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AMPL/NZDB630Principles of Leadership

Semester 1, 2013

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OVERVIEW: week twelve

1. Questions

2. Leadership: Ethics, Responsibility to Stakeholders, &

Impact on Society

Bendigo Bank and the Body Shop

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Ethics

Ginny Ferguson

An individuals personal beliefs about whatconstitutes right and wrong behavior.

Ethics are shaped by: Family

Peers Life experiences

Personal values

Laws, regulations and codes

Ethical judgments are made by people not abstractorganizations.

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Three domains of human action

Amount of

explicit controlHigh Low

Domain ofcertified law

(Legal standard)

Domain ofethics

(Socialstandard)

Domain offree choice

(Personalstandard)

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Ethical dilemma

An ethical dilemma is a situation that arises

when all alternative choices or behaviours

have been deemed undesirable because of

potentially negative ethical consequences,making it difficult to distinguish right from

wrong.

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Questions for analysing a

companys cultural impact on

ethics

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Developing an Ethical Culture

Ginny Ferguson

Code of ethics

Systems of review

Modeling by management/Leadership

Encouragement of whistle blowing

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Ethics and Business

Ginny Ferguson

Ethical investment v conventional investment. Ethical investment means choosing in a way

that reflects our values.

Ethical investment funds are growing rapidly.

Companies develop an ethical culture which

influences:

Employees

Customers

Suppliers

Stakeholders

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Responsibility to Stakeholders

Who are the stakeholders?

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Organisational stakeholders

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Social Responsibility (SR)

Ginny Ferguson

Definition: Social responsibility in business must protect

and enhance the welfare of society.

Basic SR is doing nothing to break the law

Dodgy; tobacco companies; alcohol companies

Reactive: donate to charities that ask fordonations

Proactive: companies that actively seek outopportunities to protect and enhance welfare ofsociety; e.g. Body Shop

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Social responsibility

Social responsibility is the obligation of organisation

management to make choices and take actions that

will contribute to the welfare and interests of society

as well as the organisation.

Social responsibility involves:

distinguishing right from wrong

being a good corporate citizen

Many social-responsibilities issues are ambiguouswith respect to right and wrong.

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Total corporate responsibility

Discretionary

responsibilityEthical responsibility

Legal responsibility

Economic responsibility

Contribute to the

community and

quality of life

Be ethical. Dowhat is right.

Avoid harm

Obey the

law

Be profitable

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Corporate responses to

social demands

Proactive

Take social initiatives.

Accommodation

Accept ethical

responsibility.

Defense

Do only what is legally

required.

Obstruction

Fight all the way.

High

Low

Degree of social

responsibility

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Managing company ethics

you need

Leadership

An ethicalstructure

A code of

ethics

Whistleblowers

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Managerial ethics in Australia

The most pressing ethical issues facingAustralian executives include:

employment conflicts of interest

environmental issues

sexual harassment

workplace safety

employee privacy

ethical conflicts in international business

the security of company records

affirmative action.

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Body Shop

Ginny Ferguson

Activities of the company are divorced from thecompany commercial activities.

Business is not separate from society but part

of it.

Business has a responsibility to put back into

the society from which it prospers.

Body shop business is the intersection of 3

circles: Economic success

Stakeholder fulfillment

Positive social and environmental change.

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Body Shop

Ginny Ferguson

The body shop works to create and support

sustainable local and international industries.

Dont leave your humanity on the hat standwhen you go to work

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Reference:

Ginny Ferguson

Ethics and Social Responsibility in Business (

video)Video Education Australasia

Daft R.L., Pirola-Merlo A., 2009, The

Leadership Experience, Cengage Learning.

Chapt 13 Managerial ethics and corporate responsibility