Chapter 2 Managerial Ethics

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2.1

Learning Outcomes
 

Define social responsibility and ethics List at least six main arguments for at at least four main arguments against businesses being socially responsible Explain the importance of demonstrating social responsibility in todays business world
(continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-2

Learning Objectives (continued)



Describe the concerns people have about business ethics Explain the relationship between social responsibility and managerial ethics Identify the seven factors that influence ethical behaviour Describe ways an organization can improve ethical behaviour
FOM 2-3

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Societys Expectations from Organizations and Managers



Managers regularly make decisions about issues with a social dimension In competitive environment, organizations cannot afford to be seen as socially irresponsible

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-4

Arguments Supporting Businesses Being Socially Responsible

         

Public expectations Long-run profits Ethical obligation Public image Better environment Discouragement of further government regulation Balance of responsibility and power Shareholder interests Possession of resources Superiority of prevention over cures
FOM 2-5

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Arguments Against Businesses Being Socially Responsible

      

Violation of profit maximization Dilution of purpose Costs Too much power Lack of skills Lack of accountability Lack of broad public support
FOM 2-6

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Demonstrating Social Responsibility

  

Social responsibility Social obligation Social responsiveness

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-7

Relationship Between Social Responsibility and Economic Performance



Research studies show positive relationship General public perception that companies who behave in a socially responsible way have better business performance

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-8

Managers Becoming More Socially Responsible



It is the collective behaviour and actions of managers that make a company socially responsible Managers who make the right decisions are described as being or behaving ethically

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-9

Managerial Ethics


Ethics  Rules and principles that define right and wrong conduct Three Views of Ethics  Utilitarian view - ethical decisions are made on the basis of their outcomes or consequences
(continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-10

Managerial Ethics (continued)



Three Views of Ethics (continued)  Rights view - respects and protects individual liberties and privileges  Theory of justice view - managers impose and enforce rules fairly and impartially

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-11

Moral Development


Is a measure of an individuals independence as his/her moral judgment becomes less and less dependent on outside influences Stages start with making a choice between right and wrong based on personal consequences (continued)
FOM 2-12

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Moral Development (continued)



As development evolves, moral judgment is less dependent on outside factors Individuals with highly-developed moral development can make clear distinctions to define moral principles separate from any authority

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-13

Values


 

Basic convictions about what is right and wrong Influence ethical behaviour Values are developed in early years

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-14

Organizational Factors That Affect Ethical And Unethical Behaviour

Organizational Culture

Moderators

Ethical/Unethical Behaviour

Structural Variables

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2.15

03 Pearson Education Canada Inc.

Determinants Of Issue Intensity (Exhibit 2.3)

Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 113. Copyright 2003. Reprinted by permission of Pearson Education Canada Inc.

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2.16

ation Canada Inc.

Businesses Improving Ethical Behaviour



Strong emphasis on corporate governance Companies refocusing efforts on business ethics New legislation to hold boards of directors more accountable

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-17

Managers Improving Ethical Behaviour



Hire individuals with high ethical standards Establish codes of ethics and decision rules Lead by example
(continued)

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-18

Managers Improving Ethical Behaviour (continued)



  

Delineate job goals and performance review mechanisms Provide ethics training Conduct social audits Provide support to individuals facing ethical dilemmas

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-19

Code of Ethics


 

Formal statement of an organizations primary values and ethical rules it expects employees to follow Usually written Must state in detail acceptable behaviours and actions

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

FOM 2-20

Management Responsibility Relating to Codes of Ethics



If possible, develop codes with active involvement of everyone in the organization All levels of management must support and continually reaffirm the importance Consistently discipline those who break the code Set an example by behaviour and action
FOM 2-21

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Concluding Remarks


More and more organizations are appearing in newspaper headlines about ethical conduct Survey of employees shows workplace pressures are leading to more people considering acting unethically Concerns about social responsibility are growing
FOM 2-22

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.