Topic 3: Social Responsibility and Ethics

MGMT 1001, s1 2015

School of Management

Reflective Questions to guide this lecture

Part 1:Organisations and Ethics (Corporate Social Responsibility)
1.
2.
3.
4.

How does this topic link with other topics in this course?
What are ethical imperatives of the early 21st century?
Why are the latest trends in the Global Business Environment?
What are management/ corporations responsibility today? (Classical views
vs socioeconomic views)
5. What is CSR and Corporate Sustainability? Is there a conflict between
economic performance and being socially responsible?
Part 2: Ethics and Ethical Leadership
1.
2.
3.
4.

What is Ethics?
How does ethical frameworks help managers make decisions?
What have you learn today to help you become an ethical leader in your
organisation in the future?
How does todays lecture reinforce your reading (and learning) of textbook
Chapter 4?

Why the ethical imperative of early 21st century?

Global Business Environment

Comparison of Worlds Largest Corporations Revenues to Countries GDP

Changing public perceptions of business

practice

Management
Responsibility
Objective/ Goal

Focus

Classical Views

Socioeconomic Views

Is this quote still relevant today?

The Business of Business is

Business
(Milton Friedman, 1970)

Jennings 2006 p.13-16

Definition: Corporate Social Responsibility

(vs Corporate Social Responsiveness)
When an organisation meets or exceeds legal and
normatively mandated standards by considering the
greater good to the widest possible community ...
with regard to the environmental, social, economic,
legal, ethical and philanthropic impact of the
organizations way of doing business and the
activities it undertakes
(adapted from Clegg et al 2012)

Definitions: Corporate Sustainability

... a business approach that creates long-term value for
the organisation by incorporating economic,
environmental and social dimensions into its core
business decisions
(adapted from Benn and Bolton 2011)

... Ensuring that resources are renewed

(adapted from Clegg et al 2012)

Why sustainability?
The central question to be answered in this century
is whether the current model of the corporation
needs to be modified to contribute to the
continuing health of the planet,
planet, the survival of
humans and other species, the development of a
just and humane society, and the creation of work
that brings dignity and selfself-fulfilment to those
undertaking it.
Dunphy D, Griffiths A & Benn S, 2003, Organizational Change for Corporate Sustainability,
Routledge p.3

Frames or metaphors of thinking

Defining Ethics

Ethics: many facets, levels of focus

Individual

Organisational

Macro/systemic

It is helpful to identify what Ethics is NOT:

!

Ethics is NOT the same as feelings

Ethics is NOT religion

Ethics is NOT following the Law (although in some

countries, a good system of law does incorporate many
ethical standards)

Ethics is NOT following culturally accepted norms

Ethics is NOT Science (although it can provide

important data to help us make better ethical choices)

Why be ethical?
Global business environment: business- society
relationship
Public perceptions of business practices
Regulation reflecting societys concerns
Demonstrated ethical leadership, trust
Good ethics is good business
Costs of criminal/civil liability

If our ethics are not based on feelings, religion,

law, accepted social practice, or Science, what
are they based on?
How to assess whether something is right or
wrong, good or bad?

Some commonly used frameworks

Individualism
All frameworks have
differing degrees of
usefulness, & limitations

Duties / Moral rights

Utilitarianism

Justice

ConsequenceConsequence-based frameworks

Utilitarianism

Universal principles or duties

Employee Rights & Duties (Crane & Matten,

Matten, 2010)
RIGHTS (of employees)
Right to freedom from
discrimination
Right to due process
Right to healthy and safe
working conditions
Right to fair wages
Right to work
Right to privacy
Right to collective bargaining &
association
Right to participation
Right to freedom of conscience
and speech

DUTIES (of employee to

employers)
Duty to comply with labour
contract (performance, loyalty)
Duty to comply with the law
Duty to respect the employers
property

Justice

Ethical Thinking implies an ability to:

Think critically
Recognise issues or practices that have moral content
See beyond our own personal experience, assumptions (ST)
Address issues from all sides (ST)
Consider the consequences of decisions, whether intended or
unintended (ST)
Evaluate the best arguments from each perspective (EF)
Arrive at a conclusion based on a systematic analysis of these arguments
(EF)
Defend viewpoints; analyse new information or perspectives (EF)
ST denotes System Thinking decisions made by organisations affect other
stakeholders within the system.
EF denotes ethical frameworks

Factors influencing ethical thinking (compare this to

figure 4.3, page 118 in the textbook: 4 factors individual
characteristics, structural variables, org culture, issue intensity)
Manager as a person

Employing organisation

Family influences
Religioius values
Personal standards and
needs

Policies, codes of conduct

Behaviour of supervisors,
peers
Organisational culture

Ethical managerial behaviour

External environment
Laws and regulations
Norms and values of society
Ethical climate of industry

Ethical thinking is ultimately no more than considering

oneself and ones company as citizens of the business
community and of the larger society, with some concern for
the well-being of others and the mirror image of this
respect for oneself and ones character. Nothing in ethics
excludes financially sound thinking, and there is nothing
about ethics that requires sacrificing the bottom line. In
both the long and the short run, ethical thinking is essential
to strategic planning. There is nothing unethical about
making money, but money is not the currency of ethical
thinking in business
Solomon 2004 p.44

Take Home Lessons

To successfully embed corporate responsibility and
sustainability within organisations, there needs to be a focus
on developing the mindset and skills of individual
managers, rather than simply introducing new policies and
procedures.
Many studies showed a positive relationship between social
involvement and economic performance. While there are no
conclusive evidence (contingency theory applies), managers
can afford to be (and should be) socially responsible.
Once again, managers play an important role in an
organisation! And in the near future, what decision would you
be making when confronted with an ethical dilemma in
business?