MANAGEMENT

RICHARD L. DAFT

Managing Ethics and

Social Responsibility
CHAPTER 5

chapter5

Learning Outcomes

Define ethics and explain how ethical behavior relates to behavior governed by
law and free choice.

Explain the utilitarian, individualism, moral-rights, and justice approaches

for evaluating ethical behavior.

Describe the factors that shape a managers ethical decision making.

Identify important stakeholders for an organization and discuss how managers

balance the interests of various stakeholders.

Explain the bottom-of the pyramid concept and some of the innovative
strategies companies are using.

Explain the philosophy of sustainability and why organizations are embracing it.

Define corporate social responsibility and how to evaluate it along economic,

legal, ethical, and discretionary criteria.

Discuss how ethical organizations are created through ethical leadership and
organizational structures and systems.

chapter5

Will You Be A
Courageous Manager?

Managers exercise the strength of their

moral beliefs and sense of justice
Moral lapses and financial scandals has
made ethical and courageous behavior an
important trait for todays managers

chapter5

Ethics

The code of moral principles and values that

govern the behaviors of a person or group
with respect to what is right or wrong.

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Managerial Ethics

Ethics can be difficult to define

Ethical issues are exceedingly complex
Managers face a variety of difficult
situations
Ethics fall between law and free choice

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Ethical Dilemmas: What

Would You Do?

An ethical dilemma arises in a situation

concerning right or wrong when values
are in conflict
Managers and employees are the moral
agents who must make ethical choices
Decisions about advertising, operations,
and Internet usage are all dilemmas YOU
might face
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chapter5

Criteria for Ethical

Decision Making

Utilitarian approach moral behaviors should produce the

greatest good for the greatest number
Individualism approach acts are moral when they
promote the individuals best long-term interests
Moral Rights Approach moral decisions are those that
best maintains the rights of those affected
Justice Approach decisions must be based on standards
of equity, fairness, and impartiality
Disruptive Approach different treatment of people should
not be based on arbitrary characteristics
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chapter5

Defining Justice

Disruptive Justice different treatment of

people should not be based on arbitrary
characteristics.
Compensatory Justice individuals
should be compensated for the cost of
their injuries by the party responsible.
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chapter5

Manager Ethical Choices

An important personal trait that mangers poses is their

stage of moral development

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chapter5

Globalization and Ethics

Globalization makes ethical issues more complex

Bribes are common practice in many countries

Transparency International ranks countries based on Bribe
Payers Index
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chapter5

What is Corporate
Responsibility?

Corporate Social
Responsibility (CSR) is the
obligation of organization
management to make
decisions and take actions
that will enhance the
welfare and interests of
society as well as the
organization
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chapter5 Organizational Stakeholders

Stakeholders are any group within or outside the organization
that has a stake in the organizations performance.

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chapter5

The Bottom of
the Pyramid (BOP)

Sometimes called base of the pyramid

Alleviate poverty and social ills while making profits
Selling to the worlds poorest people
4 Billion people make up the lowest level of the
worlds economic pyramid
These people have traditionally been underserved
Companies can make money while addressing
global poverty, environmental destruction, social
decay and political instability
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chapter5

The Ethic of Sustainability

Sustainable Development
Economic Development that generates wealth
Meets the needs of current generation
Saving the environment for future generations

Managers are weaving sustainability into

strategic decisions
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chapter5

Evaluating Corporate
Responsibility

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chapter5

Managing Company Ethics

and Social Responsibility

Code of Ethics formal statement of the

organizations values regarding ethics and
social issues
Ethical Structures systems, positions
and programs to implement ethical behavior
Whistle-Blowing employee disclosure of
illegal, immoral, or illegitimate practices
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chapter5

The Ethical Organization

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The Business Case for Ethics

chapter5
and Social Responsibility
Paying attention to ethics and social
responsibility is as important as profits
and costs
Ethical and social actions impact
financial performance
Companies are beginning to measure
nonfinancial factors that create value
Customers pay attention to a companys
ethics and social responsibility

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