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MANAGERIAL ETHICS & SOCIAL RESPONSIBILITY

GUIDED BY:

DR. RAKESH KUMAR MAURYAIIT ROPAR

MEL625: ENGINEERING ETHICS

A PRESENTATION BY:

SAJEED MAHABOOB2011ME1111

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2OUTLINE

What is Social Responsibility Social Responsibility and Economic Performance The Greening of Management Values-Based Management Managerial Ethics Social Responsibility and Ethics in Today’s World Conclusion

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3SOCIAL RESPONSIBILITY

THE CLASSICAL VIEW

Management’s only social responsibility is to maximize profits by operating the business in the best interests of the stockholders. WTO

Expending the firm’s resources on doing “social good” unjustifiably increases costs that lower profits to the owners and raises prices to consumers.

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4SOCIAL RESPONSIBILITY

THE SOCIOECONOMIC VIEW

Management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare. WTO

Corporations are not independent entities responsible only to stockholders. Firms have a moral responsibility to larger society to become involved in

social, legal, and political issues.

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5FROM OBLIGATION TO RESPONSIVENESS TO

RESPONSIBILITY

Social Obligation The obligation of a business to meet its economic and legal responsibilities and nothing

more.

Social Responsiveness The capacity of a firm to adapt to changing societal conditions through the practical

decisions of its managers in responding to important social needs.

Social Responsibility A firm’s obligations as a moral agent extends beyond its legal and economic obligations,

to the pursuit of long-term goals that are good for society.

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6ARGUMENTS 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

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7ARGUMENTS 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

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8RELATIONSHIP BETWEEN SOCIAL RESPONSIBILITY

AND ECONOMIC PERFORMANCE

Studies appear to show a positive relationship between social involvement and the economic performance of organizations.

Difficulties in defining and measuring “social responsibility” and “economic performance raises the issues of validity and causation in the studies.

General public perception that companies who behave in a socially responsible way have better business performance

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9MANAGEMENT’S IMPACT ON THE NATURAL

ENVIRONMENT

The recognition of the close link between anorganization’s decision and activities and itsimpact on the natural environment.

Air, water, and soil pollution from toxic wastes

Global warming from greenhouse gas emissions

Natural resource depletion

www.cengage.com/resource_uploads/.../0-324-40571-5_04_REV

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10HOW ORGANISATIONS GOES ECO-FRIENDLY

Legal Approach Firms simply do what is legally required by region they are in by obeying laws, rules, and

regulations willingly and without legal challenge.

Market Approach Firms respond to the preferences of their customers for environment friendly products.

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.

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11VALUES-BASED MANAGEMENT

An approach to managing in which managers establish and uphold an organization’s shared values.

The Purposes of Shared Values Serving as guideposts for managerial decisions Shaping employee behavior Influencing the direction of marketing efforts

The Bottom Line on Shared Corporate Values An organization’s values are reflected in the decisions and actions of its employees.

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12MANAGERIAL ETHICS

Managerial ethics is a set of principles and rules dictated by upper management that define what is right and what is wrong in an organization: Irving L. Janis

Four Views of Ethics The utilitarian view The rights view The theory of justice view The integrative social contracts theory

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13THE UTILITARIAN VIEW

Ethical decisions are made solely on the basis of their outcomes or consequences such that the greatest good is provided for the greatest number.

Encourages efficiency and productivity and is consistent with the goal of profit maximization.

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14THE RIGHTS VIEW

Concerned with respecting and protecting individual liberties and privacy.

Seeks to protect individual rights of conscience, free speech, life and safety, and due process.

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15THE THEORY OF JUSTICE VIEW

Organizational rules are enforced fairly and impartially and follow all legal rules and regulations.

Protects the interests of stakeholders and the rights of employee.

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16THE INTEGRATIVE SOCIAL CONTRACTS THEORY

Ethical decisions should be based on existing ethical norms in industries and communities in order to determine what constitutes right and wrong.

Based on integration of the general social contract and the specific contract between community members.

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17FACTORS THAT AFFECT EMPLOYEES ETHICS

MORAL DEVELOPMENTA measure of independence from outside influences

Level of Individual Moral Development Preconventional level Conventional level Principled level

Stage of moral development interacts with: Individual characteristics The organization’s structural design The organization’s culture The intensity of the ethical issue

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18INDIVIDUAL CHARACTERISTICS

Values Basic convictions about what is right or wrong on a broad range of issues

Stage of Moral Development A measure of an individual’s independence from outside influences

Personality Variables Ego strength

A personality measure of the strength of a person’s convictions Locus of Control

Internal locus: The belief that you can control your own destiny. External locus: The belief that what happens to you is due to luck or chance.

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19STRUCTURAL VARIABLES

Organizational characteristics and mechanisms that guide and influence individual ethics:

Performance appraisal systems Reward allocation systems Ethical behaviors of managers An organization’s culture

Good structural design minimizes ambiguity and uncertain and foster ethical behavior.

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20ETHICS IN AN INTERNATIONAL CONTEXT

Ethical standards are not universal Social and cultural differences determine acceptable behaviors

Foreign Corrupt Practices Act Makes it illegal to corrupt a foreign official yet “token” payments to officials

are permissible when doing so is an accepted practice in that country. WTO

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21HOW MANAGERS CAN IMPROVE ETHICAL BEHAVIOR IN AN ORGANIZATION?

Hire individuals with high ethical standards. Establish codes of ethics and decision rules. Lead by example. Delineate job goals and performance appraisal mechanisms. Provide ethics training. Conduct social audits. Provide support for individuals facing ethical dilemmas.

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22EFFECTIVE USE OF CODE OF ETHICS

Develop a code of ethics as a guide in handling ethical dilemmas in decision making.

Communicate the code regularly to all employees. Have all levels of management continually reaffirm the importance of

the ethics code and the organization’s commitment to the code. Publicly reprimand and consistently discipline those who break the code.

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23THE VALUE OF ETHICS TRAINING

Training in ethical problem solving can make a difference in ethical behaviors.

Training in ethics increase employee awareness of ethical issues in business decisions.

Ethics training clarifies and reinforces the organization’s standards of conduct.

Employees become more confident that they will have the organization’s support when taking unpopular but ethically correct stances.

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24ETHICAL LEADERSHIP

Managers must provide a good role model by: Being ethical and honest at all times. Telling the truth; don’t hide or manipulate information. Admitting failure and not trying to cover it up. Communicating shared ethical values to employees through symbols,

stories, and slogans. Rewarding employees who behave ethically and punish those who do not. Protecting whistleblowers, who bring to light unethical behaviors or raise

ethical issues.

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25CONCLUSION OF THE PROJECT

More and more organizations are appearing in the 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. Acting ethically is not always easy. However, because society’s

expectations of its institutions are changing regularly.Managers must continually monitor those expectations. What is ethical today may be a poor guide in the future.

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26REFERENCES

https://en.wikipedia.org/wiki/Corporate_social_responsibility https://en.wikipedia.org/wiki/Business_ethics http://www.unido.org/csr.html www.cengage.com/resource_uploads/.../0-324-40571-5_04_REV www.study.com/academy/.../what-is-managerial-ethics-definition-examples.html www.bus.iastate.edu/emullen/MGMT370/MGMT370Ch5Spring11 www.faculty.salisbury.edu/~whdecker/buad320/chapter4 http://www.wto.org

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