Assignment on
“Managing Social Responsibility and Ethics”
Course Title: Principles of Management
Course Code: MGT-511
Submitted to Submitted by
Anwar Ahmad Arif (AAA) Shadman Saquib Afindi
Assistant Professor ID# 2031015001
Department of Business
Administration
Leading University, Sylhet
E-mail: [email protected]
Date of submission: 28.01.2021
What is Social Responsibility?
Social responsibility refers to the business ethics concept of being accountable for impacting
society, culture and environment. Ethics takes a major role in the modern era of business. Most
companies have special training, seminars, and even a separate division to establish corporate
standards and policies of ethics and morality.
Social responsibility is an ethical theory in which individuals are accountable for fulfilling their civic
duty, and the actions of an individual must benefit the whole of society. In this way, there must be
a balance between economic growth and the welfare of society and the environment. If this
equilibrium is maintained, then social responsibility is accomplished.
What it means to be Socially Responsible and Ethical?
The theory of social responsibility is built on a system of ethics, in which decisions and actions
must be ethically validated before proceeding. If the action or decision causes harm to society or
the environment, then it would be considered to be socially irresponsible.
Moral values that are inherent in society create a distinction between right and wrong. In this
way, social fairness is believed (by most) to be in the “right”, but more frequently than not this
“fairness” is absent. Every individual has a responsibility to act in manner that is beneficial to
society and not solely to the individual.
When Do Social Responsibility and Ethics Apply?
The theory of social responsibility and ethics applies in both individual and group capacities. It
should be incorporated into daily actions/decisions, particularly ones that will have an effect on
other persons and/or the environment. In the larger, group capacity, a code of social
responsibility and ethics is applied within said group as well as during interactions with another
group or an individual.
Businesses have developed a system of social responsibility that is tailored to their company
environment. If social responsibility is maintained within a company, then the employees and the
environment are held equal to the company’s economics. Maintaining social responsibility within
a company ensures the integrity of society and the environment are protected.
Often, the ethical implications of a decision/action are overlooked for personal gain and the
benefits are usually material. This frequently manifests itself in companies that attempt to cheat
environmental regulations. When this happens, government interference is necessary.
Another key concept of being socially responsible is being accountable towards the environment
while maintain an acceptable or even better profit margin. The first thing that comes to our mind
about being accountable for environment is the concept of “Going Green”. We will discuss about
this later in this assignment.
Factors That Determine Ethical and Unethical Behavior:
Whether someone behaves ethically or unethically when faced with an ethical dilemma is
influenced by several things: his or her stage of moral development and other moderating
variables, including individual characteristics and the organization’s structural design and the
intensity of the ethical issue. People who lack a strong moral sense are much less likely to do the
wrong things if they’re constrained by organizational rules or job descriptions that disapprove of
such behaviors. Conversely, intensely moral individuals can be corrupted by an organizational
structure that permits or encourages unethical practices. Let’s look more closely at these factors.
Stage of Moral Development: Research divides moral development into three levels, each
having two stages. At each successive stage, an individual’s moral judgment becomes less
dependent on outside influences and more internalized.
At the first level, the pre-conventional level, a person’s choice between right and wrong is based
on personal consequences from outside sources, such as physical punishment, reward, or
exchange of favors. At the second level, the conventional level, ethical decisions rely on
maintaining expected standards and living up to the expectations of others. At the principled
level, individuals define moral values apart from the authority of the groups to which they belong
or society in general. The three levels and six stages are described here.
First, people proceed through the six stages sequentially. Second, there is no guarantee of
continued moral development. Third, the majority of adults are at stage four: They’re limited to
obeying the rules and will be inclined to behave ethically, although for different reasons. A
manager at stage three is likely to make decisions based on peer approval; a manager at stage
four will try to be a “good corporate citizen” by making decisions that respect the organization’s
rules and procedures; and a stage five manager is likely to challenge organizational practices that
he or she believes to be wrong.
