MANAGING SOCIAL

RESPONSIBILITY
AND ETHICS

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 LEARNING OBJECTIVES
1. Discuss what it means to be socially responsible and what
factors influence that decision.
2. Explain green management and how organizations can go
green.
3. Discuss the factors that lead to ethical and unethical
behavior.
• Develop your skill at creating trust in work groups.
4. Describe management’s role in encouraging ethical
behavior.
 Know how to make good decisions about ethical dilemmas.
5. Discuss current social responsibility and ethics issues.

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2016 Pearson
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Education, Ltd
Ltd. 6-3
 LEARNING OBJECTIVES
1. Discuss what it means to be socially responsible and what
factors influence that decision.
2. Explain green management and how organizations can go
green.
3. Discuss the factors that lead to ethical and unethical
behavior.
• Develop your skill at creating trust in work groups.
4. Describe management’s role in encouraging ethical
behavior.
 Know how to make good decisions about ethical dilemmas.
5. Discuss current social responsibility and ethics issues.

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 FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY
• Social Obligation – the obligation of a
business to meet its economic and legal
responsibilities and nothing more.

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 FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY
 Classical view – the view that management’s
only social responsibility is to maximize
profits.
Socioeconomic view – the view that
management’s social responsibility goes beyond
making profits to include protecting and improving
society’s welfare.

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FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY (CONT.)

• Social responsiveness – when a firm engages

in social actions in response to some popular
social need.

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 FROM OBLIGATION TO RESPONSIVENESS
TO RESPONSIBILITY (CONT.)
• Social responsibility
– a business’s intention,
beyond its legal and
economic obligations, to
do the right things and
act in ways that are good
for society.

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 SHOULD ORGANIZATIONS
BE SOCIALLY INVOLVED?
 Social Screening – applying social criteria
(screens) to investment decisions.
• SRI funds usually will not invest in
companies involved in liquor, gambling,
tobacco, nuclear power weapons, price
fixing, fraud, or in companies that have
poor product safety, employee relations,
and environmental track records.

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 ARGUMENTS FOR AND AGAINST SOCIAL
RESPONSIBILITY

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 GREEN MANAGEMENT AND
SUSTAINABILITY
• Green Management – managers consider
the impact of their organization on the
natural environment.

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HOW ORGANIZATIONS GO GREEN
• Legal (or Light Green) Approach
 Firms simply do what is legally required by obeying laws, rules,
and regulations willingly and without legal challenge.
• Market Approach
 Firms respond to the preferences of their customers for
environmentally friendly products.
• Stakeholder Approach
 Firms work to meet the environmental demands of multiple
stakeholders—employees, suppliers, and the community.
• Activist Approach (or Dark Green)
 Firms look for ways to respect and preserve environment and be
actively socially responsible.

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 EXHIBIT 5–4 Green Approaches

Source: Based on R.E. Freeman. J. Pierce, and R. Dodd. Shades of Green:

Business Ethics and the Environment (New York: Oxford University Press, 1995).

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EVALUATING THE GREENING OF
MANAGEMENT
• Organizations become “greener” by
 Using the Sustainability Reporting Guidelines to
document “green” actions.
 Adopting ISO 14000 standards for environmental
management.
 Being named as one of the 100 Most Sustainable
Corporations in the World.

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 EXERCISES –CHOOSE THE BEST
ANSWER
1) The ________ view is that management's social responsibility goes beyond
making profits to include protecting and improving society's welfare. 1) ______

A) sociopolitical
B) socioeconomic
C) sociocultural
D) sociotechnical

2) Social obligation is the obligation of a business to meet its ________. 2)

_______
A) economic and legal responsibilities
B) social and legal responsibilities
C) social and economic responsibilities
D) economic and social responsibilities

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 EXERCISES –CHOOSE THE BEST
ANSWER
3) If your organization was paying minimum wage when necessary and applying
the minimum legal standards to its employees work environment, it would be
said to have fulfilled its ________. 3) _______

A) social responsiveness B) social responsibility

C) social expectation D) social obligation

7) An Egyptian business that provides on-site childcare facilities for employees is

________. 7) _______

A) being socially responsive B) adopting social screening

C) practicing green management D) fulfilling its social obligations

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 EXERCISES –CHOOSE THE BEST
ANSWER
19) The process of applying social and environmental criteria to an
investment decision is known as ________. 19) ______

