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Organizational Justice, Ethics, and Corporate Social Responsibility

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Presentation on theme: "Organizational Justice, Ethics, and Corporate Social Responsibility"— Presentation transcript:

1 Organizational Justice, Ethics, and Corporate Social Responsibility
Chapter Two Organizational Justice, Ethics, and Corporate Social Responsibility

2 © Copyright Prentice-Hall 2004
Three Good Reasons Why You Should Care About Justice, Ethics, CSR Treating employees unfairly can adversely affect many different types of work attitudes and behaviors The public is growing increasingly intolerant of unethical corporate behavior, but managers can take steps to promote ethical behavior in organizations Consumers and investors tend to support socially responsible companies, enhancing their financial performance © Copyright Prentice-Hall 2004 2

3 Organizational Justice
The study of people’s perceptions of fairness in organizations Distributive Justice: The form of organizational justice that focuses on people’s beliefs that they have received fair amounts of valued work-related outcomes Procedural Justice: People’s perceptions of the fairness of the procedures used to determine the outcomes they receive Interpersonal Justice: People’s perceptions of the fairness of the manner in which they are treated by other people Informational Justice: People’s perceptions of the fairness of the information used as the basis for making a decision © Copyright Prentice-Hall 2004

4 Forms of Organizational Justice
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5 Procedural Justice and Outcomes
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6 Promoting Organizational Justice
Pay workers what they deserve Offer workers a voice Openly follow fair procedures Explain decisions thoroughly in a manner demonstrating dignity and respect Train workers to be fair © Copyright Prentice-Hall 2004

7 The Fair Process Effect
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8 Moral Values versus Ethics
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9 © Copyright Prentice-Hall 2004
Why Ethics Matters Good ethics is good business Improved financial performance Reduced operating costs Enhanced corporate reputation Increased ability to attract and retain employees Legal regulations False Claims Act (1986) Foreign Corrupt Practices Act (revised 1988) Federal Sentencing Guidelines for Organizations (1991) Sarbanes-Oxley Act (2002) Federal Prosecution of Business Organizations (2003) © Copyright Prentice-Hall 2004

10 Reasons for Unethical Behavior
Individual differences in cognitive moral development Situational determinants of unethical behavior Some managerial values undermine integrity Bottom line mentality: This line of thinking supports financial success as the only value to be considered Exploitative mentality: This view encourages “using” people in a way that promotes stereotypes and undermines empathy and compassion Madison Avenue mentality: This perspective suggests that anything is right if the public can be made to see it as right Organizations sometimes encourage behavior that violates ethical standards Workers emulate the unethical behavior of their superiors © Copyright Prentice-Hall 2004

11 Kohlberg’s Theory of Moral Development
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12 Ethical Norms and Counternorms
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13 Corporate Ethics Programs
Formal, systematic mechanisms designed to promote ethics by creating organizational cultures that both make people sensitive to potentially unethical behaviors and discourage them from engaging in them Components A code of ethics Ethics training Ethics audits An ethics committee An ethics officer A mechanism for communicating ethical standards © Copyright Prentice-Hall 2004 12

14 Ethics Program Effectiveness
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15 Corporate Social Responsibility
Business decision making linked to ethical values, compliance with legal requirements, and respect for individuals, the community at large, and the environment © Copyright Prentice-Hall 2004

16 Most Socially Responsible Firms
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17 © Copyright Prentice-Hall 2004
The Virtuous Circle © Copyright Prentice-Hall 2004

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