Social Responsibility and Ethics

MHR 300: Social Responsibility and Ethics Social responsibility: an organization?s obligation to engage in activities that protect and contribute to the welfare of society. Historical Perspective: Profit-maximizing management: what?s good for the business is good for the country. 19th and early 20th centuries. Single-mindedly pursue profits. Trustee management: share the wealth to meet social needs. 1930s through 1950s. Privately held corporations decline; managers must balance all stakeholders? interests. Quality-of-life management: help society correct problems. 1960s. noneconomic issues (e.g. poverty, pollution) become organizational concerns. Levels of social commitment: Low: social obligation. Reactive Proscriptive Adheres to legal requirements Adheres to economic considerations Medium: social responsibility. Prescriptive Does more than required by law Does more than required by economic considerations Avoids public stands on issues High: social responsiveness. Proactive Anticipates and prevents problems Searches for socially responsible acts Takes public stands on issues Social audit: detailed examination and evaluation of an organization?s social performance. A categorizing strategy: illegal + irresponsible legal + irresponsible illegal + responsible legal + responsible Managerial ethics: set of standards and code of conduct that define what is right, wrong, and just in human actions. Do managers behave ethically? 11% of 1043 corporations have been involved in blatant illegalities. Fortune 500 executives in finance, operations, and marketing frequently compromise personal values in order to succeed. 4 out of 10 executives say they are asked to behave unethically on the job. Executives say they commonly observe generally accepted?but unethical?practices. Most managers believe they should behave ethically, but nearly 2/3 report a rise in unethical practices since the 1960s. Encouraging ethical standards: Consider personality characteristics of job applicants. Avoid personalities that tare prone to unethical behavior. Implement policies to block unethical tendencies. Make public statements that ethical behavior is important and expected. Develop organizational policies that specify ethical objectives. Provide rewards for ethical behavior and avoid providing rewards for unethical behaviors. Punish unethical behavior. Be sensitive to the potential for unethical behavior in competitive situations and take appropriate steps to avoid it. Remember that group decision-making generally results in higher levels of moral reasoning than does individual decision-making.