A) value-based selection B) violation of profit maximization

C) social screening D) green screening

20) Which of the following approaches of going green reflects the highest
degree of environmental sensitivity and is also a good illustration of the
social responsibility of the organization? 20) ______

A) stakeholder approach B) market approach

C) legal approach D) activist approach

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EXERCISES –CHOOSE THE BEST
ANSWER

24) Under what approach is the organization driven to look for

ways to respect and preserve the earth and its natural resources?
24) ______

A) stakeholder approach B) market approach

C) activist approach D) legal approach

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Copyright
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 IS IT ETHICAL TO:
 Shop online during company time?
 Using office equipment for personal use?
 Read personal emails while at work?

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 MANAGERIAL ETHICS

What is the difference between Ethics

and Morals?

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 MORALS VS. ETHICS

Ethics and morals relate to “right” and “wrong”

conduct. While they are sometimes used
interchangeably, they are different:
Ethics refer to rules provided by an external
source, e.g., codes of conduct in workplaces or
principles in religions.
Morals refer to an individual's own principles
regarding right and wrong.

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MANAGERIAL ETHICS

Ethics Defined
 Principles, values, and beliefs that define what isright
and wrong behavior.

The primary debate about ethics training programs is

whether ethics can be taught or it is basic beliefs

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FACTORS THAT AFFECT EMPLOYEE ETHICS
• Moral Development:
 A measure of independence from outside influences
 Levels of Individual Moral Development
– Preconventional level
– Conventional level
– Principled level
 Stage of moral development interacts with:
 Individual characteristics
 The organization’s structural design
 The organization’s culture
 The intensity of the ethical issue

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Exhibit 5–5 Factors That Determine Ethical and Unethical Behavior

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EXHIBIT 5–6 Stages of Moral Development

Source: Based on L. Kohlberg, “Moral Stages and Moralization: The Cognitive- Development Approach,” in T. Lickona (ed.). Moral Development and
Behavior: Theory, Research, and Social Issues (New York: Holt, Rinehart & Winston, 1976), pp. 34–35.

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SUMMARY LEVEL ONE:
PRECONVENTIONAL LEVEL

 Level 1:
 Stage 1: Punishment-Obedience Orientation
 Stage 2: Following up rules when it is in your
immediate self-interest

Persons in this stage obey rules to avoid punishment or behave towards self-
interest.

In this stage, personal needs determine what is right or wrong. Favors are
returned along the lines of “you scratch my back, I’ll scratch yours”.

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SUMMARY LEVEL TWO: CONVENTIONAL
LEVEL

Level 2:
Good Boy-Nice Girl Orientation,
Law and Order Orientation

-One’s behavior in this stage is determined by what pleases

and is approved by others.

-In all cases, authority must be respected and the social order
maintained.

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SUMMARY LEVEL THREE: PRINCIPLED
LEVEL
Level 3:
 Universal Ethical Principle Orientation

(Universal ethical principles driven), moral reasoning is based

on abstract reasoning using universal ethical principles.
Laws are valid only insofar as they are grounded in justice

In this stage, persons believe there are universal point of view

on which all societies should agree. What is “good” and
“right” are matters of individual conscience and involve
abstract concepts of justice, human dignity, and equality.

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STAGES OF MORAL DEVELOPMENT IN BUSINESS
– Pre-conventional level
– When applied to business, the pre-conventional or pre-moral
level explains how many employees act when they first join
an organization. They, too, are obedient, and will try to avoid
upsetting their new boss or other people in their new
environment.
– Conventional level
– the conventional levels of morality are often witnessed as
employees become more comfortable in their department
and division and with their co-workers and
management. While employees that start to fit in still attempt
to be productive and meet their own goals, they begin to think
about the good of the company and how they fit in to the
social framework, and how their actions can best help the
company.
– Principled level
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FACTORS THAT AFFECT EMPLOYEE ETHICS
–Principled level
– Principled level behavior is most likely to manifest
in employees who have been with one employer
for years. These employees help secure the rights
and responsibilities within the social framework of
the company. Often, company culture is part of
that, for example The unquestioned idea about
quality and customer protection.

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 FACTORS THAT AFFECT EMPLOYEE ETHICS
Individual Characteristics
 Values
 Basic convictions about what is right or wrong.

