University:
Massachusetts Institute of Technology
Course:
15.992 | S-Lab: Laboratory for Sustainable Business
Academic year:

2023
Views:

113

Pages:

37
Author:

Marcus Zimmerman

Chapter 3 Ethics and Social Responsibility What Would You Do?    Should McDonald’s bow to pressure from PETA? Where do the egg farmers fit in this situation? What is the ethical thing to do? What is Ethical and Unethical Workplace Behaviour? After reading the next two sections, you should be able to: 1. discuss how the nature of a management job creates the possibility for ethical abuses 2. identify common kinds of workplace behaviour Ethics and the Nature of Management Jobs   Ethical behaviour follows accepted principles of right and wrong Intentional managerial unethical behaviours    company resources for personal use mishandling information encouraging others’ unethical behaviour Ethics and the Nature of Management Jobs  Unintentional managerial unethical behaviour   poorly constructed policies unrealistic employee goals Workplace Deviance     Property deviance Production deviance Political deviance Personal aggression Types of Workplace Deviance Production deviance     leaving early taking excessively long breaks purposely working slower intentionally wasting resources Property deviance   sabotaging, stealing damaging equipment Types of Workplace Deviance Political deviance    using favouritism spreading rumours falsely blaming others for mistakes Personal aggression    sexual harassment verbal abuse threatening co-workers How Do You Make Ethical Decisions? After reading this section, you should be able to: 3. describe what influences ethical decision-making 4. explain what practical steps managers can take to improve ethical decisionmaking Influences on Ethical Decision-Making    Ethical intensity of the decision Moral development Principles of ethical decision-making Ethical Intensity of the Decision  Magnitude of consequences   Social consensus   Probability of effect  Temporal immediacy Proximity of effect Concentration of effect Kohlberg’s Stages of Moral Development Preconventional Level Stage 1: Punishment and Obedience Stage 2: Instrumental Exchange Conventional Level Stage 3: Good Boy — Nice Girl Stage 4: Law and Order Post Conventional Level Stage 5: Legal Contract Stage 6: Universal Principle Principles of Ethical Decision-Making     Principle of longterm interest Principle of personal virtue Principle of religious injunctions Principle of government requirements    Principle of utilitarian benefits Principle of individual rights Principle of distributive justice Principle of Long-term Self-interest  People should never take any action that’s is not you or your organization’s long-term selfinterest Principle of Personal Virtue  People should never do anything that is not honest, open, and truthful, and which you would not be glad to see reported in the newspapers or on TV Principle of Religious Injunctions  People should never take any action that is not kind and that does not build a sense of community; a sense of everyone working together for a commonly accepted goal Principle of Government Requirements  People should never take any action that violates the law, for the law represents the minimum moral standard Principle of Utilitarian Benefits  People should never take any action that does not result in greater good for society. Instead, do whatever creates the greatest good for the greatest number. Principle of Individual Rights  People should never take any action that infringes on others’ agreed-on rights Principle of Distributive Justice  People should never take any action that harms the least among us: the poor, the uneducated, the unemployed Practical Steps to Ethical Decision-Making     Selecting and hiring ethical employees Codes of ethics Ethics training Ethical climate Selecting and Hiring Ethical Employees   Increase ethical behaviours by hiring more ethical employees Testing for ethics   Overt-integrity tests Personality-based integrity tests What Really Works Integrity Tests What Really Works Codes of Ethics Corporate statements on ethics  To encourage ethical decision-making and behaviour   Companies must communicate the codes to others both within and outside the organization Management must also develop practical ethical standards and procedures specific to the company’s line of business Ethics Training    Develop employee awareness about ethics Achieve credibility with employees Teach employees a practical model of ethical decision-making Ethical Climate     Managers act ethically Top managers are active in the in the company ethics program An effective reporting system Fairly and consistently punish those who violate the ethics code A Basic Model of Ethical Decision-Making 1. 2. 3. 4. 5. 6. Identify the problem Identify the constituents Diagnose the situation Analyze your options Make your choice Act Learning Objectives: What is Social Responsibility? After reading the next four sections, you should be able to explain: 5. To whom organizations are responsible 6. For what organizations are socially responsible 7. How organizations can choose to respond to societal demands for social responsibility 8. Whether social responsibility hurts or helps an organization’s economic performance To Whom Are Organizations Socially Responsible?  Shareholders    managers must satisfy the owners social responsibility is maximizing shareholder wealth Stakeholders   persons or groups with a legitimate interest in a company’s actions Social responsibility is satisfying the interests of multiple stakeholders Shareholder Model: Friedman   Managers cannot act effectively as moral agents for shareholders Time, money, and attention diverted to social causes undermine market efficiency Stakeholder Model of Corporate Social Responsibility Firm’s stakeholders:     Governments Investors Political groups Customers     Communities Employees Trade associations Suppliers Primary Stakeholder Issues Company Employees Shareholders Customers Suppliers Public stakeholders For What Are Organizations Socially Responsible Total Social Responsibilities     Economic Legal Ethical Discretionary Responses to Demands for Social Responsibility Social Responsiveness  Reactive   Defensive   Do only what is required Accommodative   Fight all the way Be progressive Proactive  Lead the industry Social Responsibility and Economic Performance    Social responsibility can sometimes cost a company significantly if it chooses to be socially responsible Sometimes it does pay to be socially responsible While socially responsible behaviour may be “the right thing to do,” it does not guarantee profitability What Really Happened?     Treatment of hens was viewed as one of “ethical intensity” McDonald’s developed a set of Animal Welfare Guiding Principles McDonald’s decided it would no longer buy eggs from suppliers who debeaked hens or kept them in very small cages Shareholder Model versus Stakeholder Model