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Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2.1
Chapter 2Managerial Ethics
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-2
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 today’s business world
(continued)
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-3
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-4
Society’s 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 2-5
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-6
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-7
Demonstrating Social Responsibility Social responsibility Social obligation Social responsiveness
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-8
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 2-9
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 2-10
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 2-11
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 2-12
Moral Development Is a measure of an individual’s
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)
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-13
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 2-14
Values Basic convictions about what is right
and wrong Influence ethical behaviour Values are developed in early years
Organizational Factors That Affect Ethical And Unethical Behaviour
ModeratorsEthical/Unethical
Behaviour
OrganizationalCulture
StructuralVariables
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.
03 Pearson Education Canada Inc.FOM 2.15
Determinants Of Issue Intensity (Exhibit 2.3)
FOM 2.16Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc.
ation Canada Inc.
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 2-17
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 2-18
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 2-19
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 2-20
Code of Ethics Formal statement of an organization’s
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 2-21
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
Robbins et al., Fundamentals of Management, 4th Canadian Edition ©2005 Pearson Education Canada, Inc. FOM 2-22
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