Ethics and Social Responsibility Flashcards
How can the nature of management jobs creates the possibility for ethical abuses
Ethics is the set of moral principles or values that define right and wrong. By contrast, workplace deviance is behavior that violates important organizational norms about right and wrong and harms the organization or its workers. Production deviance and property deviance harm the company, whereas political deviance and personal aggression harm individuals within the company.
U.S. Sentencing Commission Guidelines for Organizations and explain how they both
encourage ethical behavior and punish unethical behavior by businesses.
Under the U.S. Sentencing Commission Guidelines, companies can be prosecuted and fined up to $300
million for employees’ illegal actions. Fines are computed by multiplying the base fine by a culpability
score. Companies that establish compliance programs to encourage ethical behavior can reduce their
culpability scores and their fines.
Factors which influences ethical decision-making.
Three factors influence ethical decisions: the ethical intensity of the decision, the moral development of
the manager, and the ethical principles used to solve the problem. Ethical intensity is strong when
decisions have large, certain, immediate consequences and when we are physically or psychologically
close to those affected by the decision. There are three phases of moral maturity with two steps within
each phase. At the preconventional level, decisions are made for selfish reasons. At the conventional
level, decisions conform to societal expectations. At the postconventional level, internalized principles are
used to make ethical decisions. Finally, managers can use a number of different principles when making
ethical decisions: self-interest, personal virtue, religious injunctions, government requirements, utilitarian
benefits, individual rights, and distributive justice.
Manager’s practical steps for improving ethical decision-making.
Employers can increase their
chances of hiring ethical employees by testing all job applicants. Most large companies now have
corporate codes of ethics. In addition to offering general rules, ethics codes must also provide specific,
practical advice. Ethics training seeks to increase employees’ awareness of ethical issues, make ethics a
serious, credible factor in organizational decisions, and teach employees a practical model of ethical
decision-making. The most important factors in creating an ethical business climate are the personal
examples set by company managers, involvement of management in the company ethics program, a
reporting system that encourages whistleblowersto report potential ethics violations, and fair but
consistent punishment of violators.
Those to whom organizations are socially responsible.
Social responsibility is a business’s obligation to benefit society. According to the shareholder model, a
company’s only social responsibility is to maximize shareholder wealth by maximizing company profits.
According to the stakeholder model, companies must satisfy the needs and interests of multiple corporate
stakeholders, not just shareholders. However, the needs of primary stakeholders, on which the
organization relies for its existence, take precedence over those of secondary stakeholders.
What organizations are socially responsible for.
Companies can best benefit their stakeholders by fulfilling their economic, legal, ethical, and
discretionary responsibilities. Being profitable, or meeting one’s economic responsibility, is a business’s
most basic social responsibility. Legal responsibility consists of following a society’s laws and
regulations. Ethical responsibility means not violating accepted principles of right and wrong when
doing business. Discretionary responsibilities are social responsibilities beyond basic economic, legal,
and ethical responsibilities.
How organizations can choose to respond to societal demands for social
responsibility.
Social responsivenessis a company’s response to stakeholders’ demands for socially responsible
behavior. There are four social responsivenessstrategies. When a company uses a reactive strategy, it
denies responsibility for a problem. When it uses a defensive strategy, it takes responsibility for a
problem but does the minimum required to solve it. When a company uses an accommodative strategy,
it accepts responsibility for problems and does all that society expects to solve them. Finally, when a
company uses a proactive strategy, it does much more than expected to solve social responsibility
problems.
The ways social responsibility hurts or helps an organization’s economic
performance.
Does it pay to be socially responsible? Sometimes it costs, and sometimes it pays. Overall, there is
no clear relationship between social responsibility and economic performance. Consequently,
managers should not expect an economic return from socially responsible corporate activities. If your
company chooses to practice a proactive or accommodative social responsibility strategy, it should
do so to better society and not to improve its financial performance.
