Managing
Social Responsibility
and
Ethics
References: Management 11th Edition by Stephen P. Robbins, Mary Coulter
Management 6th Asia-Pacific Edition by John Schermerhorn, et. al
Prepared by: Angela Marie S. Dizon
Learning Outcomes
What it means to be socially responsible and what factors
influence that decision
Green Management and how organizations can go green
Factors that lead to ethical and unethical behavior
Management’s role in encouraging ethical behavior
Managing
Social
Responsibility
Colgate’s Bright
Smiles, Bright
Futures program
has reached more
than 800 million
children across 80
countries with free
dental screenings
and oral health
education.
Managing Social Responsibility
Procter & Gamble’s Tide Loads of Hope offers communities a free,
mobile laundromat so people impacted by disasters can have the
comfort of clean clothes.
Starbucks’ social
responsibility
strategy is based on
three
pillars: Community,
Ethical Sourcing and
Environment
From Obligation to Responsiveness to Responsibility
Social Obligation - The obligation of a business to meet its economic and
legal responsibilities and nothing more.
Classical view - says that management’s only social responsibility is to
maximize profits
Socioeconomic view - says that managers’ social responsibilities go
beyond making profits to include protecting and improving society’s
welfare
Social Responsiveness - When a firm engages in social actions in response
to some popular social need.
Managing Social Responsibility
Social Responsibility
A business’s intention,
beyond its legal and
economic obligations, to do
the right things and act in
ways that are good for
society.
Managing Social Responsibility
Arguments For Social Responsibility
Public expectations - Public opinion now supports businesses pursuing economic and social goals.
Long-run profits - Socially responsible companies tend to have more secure long-run profits.
Ethical obligation - Businesses should be socially responsible because responsible actions are the right
thing to do.
Public image - Businesses can create a favorable public image by pursuing social goals.
Better environment - Business involvement can help solve difficult social problems.
Discouragement of further governmental regulation - By becoming socially responsible, businesses
can expect less government regulation.
Balance of responsibility and power - Businesses have a lot of power and an equally large amount of
responsibility is needed to balance against that power.
Stockholder interests - Social responsibility will improve a business’s stock price in the long run.
Possession of resources - Businesses have the resources to support public and charitable projects that
need assistance.
Superiority of prevention over cures - Businesses should address social problems before they
become serious and costly to correct
Managing Social Responsibility
Arguments Against Social Responsibility
Violation of profit maximization - Business is being socially responsible only when it pursues
its economic interests.
Dilution of purpose - Pursuing social goals dilutes business’s primary purpose—economic
productivity.
Costs - Many socially responsible actions do not cover their costs and someone must pay those
costs.
Too much power - Businesses have a lot of power already and if they pursue social goals they
will have even more.
Lack of skills - Business leaders lack the necessary skills to address social issues.
Lack of accountability - There are no direct lines of accountability for social actions.
Managing Social Responsibility
GREEN MANAGEMENT
Managers consider the
impact of their
organization on the
natural environment
How Organizations Go Green?
Managing Social Responsibility
How Organizations Go Green?
Legal (or Light Green) Approach Firms simply do what is legally
required by obeying laws, rules, and regulations willingly and without
legal challenge.
Market Approach Firms respond to the preferences of their
customers for environmentally friendly products.
Stakeholder Approach Firms work to meet the environmental
demands of multiple stakeholders—employees, suppliers, and the
community.
Activist Approach Firms look for ways to respect and preserve
environment and be actively socially responsible.
Managing Social Responsibility
MANAGERS
AND
ETHICAL BEHAVIOR
Ethics -
Principles, values,
and beliefs that
define what is
right and wrong
behavior.
Factors That Determine Ethical and Unethical
Behavior
Stages of Moral Development
Moral Development Conclusions:
People proceed through the stages of moral development
sequentially.
There is no guarantee of continued moral development.
Most adults are in Stage 4 (“good corporate citizen”).
Individual Characteristics
Values - Basic convictions about what is right or wrong.
Personality
Ego strength - A personality measure of the strength of a
person’s convictions
Locus of Control – the degree to which people believe they
control their own life.
Internal locus: the belief that you control your destiny.
External locus: the belief that what happens to you is due to luck or
chance.
Structural Variables
Organizational characteristics and mechanisms that guide
and influence individual ethics:
Goals
Performance appraisal systems
Reward allocation systems
Organization’s Culture
Values-based Management
-the organization’s values guide employees in the way they do their jobs
Research shows that the behavior of managers is the single most important influence
on an individual’s decision to act ethically or unethically.
• Intensity of the Ethical Issue
Alternative Views of Ethical Behavior
Utilitarian view - Behaviour that would be considered ethical from
this perspective delivers the greatest good to the greatest number
of people
Individualism view of ethical behaviour is based on the belief that
our main commitment is to the advancement of long‐term
self‐interests
Moral‐rights view is that which respects and protects the
fundamental rights of people.
Justice view of moral behaviour is based on the belief that ethical
decisions treat people impartially and fairly according to guiding
rules and standards.
Encouraging Ethical Behavior
Employee Selection
Codes of Ethics and Decision Rules
Leadership
Job Goals and Performance Appraisal
Ethics Training
Independent Social Audits
Protective Mechanisms
