Chapter 7 MGMT

Classical View

the view that managements only social responsibility is to maximize profits

Socioeconomic view

the view that managers’ social responsibilities go beyond making profits to include protecting and improving society’s welfare

stakeholder capitalism

the view that companies should focus on all stakeholders, which engages more of the socioeconomic view of social responsibility

social obligation

when a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities

social responsiveness

when a company engages in social actions in response to some popular social need.

social responsibility

a business’s intention beyond its legal and economic obligations to do the right things and act in ways that are good for society

green management and sustainibility

managers consider the impact of their organization on the natural environment

Levels of green from low to high

legal approach, market approach, stakeholder approach, activist approach

ESG reporting

demanding more transparency and employees who want to work to make a positive impact. Helps measure or quantify efforts. Focuses on 4 pillars: PEOPLE, PLANET, PROSPERITY, AND PRINCIPLES OF GOVERNANCE

Global reporting initiatives

ISO 9000 quality management and ISO 14000 environmental management. United nations sustainable development goals in 2015

ethics

principles, values, and beliefs that define right and wrong behavior. Golden rule test. what if everybody did this test. family test. consciences test. front page/social media test

moderators of ethics

individual characteristics, issue intensity, organizational culture, structural variables

stages of moral development

preconventional, conventional, principled

preconventional

1- sticking to rules to avoid physical punishment. 2- following rules only when doing so is in your immediate interest

conventional

3- living up to what is expected by people close to you. 4- maintaining conventional order by fulfilling obligations to which you have agreed

principled

5- valuing rights of other and upholding absolute values and rights regardless of the majority’s opinion 6-following self-chosen ethical principles even if they violate the law.

Individual characteristics

values, ego strength, locus of control

structural variables

ethical behavior can be influenced by: organization’s structural design, goals, performance appraisal system, reward allocation

issue intensity

larger number of harmed people, more agree its wrong, greater likelihood it causes harm, more immediate consequences, closer the person is to victim, the level of concentration of the effects on person.

ethics in international context

ethical standards are not universal, foreign corrupt practices act, united nations global contact

code of ethics

a formal statement of an organizations primary values and the ethical rules it expects its employees to follow. depends on if management supports them and how employees that violate are treated.

developing codes of ethics

leaders serve as models, managers should reaffirm with discipline, stakeholders are considered during development, 5 step process

whistle-blower

individual who raises ethical concerns or issues to others