2robbins_mgmt15_ppt_06.pdf

Management
Fifteenth Edition, Global Edition
Chapter 6
Managing Social Responsibility
and Ethics
Copyright © 2021 Pearson Education Ltd.

Learning Objectives
6.1 Discuss what it means to be socially responsible and
what factors influence that decision.
6.2 Explain green management and how organizations can
go green.
6.3 Discuss the factors that lead to ethical and unethical
behavior.
6.4 Describe management’s role in encouraging ethical
behavior.
6.5 Discuss current social responsibility and ethics issues.

From Obligations to Responsiveness to Responsibility
• Social obligation: when a firm engages in social actions
because of its obligation to meet certain economic and
legal responsibilities
• Classical view: the view that management’s only social
responsibility is to maximize profits
• Socioeconomic view: the view that managers’ social
responsibilities go beyond making profits to include
protecting and improving society’s welfare

The Socioeconomic View
• Social responsiveness: when a company engages in
social actions in response to some popular social need
• 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

Exhibit 6.1 Arguments For and Against Social Responsibility
Exhibit 6.1 outlines arguments for and against social involvement.

Should Organizations Be Socially Involved?
• Social Screening – applying social criteria
(screens) to investment decisions.
• SRI funds usually will not invest in
companies involved in liquor, gambling,
tobacco, nuclear power weapons, price
fixing, fraud, or in companies that have
poor product safety, employee relations,
and environmental track records.

Green Management and Sustainability
• Green management: managers consider the impact of
their organization on the natural environment

How Organizations Go 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.
• Stakeholder Approach
 Firms work to meet the environmental demands of multiple
stakeholders—employees, suppliers, and the community.
• Activist Approach (or Dark Green)
 Firms look for ways to respect and preserve environment and be
actively socially responsible.

Exhibit 6.3 Green Approaches
Exhibit 6.3 uses the terms shades of green to describe the different environmental
approaches that organizations may take.

Evaluating Green Management Actions
• Company-issued reports on environmental performance
• ISO 9000 (quality management) and ISO 14000
(environmental management) standards
• Global 100 list of the most sustainable corporations in the
world

Exercises –Choose the best Answer
1) The ________ view is that management's social responsibility goes beyond
making profits to include protecting and improving society's welfare. 1) ______
A) sociopolitical
B) socioeconomic
C) sociocultural
D) sociotechnical
2) Social obligation is the obligation of a business to meet its ________. 2)
_______
A) economic and legal responsibilities
B) social and legal responsibilities
C) social and economic responsibilities
D) economic and social responsibilities

3) If your organization was paying minimum wage when necessary and applying
the minimum legal standards to its employees work environment, it would be
said to have fulfilled its ________. 3) _______
A) social responsiveness B) social responsibility
C) social expectation D) social obligation
4) An Egyptian business that provides on-site childcare facilities for employees is
________. 4) _______
A) being socially responsive B) adopting social screening
C) practicing green management D) fulfilling its social obligations

5) The process of applying social and environmental criteria to an
investment decision is known as ________. 5) ______
A) value-based selection B) violation of profit maximization
C) social screening D) green screening
6) Which of the following approaches of going green reflects the highest
degree of environmental sensitivity and is also a good illustration of the
social responsibility of the organization?6) ______
A) stakeholder approach B) market approach
C) legal approach D) activist approach

7) Under what approach is the organization driven to look for ways
to respect and preserve the earth and its natural resources? 7)
______
A) stakeholder approach B) market approach
C) activist approach D) legal approach

Is it ethical to:
• Shop online during company time?
• Using office equipment for personal use?
• Read personal emails while at work?

• Your friend is stressed about an upcoming test.
You already took the test and got 100%, so you
know all the answers already. Should you:
A) Just give the answers to your friend
B) Use her knowledge to coach your friend
C) Not get involved at all

Managerial Ethics
What is the difference between Ethics
and Morals?

Morals Vs. Ethics
Ethics and morals relate to “right” and “wrong”
conduct. While they are sometimes used
interchangeably, they are different:
Ethics refer to rules provided by an external
source, e.g., codes of conduct in workplaces or
principles in religions.
Morals refer to an individual's own principles
regarding right and wrong.

