ethics & corporate social responsibility. a case for companies to be socially responsible a...
TRANSCRIPT
Ethics & Corporate Social Responsibility
A Case for Companies to A Case for Companies to be Socially Responsiblebe Socially Responsible
A company is a corporate citizen—it should A company is a corporate citizen—it should act as a responsible citizenact as a responsible citizen
Improves a company’s reputationImproves a company’s reputation Companies should solve the problems they Companies should solve the problems they
causecause Example—pollutionExample—pollution Keeps the government out of businessKeeps the government out of business Increased market shareIncreased market share
A Case Against Companies A Case Against Companies being Socially Responsiblebeing Socially Responsible
Increases costsIncreases costs A company’s job is to make a good or A company’s job is to make a good or
service, not improve societyservice, not improve society Stealing shareholders’ moneyStealing shareholders’ money A company’s social obligations are A company’s social obligations are
discharged when it pays taxesdischarged when it pays taxes Gives company’s too much powerGives company’s too much power Businesses may exert too much influence Businesses may exert too much influence
over charitable causesover charitable causes
EthicsEthics
The code of moral principles and The code of moral principles and values that govern the behaviors of a values that govern the behaviors of a person or group with respect to what is person or group with respect to what is right or wrong.right or wrong.
Ethical DilemmaEthical Dilemma
A situation that arises when all alternative choices A situation that arises when all alternative choices or behaviors have been deemed undesirable. or behaviors have been deemed undesirable.
Potentially negative ethical consequences, Potentially negative ethical consequences, making it difficult to distinguish right from wrong.making it difficult to distinguish right from wrong.
Criteria for Criteria for Ethical Decision MakingEthical Decision Making
Most ethical dilemmas involveMost ethical dilemmas involve A conflict between needs of the part & whole.A conflict between needs of the part & whole.The individual versus the organization. The individual versus the organization. The organization versus society as a whole.The organization versus society as a whole.
Four Considerations inFour Considerations inEthical Decision MakingEthical Decision Making
Utilitarian Approach Utilitarian Approach Individualism Approach Individualism Approach Moral-Rights ApproachMoral-Rights ApproachJustice ApproachJustice Approach
Utilitarian ApproachUtilitarian Approach
Moral behavior produces the greatest good Moral behavior produces the greatest good for the greatest number.for the greatest number.
Computations can be very complex, Computations can be very complex, simplifying them is considered appropriate.simplifying them is considered appropriate.
Critics fear a “Big Brother” approach and ask Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out if the common good is squeezing the life out of the individual.of the individual.
Individualism ApproachIndividualism Approach
Acts are moral when they promote the Acts are moral when they promote the individual's best long-term interests.individual's best long-term interests.
Individual self-direction paramount.Individual self-direction paramount.
Individualism is believed to lead to honesty & Individualism is believed to lead to honesty & integrity since that works best in the long run.integrity since that works best in the long run.
Moral-Rights ApproachMoral-Rights Approach
Asserts human beings have fundamental rights Asserts human beings have fundamental rights and liberties.and liberties.
Moral decisions are those that best maintain Moral decisions are those that best maintain the rights of those people affected by them.the rights of those people affected by them.
An ethical decision is one that avoids An ethical decision is one that avoids interfering with the fundamental rights of interfering with the fundamental rights of others.others.
“ “Moral Rights” Moral Rights” ConsiderationsConsiderations
The right of free consentThe right of free consent
The right to privacyThe right to privacy
The right of freedom of conscienceThe right of freedom of conscience
The right of free speechThe right of free speech
The right to due processThe right to due process
The right to life & safetyThe right to life & safety
Justice ApproachJustice Approach
Moral Decisions must be based on standards Moral Decisions must be based on standards of equity, fairness, and impartiality.of equity, fairness, and impartiality.
Treatment of individuals should not be based Treatment of individuals should not be based on arbitrary characteristics.on arbitrary characteristics.
Closet thinking to codified law.Closet thinking to codified law.
Social ResponsibilitySocial Responsibility
Organization’s obligation to make choices and Organization’s obligation to make choices and take actions that will contribute to the welfare take actions that will contribute to the welfare and interests of society and organization.and interests of society and organization.
Distinguishing right from wrong.Distinguishing right from wrong. Being a good corporate citizen.Being a good corporate citizen.Many social responsibilities issues are Many social responsibilities issues are
ambiguous with respect to right and wrong.ambiguous with respect to right and wrong.
Shades of Corporate GreenShades of Corporate Green
Activist Approach
Actively conserve the environment
Stakeholder Approach
Address multiple stakeholder concerns
Market Approach
Respond to customers
Legal Approach
Satisfy legal requirements regarding environmental conservation
SOURCE: Based on R.E. Freeman, J. Pierce, and R. Dodd, Shades of Green: Ethics and the Environment (New York: Oxford University Press, 1995).
Total Corporate Total Corporate Social ResponsibilitySocial Responsibility
SOURCES: Based on Archie B. Carroll, “A Three-Dimensional Conceptual Model of Corporate Performance,” Academy of Management Review 4(1979), 499; and “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Corporate Stakeholders,” Business Horizons 34 (July-August 1991), 42.
Corporate Responses toCorporate Responses toSocial DemandsSocial Demands
Proactive
Take social initiatives.
Proactive
Take social initiatives.
Accommodation
Accept ethical responsibility.
Accommodation
Accept ethical responsibility.
Defense
Do only what is legally required.
Defense
Do only what is legally required.
Obstruction
Fight all the way.
Obstruction
Fight all the way.
High
Low
Degree of Social
Responsibility
Three Pillars of an Ethical Three Pillars of an Ethical OrganizationOrganization
SOURCE: Adapted from Linda Klebe Trevino, Laura Pincus Hartman, and Michael Brown, “Moral Person and Moral Manager,” California Management Review 42, No. 4 (Summer 2000), 128-142.