social responsibility

1. Chapter 5:
Pichpisey CHHIM
Pheakvorn CHENG
Phearnique LY
Social Responsibility
and Ethics

2. • What is Social Responsibility?
• Green Management and Sustainability
• MANAGERS and Ethical Behavior
• Encouraging Ethical Behavior
• Social Responsibility and Ethics Issues in Today’s World
• Case Application
Chapter Content

3. • From Obligations to Responsibility
• Should Organizations Be Socially Involve?
What is Social
Responsibility?

4. • Companies have large pay inequities,
however, the difference is often not
linked to employee performance, but to
entitlement.
• Business facing an extremely changed
economic environment offer employees
reduce hours and early retirement
package.
• Managers regularly face decision that
have a dimension of social
responsibility in area such as
employees relation, philanthropy,
product quality and safety, and doing
business in country that devalue human
rights.
What Is Social Responsibility?

5. • Classical View: Management’s only
social responsibility is to maximize
profits (create a financial return) by
operating the business in the best
interests of the stockholders (owners
of the corporation).
• Social obligation: the
obligation of business to meet
its economic and legal
responsibilities and nothing
more.
• The organization does what it
is obligated to do.
From Obligations to Responsibility

6. • Socioeconomic view “ manager's responsibilities go beyond making
profits to include protecting and improving society’s welfare.”
• Corporations are not independent entities responsible only to
stakeholders.
• Firms have a moral responsibility to larger society to become
involved in social, legal, and political issues.
• “to do the right thing”
From Obligations to Responsibility

7. • Social Responsibility: a business
intention, beyond its legal and
economic obligations, to do the right
things and act in a ways that are
good for society.
• A socially responsible organization
does what is right because it feel it
has an ethical responsibility to do so.
• Social Responsiveness: when a
firm engages in social actions in
response to some popular social
need.
• Managers are guided by social norms
and values and make practical,
market-oriented decisions about
their actions.
From Obligations to Responsibility
*BOTH Social Responsiveness & Social Responsibility reflect the socioeconomic view.

8. For Against
• Public Expectation
• Long-run profit
• Ethical obligation
• Public image
• Better environment
• Discouragement of further
governmental regulation
• Balance responsibility and power
• Stockholder interest
• Possession of resources
• Superiority of prevention over cures
• Violation of profit maximization
• Dilution of Purpose
• Costs
• Too much power
• Lack of skills
• Lack of accountability
Should Organizations Be Socially Involve?

9. • Social involvement affects a
company’s economic performance:
Causation
Negatively associated
Looking at socially responsible
investing (SRI) funds
Should Organizations Be Socially Involve?

10. • How Organization Go Green
• Evaluating Green Management Actions
GREEN
Management and
Sustainability

11. • Until the late 1960s, few people
(organization) paid attention on
environmental consequences of their
decisions and actions.
• Some group were conserving natural
resources “Please Don’t Litter”.
• However, a number of environmental
disasters brought a new spirit of
environmentalism to individual, group
and organization.
• By then, managers have begun to
consider the impact of their organization
on the natural environment (Green
management).
What is green management?

12. • Legal Approach: require legally they
obey laws, rules and regulations.
• Market Approach: respond to
environmental preference of
customers.
• Stakeholder Approach: organization
work to meet environmental
demands of multiple stakeholders
• Activism Approach: protect earth's
natural resources
How Organization Go Green

13. • More than 1,300 companies report
their efforts in promoting
environmental sustainability using
guideline develop by Global
Reporting Initiative (GRI).
• International Organization for
Standardization (ISO) has develop
more than 18,000 international
standards. For instance: ISO 9000, ISO
14000.
• Announced each year at the
renowned World Electronic Forum in
Davos, Switzerland.
• A business become greener they
often release detailed reports on
their environmental performance.
• On the other hand, they can show
the commitment of being green is
through pursuing standard develop
by ISO.
• Using the global 100 list of the most
sustainable corporations in the world.
Evaluating Green Management Actions

14. • Factors That Determine Ethical and Unethical behavior
• Ethics in an International Context
Managers and Ethical
Behavior

15.  Bernard Madoff, a financier who stole billion of dollars from his clients.
 British government installed monitoring chips in trash bins.
 Is it ethical for someone to use company car for private use?
 How about using company email for personal business?
 And using company phone to make private call?
 What if manager command the employees to work on emergency situation?
 And the company’s policy will not compensate over time working?
Discussing Scenarios

16. Ethics are the principles, values, and beliefs that define right
and wrong decisions and behaviors.
Decisions of the manager:
 Consider about the process
 Who will be affected by the result
What do we mean by Ethics?

