CH 5 Socially Conscious Management

Chapter 5
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter ©2012 Pearson Education, Inc. publishing as Prentice Hall
2-1
• Discuss what it means to be socially responsible and what
factors influence that decision.
• Explain green management and how organizations can go
green.
• Discuss the factors that lead to ethical and unethical behavior.
• Describe management’s role in encouraging ethical behavior.
• Know how to make good decisions about ethical dilemmas.
2-2
WHAT IS SOCIAL RESPONSIBILITY?
2-3
LEGAL RESPONSIBILITIES
• A business is responsible for ensuring that it is Registered
• A business is responsible for honoring its tax obligation
• A business is responsible for obtaining License for those
businesses which need to be specially licensed
• The business is responsible for respecting the terms of
Contractual agreement that it enters into
• Responsible for honoring legal requirement in Selling goods
and services
• Responsibility to ensure Occupational health and safety (OHS)
of workers
2-4
SOCIOECONOMIC VIEW
• The other two concepts—social responsiveness and

social responsibility—reflect the socioeconomic
view, which says that managers’ social
responsibilities go beyond making profits to include
protecting and improving society’s welfare. This view
is based on the belief that corporations are not
independent entities responsible only to stockholders,
but have an obligation to the larger society.
2-5
SOCIAL RESPONSIVENESS
• When a firm engages in social actions in response to some

popular social need
• In 2014, Boeing arranged 10 flights transporting more than 54,000 pounds
of medical supplies and equipment to patients in Ethiopia, Kenya and
Thailand; educational books and computers to schools in Ethiopia; toys to
orphans in Iraq; and winter clothing, blankets and quilts to the displaced
and needy in Bangladesh, Iraq and Thailand.
• Pfizer Consumer Healthcare employees volunteered with Habitat of
Humanity in response to the needs of residents who lost their homes during
Hurricane Sandy on the U.S. East Coast.
• During Covid pandemic, Pfizer provided $5 millions to help improve the
recognition, diagnoses, treatment and management of patients.
2-6
SOCIAL RESPONSIVENESS
• Microsoft is working for international economical

evolvement as it arranged free technical and
computing education for about 42 million and More
than $410 million in cash, technology, and resources
committed to support COVID-19 response efforts as
of June 2021
2-7
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
• Socially responsible organization does what is right because it feels it has
an ethical responsibility to do so.
• For example, Home builder Prime Five Homes in Los Angeles, California,
would be described as socially responsible. Prime Five Homes builds
environmentally friendly homes, which they sell for profit. The company
directs a portion of these proceeds to its nonprofit organization named
Dream Builders Project. Dream Builders Project supports a variety of
social causes including anti–human trafficking campaigns.
2-8
• KFC Pakistan also gathers funds for different

welfare project. They collaborated with
zindagi trust to provide foods to younger
children who cannot afford it.
• Microsoft is also working for the rights and
providing basic necessities to people around
the world
2-9
• Companies are travelling and transporting by

using environmentally friendly electric
vehicles.
A delivery company by the name of M&P have
Introduced EV called Tourer 250 in
collaboration with Top sun Motors (China) and
is functional in some parts of
Pakistan which charges up in 3 hours and
provides you with upto 250 km of distance
2-10
• Rizwan Alam is a Pakistani environmental

lawyer and activist. In 2013, after over a
decade of practicing corporate and
constitutional law, Rizwan co-founded Saleem,
Alam & Co., a firm that specializes in the
energy, water, natural resources, and urban
infrastructure sectors.
“For every tree you burn, we will Plant 100” -
Rizwan
2-11
• Chocolate producers in Switzerland decided

that they will not buy cocoa from countries
that do not stand against child labor or child
slavery. Another example is that a government
may decide to close down a company whose
activities are destroying the water bodies in
the country.
2-12
CSR AWARDS
• Federal Minister’s and other important
dignitaries honored 14th CSR Awards to 78
different companies and organizations for
showing excellence in the field of corporate
social responsibility during last one year.
• The National Forum for Environment and Health (NFEH)

