2. Governance, risk and ethics
Section A: Governance and responsibility
Section B: Internal control and review
Section C: Identifying and assessing risk
Section D: Controlling risk
Section E: Professional values and ethics

3. Section E: Professional values and ethics
Designed to give you knowledge and application of:
E1. Ethical theories
E2. Different approaches to ethics and social responsibility
E3. Professions and the public interest
E4. Professional practice and codes of ethics
E5. Conflicts of interest and the consequences of unethical behaviour
E6. Ethical characteristics of professionalism
E7. Social and environmental issues in the conduct of business and of ethical behaviour 1

4. Study Guide E2: Different approaches to ethics and social responsibility
Learning Outcomes
Describe and evaluate Gray, Owen & Adams (1996) seven positions on social responsibility.[2]
Describe and evaluate other constructions of corporate and personal ethical stance. [2]
Describe and analyse the variables determining the cultural context of ethics and corporate social responsibility (CSR). [2]

5. 7 positions – relationship between organisation & society
Describe and evaluate Gray, Owen & Adams (1996) seven positions on social responsibility.
7 positions – relationship between organisation & society
Pristine capitalists
liberal economic democracy
Expedients
accept wider social responsibilities for long-term economic welfare & stability
Proponents of the social contract
society’s wishes have to be taken into account as organisation’s existence depends on society’s will
Social ecologists
organisations are responsible for providing solutions to problems created by them
Socialists
the present domination of social, economic and political life by capital is inimical
Radical feminists
economic, social, political and business systems are essentially ‘masculine’ constructs
Deep ecologists
human beings don’t have any greater rights to existence than any other forms of life
Refer to pages 444 to 446

6. Corporate ethical stance (CES)
Long-term
shareholder interests
Short-term shareholder interests
Maximise short-term shareholders’ profit
Meet minimum obligation required by law
Multiple stakeholders’ obligations
Shaper of society
Maximise long-term shareholders’ interests
Ensure long-term growth of company. This may involve sacrificing short-term gain
Fulfil the interests of various stakeholder groups
Company goes beyond minimum obligations set
Try to improve society
Profit-making is not primary objective
Continued…

7. Personal ethical stance
Continued…
Small investors will not be happy if they want to keep investments for a long time
Large investors will not be happy if they want good returns & long-term growth
Small investors interested in investing long-term will be happy
Large investors will be happy with the ethical stance
Situation may cause conflict of interest between various stakeholders
Collectively individuals can take actions to change society
Personal ethical stance
Long-term
shareholder interests
Short-term shareholder interests
Multiple stakeholders’ obligations
Shaper of society
Continued…

8. Ethical stance – personal & corporate
Continued…
Ethical stance – personal & corporate
Ethical stance
CES:
Shareholders are the primary focus
4 levels are the ethical stance which rank moral objectives of business
Refers to:
The way organisation perceives its responsibility towards stakeholders
Determines:
The extent to which organisation exceeds its minimal obligation towards stakeholders
Macro level
Ethical issues of company at national & international level
Micro level
Ethical issues within company
Individual level
Ethical issues of individuals within company

9. CSR depends on culture which
Describe and analyse the variables determining the cultural context of ethics and corporate social responsibility (CSR)
CSR depends on culture which
guides organisation’s activities
determines the success or failure of organisation’s objectives
determines who fits in
sets the mood of the organisation
Culture of entity
Refer to Test Yourself 3 on page 456

10. Organisational structure
Cultural web
Stories
Control system
The paradigm
Routines & rituals
Organisational structure
Power structures
Symbols

11. RECAP
Describe and evaluate Gray, Owen & Adams (1996) seven positions on social responsibility.[2]
Describe and evaluate other constructions of corporate and personal ethical stance. [2]
Describe and analyse the variables determining the cultural context of ethics and corporate social responsibility (CSR). [2]