Chapter 5 Flashcards
When a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities.
Social Obligation
the management’s only social responsibility is to maximize profits.
Classical View of Social Responsibility
The view in which the managers’ social responsibilities go beyond making profits to include protecting and improving society’s welfare.
Socioeconomic View
When a company engages in social actions in response to some popular social need.
Social Responsiveness
A business’ intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society.
Social Responsibility
Another way to view social involvement and economic performance that provide a way for individual investors to support socially repsponsible companies
Socially Responsible Investing (SRI) funds
When managers have begun to consider the impact of their organization on the natural environment.
Green Management
describes the different environmental approaches that organizations may take.
Shades of Green
4 Facets of the Shades of Green Approach
1) Legal 2) Market 3) Stakeholder 4) Activist
Lowest degree of environmental sensitivity. Simply doing what is required legally; social obligation
Legal or Light Green Approach
Responding to environmental preferences of customers; social responsiveness.
Market Approach
An organization works to meet environmental demands of multiple stakeholders (employees, suppliers, or community); social responsiveness.
Stakeholder Approach
Highest degree. The organization looks for ways to protect the earth’s natural resources; social responsibility.
Activist or Dark Green Approach
Organization that develops guidelines for becoming greener
Global Reporting Initiative (GRI).
Non-govermental Organization that develops standards
International Organization for Standardization (ISO)
List of companies that are the most sustainable corporations in the world
Global 100
Three levels of moral develpment
1) preconventional 2) conventional 3) principled
A person’s choice between right or wrong is based on personal consequences from outside sources (ex. physical punishment, reward, exchange of favors).
First Level: Preconventional Level
Ethical decisions rely on maintaining expected standards and living up to the expectations of others.
Second Level: Conventional Level
Moral values are defined apart from the authority of groups or society in general.
Third Level: Principled Level
represent basic convictions about what is right and wrong; develop from a young age based on what we see and hear.
Values
measures the strength of a person’s convictions.
Ego Strength
Locus of Control
the degree to which people believe they control their own fate.
people believe that they control their own destinies.
Internal Locus of Control
people believe that what happens to them is due to luck or chance.
External Locus of Control
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 (ex. goals, performance appraisal systems, reward allocation procedures).
Structural Variables
The content and strength of an organization’s culture also influence ethical behavior.
Organization’s Culture
Management style in which the organization’s values guide employees in the way they do their jobs.
Values-Based Management
a document created by the UN outlining principles for doing business globally in the areas of human rights, labor, the environment, and anticorruption. Its goal is to create a more sustainable and inclusive global economy.
Global Compact
opportunity to learn about an individual’s level of moral development, personal values, ego strength, and locus of control.
Employee Selection
a formal statement of an organization’s values and the ethical rules it expects employees to follow; a popular choice for reducing ambiguity.
Code of Ethics
Upholding shared values and setting the cultural tone. Becoming role models in terms of both words and actions
Leadership
a key issue in performance appraisal.
Goal Achievement
setting up seminars, workshops, and similar ethics training programs to encourage ethical behavior.
Ethics Training
Evaluating decisions and management practices in terms of the organization’s code of ethics.
Independent Social Audits
protective mechanisms so they can do what is right without fear of reprimand.
Protective Mechanisms
the world’s largest group of ethics and compliance practitioners.
Ethics and Compliance Officer Association
2 things Managers can do to uphold ethical standards
1) Ethical Leadership 2) Protection of Employees who Raise Ethical Issues
an individual or organization who seeks out opportunities to improve society by using practical, innovative, and sustainable approaches.
Social Entrepreneur
2 ways tro promote positive social change
1) Corporate Philanthropy 2) Emplyoee Volunteering Efforts
