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8/8/2019 Ethics and Stake Holders Responsbiltys in Organizations 162
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Ethics and
Stakeholder Social Responsibility
8/8/2019 Ethics and Stake Holders Responsbiltys in Organizations 162
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Learning Objectives
State the importance of ethics for individual
employees and organizations.
Describe four forces that influence the ethical
behavior of individuals and organizations.
Describe three approaches that people use
when making ethical judgments. Explain stakeholder social responsibility and
how it influences managers¶ ethical decisions.
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Shaping Ethical Conduct(adapted from Figure 6.1)
Cultural Forces
Fundamental American personal values include:
honesty
integrity trustworthiness
respect for other people
self-respect
family
achievement
reliability fairness
loyalty
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Shaping Ethical Conduct(adapted from Figure 6.1)
Laws are society¶s values and standards that
are enforceable in the courts.
Cultural Forces
Legal and Regulatory Forces
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Shaping Ethical Conduct(adapted from Figure 6.1)
A code of ethics states the principles that
employees are expected to follow when
acting on behalf of the organization.
Cultural Forces
Legal and Regulatory Forces
Organizational Forces
Some recommended actions include
Create a formal ethics system
Communicate ethical expectations
Include ethical conduct as a measure of performance evaluations
Make it acceptable to talk about ethics
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Shaping Ethical Conduct(adapted from Figure 6.1)
Moral Development
Whistle Blowing
Cultural Forces
Legal and Regulatory Forces
Organizational Forces
Individual Forces
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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?
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Shaping Ethical Conduct(adapted from Figure 6.1)
Ethical Conduct
Individual
Organization
Cultural Forces
Legal and Regulatory Forces
Organizational Forces
Individual Forces
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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
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Making Ethical Judgments
The justice approach involves evaluating
decisions and behavior with regard to how
equitably they distribute the benefits and costsamong individuals and groups.
± Distributive Justice Principle
± Fairness Principle ± Natural Duty Principle
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Stakeholder Social Responsibility
Stakeholder social responsibility holds that
managers and other employees have
obligations to identifiable groups that areaffected by, or can affect the achievement of
an organizations goals.
Stakeholders are individuals or groups thathave interests, rights, or ownership in an
organization and its activities.
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Common Stakeholders of Organizations(adapted from Figure 6.2)
MediaGovernments
(Regulatory Agencies)
Secondary Stakeholders
Political
Action
Groups/
Activists
Unions
Nongovernmental
Organizations
Primary Stakeholders
Suppliers
Customers
Shareholders
EmployeesThe
Organization
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Examples of Types of Pressures from Primary
Stakeholders
(adapted from Table 6.3)
Employees ± Pay and benefits
± Safety and health
± Rights at work/global labor standards
± Fair/ethical treatment in hiring, reviews, promotion, and relatedareas
Shareholders
± Demands for efficiency/profitability
± Viability (sustainability)
± Growth of investment
± Ethical disclosure of financial information
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Examples of Types of Pressures from Primary
Stakeholders (cont.)
(adapted from Table 6.3)
Customers
± Competitive prices
± Quality and safe products ± Respect for customers¶ privacy
± Concern for environment
± Truthful/ethical advertising and sales practices
Suppliers
± Meet commitments
± Repeat business
± Fair trade practices/ethical treatment
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Evaluating Social Performance
Proactive Responsibility
± Broad performance criteria
± Ethical norms
± Operation strategy
± Response to social pressures
± Legislative and political activities Social Audits