1. CHAPTER 3: ETHICS AND CORPORATE SOCIAL RESPONSIBILITY

2. Part 1: Ethics
Management Fundamentals - Chapter 3

3. Questions to be answered…
What is ethical behavior?
How do ethical dilemmas complicate the workplace?
How can high ethical standards be maintained?
Management Fundamentals - Chapter 3

4. What is ethical behavior?
Ethics
Code of moral principles.
Set standards of “good” and “bad” as opposed to “right” and “wrong.”
Ethical behavior
What is accepted as good and right in the context of the governing moral code.
Management Fundamentals - Chapter 3

5. What is ethical behavior?
Law, values, and ethical behavior:
Legal behavior is not necessarily ethical behavior.
Personal values help determine individual ethical behavior.
Terminal values – preferences regarding desired ends, such as the goals one strives to achieve in life. i.e. self-respect, family security, self discipline
Instrumental values – preferences regarding the means to desired ends i.e. honesty, courage, imagination
Management Fundamentals - Chapter 3

6. Four views of ethical behavior.
Utilitarian view of ethics — greatest good to the greatest number of people i.e. cutting 30% of the workforce in order to save costs and save the rest of the jobs at the plant.
Individualism view of ethics — primary commitment is to one’s long-term self-interests i.e. if you lie and cheat in the short run, then everyone will do it and no ones long term interests will be served.

7. Four views of ethical behavior.
Moral-rights view of ethics — respects and protects the fundamental rights of all people. i.e. ensuring employees are always protected in terms of rights to privacy, free speech, health and safety etc.
Justice view of ethics — fair and impartial treatment of people according to legal rules and standards i.e. is the ethical aspect of any decision “equitable” for everyone affected?
Management Fundamentals - Chapter 3

8. Study Question 1: What is ethical behavior?
Cultural issues in ethical behavior:
Cultural relativism
Ethical behavior is always determined by cultural context.
Cultural universalism
Behavior that is unacceptable in one’s home environment should not be acceptable anywhere else.
Management Fundamentals - Chapter 3

9. What is ethical behavior?
How international businesses can respect core or universal values:
Respect for human dignity
Create culture that values employees, customers, and suppliers.
Keep a safe workplace.
Produce safe products and services.
Respect for basic rights
Protect rights of employees, customers, and communities.
Avoid anything that threatening safety, health, education, and living standards.
Be good citizens
Support social institutions, including economic and educational systems.
Work with local government and institutions to protect environment.
Management Fundamentals - Chapter 3

10. How do ethical dilemmas complicate the workplace?
Ethical Dilemma - occurs when choices, although having potential for personal and/or organizational benefit, may be considered unethical.
Ethical dilemmas include:
Discrimination
Sexual harassment
Conflicts of interest
Customer confidence
Organizational resources
Management Fundamentals - Chapter 3

11. How do ethical dilemmas complicate the workplace?
Ethical behavior can be rationalized by convincing yourself that:
Behavior is not really illegal.
Behavior is really in everyone’s best interests.
Nobody will ever find out.
The organization will “protect” you.
Management Fundamentals - Chapter 3

12. How do ethical dilemmas complicate the workplace?
Factors influencing ethical behavior include:
The person
Family influences, religious values, personal standards, and personal needs.
The organization
Supervisory behavior, peer group norms and behavior, and policy statements and written rules.
The environment
Government laws and regulations, societal norms and values, and competitive climate in an industry.
Management Fundamentals - Chapter 3

13. Factors influencing ethical managerial behavior—the person, organization, and environment.
Management Fundamentals - Chapter 3

14. Study Question 3: How can high ethical standards be maintained?
Checklist for dealing with ethical dilemmas
Step 1. Recognize the ethical dilemma
Step 2: Get the facts
Step 3. Identify your options
Step 4. Test each option: Is it legal? Is it right? Is it beneficial?
Step 5. Decide which option to follow
Step 6. Double-check decision by asking the “spotlight” questions: “How would I feel if my family found out about my decision?” “How would I feel about this if my decision were printed in the local newspaper?”
Step 7. Take action.
Management Fundamentals - Chapter 3

15. Study Question 3: How can high ethical standards be maintained?
Ethics training:
Structured programs that help participants to understand ethical aspects of decision making.
Helps people incorporate high ethical standards into daily life.
Helps people deal with ethical issues under pressure.
Enter…..THE OFFICE…
Management Fundamentals - Chapter 3

16. Study Question 3: How can high ethical standards be maintained?
Whistleblowers
Expose misdeeds of others to:
Preserve ethical standards
Protect against wasteful, harmful, or illegal acts
Laws protecting whistleblowers vary
Management Fundamentals - Chapter 3

17. Study Question 3: How can high ethical standards be maintained?
Barriers to whistleblowing include:
Strict chain of command
Strong work group identities
Ambiguous priorities
Organizational methods for overcoming whistleblowing barriers:
Ethics staff units who serve as ethics advocates
Moral quality circles
Management Fundamentals - Chapter 3

18. 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 3