organized the 14th Annual CSR Summit 2022 at Serena Hotel,
Islamabad on February 24, 2022.
2-13
CSR AWARDS
2-14
Arguments For and Against Social
Responsibility
2-15
?
• Does Social
Responsibility Pay ?
2-16
GREENING OF
MANAGEMENT
2-17
• link between an organization’s decision and
activities and its impact on the natural
environment.
Global environmental problems
Air, water, and soil pollution from toxic wastes
• Global warming from greenhouse gas
emissions
• Natural resource depletion
2-18
How Organizations Go Green?
• Nike Inc. launched an app called Making, which
allows its design engineers to see the environmental
effects of their material choices on water, energy and
waste.
• The Swedish packaging company Tetra Pak is
pioneering a new technique for using bioplastic
materials in its shelf-stable packaging. This
breakthrough is helping the company reduce its
carbon footprint and reduce the use of traditional
fossil fuel-derived plastics as it produces more than
180 billion packages yearly.
2-19
How Organizations Go Green?
• One model uses the terms “shades of green” to
describe the different environmental approaches that
organizations may take.
2-20
SHADES OF 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
2-21
• 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
2-22
• The activist approach reflects the highest degree of
environmental sensitivity and illustrates social
responsibility. For example, Belgian company Ecover
produces ecological cleaning products in a near-zero-
emissions factory. This factory (the world’s first
ecological one) is an engineering marvel with a huge
grass roof that keeps things cool in summer and
warm in winter and a water treatment system that
runs on wind and solar energy. The company chose
to build this facility because of its deep commitment
to the environment.
2-23
ETHICS
Ethics Defined
– Principles, values, and beliefs that
define what is right and wrong behavior.
– Ethics is a set of moral standards for judging
whether something is right or wrong.
– Individual behavior + society context
determines ethical behavior
2-24
INDIVIDUAL ETHICS
• Vary from person to person, situation to
situation and culture to culture
• Determined partly by culture and partly
by individual
• Sources of Individual Values & Codes
– Parents, friends, colleagues
– Experience
2-25
Situations
What do you think?
• A Pharmaceutical, raised the price of a
drug used for newborns and HIV patients
by more than 5000 percent. Was this
ethical behavior?
• A hungry person who lost everything in
the recent flood. He broke into flooded
stores, taking food and bottled water
without paying for them. Was this
unethical behavior?
2-26
Situations
What do you think?
• what about the small Texas plastics manufacturer that
employed over 100 people and specialized in the
Latin American market? The president was worried
because he knew the firm would be bankrupt by the
end of the year if it didn’t receive more contracts. He
knew that he was losing business because he refused
to pay bribes. Bribes were part of the culture in his
major markets. Closing the firm would put many
people out of work. Should he start paying bribes
in order to stay in business? Would this be
unethical?
2-27
Situations
What do you think?
• Is it ethical for a pharmaceutical sales representatives to
provide doctors with lavish gifts as an inducement to buy?
• Is it ethical for someone to use a company car for private use?
• How about using company e-mail for personal correspondence
or using the company phone to make personal phone calls?
• As an employee, would it be all right to award a lucrative
contract to a company in which you hold significant financial
interest?
• What if you managed an employee who worked all weekend
on an emergency situation and you told him to take off two
days sometime later and mark it down as “sick days” because
your company had a clear policy that overtime would not be
compensated for any reason?
2-28
Recognizing Unethical Business
Activities
Researchers from Brigham Young University tell us that all
unethical business activities will fall into one of the
following categories:
Taking things that don’t belong to you: The unauthorized
use of someone else’s property, Even the smallest
offense, such as using the postage meter at your office
for mailing personal letters or exaggerating your travel
expenses.
Saying things you know are not true: Often, when trying
for a promotion and advancement, fellow employees
discredit their coworkers. Falsely assigning blame or
inaccurately reporting
2-29
Recognizing Unethical Business
Activities
Giving or allowing false impressions. A car dealer who
fails to disclose that a car has been in an accident is
misleading potential customers.
Buying influence or engaging in a conflict of interest. A
conflict of interest arises when what is in a person’s
best interest is not in the best interest of another
person or organization to which that individual owes
loyalty.
• For example, an employee may simultaneously help
himself but hurt his employer by taking a bribe to
purchase inferior goods for his company’s use.
2-30
Hiding information: Failing to disclose the results of
medical studies that indicate your firm’s new drug
has significant side effects is the ethical violation of
hiding information that the product could be harmful
to purchasers.
Taking unfair advantage: Many businesses took unfair
advantage of people who are not educated or unable
to understand the complex contracts.
Abusing power and mistreating individuals: Suppose a
manager sexually harasses an employee or subjects
employees to humiliating corrections or warnings in
the presence of customers.
2-31
Ignoring unethical actions. What if you witnessed a
fellow employee stealing company funds by forging
her signature on a check? Would you report the
violation? A winking tolerance of others’ unethical
behavior is itself unethical.
Permitting organizational abuse. The unfair treatment
of workers in operations appears in the form of child
labor, demeaning wages, and excessive work hours.
2-32
Factor that Determine Ethical & Unethical
Behavior
2-33
Stages of Moral Development
• Research divides moral development into three
levels, each having two stages. At each successive
stage, an individual’s moral judgment becomes less
dependent on outside influences and more
internalized
• Levels of Individual Moral Development
• Pre-conventional level
• Conventional level
• Principled level
2-34
PRECONVENTIONAL LEVEL
• At the first level, the preconventional level, a
person’s choice between right and wrong is
based on personal consequences from outside
sources, such as physical punishment, reward,
or exchange of favors
2-35
CONVENTIONAL LEVEL &
PRINCIPLED LEVEL
• At the second level, the conventional level,
ethical decisions rely on maintaining expected
standards and living up to the expectations of
others (friends, family)
• At the principled level, individuals define moral
values apart from the authority of the groups to
which they belong or society in general.
manager is likely to challenge organizational
practices that he or she believes to be wrong
2-36
• Moral Development
– At each successive stage, an individual’s moral
judgment becomes less dependent on outside
influences and more internalized.
– People proceed through the stages of moral
development sequentially.
– There is no guarantee of continued moral
development.
2-37
Moderators
– Stage of moral development interacts
with:
• Individual characteristics
• The organization’s structural design
• The intensity of the ethical issue
2-38
Individual Characteristics
Values: one’s judgment of what is important in life.

