1. Management Fundamentals
Issues of Ethics and Social Responsibility
Unit 1

2. Individual Ethics in Organizations
Ethics are an individual’s personal beliefs regarding right and wrong behaviour.
Ethical behaviour conforms to generally accepted social norms
Unethical behaviour does not conform to generally accepted social norms

3. Social Responsibility
Much of business is based on factual and practical manners, but there are times when managers have to deal with more abstract concerns.
Rather than asking how a manager performs a job we have to ask ourselves the following questions:
Should this be done?
Is it good or bad?
Is it right or wrong?

4. The Formation of Individual Ethics

5. The Formation of Individual Ethics
Family Influences – Individuals start to form their ethics as children
Peer Influences – Your friends influence your ethics

6. The Formation of Individual Ethics
Personal Values and Morals - the items that people value and the morals by which they live
Life Experiences – experiences also shapes lives and, ultimately, ethics.
Situational Factors –factors that arise, often unexpectedly, may influence a person’s ethics.

7. Managerial Ethics How Employees Treat the Organization
The ethical standards of an individual may conflict with the organization’s policies
How the Organization Treats Other Economic Agents
Managers also must have ethical standards when dealing with others. It is important to supply truthful communications with others in order to behave ethically

8. Dilemma!
What do you do when your company is planning layoff and one of the targeted employees asks your advice about making an offer on a house?
Do you tell her and risk panicking others?
Do you stay mum, possibly jeopardizing her financial future

9. Solution? There is no ‘right’ solution
Many who are faced with this dilemma have responded in a variety of ways, depending on the individual circumstances

10. Ethics in an Organizational Context
Unethical behaviour by mgmt and other employees sometimes occurs because the firm appears to support such behaviour.
Employees who work for firms that support and encourage unethical acts, may find themselves in a conflict-of-interest situation.

11. Managing Ethical Behaviour
Top managers are responsible for setting the ethical standards for an organization
Committees can be set up to investigate unethical activities
A code of ethics is a formal written statement of the values and standards that guide the firm

12. Organizational Constituents
These include customers, employees, the local community, and creditors, just to name a few
Any firm that ignores one of its constituents is asking for trouble

13. Social Responsibility and Organizations
The Natural Environment
laws regulate what a company can go with respect to the environment. Previously, companies dumped sewage, and waste products anywhere they could.
General Social Welfare
Organizations also can promote the social welfare by contributing to charities.

14. Arguments Against Social Responsibility
Businesses should simply focus on making a profit
Involvement in social programs gives businesses too much power
There is potential for conflict of interest
Organizations lack the expertise to understand how to assess and make decisions about worthy social programs

15. The Government and Social Responsibility
Direct Regulation
the establishment of laws that dictate what businesses can and cannot do
Indirect Regulation
Finding ways to influences firms to act in a responsible way without laws.
One way is to change the tax structure to make them act in a way that the government thinks is socially acceptable

16. Does Business Have A Social Responsibility?
Yes
In the eyes of the law a corporation is an artificial person and therefore has certain responsibilities
It uses air, water and land, therefore it must use the resources in a careful manner
If business accepts it responsibilities then the gov’t will keep rules to a min.
Some firms, (GM, IBM) are bigger than many nations and with that comes responsibility No
A business is an economic institution & not a social one & its primary responsibility to the shareholder
It should focus on maximizing profits
Social obligations are discharged through taxes
Money spent on social goods takes away from profits & puts you at a disadvantage
Politicians have a mandate to decide on what social projects are desirable not managers

17. Managing Social Responsibility
Organization Leadership & Culture
The leadership practices of an organization can define the social responsibility adopted by an organization
Whistle Blowing
Occurs when an employee discloses illegal conduct by others within the organization

18. Ethics in the Workplace
Ethical Imperialism
Cultural Relativism
Certain absolute truths apply everywhere.
Universal values transcend cultures in determining what is right or wrong.
“Don’t do anything you wouldn’t do at home.”
No culture’s ethics are superior.
The values and practices of the local setting determine what is right or wrong
“When in Rome, do as Romans do.”

19. How to make Tough Ethical Calls
The Mirror Test
Ask yourself “What kind of person do I want to see when I shave… or put lipstick on in the morning.”
The Sleep Test
How well do you sleep at night?

20. How to make Tough Ethical Calls
Can you answer the following questions?
Is it legal?
If someone else did it to you would you think that it is fair?
Would you be content if it appeared on the front-page of the Ottawa Citizen?
Would you like your mother to see you do it?
If you can answer ‘yes’ to all 4 of these questions then whatever you are about to do is probably ethical.

21. Exercise
From your own position of values, would you “Live and let live” or reject this and intervene to prevent what you see as harm being done in each of the following cases.
Cheating on tests to get into a good school
Ethnic cleansing
Bribery to officials and business people to get things done
Queue jumping where the influential can get to the front of the hospital queue first
Selling arms to totalitarian regimes
Using small animals for the testing of medicinal products