Business Ethics
“The principles and standards that define right and wrong
behavior in business.”
In the next slide of Exhibit 6-4 you will find several tests a manager
can use when faced with an ethical dilemma. Posing one of the
questions listed in Exhibit 6-4 can help you make an ethical choice

Exhibit 6.4 Helping You Make Ethical Decisions
When faced with an ethical dilemma, consider using one or more of
these tests:
• The Golden Rule Test: Would I want people to do this to me?
• The What-If-Everybody-Did-This Test: Would I want everyone to do
this? Would I want to live in that kind of world?
• The Family Test: How would my parents/spouse/significant
other/children feel if they found out I did this?
• The Conscience Test: Does this action go against my conscience? Will
I feel guilty afterwards?
• The Front Page/Social Media Test: How would I feel if this action was
reported on the front page of my hometown newspaper or splashed
across social media outlets for all to see?
Source: Based on T. Lickona, Character Matters: How to Help Our Children Develop Good Judgment Integrity, and Other
Essential Virtues (New York: Touchstone Publishing, 2004); A. Goodman, “The Dilemma: Addicted and Conflicted About
Laughing at the Afflicted,” Institute for Global Ethics, June 3, 2013, globalethics.org; and G. Enck, “Six-Step Framework for
Ethical Decision Making,” Journal of Health Services Research and Policy (January 2014): pp. 62–64.

Importance of Business Ethics
Ethics influence and contribute to :
Employee Commitment
Investor and customer loyality
Customer satisfaction
Ability to build relationship with stakholders
Greater earning

Reasons for Not Reporting observed
Misconduct
1. Didn’t believe corrective action
2. Feared retribution from supervisor
3. Feared they wouldn’t remain anonymous
4. Thought someone else would report the misconduct
5. Didn’t know who to contact

Exhibit 6.5 Factors that Determine Ethical
and Unethical Behavior
Exhibit 6.5 shows factors that determine ethical and unethical behavior.

Stages of Moral Development
• Preconventional level
• Conventional level
• Principled level

Exhibit 6.6 Stages of Moral Development
Exhibit 6.6 shows the three levels and six stages of moral development.

The Heinz Dilemma
• Scenario
A woman was near death from a unique kind of
cancer. There is a drug that might save her. The
drug costs $4,000 per dosage. The sick woman's
husband, Heinz, went to everyone he knew to
borrow the money and tried every legal means,
but he could only get together about $2,000. He
asked the doctor scientist who discovered the
drug for a discount or let him pay later. But the
doctor scientist refused.

QUESTION
S h o u l d H e i n z b r e a k i n t o t h e
D r u g s t o r e t o s t e a l t h e d r u g f o r
h i s w i f e ? W h y o r w h y n o t ?

Possible Answers LEVEL 1: Pre-conventional Level
• Heinz should not steal the drug because he might be caught and
sent to jail.
• Heinz should steal the drug because if he doesn't then his wife
might scold him.
• It is right for Heinz to steal the drug because it can cure his wife
and then she can cook for him.

Summary Level 1: Pre-conventional Level
• Level 1:
• Stage 1: Punishment-Obedience Orientation
• Stage 2: Following up rules when it is in your immediate
self-interest
Persons in this stage obey rules to avoid punishment or behave towards
self-interest.
In this stage, personal needs determine what is right or wrong. Favors are
returned along the lines of “you scratch my back, I’ll scratch yours”.

Possible Answers LEVEL 2: Conventional Level
• Yes, Heinz should steal the drug. He probably will go to jail for
a short time for stealing but his in-laws will think he is a good
husband. (Approval from others)
• As her husband, Heinz has a duty to save his wife’s life so he
should steal the drug. But it’s wrong to steal, so Heinz should
be prepared to accept the penalty for breaking the law.

Summary Level 2: Conventional Level
• Level 2:
• Approval from others,
• Law and Order Orientation
-One’s behavior in this stage is determined by what pleases
and is approved by others.
-In all cases, authority must be respected and the social order
maintained.