 Personality
 Ego strength - A personality measure of the strength of a
person’s convictions
 Locus of Control
– A personality attribute that measures the degree to which
people believe they control their own life.
– Internal locus: the belief that you control your destiny.
– External locus: the belief that what happens to you is due
to luck or chance.

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HOW MANAGERS CAN IMPROVE ETHICAL
BEHAVIOR IN AN ORGANIZATION
1. Hire individuals with high ethical standards.
2. Establish codes of ethics and decision rules.
3. Lead by example.
4. Set realistic job goals and include ethics in
performance appraisals.
5. Provide ethics training.
6. Conduct independent social audits.
7. Provide support for individuals facing ethical
dilemmas.

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CODE OF ETHICS
 A code of ethics is formal document may outline
and state the mission and values of the business or
organization, how professionals are supposed to
approach problems, the ethical principles based on
the organization's core values and the standards to
which the professional is held.
 Breaking the code of ethics can result in termination
or dismissal from the organization. A code of ethics
is important because it clearly lays out the rules for
behavior and provides a preemptive warning.

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ETHICS WHISTLE BLOWERS
 Employees who raise flags for ethical issues in
organizations. Usually whistleblowing is a topic of
ongoing ethical debate. Leading arguments in the
ideological camp that whistleblowing is ethical
maintain that whistleblowing is a form of civil
disobedience, and aims to protect the organization,
employees and society from business wrong doing.

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THE VALUE OF ETHICS TRAINING
• Can make a difference in ethical behaviors.
• Increases employee awareness of ethical issues
in business decisions.
• Clarifies and reinforces the organization’s
standards of conduct.
• Helps employees become more confident that
they will have the organization’s support when
taking unpopular but ethically correct stances.

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 EXERCISES –CHOOSE THE BEST
ANSWER

10) ______ represent basic convictions about what is right and wrong.

A) Dogmas
B) Values
C) Cultures
D) Beliefs

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 EXERCISES –CHOOSE THE BEST
ANSWER
4) In which of the stages of moral development do individuals stick to rules to
avoid physical punishment and follow rules only when doing so is in their
immediate interest? 4) _______

A) conventional stage B) principled stage

C) pre-conventional stage D) cross-conventional stage

5) The primary debate about ethics training programs is whether ________.

5) _______
A) the programs decrease awareness of ethical issues in business
B) ethics can be taught
C) the programs cause a regression in a person's moral development
D) ethics training is sufficient

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EXERCISES –CHOOSE THE BEST ANSWER
12) at the ________ level of moral development, individuals define moral
values apart from the authority of the groups to which they belong or society in
general.

A) conventional
B) established
C) principled
D) pre-conventional

14) ________ is the degree to which people believe they control their own fate.
14) ______
A) Social obligation
B) Locus of control
C) Ego strength
D) Social responsibility

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 EXERCISES –CHOOSE THE BEST
ANSWER
15) What can be said about a manager who believes that she can work hard and
will meet the productivity goals of her organization despite unfavorable conditions?
15) ______

A) She has a weak ego strength. B) She has an external locus of control.
C) She has a high ego strength. D) She has an internal locus of control.

18) at the ______ level of moral development, ethical decisions rely on maintaining
expected standards and living up to the expectations of others.

A) principled
B) conventional
C) conscientious
D) preconventional

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 EXERCISES –CHOOSE THE BEST
ANSWER
22) Norman is a stickler for following the rules because he is sure he will be caught
and punished if he doesn't. What is Norman's level of moral development?
22) ______

A) pre-conventional B) conventional
C) Mid-conventional D) principled

25) A ________ is a formal statement of an organization's primary values and the

ethical rules it expects its employees to follow. 25) ______

A) code of ethics
B) mission statement
C) values statement
D) vision statement

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 EXERCISES –CHOOSE THE BEST
ANSWER
26) Employees who raise ethical concerns or issues in an organization are known
as ________. 26) ______

A) employee-volunteers
B) philanthropist
C) Entrepreneurs
D) whistle-blowers

27) ________ measures the strength of a person's convictions. 27) ______

A) Locus of control
B) Moral development
C) Social desirability
D) Ego strength

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 TERMS TO
KNOW
• ethics
• values
• ego strength
• locus of control
• code of ethics
• whistle-blower

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