Organizational Justice, Ethics, and Corporate Social Responsibility Chapter 2 Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall Learning Objectives Identify four different forms of organizational justice and the organizational impact of each. Describe strategies that can be used to promote organizational justice. Explain what is meant by ethical behavior and why organizations should be concerned about ethics. Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall Learning Objectives Explain ways of behaving ethically when conducting business internationally. Describe the individual and situational factors responsible for unethical behavior in organizations and methods for minimizing such behavior. Explain what is meant by corporate social responsibility, the forms it take, and the nature of the relationship between responsible behavior and financial profitability. Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Organizational Justice Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Procedural Justice Criteria Criterion Description Example Voice in the making of decisions Perceptions of procedural justice are enhanced to the extent that people are given a say in the decisions affecting them. Workers are given an opportunity to explain their feelings about their own work to a supervisor who is evaluating their performance. Consistency in applying rules To be fair, the rules used as the basis for making a decision about one person must be applied equally to making a decision about someone else. A professor must use the same exact standards in evaluating the term papers of each student in the class. Accuracy in use of information Fair decisions must be based on information that is accurate. A manager calculating the amount of overtime pay a worker is to receive must add the numbers accurately. Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Procedural Justice Criteria Criterion Description Example Opportunity to be heard Fair procedures are ones in which people have a readily available opportunity to correct any mistakes that have been made. Litigants have an opportunity to have a judge’s decision reconsidered in the event that an error was made in legal proceedings. (See also the instant replay rule used by the NFL as described in the Preview Case.) Safeguards against bias A person making a decision must not have any opportunity to bias the results. Lottery drawings are held in such a manner that each number is selected in a completely random, unbiased fashion. Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Distributive and Procedural Justice Interaction Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Organizational Justice Promotion Strategies Pay workers what they deserve Follow open and fair procedures Offer workers a voice Meet regularly and invite input Conduct employee surveys Keep an “open door policy” Use suggestion system Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall Fair Process Effect Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Organizational Justice Promotion Strategies Explain decisions thoroughly in a manner demonstrating dignity and respect Train workers to be fair Oorganizational citizenship behaviors Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ethical Behavior in Organizations Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Bad Ethics Is Bad Business Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ethics Enforcement Policies Federal sentencing guidelines Sarbanes-Oxley act Limited acceptance of entertainment and gifts by employees Increased accurate company performance documentation standards Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Ethics in International Arena Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Global Ethics Guiding Principles Show respect for core human values Demonstrate sensitivity to local traditions Recognize that context matters Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Unethical Behavior Situational Determinants Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Unethical Behavior Situational Determinants Managerial values sometimes discourage ethical behavior Bottom line mentality Exploitative mentality Madison Avenue mentality Subordinates emulate managers’ unethical behavior Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Corporate Ethics Programs Components Code of ethics Ethics training Official bodies formally responsible for ethics Mechanisms for communicating ethical standards Ethics audits Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Corporate Ethics Programs Effectiveness Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Corporate Social Responsibility Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Socially Responsible Behavior Forms Make charitable contributions Preserve the environment Invest socially responsibly Promote employee welfare Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Profitability and Social Responsibility Copyright© 2011 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall