management’s social and ethical responsibilities prepared by: aquino, bea katrina nicole s....
TRANSCRIPT
Management’s Social and Ethical Responsibilities
Prepared by: Aquino, Bea Katrina Nicole S.Original Copyright: Prof. Emilia. S. BioSource: Principles of Management by Krietner, 11th Edition
The Changing Workplace
• As the social, political, economic, and technological environments of management have changed, the practice of management itself has changed. This is especially true for managers in the private business sector.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
The Changing Workplace
• Today, it is far less acceptable for someone in business to stand before the public and declare that his or her sole job is to make as much profit as possible.
• The public is wary of the abuse of power and the betrayal of trust, and business managers—indeed, managers of all types of organizations—are expected to make a wide variety of economic and social contributions.“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
The Changing Workplace
• Demands on business that would have been considered patently unreasonable 30 or 40 years ago have become the norm today.
“The future is that there will be no letup in the demands of shareholders for financial performance. There will also be no letup in the demands of society that businesses behave responsibly. Management just has to better.”
-Stuart Graham, CEO of Skanska
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Social Responsibility: Definition and Perspectives
Corporate Social Responsibility
• It is the notion that corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law or union contract.
• In other terms, it is the idea that business has social obligations above and beyond making a profit.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Carroll’s Global Corporate Social Responsibility Pyramid
Philanthropic responsibility
Ethical responsibility
Legal responsibility
Economic responsibility
Be a good global citizen
Be ethical
Obey the law
Be profitable
Do what is desired by global stockholders
Do what is expected by global stockholders
Do what is required by global stockholders
Do what is required by global capitalism
Corporate Social Responsibility
• From the previous figure, global and transnational companies have four main areas of responsibility: economic, legal, ethical, and philanthropic.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Corporate Social Responsibility
• Working from bottom to top, this means that the global corporation should:Make a profit consistent with expectations for
international businessesObey the law of host countries as well as international lawBe ethical in its practices, taking host-country and global
standards into considerationBe a good corporate citizen, especially as defined by the
host country’s expectations
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
CSR Requires Voluntary Action
• An implicit feature of the above definition and perspective is that an action must be voluntary to qualify as socially responsible.
“All businesses should commit to the triple bottom line—a measure of corporate success that takes int oaccount not just profit and loss but also social and environmental impact.”
-Paul Dolan, “True to Our Roots: Fermenting a Business Revolution”
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.” -Stephen R. Covey
What is the Role of Business in Society?
• Much of the disagreement over what social responsibility involves can be traced to a fundamental debate about the exact purpose of a business.
• “Is business an economic entity responsible only for making a profit for its stockholders? Or is it a socioeconomic entity obligated to make both economic and social contributions to society?”
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
The Stockholder Audit—the identification of all parties that might be affected by the
organization.
• (for) Wal-Mart
Customers
CompetitorsDomestic and Foreign suppliers
and distributors
Customers
Stockholders
Public-at-large
Political Parties
Financial Community
(bankers, brokers, and
investors)
Neighbors of stores and facilities
(homeowners’ association)
All levels of domestic and
foreign government
Stockholders
Public-at-large
Political Parties
WAL-MART
Arguments For Social Responsibility
1. Business is unavoidably involved in social issues.
2. Business has the resources to tackle today’s complex societal problems.
3. A better society means a better environment for doing business.
4. Corporate social action will prevent government intervention.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.” -Stephen R. Covey
Arguments Against Social Responsibility
1. Profit maximization ensures the efficient use of society’s resources.
2. As an economic institution, business lacks the ability to pursue social goals.
3. Business already has enough power.4. Because managers are not elected, they are
not directly accountable to the people.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Toward Greater Social Responsibility
The Iron Law of Responsibility
• Is it inevitable that management will assume greater social responsibility? Some scholars believe so. It has been said that business Is bound by an iron law of responsibility, which states that “in the long run, those who do not use power in a way that society considers responsible will tend to lose it.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Who Benefits from Corporate Social Responsibility?
• Is it accurate to say of social responsibility what used be said about home medicine, “It has to taste bad to be good”? In other words, does social responsibility have to be a hardship for the organization? Those who answer yes believe that it should be motivated by altruism, an unselfish devotion to the interests of others.
• This implies that businesses that are not socially responsible are motivated strictly by self-interest.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.” -Stephen R. Covey
Who Benefits from Corporate Social Responsibility?
• On the basis of evidence alone, one would hard pressed to say that social responsibility pays. But research paints a brighter picture:
– A study of 243 companies for two years found a positive correlation between industry leadership in environmental protection/pollution control and profitability. The researchers concluded, “It pays to be green.”
– A second study found agood reputation for corporate social responsibility to be a competitive advantage in recruiting talented people.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Who Benefits from Corporate Social Responsibility?
• Enlightened self-interest, the realization that business ultimately helps itself by helping to solve societal problems, involves balancing short-run costs and long-run benefits. Advocates of enlightened self-interest contend that social responsbility expenditures are motivated by profit.
• Research into corporate philanthropy, the charitable donation of company resources ($12.7 billion in US in 2006), supports this contention.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.” -Stephen R. Covey
An Array of Benefits for the Organization
• In addition to the advertising effect, other possible long-run benefits include:– Tax-free incentives to employees.– Retention of talented employees by satisfying their altruistic
motives.– Help in recruiting talented and socially conscious personnel.– Swaying public opinion against government intervention.– Improved community living standards for employees.– Attracting socially conscious investors.– A nontaxable benefit for employees in which company funds
are donated to their favorite causes.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.” -Stephen R. Covey
The Ethical Dimension of Management
The Ethical Dimension of Management
• Ethics is the study of moral obligation involving the distinction between right and wrong.MoralImmoralAmoral Managers – managers who are neither moral nor immoral, but ethically lazy.
• Business ethics, sometimes referred to as management ethics or organizational ethics, narrows the frame of reference to productive organizations.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
Practical Lessons from Business Ethics Research
• Ethical Hot Spots. – In a survey of 1,324 US employees from all levels across
several industries, 48 percent admitted to having performed at least one illegal or unethical act from a list of 25 questionable practices.
– The list included everything from calling in sick when feeling well through cheating on expense accounts, forging signatures, and giving or accepting kickbacks, to ignoring violations of environmental laws.
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.”
-Stephen R. Covey
-Stephen R. Covey
• The top ten workplace hot spots responsible for triggering unethical conduct are:
1. Balancing work and family2. Poor internal communications3. Poor leadership4. Work hours, workload5. Lack of management support6. Need to meet sales, budget, or profit goals7. Little or no recognition of achievements8. Company politics9. Personal financial worries10. Insufficient resources
“I find a universal belief in fairness, kindness, dignity, charity, integrity, honesty, quality, and patience.” -Stephen R. Covey
Thank You!!!
EMG20/SectionB5; 1st Qtr. S.Y.2014-2015
Aquino, Bea Katrina Nicole S.
Materials And Original Copyright: Prof. Emilia S. Bio, P. I. E., IE-EMG Dept.