Possible Answer Level 3: Principled Level
 Heinz should steal the drug because everyone has the
right to life regardless of the law against stealing. Should
Heinz be caught and prosecuted for stealing then the law
needs to be reinterpreted because a person’s life is at
stake.

Summary Level 3: Principled Level
• Level 3:
• Universal Ethical Principle Orientation
(Universal ethical principles driven), moral reasoning is
based on abstract reasoning using universal ethical
principles. Laws are valid only insofar as they are
grounded in justice
In this stage, persons believe there are universal point of
view on which all societies should agree. What is “good”
and “right” are matters of individual conscience and
involve abstract concepts of justice, human dignity, and
equality.

Stages of Moral Development In BUSINESS
– Pre-conventional level
– When applied to business, the pre-conventional or pre-moral
level explains how many employees act when they first join
an organization. They, too, are obedient, and will try to avoid
upsetting their new boss or other people in their new
environment.
– Conventional level
– the conventional levels of morality are often witnessed as
employees become more comfortable in their department
and division and with their co-workers and
management. While employees that start to fit in still attempt
to be productive and meet their own goals, they begin to think
about the good of the company and how they fit in to the
social framework, and how their actions can best help the
company.

Factors That Affect Employee Ethics
– Principled level
– Principled level behavior is most likely to manifest in
employees who have been with one employer for years.
These employees help secure the rights and
responsibilities within the social framework of the
company. Often, company culture is part of that, for
example The unquestioned idea about quality and
customer protection.

Again: Factors that Determine Ethical
and Unethical Behavior
Exhibit 6.5 shows factors that determine ethical and unethical behavior.

Individual Characteristics
• Values
Basic convictions about what is right or wrong.
• Ego strength
A personality measure of the strength of a person’s convictions
• Locus of control
A personality attribute that measures the degree to which people
believe they control their own life.
Internal locus: the belief that you control your destiny.
External locus: the belief that what happens to you is due to luck
or chance.

Structural Variables
• Ethical behavior can be influenced by:
– An organization’s structural design
– Goals
– Performance appraisal system
– Reward allocation

Organizational culture
• The company’s culture has a profound effect on the ethical
behavior of employees. A positive corporate culture
encourages employees to behave in responsible, ethical
ways, resulting in a happy workplace, team collaboration
and employee empowerment. Negative corporate cultures,
on the other hand, can promote unethical behavior,
causing a wide variety of problems.

Exhibit 6.7 Issue Intensity
As Exhibit 6.7 shows, six characteristics determine issue intensity or how important an
ethical issue is to an individual: greatness of harm, consensus of wrong, probability of
harm, immediacy of consequences, proximity to victim(s), and concentration of effect.

Issue Intensity
• The six factors suggest that:
– the larger the number of people harmed
– the more agreement that the action is wrong
– the greater the likelihood that the action will cause
harm
– the more immediately the consequences of the action
will be felt
– the closer the person feels to the victim
– The more concentrated the effect of the action on the
victim(s)…
• The greater the issue intensity or importance

Ethics in an International Context
• Ethical standards are not universal
• Foreign Corrupt Practices Act
• United Nations Global Contract

Employee Selection
• Some firms do pre-employment integrity testing to weed
out applicants that are likely to be dishonest or engage in
other undesirable workplace behaviors
• Firms need to state that background checks will be
conducted and references contacted
• Use the interview to pose ethical questions to determine
the applicant’s integrity

Codes of Ethics and Decision Rules
• Code of ethics: a formal statement of an organization’s
primary values and the ethical rules it expects its
employees to follow
• The effectiveness of a code of ethics depends heavily on
whether management supports them and how employees
that violate the codes are treated

Developing Codes of Ethics
• Organizational leaders should model appropriate behavior
and reward those who act ethically.
• Managers should reaffirm the importance of the ethics
code and discipline those who break it
• Stakeholders should be considered as an ethics code is
developed or improved
• Managers should communicate and reinforce the ethics
code regularly
• Managers should use the five-step process to guide
employees when faced with ethical dilemmas

Leadership at the Top
• Doing business ethically requires a commitment from
managers at all levels, but especially the top level
because:
– they uphold the shared values and set the cultural tone
– they’re role models in both words and actions

Ethics Training
• More organizations are setting up seminars, workshops,
and similar ethics training programs to encourage ethical
behavior.