INDIVIDUAL CHARACTERISTICS: Two individual characteristics—values and personality—play a
role in determining whether a person behaves ethically. Each person comes to an organization
with a relatively entrenched set of personal values, which represent basic convictions about what
is right and wrong. Our values develop from a young age based on what we see and hear from
parents, teachers, friends, and others. Thus, employees in the same organization often possess
very different values. Although values and stage of moral development may seem similar, they’re
not. Values are broad and cover a wide range of issues; the stage of moral development is a
measure of independence from outside influences. Two personality variables have been found to
influence an individual’s actions according to his or her beliefs about what is right or wrong: ego
strength and locus of control. Ego strength measures the strength of a person’s convictions.
People with high ego strength are likely to resist impulses to act unethically and instead follow
their convictions. That is, individuals high in ego strength are more likely to do what they think is
right and be more consistent in their moral judgments and actions than those with low ego
strength.
STRUCTURAL VARIABLES: An organization’s structural design can influence whether employees
behave ethically. Those structures that minimize ambiguity and uncertainty with formal rules and
regulations and those that continuously remind employees of what is ethical are more likely to
encourage ethical behavior. Other structural variables that influence ethical choices include goals,
performance appraisal systems, and reward allocation procedures.
ISSUE INTENSITY: A student who would never consider breaking into an instructor’s office to steal
an accounting exam doesn’t think twice about asking a friend who took the same course from the
same instructor last semester what questions were on an exam. Similarly, a manager might think
nothing about taking home a few office supplies, yet be highly concerned about the possible
embezzlement of company funds. These examples illustrate the final factor that influences ethical
behavior: the intensity of the ethical issue itself. Six characteristics determine issue intensity or
how important an ethical issue is to an individual: greatness of harm, consensus of wrong,
probability of harm, immediacy of consequences, proximity to victim(s), and concentration of
effect. These factors suggest that:
• the larger the number of people harmed
• the more agreement that the action is wrong
• the greater the likelihood that the action will cause harm
• the more immediately the consequences of the action will be felt
• the closer the person feels to the victim(s) • the more concentrated the effect of the action on
the victim(s)…
• the greater the issue intensity or importance. When an ethical issue is important, employees are
more likely to behave ethically.
What does it mean to be Green & why does it matter?
Green management is about becoming aware of how your behavior, working practices or
production methods impact the environment, and making changes that reduce your
environmental "footprint" and make your business more sustainable.
This often includes measures to reduce the raw materials, water and energy that you use, and to
minimize the waste that you produce
Many of us want to "do our bit" for the environment, and there are many good reasons to do so.
Preventing pollution, for example, can improve our health; protecting wildlife means that we can
continue to enjoy our natural world; and reducing consumption preserves resources for the
future.
For organizations, failure to comply with your country's environmental legislation can result in
prosecution and financial penalties. But greener working practices can also reduce costs and save
you money. For example, the car manufacturer General Motors reported that they saved $5
million in 2016 by using renewable energy sources.
And, green initiatives can stimulate innovation and reveal new sources of revenue, or even
entirely new products.
Toyota, for example, recognized the need for more energy-efficient motoring, and this led it to
develop and launch the first mass-produced hybrid car, the Prius, in 1997. This set the company
apart from its competitors, and opened up a new market by appealing to eco-conscious drivers.
The first step is to make a commitment to changing your behavior. Then, consider the following
10 ways to make your workplace kinder to the environment:
1. Assess Your Current Position
Audit your organization's working practices, and assess their environmental impact. This will
highlight potential areas for change.
2. Set Goals
Once you've assessed your environmental impact, set goals for reducing it. Make sure that they
are realistic and achievable, and track your progress toward achieving them. If possible, conduct a
Cost-Benefit Analysis for your green initiatives to demonstrate the savings that they will make.
3. Think Twice Before You Buy
The best way to prevent waste, and to reduce the need for recycling, is to use less in the first
place. So, remember the words "reduce, reuse, recycle" – in that order!
4. Make Recycling Easy
Place recycling points in prominent spots around the office, and clearly signpost which items
people can and cannot recycle.
5. Watch Your Power Use
Office lighting is an "easy win." After the initial investment, energy-efficient LED bulbs can use 70-
75 percent less energy, emit far less heat, and last up to 50 times longer.
