chp003 social responsibility and ethics

8/13/2019 Chp003 Social Responsibility and Ethics

1/23

STRATEGIC MANAGEMENT & BUSINESS POLICY13THEDITION

THOMAS L. WHEELEN J. DAVID HUNGER


2/23

Prentice Hall, Inc. 2012 3-2

Responsibilities of a Business Firm

Social Responsibility:proposes that a privatecorporation has responsibilities to society that extendbeyond making a profit


3/23



Friedmans traditional view of a business firm: Argues against the concept of social

responsibility

Primary goal of business is profit maximization not

spending shareholder money for the general socialinterest


4/23



Carrolls four responsibilities of business: (in order

of priority) Economic

Legal

Ethical

Discretionary


5/23


Carrolls four responsibilities of business:


6/23



The ability to enter local andinternational markets

Enhanced reputation

Competitive advantage

Cost savings

The ability to charge premiumprices

Improved relationships withsuppliers and distributors

The ability to attract bettertalent

Goodwill in the eyes of publicofficials

Access to capital

Social capitalrefers to the goodwill of key stakeholdersand provides a company with:


7/23



Characteristics of Sustainability

Environmental

Economic

Social


8/23


Corporate Stakeholders

Stakeholders have an interest in the business and affect

or are affected by the achievement of the firmsobjectives

Enterprise strategy- articulates the firms ethicalrelationship with its stakeholders


9/23


Stakeholder Analysis- the identification of corporatestakeholders in 3 steps:

1. Primary stakeholdershave a direct connection with

the corporation and have sufficient bargaining powerto directly affect corporate activities

2. Secondary stakeholdershave an indirect stake inthe corporation but are also affected by corporate

activities3. Estimate the effect on each stakeholder from a

particular strategic decision


10/23


Reasons for Unethical Behavior

Unaware that behavior is questionable

Lack of standards of conduct Different cultural norms and values

Behavior-based or relationship-based governancesystems

Different values between business people andstakeholders


11/23


Moral Relativismclaims that morality is relative to somepersonal, social, or cultural standard and that there isnot a method for deciding whether one decision is

better than another


12/23


Types of Moral Relativism include:

Nave relativism

Role relativism

Social group relativism

Cultural relativism


13/23


Kohlbergs Levels of Moral Development

Preconventional level: concern for ones self

Conventional level: considerations for societys lawsand norms

Principled level: guided by an internal code of ethics


14/23


Encouraging Ethical Behavior

Code of Ethics-specifies how an organization

expects its employees to behave while on the job

Whistleblowers- employees who report illegal orunethical behavior on the part of others


15/23


Key Terms in Ethical Behavior

Ethics-the consensually accepted standards of behaviorfor an occupation, trade, or profession

Morality-the precepts of personal behavior based onreligious or philosophical grounds

Law is the formal codes that permit or forbid certainbehaviors and may or may not enforce ethics ormorality


16/23


Approaches to Ethical Behavior

Utilitarian- actions are judged by consequences

Individual rights- fundamental rights should berespected

Justice- decisions must be equitable, fair and impartial inthe distribution of costs and benefits to individuals orgroups


17/23



Cavanaghs questions to solve ethical problems:

1. Utility- does it optimize the satisfactions of thestakeholders?

2. Rights- Does it respect the rights of the individuals

involved3. Justice- Is it consistent with the canons of justice?


18/23



Kants categorical imperatives:

1. Actions are ethical only if the person is willing for thesame action to be taken by everyone who is in asimilar situation

2. Never treat another person simply as a means butalways as an end


19/23


1. What is the relationship between corporategovernance and social responsibility?

2. What is your opinion of GAP Internationals having

a code of conduct for its suppliers? What wouldMilton Friedman say? Contrast his view with ArchieCarrolls view.


20/23


3. Does a company have to act selflessly to be consideredsocially responsible? For example, when building a newplant, a corporation voluntarily invested in additionalequipment that enabled it to reduce its pollution emissionsbeyond any current laws. Knowing that it would be veryexpensive for its competitors to do the same, the firmlobbied the government to make pollution regulationsmore restrictive on the entire industry.Is this company socially responsible? Were its managers

acting ethically?


21/23


4. Are the people living in a relationship-based governancesystem likely to be unethical in business dealings?

5. Given that people rarely use a companys code of ethicsto guide their decision making, what good are the codes?


22/23


PowerPoint created by:

Ronald Heimler

Dowling College- MBA

Georgetown University- BS Business

Administration Adjunct Professor- LIM College, NY

Adjunct Professor- Long IslandUniversity, NY

Lecturer- California State PolytechnicUniversity, Pomona, CA

President- Walter Heimler, Inc.


23/23

All rights reserved. No part of this publication may be reproduced,stored in a retrieval system, or transmitted, in any form or by any

means, electronic, mechanical, photocopying, recording, or otherwise,without the prior written permission of the publisher. Printed in the

United States of America.

Copyright 2012 Pearson Education, Inc.publishing as Prentice Hall

chp003 social responsibility and ethics

Documents