Protection of Employees Who Raise Ethical Issues
• Whistle-blower: individual who raises ethical concerns or
issues to others
– Currently 22 federal statutes protecting whistle-blowers
– Managers retaliating against whistle-blowers could face
a ten-year prison sentence
– OSHA has proposed that anti-retaliation programs
have the 5 key elements discussed next

8) ______ represent basic convictions about what is right and wrong.
A) Dogmas
B) Values
C) Cultures
D) Beliefs

9) In which of the stages of moral development do individuals stick to rules to
avoid physical punishment and follow rules only when doing so is in their
immediate interest? 9) _______
A) conventional stage B) principled stage
C) pre-conventional stage D) Cross-conventional stage
10) The primary debate about ethics training programs is whether ________.
10) _______
A) the programs decrease awareness of ethical issues in business
B) ethics can be taught
C) the programs cause a regression in a person's moral development
D) ethics training is sufficient

11) at the ________ level of moral development, individuals define moral
values apart from the authority of the groups to which they belong or society in
general.
A) conventional
B) established
C) principled
D) pre-conventional
12) ________ is the degree to which people believe they control their own fate.
12) ______
A) Social obligation
B) Locus of control
C) Ego strength
D) Social responsibility

13) What can be said about a manager who believes that she can work hard and
will meet the productivity goals of her organization despite unfavorable conditions?
13) ______
A) She has a weak ego strength. B) She has an external locus of control.
C) She has a high ego strength. D) She has an internal locus of control.
14) at the ______ level of moral development, ethical decisions rely on maintaining
expected standards and living up to the expectations of others.
A) principled
B) conventional
C) conscientious
D) preconventional

15) John is offered an attractive incentive to steal sensitive information about his
company's wealthy investment customers. Which of the following statements best
reflects John's thoughts if he is at the principled level of moral development?
15) ______
A) If I am convicted for this crime, I will surely be imprisoned and will probably
never be employed anywhere else.
B) By stealing from another person, I will be in violation of the moral standards
I've come to expect of myself.
C) My job is to protect the information that this company deals in and I should not
be violating my duties.
D) If my involvement is detected, my friends and family would be humiliated by
my actions.

16) Norman is a stickler for following the rules because he is sure he will be caught
and punished if he doesn't. What is Norman's level of moral development?
16) ______
A) pre-conventional B) conventional
C) Mid-conventional D) principled
17) A ________ is a formal statement of an organization's primary values and the
ethical rules it expects its employees to follow. 17) ______
A) code of ethics
B) mission statement
C) values statement
D) vision statement

18) Employees who raise ethical concerns or issues in an organization are known
as ________. 18) ______
A) employee-volunteers
B) philanthropist
C) Entrepreneurs
D) whistle-blowers
18) ________ measures the strength of a person's convictions. 27) ______
A) Locus of control
B) Moral development
C) Social desirability
D) Ego strength

What will you do if you are the manager?
• You are a manager in a large commercial bank. You
discover that Monica, a loan officer who reports to you,
has forged an approval signature on a customer loan,
which requires signatures from two loan officers. When
you confront Monica with the forgery, she apologizes
profusely and says that her husband has been very ill.
The day she forged the signature, he was going into
surgery and she just did not have time to find another
loan officer to sign the authorization for the loan.
Monica has been with your bank for 15 years and has a
spotless record.

What will you do if you are the manager?
Case Answer
• This real case resulted in termination and caused a lot
of angst for the manager who had to do the firing. But,
this kind of behavior simply cannot be tolerated in a
financial institution. Forgery is one of the biggest "sins"
an employee can commit in a company, especially a
financial firm. Appeals would get an employee nowhere
in a situation like this one. Patricia could have avoided
the debacle by asking for help. If she had admitted to
her manager that she could not get the other signature,
he or she could have helped her. It is a sad case, but
there is really no excuse for her behavior.

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