MANAGEMENT & SOCIETY :

THE EXTERNAL ENVIRONMENT,

SOCIAL RESPONSIBILITY &
ETHICS
CHAPTER 2
The Organization & its External Environment

School of Management, NITK Surathkal

The Technological Environment
• Inventions, techniques, organized knowledge

• Main influence is on ways of doing things:

 How we design, produce, distribute and sell goods &
services

Technology:
The sum total of the knowledge we have of ways to do
things.

School of Management, NITK Surathkal

The Ecological Environment

Ecology:
The relationship of people and other living things with
their environment (soil, water, and air)

School of Management, NITK Surathkal

The Social Responsibility
of Managers

School of Management, NITK Surathkal

• Social Responsibility – serious consideration of the
impact of the company’s action on society.

• Social Responsiveness – the ability of a corporation to

relate its operations and policies to the social environment
in ways that are mutually beneficial to the company and to
society.

School of Management, NITK Surathkal

 Arguments for and against
business involvement in social
actions

School of Management, NITK Surathkal

Arguments for Social Involvement of business

1. Changed expectations of public

2. Better social environment
3. Discourages Government intervention
4. Power and Responsibility
5. Interdependent system
6. Interest of stockholders
7. Problems can become profits
8. Creates favorable public image
9. Solve problems
10. Business has the resources
11. Prevention not cure
School of Management, NITK Surathkal
Arguments against Social Involvement of business

1. Reduction of economic efficiency

2. Society has to pay higher prices
3. Weakened balance of payment situation
4. Lack of Social skills
5. No full support

School of Management, NITK Surathkal

Ethics in Managing: An
Integrative Approach

School of Management, NITK Surathkal

Ethics in Managing: An Integrative Approach

Ethics:
The discipline dealing with
what is good and bad,
And with moral duty and
obligation.

Business Ethics:
Concerned with a systematic
study of morals, truth, and
justice.

School of Management, NITK Surathkal

Ethical Theories
(i) Utilitarian Theory:
Plans and actions should be evaluated by their consequences,
Should produce the greatest good for a greater number of people.

(ii) Theory based on Rights:

All people have basic rights.

(iii) Theory of Justice:

Decision-makers must be guided by fairness, equity, impartiality.

School of Management, NITK Surathkal

Institutionalizing Ethics
- applying & integrating ethical concepts with daily actions

 By establishing an appropriate company policy or

a code of ethics

 By using a formally appointed ethics committee

 By teaching ethics in management development

programs

School of Management, NITK Surathkal

Code of Ethics and its implementation
Code:
A statement of policies, principles or rules that guides behavior.

Functions of a Formal Committee

1. Holding regular meetings
2. Dealing with gray areas
3. Communicating the code
4. Checking for possible violations of the code
5. Enforcing the code
6. Rewarding compliance and punishing violations
7. Reviewing and updating the code
8. Reporting activities of the committee to the board of directors

School of Management, NITK Surathkal

Whistle-Blowing
• Making known to outside agencies unethical company
practices.

• A whistleblower is a person who exposes any kind of

information or activity that is deemed illegal, unethical, or
not correct within an organization
Know your group
Know your TOPIC
The case of Misleading
Satyendra Dubey Freedom 251 Organizational W
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The case of Satish Controversy culture at Microsoft ar
Practices in India
Shetty 9 12
5 4

The case of Narendra

What went wrong Kumar
Social Responsiveness The Whistleblower
with Kingfisher The case of
at Infosys Protection Act 2014
Airlines? Manjunath
3 6 Shanmugam
7
2

What companies
What is the PnB
prospered during The Harshad Mehta What makes IKEA
Scam of 2018? (Role
Covid-19 pandemic. Scam successful?
of Nirav Modi)
How? 10 1
11
13
 SCORE

Voice,
Team Visuals Posture, Time TOTAL
Content
Participation Body Mgmt. (10
(3 marks)
(2 marks) (2 marks) Language (1 mark) marks)
(2 marks)