Chapter 6

Ethics and Corporate Social Responsibility

6.1

Learning Objectives
After reading this chapter, you should be able to:
State the importance of ethics for employees and organizations Describe four forces that influence the ethical behavior of individuals and corporate social responsibility Describe three approaches that people use when making ethical judgments Explain how the concerns of stakeholders influence managers ethical decisions Describe how individuals and organizations can contribute to improving ethical conduct at work

6.2

Forces That Shape Ethical Conduct

Societal Norms and Culture Laws and Regulations Organizational Practices and Culture Individual Perspective

Ethical Conduct: Individuals Organizations

Adapted from Figure 6.1

6.3

Ethical Models

Utilitarian
IDEAL Outcome

Justice

Moral Rights

6.4

Stakeholders of the Organization

Customers
Owners

Employees

Unions

Suppliers

Government Strategic partners

Local Community Society in General

Adapted from Figure 6.2

6.5

Stakeholders Concerns
Stakeholder Group

Examples of Concerns

Owners and Investors

Financial Soundness
Consistency in meeting shareholder expectations Sustained profitability Average return on assets over fiveyear period Timely and accurate disclosure of financial information

6.6

Stakeholders Concerns (cont.)

Stakeholder Group

Examples of Concerns

Customers

Product/service quality, innovativeness, and availability

Responsible management of defective or harmful products/services

Safety records for products/services

Pricing policies and practices

Honest, accurate, and responsible advertising

6.7

Stakeholders Concerns (cont.)

Stakeholder Group

Examples of Concerns

Employees

Nondiscriminatory, merit-based hiring and promotion

Diversity of the workforce

Wage and salary levels and equitable distribution

Availability of training and development

Workplace safety and privacy

6.8

Stakeholders Concerns (cont.)

Stakeholder Group

Examples of Concerns

Society

Environmental issues

Environmental sensitivity in packaging and product design Recycling efforts and use of recycled materials Pollution prevention Global application of environmental standards

6.9

Stakeholders Concerns (cont.)

Stakeholder Group

Examples of Concerns

Society

Community involvement

Percentage of profits designated for cash contributions Innovation and creativity in philanthropic efforts Product donations Availability of facilities and other assets for community use Support for employee volunteer efforts