Get into the habit of turning off the lights when you leave the room, too. You could even install
motion sensors that turn off lights automatically in bathrooms, break rooms and conference
areas.
Computers, printers, and other AC- or mains-powered devices consume energy even when they're
not being used. According to the U.S. Environmental Protection Agency, switching them off fully
could save your organization $25-$75 per machine, per year. "Smart" power strips, which stop
power consumption completely when you turn off the machine, are a good way to tackle this.
Then, when it's time to upgrade, consider switching to laptops, which can use up to 80 percent
less energy than desktop computers.
6. Switch Energy Suppliers
Many utility companies use renewable energy sources. Changing your supplier could save your
organization money, and reduce or offset your organization's environmental impact.
If it's feasible, you could also consider installing solar panels or "micro" wind turbines on the roof
of your offices, to generate your own energy.
7. Plant Trees
Not all workplaces will have the space to do it, but planting trees can save energy and make your
work environment healthier and more attractive.
If it is not possible to plant trees, placing plants around the office can help to clean the air and
promote natural climate control.
8. Cut Down on Car Journeys
If it's appropriate, allow people to work from home one or more days each week. This saves on
commuting time, and reduces fuel consumption and carbon emissions.
Carpooling is another great option. You could set up an information board or intranet page to
connect people who travel similar routes to work.
You could also encourage people to walk, cycle or use public transportation, by posting transit
schedules and bike routes, and by arranging cycle-to-work schemes.
9. Use Technology
Do you really need to fly to that face-to-face meeting in another city or country? Using technology
to conduct training, catch-ups, conferences, or even job interviews online is often more cost-
effective, as well as more environmentally friendly.
10. Review Your Suppliers
When you're auditing your organization's environmental impact, consider your extended network,
too.
If you have concerns, investigate whether you could change your supplier, or encourage an
existing one to work in a greener way. Perhaps they could package items more efficiently to cut
down on waste, or use electronic invoices instead of paper.
Corporate Social Responsibility (Benefiting Both Business and the Community)
Today's societies often ask more from major corporations than simply making a profit and paying
taxes.
There's a general expectation that companies should do their best to trade fairly, uphold human
rights, and protect the environment. And the focus is not just on big corporations: small
companies are often asked to support local causes and play their part in community development.
So, how can a business manage these expectations, but benefit its bottom line, too? A successful
Corporate Social Responsibility (CSR) strategy can help.
What Is Corporate Social Responsibility?
No company exists in a vacuum. Every business operates in society, whether on a global or local
scale. Its impact and behavior – ethical, social, economic, and environmental – are open to
examination and criticism, typically from politicians, the media, and other campaigners, as well as
from its own customers.
These cases show the kinds of risk to reputation that can be associated with an organization's
business activity. CSR helps manage such risk. It's not just about charitable giving or philanthropy.
Effective CSR is about strategically positioning a company in society so that it can actually take
advantage of public concerns, like poverty or global warming, rather than be damaged by them.
A company's CSR program needs to consider the social and environmental impact of the business.
Of course, it must address the concerns of its most immediate stakeholders – including staff,
customers, investors, and the community where the firm's offices or plants are based. At the same
time, any CSR strategy also must look at the bigger picture, considering both backward and
forward links in the business chain.
An organization's reputation is at stake at every stage of the production process. Many major
corporations now have extensive CSR programs that look beyond the business basics to manage
these risks not only successfully, but often profitably. The idea is that there's a benefit to both the
company and the society in which it operates.
Elements of CSR
Corporate Social Responsibility programs typically have three main elements:
1. Charitable giving – Many businesspeople have a sense of moral and social responsibility, and
they want to support the disadvantaged through charitable giving. Although this is basically
philanthropy, you can help develop your company's image by carefully selecting who receives
your gifts.
2. Community investment – Many organizations also see the advantage of developing local
communities in ways that can bring real returns to the business. For example, a
telecommunications provider might want to sponsor internet access in schools. In practice,
they're helping to create the right long-term social conditions for the business to succeed by
improving their reputation among consumers and as an employer of choice in the area.
