Ethical Behavior and Corporate Social Responsibility.pptx

Ethical Behavior &
Corporate Social
Responsibility
.
Rearranged By:
Mr. Muhammad Saqib Tahir

2
Outline
What is ethical behavior?
How do ethical dilemmas complicate the
workplace?
How can high ethical standards be
maintained?
What is corporate social responsibility?
How do organizations and governments
work together in society?
12/8/2022 Ethical Behavior

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Ethics
– Code of moral principles.
– Set standards of “good” and “bad” as opposed
to “right” and “wrong.”
Ethical behavior
– What is accepted as good and right in the
context of the governing moral code.
What is ethical behavior?

4
Law, values, and ethical behavior:
– Legal behavior is not necessarily ethical
behavior.
– Personal values help determine individual
ethical behavior.
• Terminal values
• Instrumental values

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 Utilitarian view of ethics — greatest good to the
greatest number of people.
 Individualism view of ethics — primary
commitment is to one’s long-term self-interests.
 Moral-rights view of ethics — respects and
protects the fundamental rights of all people.
 Justice view of ethics — fair and impartial
treatment of people according to legal rules and
standards.

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Four views of ethical behavior.

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Cultural issues in ethical behavior:
– Cultural relativism
• Ethical behavior is always determined by cultural
context.
– Cultural universalism
• Behavior that is unacceptable in one’s home
environment should not be acceptable anywhere
else.

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The extremes of cultural relativism and ethical imperialism in
international business ethics.
Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,”
Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.

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How international businesses can respect core or universal values:
Respect for human dignity
• Create culture that values employees, customers, and suppliers.
• Keep a safe workplace.
• Produce safe products and services.
Respect for basic rights
• Protect rights of employees, customers, and communities.
• Avoid anything that threatening safety, health, education, and living
standards.
Be good citizens
• Support social institutions, including economic and educational
systems.
• Work with local government and institutions to protect environment.

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 An ethical dilemma occurs when choices,
although having potential for personal and/or
organizational benefit, may be considered
unethical.
 Ethical dilemmas include:
– Discrimination
– Sexual harassment
– Conflicts of interest
– Customer confidence
– Organizational resources
How do ethical dilemmas complicate the
workplace?

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workplace?
 Ethical behavior can be rationalized by convincing
yourself that:
– Behavior is not really illegal.
– Behavior is really in everyone’s best interests.
– Nobody will ever find out.
– The organization will “protect” you.

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 Factors influencing ethical behavior include:
– The person
• Family influences, religious values, personal standards, and
personal needs.
– The organization
• Supervisory behavior, peer group norms and behavior, and
policy statements and written rules.
– The environment
• Government laws and regulations, societal norms and values,
and competitive climate in an industry.
workplace?

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Factors influencing ethical managerial behavior—the person,
organization, and environment.

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How can high ethical standards be
maintained?
Checklist for dealing with ethical dilemmas
Step 1. Recognize the ethical dilemma
Step 2: Get the facts
Step 3. Identify your options
Step 4. Test each option: Is it legal? Is it right? Is it beneficial?
Step 5. Decide which option to follow
Step 6. Double-check decision by asking the “spotlight” questions: “How
would I feel if my family found out about my decision?” “How would
I feel about this if my decision were printed in the local newspaper?”
Step 7. Take action.

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Ethics training:
– Structured programs that help participants
to understand ethical aspects of decision
making.
– Helps people incorporate high ethical
standards into daily life.
– Helps people deal with ethical issues
under pressure.
maintained?

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 Whistleblowers
– Expose misdeeds of others to:
• Preserve ethical standards
• Protect against wasteful, harmful, or illegal acts
 Laws protecting whistleblowers vary
maintained?

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maintained?
Barriers to whistleblowing include:
– Strict chain of command
– Strong work group identities
– Ambiguous priorities
Organizational methods for overcoming
whistleblowing barriers:
– Ethics staff units who serve as ethics advocates
– Moral quality circles

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maintained?
 Ethical role models:
– Top managers serve as ethical role models.
– All managers can influence the ethical behavior of
people who work for and with them.
– Excessive pressure can foster unethical behavior.
– Managers should be realistic in setting performance
goals for others.

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Codes of ethics:
– Formal statement of an organization’s values and
ethical principles regarding how to behave in situations
susceptible to the creation of ethical dilemmas.
 Areas often covered by codes of ethics:
– Bribes and kickbacks
– Political contributions
– Honesty of books or records
– Customer/supplier relationships
– Confidentiality of corporate information
maintained?

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What is corporate social responsibility?
Corporate social responsibility:
– Looks at ethical issues on the organization
level.
– Obligates organizations to act in ways that
serve both its own interests and the interests of
society at large.

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 Organizational stakeholders
– Those persons, groups, and other organizations directly affected by
the behavior of the organization and holding a stake in its
performance.
 Typical organizational stakeholders
– Employees
– Customers
– Suppliers
– Owners
– Competitors
– Regulators
– Interest groups

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Multiple stakeholders in the environment of
an organization.

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 Beliefs that guide socially responsible business
practices:
– People do their best with a balance of work and family
life.
– Organizations perform best in healthy communities.
– Organizations gain by respecting the natural
environment.
– Organizations must be managed and led for long-term
success.
– Organizations must protect their reputations.

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 Perspectives on corporate social responsibility:
– Classical view—
• Management’s only responsibility is to maximize profits.
– Socioeconomic view—
• Management must be concerned for the broader social welfare,
not just profits.

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 Arguments against
social responsibility:
– Reduced business
profits
– Higher business costs
– Dilution of business
purpose
– Too much social power
for business
– Lack of public
accountability
 Arguments in favor of
social responsibility:
– Adds long-run profits
– Improved public image
– Avoids more
government regulation
– Businesses have
resources and ethical
obligation

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Criteria for evaluating corporate social
performance:
– Is the organization’s …
• Economic responsibility met?
• Legal responsibility met?
• Ethical responsibility met?
• Discretionary responsibility met?

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Criteria for evaluating corporate social
performance.

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Strategies for pursuing social responsibility:
– Obstructionist — meets economic
responsibilities.
– Defensive — meets economic and legal
responsibilities.
– Accommodative — meets economic, legal, and
ethical responsibilities.
– Proactive — meets economic, legal, ethical,
and discretionary responsibilities.

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Four strategies of corporate social responsibility—from
obstructionist to proactive behavior.

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How do organizations and governments work
together in society?
How government influences organizations:
– Common areas of government regulation of
business affairs:
• Occupational safety and health
• Fair labor practices
• Consumer protection
• Environmental protection

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 How organizations influence governments:
– Personal contacts and networks
– Public relations campaigns
– Lobbying
– Political action committees
– Sometimes by illegal acts, such as bribery or illegal
financial contributions to political campaigns

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Centrality of ethics and social responsibility in leadership and
the managerial role.

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 Corporate governance:
– The oversight of the top management of an
organization by a board of directors.
 Corporate governance involves:
– Hiring, firing, and compensating the CEO.
– Assessing strategy.
– Verifying financial records.

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