Social Responsibility and Managerial Ethics

Summary:

Corporate Social Responsibility (CSR):

• It involves management’s obligation to make choices that benefit society and the organization.
• CSR is complex due to differing beliefs about what actions improve societal welfare.
• Encompasses economic, legal, ethical, and discretionary responsibilities.

Evaluating CSR:

• Four criteria: economic, legal, ethical, and discretionary responsibility.
• Economic responsibility focuses on maximizing profits.
• Legal responsibility adheres to legal requirements.
• Ethical responsibility involves fair and impartial actions.
• Discretionary responsibility includes voluntary, community-focused contributions.

Managing Ethics and Social Responsibility:

• Managers should practice ethical leadership by being honest, trustworthy, and fair.
• Managers and supervisors are role models influencing ethical climate.
• The code of ethics communicates company values and standards.
• The Ethics committee oversees ethical issues and discipline.
• The chief ethics officer oversees ethics and legal compliance.
• Ethics hotline and training help employees navigate ethical dilemmas.

Whistle-Blowing:

• Employee disclosure of illegal or unethical practices.

Managerial Ethics:

• Ethics involves moral principles guiding right and wrong behaviour.
• Ethical dilemmas arise when values conflict.
• Ethical domains: codified law, free choice, and social standards.

Criteria for Ethical Decision-Making:

1. Utilitarian Approach: Optimize benefits for the greatest number.
2. Individualism Approach: Promote individual’s long-term interests.
3. Moral Rights Approach: Uphold fundamental human rights.
4. Justice Approach: Base decisions on equity, fairness, and impartiality.
   • Distributive justice treats similar cases similarly.
   • Procedural justice enforces rules fairly.
   • Compensatory justice compensates for injuries.

Understanding these ethical approaches helps guide managers in making ethical decisions.

Excerpt:

Social Responsibility and Managerial Ethics

What is corporate social responsibility (CSR)?

• Management must make choices and take actions that will contribute to the welfare and interests of society and the organization.
• CSR can be difficult to grasp because different people have different beliefs about which actions improve society’s welfare. To make matters worse, social responsibility covers a range of issues, many of which are ambiguous with respect to right or wrong.

Evaluating corporate social responsibility

• Four criteria of corporate social responsibility

1) economic responsibility- the business institution is the basic economic unit of society, responsible for producing the goods and services that society wants and maximising profits for its owners and shareholders.