Perspective

Management
Lecture-5
Social Responsibility and Ethical
behavior
Agenda
 Social Responsibility
 Stakeholder pressures
 Ethical Judgments
 Ethical Behavior
Social Responsibility
 Social Responsibility higher due to greater
interdependence ( Farmer agitation for SEZ)

 Involves all types of Organizations (Charity

Commissioners office, BMC, etc)

 Greater Media Coverage and faster

reporting( TV and Radio coverage of events)
Corp. Social Responsibility
(CSR)
 CSR considers the impact of the Firm’s
activities on the Society
 Social Responsibility
 Proaction vs Reaction: Proaction means
deliberate and planned activity to solve social
problems Eg: Infosys Foundation
Socially Beneficial Activities
 By Legislation: Introduced and forced
compliance by the Govt ( Health warnings)

 By Voluntary contribution to the Community

Evaluating Social Performance
 Proactive Responsibility
 Broad performance criteria
 Ethical norms
 Operation strategy
 Response to social pressures
 Legislative and political activities
 Social Audits
Social Audit
 Commitment to systematic assessment of
socially beneficial activities of the firm
- Measures
- Money spent
- Voluntary Programs conducted
- Analyzing the feedback of the stakeholders
(Employees, Customers, community, public at
large)
Stakeholder Social
Responsibility
 Stakeholder social responsibility holds that
managers and other employees have
obligations to identifiable groups that are
affected by, or can affect the achievement of
an organizations goals.
 Stakeholders are individuals or groups that
have interests, rights, or ownership in an
organization and its activities.
Common Stakeholders of Organizations

Secondary Stakeholders
Governments
Media (Regulatory Agencies)

Primary Stakeholders

Political Customers
Action Unions
Suppliers The Employees
Groups/
Organization
Activists
Shareholders

Nongovernmental
Organizations
Stakeholder Pressure

Employees
Pay and benefits Customers
Safety and health Competitive prices
Rights at work/global labor Quality and safe products
standards Respect for customers’
Fair/ethical treatment in hiring, privacy
reviews, promotion, and related Concern for environment
areas Truthful/ethical advertising
and sales practices

Suppliers
Shareholders Meet commitments
Demands for Repeat business
efficiency/profitability Fair trade
Viability (sustainability) practices/ethical
Growth of investment treatment
Ethical disclosure of
financial information
Ethical Judgments and Behavior
Basis of Ethical Judgments
 Utilitarian Approach

 The Moral Rights Approach

 The Justice Approach

Making Ethical Judgments
 The utilitarian approach focuses on behaviors
and their results, not on the motives for such
actions.
 Achieving organizational goals
 Efficiency
 Conflicts of interest
Making Ethical Judgments
 The moral rights approach holds that
decisions should be consistent with
fundamental rights and privileges.
 Life and safety
 Truthfulness
 Privacy
 Freedom of conscience and speech
Making Ethical Judgments
 The justice approach involves evaluating
decisions and behavior with regard to how
equitably they distribute the benefits and
costs among individuals and groups.
 Distributive Justice Principle
 Fairness Principle
 Natural Duty Principle
Factors Shaping Ethical
Conduct
Shaping Ethical Conduct
Cultural
Forces Ethical

Legal and
Regulatory Behavior
Forces Individual

Organizational
Forces
Unethical

Individual
Forces
 Shaping Ethical Conduct
Cultural Forces
Determine Fundamental personal values
Personal Values include:
 honesty
 integrity
 trustworthiness
 respect for other people
 self-respect
 family
 achievement
 reliability
 fairness
 loyalty
 Shaping Ethical Conduct
Cultural Forces

Influence the Behavior

Of Organizations
Legal and Regulatory Forces

Influence the
Laws are society’s values Individual’s Behavior
and standards that In Public
are enforceable in the courts.
 Shaping Ethical Conduct
Cultural Forces

Legal and Regulatory Forces

Organizational Forces

Some recommended actions include

A code of ethics states  Create a formal ethics system
the principles that
 Communicate ethical expectations
employees are expected
to follow when acting  Include ethical conduct as a measure of
on behalf of the performance evaluations
organization.  Make it acceptable to talk about ethics
Shaping Ethical Conduct

Cultural Forces

Legal & R’gulatory

Org’nl forces

Individual
Forces

Friends

Perceived
enemies
Personality
Prejudices Biases
Traits
Examples of Lawful and Unlawful Reasons for
Dismissing Employees
Some Permissible
Reasons
 Incompetence in performance
 Gross or repeated
insubordination
 Civil rights violations such as
engaging in harassment
 Illegal behavior such as theft or
physical violence
 Repeated lateness or
unexcused absences
 Drug activity or drunkenness
on the job
Some Unacceptable
Reasons
 Blowing the whistle about illegal
conduct by the employer
Filing discrimination charges
with state or municipal authority
 Filing unfair labor practice
charges with the authority under
the Labour/ Employment law of a
state
 Engaging in union activities,
provided there is no violence or
unlawful behavior
 Complaining or testifying about
violations of equal pay, wage, or
hour law
 Shaping Ethical Conduct

Cultural Forces

Legal and Regulatory Forces

Organizational Forces

Individual Forces
 Moral Development
 Whistle Blowing
Whistle-Blowing
 Anyone considering whistle-blowing should
consider the following
 Is this the only way?
 Do I have the evidence?
 Why am I doing this?
 Am I ready?