responsibility and international norms The goal

for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.

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Organizational Stakeholders
Owners, Investors Employees Suppliers Customers Government Society

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Corporate Social Responsibilities 1 Economic Responsibilities:

The only Social Responsibility = Profit-Maximizing. 2 Legal Responsibilities: Social Responsibility = Obeying the Law (as well as making a profit)

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3 Ethical Responsibilities To be ethical, an organization should seek a higher standard than merely obeying the law:
e.g., Act with equity, fairness, and impartiality e.g., Respect the rights of individuals

4 Discretionary Responsibilities Purely voluntary, not mandated by economics, law, or ethics Goes beyond what society expects This is true Social Responsibility
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MANAGEMENT ETHICS
THE DOs
1. Always model responsible personal professional behavior. 2. Always develop fair, reasonable rules and expectations for the workplace. 3. Focus efforts on trust, motivation, encouragement, and building a positive work environment. 4. Always enjoy administration and be proud that you are successful in your 5/23/12 profession.

THE NEVERs
Never demean an employee especially in the presence of other workers. 2. Never compare employees. 3. Never demand respect, earn it. 4. Never be dishonest with employees 5. Never accuse workers of not trying hard, rather help them try again where they failed. 6. Never get into power struggles with workers. 7. Never become defensive. 8. Never lose control of your feelings. 9. Never underestimate the importance of professional style and demeanor 10. Never think that being consistent means treating all workers alike.
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