Chapter 14: ethics, social responsibility, and sustainability Business Leadership: Management Fundamentals John R. Schermerhorn, Jr., Barry Wright, and Lorie Guest © John Wiley & Sons Canada, Ltd.

Video: Ben & Jerry’s Ben & Jerry’s: The Greenest Ice Cream Around (external link) Link: http://www.youtube.com/watch?v=yQykGinvNrw

What is Ethical Behaviour? Ethics: Code of moral principles Set standards of “good” or “bad” or “right” or “wrong” in one’s conduct Ethical behaviour: What is accepted as good and right in the context of the governing moral code © John Wiley & Sons Canada Ltd.

What is Ethical Behaviour? (cont’d) Law, values, and ethical behaviour: Legal behaviour is not necessarily ethical behaviour BRAINSTORM: CAN YOU THIN OF AN EXAMPLE? Personal values help determine individual ethical behaviour Values span broad beliefs: beliefs and attitudes that help determine your behaviour Terminal values: preferences about desired ends Instrumental values: preferences regarding the means to desired ends © John Wiley & Sons Canada Ltd.

Alternate Views of Ethics Utilitarian view of ethics: Greatest good to the greatest number of people. Individualism view of ethics: Primary commitment is to one’s long-term self-interests. Moral-rights view of ethics: Respects and protects the fundamental rights of all people. Justice view of ethics: Fair and impartial treatment of people according to legal rules and standards Procedural justice: policies and rules fairly applied Distributive justice: equal treatment for all people Interactional justice: people treated with dignity and respect

Figure 14.1 Four views of ethical behaviour

Ethics in the Workplace http://www.youtube.com/watch?v=vstg5c3c3g8

Ethics in the Workplace An ethical dilemma occurs when certain choices may be considered unethical, despite possible potential for personal and/or organizational benefit Ethical dilemmas include: Discrimination Sexual harassment Conflicts of interest Customer confidence Organizational resources

You be the judge ethical or not?! http://www.youtube.com/watch?v=bd2jFAyEnrY What do you think of the outcome?

Ethical Decision Making Checklist for dealing with ethical dilemmas: Recognize the ethical dilemma Get the facts Identify your options Test each option: Is it legal? Is it right? Is it beneficial? Decide which option to follow Double-check decision by asking “spotlight” questions: “How would I feel if my family found out about my decision?” “How would I feel about this if my decision were in the local news?” Take action

how do we convince ourselves that unethical behaviour is okaY? Unethical behaviour can be rationalized by convincing yourself that: The behaviour is not actually illegal The behaviour is truly in everyone’s best interests Nobody will ever find out The organization will “protect” you HAVE YOU EVER FOUND YOURSELF FALLING INTO THIS TRAP?

Maintaining High Ethical Standards Whistleblowers: Expose the misdeeds of others in order to: Preserve ethical standards Protect against wasteful, harmful, or illegal acts Laws protecting whistleblowers may vary THINK – PAIR – SHARE: WOULD YOU EVER EXPOSE SOMEONE ELSE? WHY/WHY NOT? or WHAT WOULD SOMEONE HAVE TO DO FOR YOU TO STEP IN AND SAY SOMETHING?

Social Entrepreneurship A unique form of entrepreneurship that seeks novel ways to solve pressing social problems at home and abroad Examples include: Housing and job training for homeless Bringing technology to poor families Improving literacy among disadvantaged youth Offering small loans to start minority-owned businesses

Social Responsibility Corporate social responsibility: Obligates organizations to act in ways that serve both its own interests and the interests of society at large In 1988, Jeffery Hollender founded cleaning, paper, and personal care products company Seventh Generation. The company focuses on producing products that have a reduced environmental impact, avoiding the harsh chemicals that are part of many of today's leading cleaning and personal care products.

Stakeholder Issues and Analysis Organizational stakeholders: Those persons, groups, and other organizations directly affected by the behaviour of the organization and holding a stake in its performance

Figure 14.7 Sample Stakeholder Model

Perspectives on 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 Examples: Environment People in Community Employee Benefit http://www.youtube.com/watch?v=SXOJEH0se9A

Evaluating Corporate Social Performance Social Responsibility Audit: assesses organization’s accomplishments in areas of CSR Asks: is the organization’s… Economic responsibility met? Is it profitable? Legal responsibility met? Does it obey the law? Ethical responsibility met? Is it doing the right thing? Discretionary responsibility met? Does it contribute to the broader community?

Fig. 14.8 Criteria for evaluating corporate social performance

Evaluating Corporate Social Performance (cont’d) Strategies for pursuing social responsibility: Obstructionist: meets only economic responsibilities Defensive: meets economic and legal responsibilities Accommodative: meets economic, legal, and ethical responsibilities Proactive: meets economic, legal, ethical, and discretionary responsibilities

Figure 14.9 Four strategies of corporate social responsibility—from obstructionist to proactive behaviour

Ethics and the environment How “green” is a business? How can a business be “green”? Why is it so important in today’s society for businesses to go “green”? http://www.youtube.com/watch?v=TTNzuXZyl28

Group Work What does Eco Friendly mean? What do you do to be Eco-friendly at home and at school? Any ideas as to what you can do to improve yourself in terms of being eco-friendly? Think of various ways in which companies can be more environmentally friendly and be prepared to present to t he class!

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