Ethical and Social Responsibilities

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Human Resource Management
Session 10
LO3: Employment Relations and Legislations
Ethical and Social

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Session Objectives
By the End of the session you will be able
to :
Understand the meaning of ethics and
social responsibility
Understand how ethics affect workplace
Understand corporate social responsibility
and whistle blowing
Ethics in managing
Ethics is the discipline dealing with what
is good and bad and with moral duty and
Business ethics is concerned with truth
and justice and a variety of aspects, such
as the expectations of society, fair
competition, advertising, public relations,
social res, consumer autonomy and
corporate behaviour in the home country
as well as abroad.

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Management – Chapter 3 5
Law, values, and ethical behavior:
Legal behavior is not necessarily
ethical behavior.
Personal values help determine
individual ethical behavior.
Terminal values
Instrumental values
What is ethical behavior?
Ethical theories
Utilitarian theory: plans and actions should be
evaluated by their consequences e.g greatest good for
greatest number of people
Theory based on rights: e.g free speech
Theory of justice: decision makers must be guided by
fairness and equity as well as impatiality

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Management – Chapter 3 7
Four views of ethical behavior.
Management – Chapter 3 8
Cultural issues in ethical behavior:
Cultural relativism
Ethical behavior is always determined by
cultural context.
Cultural universalism
Behavior that is unacceptable in one’s
home environment should not be
acceptable anywhere else.
Ethical behavior and Culture
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Management – Chapter 3 9
How international businesses can
respect core or universal values:
Respect for human dignity
Create culture that values employees, customers, and
Keep a safe workplace.
Produce safe products and services.
Respect for basic rights
Protect rights of employees, customers, and communities.
Avoid anything that threatening safety, health, education,
and living standards.
Be good citizens
Support social institutions, including economic and
educational systems.
Work with local government and institutions to protect
Management – Chapter 3 10
An ethical dilemma occurs when choices, although
having potential for personal and/or
organizational benefit, may be considered
Ethical dilemmas include:
Sexual harassment
Conflicts of interest
Customer confidence
Organizational resources
How do ethical dilemmas
complicate the workplace?

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Institutionalizing ethics
By establishing an appropriate co policy or a code of
ethics. A code is a statement of policy, principles or
rules that guide behaviour
By using a formally appointed ethics committe the
functions of which may be: 1) holding reg meetings to
discuss ethical issues 2) dealing with grey areas 3)
communicating the code to all members of the org 4)
checking for possible violation of code 5) enforcing the
code 6) rewarding compliance & punishing violation 7)
reviewing and updating the code 8) reporting activities
of the committee to the board of directors
By teaching ethics in mgt dev programme
Management – Chapter 3 12
The person
Family influences, religious values,
personal standards, and personal needs.
The organization
Supervisory behavior, peer group norms and
behavior, and policy statements and
written rules.
The environment
Government laws and regulations, societal
norms and values, and competitive climate
in an industry.
Factors influencing ethical

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Factors that raise ethical
Public disclosure & publicity
The increased concern of well informed public
Govt rules and regulations
Management – Chapter 3 14
Corporate social responsibility?
Corporate social responsibility:
Looks at ethical issues on the organization level.
Obligates organizations to act in ways that serve both its
own interests and the interests of society at large.
The serious consideration of the impact of the company’s
action on society.

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Management – Chapter 3 15
Multiple stakeholders in the environment
of an organization.
Management – Chapter 3 16
Beliefs that guide socially
responsible business practices
People do their best with a balance of work and
family life.
Organizations perform best in healthy
Organizations gain by respecting the natural
Organizations must be managed and led for longterm success.
Organizations must protect their reputations.
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Arguments for social
involvement of business
Both bus & society get benefit
Social involvement discourage Government intervention
Create a favourable public image
Bus receive charter from society & consequently
respond to the needs of society
Problems can become profit (drink cans)
It is better to prevent social problem through business
involvement than to cure them
Business has the resources
Social involvement may be in the interest of
Arguments against social
involvement of business
Society must pay for social involvement of bus
Bus has enough power & additional social involvement
would further increase its power
Social involvement could reduce economic eff
Business people lack the social skill to deal
There is a lack of accountability of bus to society
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Management – Chapter 3 19
Criteria for evaluating corporate
social performance
Is the organization’s …
Economic responsibility met?
Legal responsibility met?
Ethical responsibility met?
Discretionary responsibility met?
Management – Chapter 3 20
Strategies for pursuing social
Obstructionist — meets economic
Defensive — meets economic and legal
Accommodative — meets economic, legal,
and ethical responsibilities.
Proactive — meets economic, legal,
ethical, and discretionary responsibilities
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Management – Chapter 3 21
The Roles of government to
influences organizations
Common areas of government
regulation of business affairs:
Occupational safety and health
Fair labor practices
Consumer protection
Environmental protection
Management – Chapter 3 22
How organizations influence
Personal contacts and networks
Public relations campaigns
Political action committees
Sometimes by illegal acts, such as
bribery or illegal financial
contributions to political campaigns

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Management – Chapter 3 23
How do organizations and
governments work together in
Corporate governance:
The oversight of the top management of an
organization by a board of directors.
Corporate governance involves:
Hiring, firing, and compensating the CEO.
Assessing strategy.
Verifying financial records.
18 rules of international business
ethics. Part 1: International Bus
If you strive to understand the values of
different cultures, you will find common
If you analyse the facts, you will realize
the honesty & reliability benefit you.
If you analyse case studies from different
perspectives, you will discover the
benefits of fair plan.

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18 rules of international business
ethics. Part 2: labour conditions
Respecting your colleagues is the smartest
investment you can make
To increase productivity, provide safe and healthy
working conditions
To inspire trust, make your performance
Your loyal dissent can lead your institution in the
right direction
Downsizing you labour force is only beneficial
when you respect each stakeholder.
18 rules of international business
ethics. Part 3: area of justice

To establish your brand name, act as a fair competitor
Reduce the gap btn the rich and poor by developing a new
social security system
If you act against discrimination, you will increase your
productivity & profitability
If you protect intellectual property, all stakeholders will
receive their due share
On-going change in IT requires new form of loyalty
PR strategy will only secure your reputation if it witnesses your
drive for quality & excellence
Your economic achievement will only stand on firm ground if
you dismiss corruption
Long term success urgently calls you to constantly care for the

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18 rules of international business
ethics. Part 4: Toward Virtue
To become a refined player, sharpen your
discernment and cultivate good manners
Care for your business by caring society
Whistle blowing
Making known to outside agencies
unethical co practices.
Whistle blower is an employee who
refuges to engage in and/or reports
illegal or wrongful activities of his
employer or fellow employees.

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Management – Chapter 3 29
Whistle Blowing: Barriers and
organizational Methods
Barriers to whistleblowing include:
Strict chain of command
Strong work group identities
Ambiguous priorities
Organizational methods for overcoming
whistleblowing barriers:
Ethics staff units who serve as ethics advocates
Moral quality circles