Chapter 3

Ethics and Social Responsibility

2

Philosophical Principles Underlying Business Ethics

Focus on consequences and pragmatism (So who is hurt?)

Focus on rights of individuals (deontology emphasizes principles)

Focus on integrity (virtue ethics focuses on character of person)

3

Values and Ethics

Ethics converts values into action. The right values can lead to

competitive advantage. Ethically-centered management

focuses on quality of product rather than completion date.

4

Contributing Factors to Ethical Problems

Greed, gluttony, and self-gain Unethical organizational culture Moral laxity (“Forget ethics for now.”) Self-interest (“I’ll take care of me first.”) Unconscious bias (“A man is best for

the job of CEO.”) Rationalization (“Everybody else cheats

on taxes.”)

5

Ethical Temptations and Violations

1. Stealing from employers and customers

2. Illegally copying software3. Treating people unfairly4. Sexual harassment5. Conflict of interest (lose objectivity)6. Accepting kickbacks and bribes

6

Ethical Temptations and Violations, continued

7. Divulging confidential information8. Misuse of corporate resources (“Let’s

take the corporate jet to Cancun.”)9. Corporate espionage (e.g., dumpster

diving for dirt on the competition)10. Poor cyberethics (e.g., stealing

identities from résumés posted online)

7

A Guide to Ethical Decision Making

1. Is it right?2. Is it fair?3. Who gets hurt?4. Would you be comfortable if your

decision were widely circulated?5. Would you tell your child to do it?6. How does it smell?

8

Background Concepts of Social Responsibility Corporate social responsibility—

obligations to society beyond profits Stockholder viewpoint—only responsibility

is to owners/stockholders Stakeholder viewpoint—firm is responsible

to all affected groups Iron law—lose power if irresponsible Corporate social performance—good

citizen in the community

9

Social Responsibility Initiatives Environmental protection Work-life programs (such as flexible

work schedules) Community redevelopment projects Acceptance of whistle blowers Compassionate downsizing (such as

outplacement services and emotional support)

10

Ethical and Socially Responsible Workplace Formal mechanisms for monitoring ethics

(e.g., ethics committee, ethics hotline) Written organizational codes of conduct Communication about ethics and social

responsibility Leadership by example and ethical role

models Confrontation about ethical deviations Training in ethics and social

responsibility