3. Commercial initiatives – Carefully selected commercial initiatives can be very good for
business, making a significant contribution to the bottom line. One possibility is working with a
reputable charity on an issue that's relevant to your product, in a way that will be mutually
beneficial. For example, an optometry chain might support an initiative to improve eye care in the
developing world. The idea of this "cause-related marketing" technique is to promote your brand
and your reputation as a socially responsible company, with whom consumers will want to be
associated.
CSR programs don't need to be, and shouldn't be, separated from your central business
objectives. If done well, they can be a very real and measurable asset to a company – and they can
help you understand, shape, and take advantage of the wider context in which your business
operates.
The Ten Principles of the United Nations Global Compact:
Another guide to being ethical in international business is the United Nations Global Compact,
which is an initiative created by the United Nations outlining principles for doing business globally
in the areas of human rights, labor, the environment, and anti-corruption (see Exhibit 6-6). More
than 12,000 participants and stakeholders.
The UN Global Compact asks companies to embrace, support, and enact, within their sphere of
influence, a set of core values in the areas of human rights, labor standards, the environment, and
anti-corruption:
Human Rights
Principle 1: Business should support and respect the protection of internationally
proclaimed human rights within their sphere of influence; and
Principle 2: Make sure they are not complicit in human rights abuses.
Labor Standards
Principle 3: Business should uphold the freedom of association and the effective
recognition of the right to collective bargaining;
Principle 4: The elimination of all forms of forced and compulsory labor;
Principle 5: The effective abolition of child labor; and
Principle 6: The elimination of discrimination in respect to employment and occupation.
Environment
Principle 7: Business should support a precautionary approach to environmental
challenges;
Principle 8: Undertake initiatives to promote greater environmental responsibility;
Principle 9: Encourage the development and diffusion of environmentally friendly
technologies.
Anti-Corruption
Principle 10: Business should work against corruption in all its forms, including extortion
and bribery.
Ways to Encourage Ethical Behavior:
Every company should have a code of ethics in place that represents the company’s values,
responsibilities, and conduct expectations. It should act as a moral compass that guides
employees in handling ethical dilemmas. Ethical conduct will ensure that your business maintains
a reputation of professional principles and values. Here are a few ways managers can promote
ethical conduct among their staff.
Set clear expectations
Organization’s Code of Conduct should define the expectations for employees’ behavior in clear
and simple language. This should include how employees should interact with each other,
customers, as well as what is and is not considered acceptable behavior in the workplace. These
expectations also serve as guidance for managers, setting out when they need to intervene and/or
take disciplinary action. The Code of Conduct should be communicated to all employees.
Lead by example
Managers need to model the behavior they expect to see in their staff. If employees can see
others, particularly the roles they report to behaving ethically, the team is more likely adopt the
same behavior and values.
Reward good behavior
Ethical behaviors, such as when an employee goes above and beyond to put his or her personal
interests aside to always do what is best for the client, should be actively rewarded and held up as
an example for others.
Feedback mechanisms
Fundamentally, ethical behavior is about “doing the right thing”. Ensure there is a clear feedback
mechanism in place through which employees can report any unethical behavior they witness.
These mechanisms should allow staff to make reports anonymously and without fear of any
adverse action being taken against them.
Training
Hold workshops and provide regular training on how to solve problems ethically. Use examples,
case studies and role play to discuss tough decisions that may arise, and brainstorm solutions
together.
Code of Ethics:
A code of ethics and professional conduct outlines the ethical principles that govern decisions and
behavior at a company or organization. They give general outlines of how employees should
behave, as well as specific guidance for handling issues like harassment, safety, and conflicts of
interest. A survey of companies’ codes of ethics found their content tended to fall into three
