MIDTERMrobbins PPT05

8th edition
Steven P. Robbins
Mary Coulter
PowerPoint Presentation by Charlie Cook

Copyright © 2005 Prentice Hall, Inc.
All rights reserved.
What Is Social Responsibility?
• The Classical View
 Management’s only social responsibility is to
maximize profits (create a financial return) by
operating the business in the best interests of the
stockholders (owners of the corporation).
 Expending the firm’s resources on doing “social good”
unjustifiably increases costs that lower profits to the
owners and raises prices to consumers.
Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–2

What Is Social Responsibility? (cont’d)
• The Socioeconomic View
 Management’s social responsibility goes beyond
making profits to include protecting and improving
society’s welfare.
 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.
 “To do the right thing”

Does Social Responsibility Pay?
• Studies appear to show a positive relationship
between social involvement and the economic
performance of firms.
 Difficulties in defining and measuring “social
responsibility” and “economic performance raise
issues of validity and causation in the studies.
 Mutual funds using social screening in investment
decisions slightly outperformed other mutual funds.
• A general conclusion is that a firm’s social
actions do not harm its long-term performance.
How Organizations Go Green
• There are 9 ways companies can go green
• 1- Alternative energy
• 2- Natural Materials
• 3- Replace Equipment
• 4- Personal Computers
• 5- LED Lighting
• 6- Recycling
• 7- Paperless Environment
• 8- Products & Promotions
• 9- Services and Products
•

Values-Based Management
• Values-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
 Building team spirit
• The Bottom Line on Shared Corporate Values
 An organization’s values are reflected in the decisions
and actions of its employees.
Managerial Ethics
• Ethics Defined
 The rules and principles that define right and wrong
conduct.
• Four Views of Ethics

 The utilitarian view
 The rights view
 The theory of justice view
 The integrative social contracts theory

Managerial Ethics (cont’d)
• 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.
• 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.

Managerial Ethics (cont’d)
• The Theory of Justice
 Organizational rules are enforced fairly and impartially
and follow all legal rules and regulations.
 Protects the interests of underrepresented stakeholders
and the rights of employee.
• 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.

Factors That Affect Employee Ethics
• Moral Development
 A measure of independence from outside influences
 Levels of Individual Moral Development
– Preconventional level
– Conventional level
– Principled level
 Stage of moral development interacts with:
 Individualcharacteristics
 The organization’s structural design
 The organization’s culture
 The intensity of the ethical issue

Stages of Moral Development
Source: Based on L. Kohlberg, “Moral Stages and Moralization: The Cognitive-

Development Approach,” in T. Lickona (ed.). Moral Development and Behavior: Theory, Exhibit 5.8
Research, and Social Issues (New York: Holt, Rinehart & Winston, 1976), pp. 34–35.
Structural Variables
• Organizational characteristics and mechanisms
that guide and influence individual ethics:
 Performance appraisal systems
 Reward allocation systems
 Behaviors (ethical) of managers
 An organization’s culture
 Intensity of the ethical issue
• Good structural design minimizes ambiguity and
uncertainty and fosters ethical behavior.
Code of Ethics
• A formal statement of an organization’s primary
values and the ethical rules it expects its
employees to follow.
 Be a dependable organizational citizen
 Don’t do anything unlawful or improper that will harm
the organization
 Be good to customers
Source: F.R. David, “An Empirical Study of Codes of Business Ethics: A Strategic Perspective.” paper
presented at the 48th Annual Academy of Management Conference, Anaheim, California August 1988.
Effective Use of a 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.
How Managers Can Improve Ethical
Behavior in An Organization
1. Hire individuals with high ethical standards.
2. Establish codes of ethics and decision rules.
3. Lead by example.
4. Delineate job goals and performance appraisal
mechanisms.
5. Provide ethics training.
6. Conduct independent social audits.
7. Provide support for individuals facing ethical dilemmas.

Ethical 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 employees (whistleblowers) who bring to
light unethical behaviors or raise ethical issues.

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8th edition

PowerPoint Presentation by Charlie Cook

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–2

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–3

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–5

• Four Views of Ethics

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–7

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–8

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Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–10

Source: Based on L. Kohlberg, “Moral Stages and Moralization: The Cognitive-

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 5–15

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