17.  People’s behavior is influenced by:
 Their stage of moral
development
 Individuals’ characteristics
 Organization’s structural design
 Organization’s culture
 Intensity of ethical issue.
Factors That Determine Ethical And Unethical
Behavior

18. • Research divides moral development into three levels:
o Preconvention level: choice between right or
wrong is based on personal consequence from
outside source, such as physical punishment,
reward, or exchange of favor.
o Conventional level: ethical decisions rely on the
expected standard or the expectations of others.
o Principled level: individual defines moral values
apart from the authority of the groups to which
they belong.
Stage Of Moral Development

19. Stages Of Moral Development

20. • There are two individual
characteristics:
 Value
 Personality
Individual Characteristics

21.  Value is the basic belief about what
is right and wrong.
 Value development is based on what
we see and hear from parents,
teachers, friends and others.
 Employees in the same organization
often have different values.
Personal Values

22. • There are two personality variables that influence individual action:
 Ego strength: a personality measure of the strength of a person’s
conviction.
 Locus of control: a personality attribute that measure the degree to
which people believe they control their own fate.
• Internal locus
• External locus
Personality

23. • The structures that influence ethical choices include:
 Company’s goal
 Performance
 Reward allocation
Organization’s structure

24. • Employees in such a culture are encouraged to be aggressive and
innovation.
• They are aware that unethical practices will be discovered and feel free to
openly challenge expectation they consider to be unrealistic
Organization’s Culture

25. Issue Intensity

26. • Although some common moral
beliefs exist, social and cultural
differences between countries are
important factors that determine
ethical and unethical behavior.
Ethics In An International Context

27. • Employee Selection
• Codes of Ethics decision Rules
• Leadership
• Job Goals and Performance Appraisal
• Ethics Training
• Independence social Audits
• Protective Mechanisms
Encouraging Ethical
Behavior

28. • Interview, tests, background check, and experiences should be viewed as an
opportunity to learn about individual’s level of moral development, personal
values, ego strength, and locus of control.
• However, a carefully designed selection process is necessary.
Employee Selection

29.  Codes of ethics is a formal statement of an organization’s primary values and
the ethical rules that expect employees to follow.
 Codes of ethics should be specific enough to show employees the spirit in
which they’re supposed to do things, yet it is loose enough to allow for
freedom of judgment.
Codes of Ethics

30. • Strong management skills are
needed.
• Reward and punishment are used in
the process.
Leadership

31.  Realistic goal is very important.
 Employees will work under stress
and go nowhere fast when there’s no
clear goal.
Job goals

32. How can ethics be
taught?
Ethics Training

33.  The fear of being caught can be an
important deterrent to unethical
behavior.
 An effective ethics program needs
independent social audits.
Independent Social Audits

34.  Protective mechanism are one way of looking at how people distance
themselves from a full awareness of unpleasant thoughts, feelings and
behaviors.
 Employees who face ethical dilemmas need protective mechanism so they can
do what is right without fear of reprimand.
Protective Mechanisms

35. • Managing Ethical Lapses and Social Irresponsibility
• Social Entrepreneurship
• Business Promoting Positive Social Change
Social responsibility and
Ethics Issue in Today’s
World

36. • Studies conducted by the Center of Academic Integrity show 26% of colleges
and university business major admitted to “Serious cheating” on exam and 54%
admitted to cheating on written assignments. A survey by Students in Free
Enterprise found that only 19% would report a classmate who cheated.
• Organization may have difficulty upholding high ethical standards when their
future employees so readily accept unethical behavior. What can manager do?
Managing Ethical Lapses and Social Irresponsibility