What we think we ought to do
Basic convictions about what is right or wrong.
Our values develop from a young age based on what we
see and hear from parents, teachers, friends, and others
An organization devoted to global ethics says that

societies share five core moral values—
honesty, respect, responsibility, fairness and

compassion
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 39

©2012 Pearson Education, Inc. publishing as Prentice Hall 2-39
Individual Characteristics
Personality: it is our pattern of thinking and feeling.

what we naturally tend to do.
•Ego strength - A personality measure of the
strength of a person’s convictions.
•People with high ego strength are likely to resist
impulses to act unethically and instead follow their
convictions than those with low ego strength

Locus of Control
A personality attribute that measures the
degree to which people believe they
control their own life/fate.
Internal locus: the belief that you control
your destiny.
External locus: the belief that what
happens to you is due to luck or chance.
They’re less likely to take personal
responsibility for the consequences of
their behavior and more likely to rely on
external forces.

Structural Variables
Organizational characteristics and
mechanisms that guide and influence
individual ethics:
•Goals/objectives
•Performance appraisal systems
(Reward allocation procedure)
•Behaviors of managers
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter ©2012 Pearson Education, Inc. publishing as Prentice Hall 2-42
1. Goals/objectives: . One study found
that people who don’t reach set goals are
more likely to engage in unethical
behavior, even if they do or don’t have
economic incentives to do so.
2. PAS: Some systems focus exclusively on
outcomes, while others evaluate means as
well as ends.
“success may serve to excuse unethical
behaviors.”
3. Behaviors of managers
If managers are more lenient in correcting
unethical behaviors of successful
employees, other employees will model
their behavior on what they see.
Four main kinds of ethical philosophies
1. Utilitarianism/Utility-Seeking the Best for the

