Management Fundamentals - Chapter 31 Study Question 3: How can high ethical standards be maintained?  Ethical role models: – Top managers serve as ethical role models. – All managers can influence the ethical behavior of people who work for and with them. – Excessive pressure can foster unethical behavior. – Managers should be realistic in setting performance goals for others.

Management Fundamentals - Chapter 32  Codes of ethics: – Formal statement of an organization’s values and ethical principles regarding how to behave in situations susceptible to the creation of ethical dilemmas.  Areas often covered by codes of ethics: – Bribes and kickbacks – Political contributions – Honesty of books or records – Customer/supplier relationships – Confidentiality of corporate information Study Question 3: How can high ethical standards be maintained?

Management Fundamentals - Chapter 33 Study Question 4: What is corporate social responsibility?  Corporate social responsibility: – Looks at ethical issues on the organization level. – Obligates organizations to act in ways that serve both its own interests and the interests of society at large.

Management Fundamentals - Chapter 34 Study Question 4: What is corporate social responsibility?  Organizational stakeholders – Those persons, groups, and other organizations directly affected by the behavior of the organization and holding a stake in its performance.  Typical organizational stakeholders – Employees – Customers – Suppliers – Owners – Competitors – Regulators – Interest groups

Management Fundamentals - Chapter 35 Figure 3.4 Multiple stakeholders in the environment of an organization.

Management Fundamentals - Chapter 36 Study Question 4: What is corporate social responsibility?  Beliefs that guide socially responsible business practices: – People do their best with a balance of work and family life. – Organizations perform best in healthy communities. – Organizations gain by respecting the natural environment. – Organizations must be managed and led for long-term success. – Organizations must protect their reputations.

Management Fundamentals - Chapter 37 Study Question 4: What is corporate social responsibility?  Perspectives on corporate social responsibility: – Classical view— Management’s only responsibility is to maximize profits. – Socioeconomic view— Management must be concerned for the broader social welfare, not just profits.

Management Fundamentals - Chapter 38 Study Question 4: What is corporate social responsibility?  Arguments against social responsibility: – Reduced business profits – Higher business costs – Dilution of business purpose – Too much social power for business – Lack of public accountability  Arguments in favor of social responsibility: – Adds long-run profits – Improved public image – Avoids more government regulation – Businesses have resources and ethical obligation

Management Fundamentals - Chapter 39 Study Question 4: What is corporate social responsibility?  Criteria for evaluating corporate social performance: – Is the organization’s … Economic responsibility met? Legal responsibility met? Ethical responsibility met? Discretionary responsibility met?

Management Fundamentals - Chapter 310 Figure 3.5 Criteria for evaluating corporate social performance.

Management Fundamentals - Chapter 311 Study Question 4: What is corporate social responsibility?  Strategies for pursuing social responsibility: – Obstructionist — meets economic responsibilities. – Defensive — meets economic and legal responsibilities. – Accommodative — meets economic, legal, and ethical responsibilities. – Proactive — meets economic, legal, ethical, and discretionary responsibilities.

Management Fundamentals - Chapter 312 Figure 3.6 Four strategies of corporate social responsibility— from obstructionist to proactive behavior.

Management Fundamentals - Chapter 313 Study Question 5: How do organizations and governments work together in society?  How government influences organizations: – Common areas of government regulation of business affairs: Occupational safety and health Fair labor practices Consumer protection Environmental protection

Management Fundamentals - Chapter 314 Study Question 5: How do organizations and governments work together in society?  How organizations influence governments: – Personal contacts and networks – Public relations campaigns – Lobbying – Political action committees – Sometimes by illegal acts, such as bribery or illegal financial contributions to political campaigns

Management Fundamentals - Chapter 315 Study Question 5: How do organizations and governments work together in society?  Corporate governance: – The oversight of the top management of an organization by a board of directors.  Corporate governance involves: – Hiring, firing, and compensating the CEO. – Assessing strategy. – Verifying financial records.