The Nature of Social Responsibility

Social responsibility
An organizations obligation to engage in activities that
protect and contribute to the welfare of society.
The law and social responsibility

Social Responsibility

illegal and legal and illegal and legal and

irresponsible irresponsible responsible responsible

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 An Historical Perspective
Principle of charity
Suggests that those who have plenty should give to
those who do not.
Principle of stewardship
Suggests that organizations have an obligation to see
that the publics interests are served by corporate
action and the ways in which profits are spent.

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 Organizational
Stakeholders
Employees Society
at Large

Suppliers of:
Capital Allies
Raw Materials
Human Resources Organization
Information

Customers Competitors

Regulatory Agencies and

Influence Groups:
Governments
Unions
Professional Associations
Interest Groups

FIGURE 32
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 The Social The Needs
of Society

Audit
An Organizations Gap Analysis
Social Goals Measurement Goal Successes
(e.g. Improving
of Social Goal Failures
Environment,
Performance Changes Needed
Increasing
Employment)

A detailed
examination and
evaluation of an Organizational
Resources
organizations
social performance

Report to Report to Internal Report to External

Management Stakeholders Stakeholders
Organizational Goals Organizational Goals Organizational Goals
Goal Successes Goal Successes Goal Successes
Goal Failures Goal Failures Goal Failures
Social Exposures Changes Needed Future Goals
Changes Needed

FIGURE 33
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 Levels and Types of Social Commitment

Social Social Social

Obligation Responsibility Responsiveness

Low High

Reactive Prescriptive Proactive

Proscriptive* Does more than Anticipates and
required by law prevents problems
Adheres to legal Does more than Searches for socially
requirements required by economic responsible acts
considerations
Adheres to economic Avoids public stands Takes public stands on
considerations on issues issues
*Proscriptive means the firm reacts when its action is called (or threatened to be called) to the publics attention.

TABLE 33
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 Diverging Views on Social Responsibility
Arguments for social responsibility
The assumption of social responsibility balances
corporate power with corporate responsibilities.
The voluntary assumption of social responsibility
discourages the creation and imposition of of
government regulations.
Acts of social responsibility by organizations help
correct the social problems that organizations create.
Organizations, as members of society, have a moral
obligation to help society deal with its problems and to
contribute to its welfare.

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 Diverging Views (contd)
Arguments against social responsibility
Socially responsible behavior lowers operating
efficiency and weakens the ability to offer goods and
services at the lowest possible competitive cost.
Socially responsible behavior costs reduce dividends,
lower wages, and increase consumer prices.
Social responsibility may conflict with organizational
goals for profit making.
Assuming social responsibilities makes organizations
too powerful.
Business persons are not trained to deal with social
problems.
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 The Nature of Managerial Ethics
Ethics
The set of standards and code of conduct that defines
what is right, wrong, and just in human actions.
Sources of ethics
Socializationthe process through which people
develop beliefs (social values, norms, and mores) about
what is right, wrong, and just.
Organizations teaching ethics: religious, educational,
cultural, and family.

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 Moral Development Models
Ethic of care
An act is judged as ethical depending on whether the
act derives from feelings, emotions, and empathy for
others.
Ethic of justice
Abstract rules (personal moral principles) are used
to define which actions are fair and which actions are
not.

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 Managerial Ethics
Managerial ethics and responsibilities
The application of personal ethics within the context of
the management of organizations.
Ethical responsibilities:
Personal decisions and actions
Actions taken at the direction of superior
Actions taken by subordinates following orders
Inaction that allows unethical behavior to occur

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 An Organizations Ethical Responsibility
Top managements responsibilities
Infuse ethical behavior into the organizational culture.
Provide role models for ethical behavior.
Punish unethical behavior when it occurs.
Make explicit statements of what ethical conduct is.
Establish a ethical code of conduct.
Encourage the reporting of unethical conduct
(whistleblowing) and protect those who report it.

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 Theories Affecting Ethical Standards
Utilitarian theory
An action is considered morally right if its
consequences for everyone affected by the action are
greater than those which would be realized by a
different action.
Rights theory
Decision makers paramount concern is respecting the
moral and/or legal rights to which people are entitled.
Procedural justice is applied to ensure that, while all
individual outcomes may not be equal, the process of
outcome allocation is perceived as fair and impartial.

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 Ethical Dilemmas
Ethical dilemmas
Situations that arise when managers attempt to balance
the utilitarian (future-oriented) ethic and the formalistic
(perpetuating rights and the status quo) ethic.

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 Encouraging Ethical Behavior
Encourage ethical behavior in short-term by:
Hiring persons who are not prone to unethical behavior.
Making public statements (e.g., a code of ethics) about
the importance of ethical behavior.
Developing policies that specify ethical objectives.
Rewarding ethical behavior; punishing unethical
behavior.
Avoiding competitive situations where there is a
potential for unethical behavior.
Using groups to make decisions requiring moral
judgment.

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 Individual Belief Systems
Locus of Control

Cognitions
Ethical/
Ethical Stage of
Unethical
Dilemma Cognitive Moral
Behavior
Development

The Interactionist SITUATIONAL FORCES

Model of Ethical
Immediate Job Context
Reinforcement

Decision Making Job Pressures

Organizational Culture
in Organizations Responsibility for
Consequences

Characteristics of the Work

Role Taking
Resolution of Moral Conflict
Source: Modified from L. K. Trevino. 1986. Ethical
Decision Making in Organizations: A Person-Situation
Interactionist Model. Academy of Management
Review 11:603. FIGURE 37
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 DiversityA Contemporary Issue of Ethics
and Social Responsibility
Organizational diversity
The goal of having a heterogeneous work group where
no one group occupies a majority position, and all
members are expected to work effectively with people
different from themselves.
Why value diversity?
Diversity is ethical.
Diversity is socially responsible.
Diversity is good business (competitive advantage).

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