Majority
Act of optimizing benefits for those who are
affected
https://ethicsunwrapped.utexas.edu/glossary/utili
tarianism
2-46
 One problem with this philosophy is that it is nearly
impossible to accurately determine how a decision will affect
a large number of people.
 Another problem is that utilitarianism always involves both
winners and losers. If sales are slowing and a manager decides
to fire five people rather than putting everyone on a 30-hour
workweek, the 20 people who keep their full-time jobs are
winners, but the other five are losers.
2-47
2. Deontology (Following Our Obligations and Duties):
The philosophy that says people should meet their
obligations and duties
Deontology is often associated with philosopher Kant
who believed that ethical actions follow universal moral
laws, such as “Don’t lie. Don’t steal. Don’t cheat.”
2-48
• ?
• Despite its strengths, rigidly following deontology can produce

results that many people find unacceptable. For example,
suppose you’re a software engineer and learn that a nuclear
missile is about to launch that might start a war. You can hack
the network and cancel the launch, but it’s against your
professional code of ethics to break into any software system
without permission. And, it’s a form of lying and cheating.
Deontology advises not to violate this rule. However, in letting
the missile launch, thousands of people will die.
• https://ethicsunwrapped.utexas.edu/glossary/deontology
2-49
?
• if the business person who must be on time to
meetings is running late, how is he/she
supposed to drive? Is speeding breaking
his/her duty to society to uphold the law, or is
the businessperson supposed to arrive at the
meeting late, not fulfilling the duty to be on
time?
2-50
3. Justice—The Question of Fairness
 Another factor influencing individual business ethics
is justice, or what is fair according to prevailing standards
of society.
 We all expect life to be reasonably fair. You expect your
exams to be fair, the grading to be fair, and your wages to
be fair, based on the type of work being.
 For example you are using company money for personal
dinner
2-51
4. Individual Rights:
In our society, individuals and groups have certain rights that

exist under certain conditions regardless of any external
circumstances. The term human rights implies that certain rights
—to life, to freedom, to the pursuit of happiness—are bestowed
at birth and cannot be arbitrarily taken away.
Right of privacy, right of speech
These rights are to be applied without regard to race, color,
creed, gender, or ability.
2-52
ETHICS DILEMMA
• A coworker takes credit for the excellent job you’ve
performed. Frustrating! It’s probably happened to you
or someone you know. How did it happen? Perhaps
you shared an idea with a coworker and then she is
presenting it as her own in a meeting. Or perhaps you
worked during the weekend to ensure that a project
report is completed on time and your coworker takes
credit for your initiative. Or maybe you resolved a
conflict with a customer, but your department head
reports the resolution as his own.
2-53
?
• What are some of the possible reasons for
others taking credit for your work? Are any of
the reasons justifiable? Why or why not?
• Do you think that those who take credit for
your work know that what they’re doing is
wrong?
• How would you respond to your coworker or
boss? Explain
2-54
Tasks:
• REVIEW AND DISCUSSION QUESTIONS (page
203)
2-55
YOUR TURN TO BE A MANAGER
• Identify three companies that are known for
being socially responsible. List and compare
the types of socially responsible behavior that
each company engages in.
• Interview a manager about how they
encourage their employees to be ethical. Write
down their comments and discuss how these
ideas might help you be a better manager.
• Presentations (17 April,2023)
2-56

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Chapter 5

• The other two concepts—social responsiveness and

• When a firm engages in social actions in response to some

• Microsoft is working for international economical

• A business’s intention, beyond its legal and economic

• KFC Pakistan also gathers funds for different

• Companies are travelling and transporting by

• Rizwan Alam is a Pakistani environmental

• Chocolate producers in Switzerland decided

• The National Forum for Environment and Health (NFEH)

Values: one’s judgment of what is important in life.

An organization devoted to global ethics says that

honesty, respect, responsibility, fairness and

Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 39

Personality: it is our pattern of thinking and feeling.

Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 40

Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 41

1. Utilitarianism/Utility-Seeking the Best for the

• Despite its strengths, rigidly following deontology can produce

In our society, individuals and groups have certain rights that

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