37. • Ethical Leadership
– Ex. CEO of Dial Corporation got a call from CEO of competitor Colgate Palmolive,
told him he had a copy of Dial’s strategic marketing plan that had come from a former
Dial salesperson who recently had joined Colgate-Palmolive. However, he had not
looked at it, has no intention to and he will return it. In addition, he will deal
appropriately with the new salesperson himself.
Managing Ethical Lapses and Social Irresponsibility

38.  How manager can provide ethical leadership
– Be a good role model by being ethical and honest
• Tell the truth always
• Don’t hide or manipulate information
• Be willing to admit your failure
– Share your personal values by regularly communicating them to employees
– Stress the organization’s or team’s important shared values
– Use the reward system to hold everyone accountable to the values
Managing Ethical Lapses and Social Irresponsibility

39. • Protection of Employee who raise Ethical Issue
– Whistle-blower: individual who raise ethical concerns or issue to other
• Important for manager to assure employees who raise ethical concern or
issue that they will face no personal or career risk.
• 3 ways:
– Set up toll-free ethics hotlines
– Create a culture where bad news can be heard and acted on before it’s too late
– Offer legal protection and any manager who retaliates against an employee for
reporting violation faces a stiff penalty
Managing Ethical Lapses and Social Irresponsibility

40. • Social Entrepreneur: individual or organization who seeks out opportunities to
improve society by using practical, innovative and sustainable approaches
• Although many organization has committed to doing business ethically and
responsibility there is more they can do like:
– Collaborating with public groups or non-profit organization to address a social
(EX: PATH)
– provide expertise where need. (EX: Agsquared)
– Involve in nurturing individuals who passionately and unwaveringly believe they
an idea that could make the world a better place and simply need the
support to pursue it. (EX: Cellcard Lab)
Social Entrepreneurship

41. • Corporate Philanthropy is the act of a corporation or business promoting the
welfare of others, generally via charitable donations of funds or timee
Philanthropy
– Many companies donate money to various cause that employees and customer care
about
– Funded their own foundation to support various social issue
– Example: Google’s foundation, DotOrg has about 2$ million in assests that it will use
support five areas: developing system to help predict and prevent disease
empowering the poor with information about public services, creating jobs by
investing in small and midsized business in the developing world, accelerating the
commercialization of plug-in cars, and making renewable energy cheaper than coal
Business Promoting Positive Social Change

42. • Employees volunteering effort
– Dow Corning sent a small team of employees to rural India helping women “examine
stitchery and figure out prices for garment to be sold in local market
– Molson-Coors’ 11 members executive team spent a full day at their annual team-
building retreat building a house in Las Vegas with Habitat for Humanity
– PricewaterhosueCoopers employees renovate an abandoned school ini Newark.
– Every Wachovia employee is gent six paid days off from work each year to volunteer in
his or her community.
Business Promoting Positive Social Change

43. • The Wellness Foundation launched by Nerio Alessadri, founder of Italian
wellness company Technogym.
• Technogym is the official supplier of gym equipment for the Olympic Games
as well as for major luxury hotel chain in the world such as the Mandarin
Oriental and Four Seasons.
• Goals: promoting a novel style of living in society, grounded in a perfect
balance between physical, mental, and social component.
• Address the problem of sedentary lifestyle which is responsible for harmful
effects such as an increase in the number of chronic pathologies, a huge
deficit in government’s health budget and work absenteeism rough
promoting scientific research, education, and tangible projects and by
encouraging people of all generation to engage in regular physical activity.
Case Application: A Novel Wellness Culture

44. • How can Techogym balance being socially responsible and focused on profit?
• Would you describe Nerio Alessandri’s approach as social obligation, social
responsiveness or social responsibility? Explain
• It’s time to think like a manager. Corporate social responsibility is wonderful,
though often criticized as purely rhetorical and laden with subtle profit goals.
How can a manger emphasize genuineness of corporate social responsibilities
and activities in society?
• Do you think the Wellness Foundation can boost Technogym’s turnover? Why
or why not?
Case Application (con’t)