categories,
Cluster 1. Be a Dependable Organizational Citizen
1. Comply with safety, health, and security regulations.
2. Demonstrate courtesy, respect, honesty, and fairness.
3. Illegal drugs and alcohol at work are prohibited.
4. Manage personal finances well.
5. Exhibit good attendance and punctuality.
6. Follow directives of supervisors.
7. Do not use abusive language.
8. Dress in business attire.
9. Firearms at work are prohibited.
Cluster 2. Do Not Do Anything Unlawful or Improper That Will Harm the Organization
1. Conduct business in compliance with all laws.
2. Payments for unlawful purposes are prohibited.
3. Bribes are prohibited.
4. Avoid outside activities that impair duties.
5. Maintain confidentiality of records.
6. Comply with all antitrust and trade regulations.
7. Comply with all accounting rules and controls.
8. Do not use company property for personal benefit.
9. Employees are personally accountable for company funds.
10. Do not propagate false or misleading information.
11. Make decisions without regard for personal gain.
Cluster 3. Be Good to Customers
1. Convey true claims in product advertisements.
2. Perform assigned duties to the best of your ability.
3. Provide products and services of the highest quality.
Unfortunately, codes of ethics may not work as well as we think they should. So instead of straight
up using the codes, managers should use the following suggestions:
1. Organizational leaders should model appropriate behavior and reward those who act
ethically.
2. All managers should continually reaffirm the importance of the ethics code and
consistently discipline those who break it.
3. The organization’s stakeholders (employees, customers, and so forth) should be
considered as an ethics code is developed or improved.
4. Managers should communicate and reinforce the ethics code regularly.
5. Managers should use the five-step process to guide employees when faced with ethical
dilemmas. These steps are:
i) What is ethical dilemma?
ii) Who are the affected stakeholders?
iii) Which personal, organizational, and external factors are important in this
decision?
iv) What are possible alternatives?
v) What is my decision and how will I act on it?
Social Responsibility and Ethics issues in today’s world
Today’s managers continue to face challenges in being socially responsible and ethical. Next, we
examine three current issues: managing ethical lapses and social irresponsibility, social
entrepreneurship, and promoting positive social change.
Managing Ethical Lapse and Social irresponsibility
An ethical lapse is a mistake or error in judgment that produces a harmful outcome. A lapse in
ethics doesn't show a complete lack of integrity, just an oversight or an ethical blind spot.
Routinely producing harmful results is not considered a “lapse”, that’s just considered unethical.
Ethical lapses can be large or small scale, kept private or publicized and be illegal or within the
realm of the law, but immoral.
Social irresponsibility for corporations can be defined as the increase of environmental costs,
external costs for society, communities and stakeholders. It can include even shareholder as a
subcategory of group who bear costs when the management of the organization is responsible for
negligence or fraud or any behavior that can be considered non-righteous.
Social Entrepreneurship
Social entrepreneurship is an approach by individuals, groups, start-up companies
or entrepreneurs, in which they develop, fund and implement solutions to social, cultural, or
environmental issues. The world’s social problems are many and viable solutions are few. But
numerous people and organizations are trying to do something. For example Social entrepreneur
Saba Gul, founder of the high-end handbag company Popinjay, created an organization that
provides opportunities for impoverished women in her home country of Pakistan to transform
their lives. She trains, employs, and pays artisan women a fair wage to embroider silk designs that
are incorporated in Popinjay handbags.
Promoting Positive Social Change
Businesses can do this in a couple of ways: through corporate philanthropy and through employee
volunteer efforts.
Corporate philanthropy: helps support communities where companies are based. It
supports corporate giving programs, which essentially lead to free money for nonprofits.
Employee volunteer efforts: is a simple and effective way for businesses to contribute to
the community. Companies give their employees an allowance of paid time off annually, which
they use to volunteer at a charity of their choice.
References
[1] Textbook, class notes & sheet
[2] https://www.pachamama.org/social-justice/social-responsibility-and-ethics
[3] https://www.mindtools.com/pages/article/green-management-tips.htm
[4] https://www.grcsolutions.com.au/articles/top-tips-to-encourage-ethical-behaviour-in-the-
workplace
[5] https://www.myaccountingcourse.com/accounting-dictionary/social-responsibility
[6] https://www.betterteam.com/code-of-ethics-and-professional-conduct
[7] https://www.wisegeek.com/what-is-a-code-of-ethics.htm
[8] https://doublethedonation.com/tips/corporate-philanthropy/
[9] https://benefacto.org/what-is-corporate-volunteering/
