1. Managerial Ethics
1

2. LEARNING OUTCOME
Define social responsibility and ethics
List at least six main arguments for at least four
main arguments againts businesses being socially
responsible.
Explain the importance of demonstrating social
responsibility in today business world
2

3. Learning Objectives ( continued)
•Describes the concern people have about
business ethics
•Explain the relationship between social
responsibility and managerial ethics
•Identify the seven factors that influence ethical
behaviour
•Describe ways an organization can improve ethical
behaviour
3

4. Society’s Expectation from
Organizations and Manager
Managers regularly make decisions about issues
with a social dimension
In competitive environment, organizations
cannot afford to be seen as socially irresponsible
4

5. Arguments Supporting Businesses
Being Socially Responsible
Public expectations
Long-run profits
Ethical obligation
Public image
Better environment
Balance of responsibility and power
Shareholder interests
Possession of resources
Superiority of prevention over cures
5

6. Arguments Againts Businesses Being
Socially Responsible
Violation of profit maximization
Dilution of purpose
Costs
Too much power
Lack of skills
Lack of accountability
Lack of broad public support
6

7. Demonstrating Social Responsibility
Social responsibility
Social obligation
Social responsiveness
7

8. Relationship Between Social
Responsibility and Economic
Performance
Research studies show positive relationship
General public perception that companies who behave in
a socially responsible way have better business
performance
8

9. Managers Becoming More Socially
Responsible
• It is the collective behaviour and actions of
managers that make a company socially
responsible
• Managers who make the right decisions are
described as being or behaving ethically
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
9

10. Managerial Ethics
• Ethics
- Rules and principles that define right and
wrong conduct
• Three Views of Ethics
- Utilirian view – ethical decisions are made on
the basis of their outcomes or consequences
(continued)
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
10

11. Managerial Ethics (continued)
• Three Views of Ethics (continued)
- Right view – respects and protects individual
liberties and privileges
• Theory of injustice view – managers impose
and enforce rules fairly and impartially
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
11

12. Moral Development
• Is a measure of an individual’s independence
as his/her moral judgment becomes less and
less dependent on outside influences
• Stages start with making a choice between
right and wrong based on personal
consequences
(continued)
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
12

13. Moral Development (continued)
• As development evolves, moral judgment is
less dependent on outside factors
• Individuals with highly-developed moral
development can make clear distinctions to
define moral principles separate from any
authority
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
13

14. Values
• Basic convictions about what is right and
wrong
• Influence ethical behaviour
• Values are developed in early years
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
14

15. Organizational Factors That Affect
Ethical And Unethical Behaviour
Organizational Culture
Ethical/Unethical
Moderators Behaviour
Structural
Variables
Robbins et al., Fundamentals of Management, 4th Canadia Edition
©2005 Pearson Education Canada, Inc.
FOM 2.15

16. Determinants Of Issue Intensity (Exhibit 2.3)
How much agreement is there
How many people will that this action is wrong?
be harmed?ed? How likely is it that this
action will cause harm?
Consensus of
Greatness Wrong Probability of
of Harm Harm
Issue Intensity
Concentration Immediacy of
of Effect Proximity
Consequences
to Victims
How concentrated is the effect
of the action on the victims? Will harm be felt
How close are the potential
immediately?
victims?
Source : Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robbin
Stuart-Kotze, page 113. Copyright 2003. Reprinted by permission of Pearson Education Canada Inc.
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc.

17. Businesses Improving Ethical
Behaviour
• Strong emphasis on corporate governance
• Companies refocusing efforts on business
ethics
• New legislation to hold boards of directors
more accountable
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc.
17

18. Managers Improving Ethical
Behaviour
• Hire individuals with high ethical standards
• Establish codes of ethics and decision rules
• Lead by example
(continued)
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc.
18

19. Managers Improving Ethical
Behaviour (continued)
• Delineate job goals and performance review
mechanisms
• Provide ethics training
• Conduct social audits
• Provide support to individuals facing ethical
dilemmas
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc. 19

20. Code of Ethics
• Formal statement of an organization’s primary
values and ethical rules it expects employees to
follow
• Usually written
• Must state in detail acceptable behaviours and
actions
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc. 20

21. Management Responsibility
Relating to Codes of Ethics
• If possible, develop codes with active
involvement of everyone in the organization
• All levels of management must support and
continually reaffirm the importance
• Consistently discipline those who break the code
• Set an example by behaviour and action
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc. 21

22. Concluding Remarks
• More and more organizations are appearing in
newspaper headlines about ethical conduct
• Survey of employees shows workplace
pressures are leading to more people
considering acting unethically
• Concerns about social responsibility are
growing
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson
Education Canada, Inc. 22

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Format: LAWM483-