MGMT

Ethics and Social

Responsibility
Chapter 4
Workplace Deviance

§ Ethical behavior
q conforms to a society’s accepted principles of
right and wrong.

§ Workplace deviance
q unethical behavior that violates
organizational norms about right and wrong.
q Production Deviance
q Property Deviance

q Political Deviance

q Personal Agression

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Types of Workplace Deviance

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Determining the Punishment

§ Guidelines impose smaller fines on

companies that take proactive steps to
encourage ethical behavior

§ Steps to determine:
q Base fine is computed by determining the
level of offense
q Culpability score of the company is
computed by a judge (assessing how much
blame the company is responsible for)
q Total fine is calculated by multiplying the
base fine by the culpability score
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Compliance Program Steps

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Influences on Ethical Decision Making

Ethical Intensity Moral

of the decision Development

Principles of
ethical decision
making

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Ethical Intensity of the Decision
Ethical intensity: degree of concern people have about
an ethical issue.

Magnitude of consequences
•Total harm or benefit from an ethical decision

Social consensus
•Agreement on whether behavior is good or bad

Probability of effect
•Will it happen again?

Temporal immediacy
•Time between act and consequence

Proximity of effect
•Distance between decision maker and person affected

Concentration of effect
•How the act affects the average person

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Kohlberg’s Stages of Moral
Development
§ Moral development of the manager
q Phases
´Preconventional level of moral development
´Conventional level of moral development
´Postconventional level of moral development

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Ethical Principles
§ Principle of… § Principle of…
q Long-term self-interest q Individual rights –
– should never take any should never take action
action that is not in that infringes on other’s
your/your organization’s agreed upon rights
long-term interest
q Personal virtue – should
q Religious injunctions – never do anything not
should never take action honest, open, and
unkind/harms a sense of truthful
community
q Distributive justice –
q Government should never take action
requirements – law that harms the least
represents the minimal fortunate among us in
moral standards of some way
society, so never violate
law q Utilitarian benefits –
should never take action
that does not result in
greater good of society.

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Practical Steps to Ethical Decision
Making
§ Selecting and hiring ethical employees
´ Overt and personality-based integrity tests

§ Establishing a specific code of ethics

§ Training employees to make ethical decisions

§ Creating an ethical climate by:

q Ensuring managers act ethically
q Ensuring top management is active and committed to the
ethics program
q Developing a reporting system that encourages whistle-
blowers
q Fairly and consistently punishing those who violate the
code of ethics
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Codes of Ethics

§ A company must communicate its code

inside and outside the company.

§ Management must develop practical

ethical standards and procedures specific
to the company’s line of business.

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Objectives of Ethics Training

§ Develop employees’ awareness of ethics

§ Achieve credibility with employees
§ Teach employees a practical model of
ethical decision making

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Social Responsibility of Organizations

§ Shareholder model
q Organization’s overriding goal should be
profit maximization for the benefit of
shareholders

§ Stakeholder model
q Management’s most important responsibility
is long-term survival
q Achieved by satisfying the interests of
multiple corporate stakeholders

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Stakeholder Model

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 Social Responsibility of
Organizations
Economic responsibility
• To make a profit by producing a valued product or
service

Legal responsibility
• To obey society’s laws and regulations

Ethical responsibility
• To abide accepted principles of right and wrong
when conducting business

Discretionary responsibilities
• Social roles that a company fulfils beyond its
economic, legal, and ethical responsibilities

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 Responses to Demands for Social
Responsibility
Reactive strategy
• Company does less than society expects

Defensive strategy
• Company admits responsibility for a problem but
does the least required to meet societal
expectations

Accommodative strategy
• Company accepts responsibility for a problem and
does all that society expects to solve that problem

Proactive strategy
• Company anticipates a problem before it occurs
and does more than society’s expectations

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Social Responsibility and Economic
Performance
§ No trade-off between being socially
responsible and economic performance
(usually associated with increased profits, but
not guaranteed)

§ Relationship becomes stronger when a

company has a strong reputation for social
responsibility

§ Socially responsible companies experience

the same ups and downs in economic
performance that traditional businesses do
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Summary

§ US Sentencing Commission Guidelines for

Organizations give companies an incentive to
cooperate and disclose illegal activities to
federal authorities
q Total fine is calculated by multiplying the base
fine by the culpability score

§ Steps to ethical decision making

q Selecting and hiring ethical employees
q Establishing a specific code of ethics
q Training employees to make ethical decisions
q Creating an ethical climate

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Summary

§ Social responsibilities of organizations

q Economic, legal, ethical, and discretionary

§ Responses to demands for social

responsibility
q Reactive, defensive, accommodative, and
proactive strategies

§ No trade-off between being socially

responsible and economic performance
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Key Terms
§ Ethics § Social consensus
§ Ethical behavior § Probability of effect
§ Workplace deviance § Temporal immediacy
§ Production deviance § Proximity of effect
§ Property deviance § Concentration of
§ Employee shrinkage effect
§ Political deviance § Preconventional level
of moral
§ Personal aggression development
§ Ethical intensity § Conventional level of
§ Magnitude of moral development
consequences § Postconventional
level of moral
development
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Key Terms
§ Principle of long-term self- § Stakeholders
interest
§ Primary stakeholder
§ Principle of personal virtue
§ Secondary stakeholder
§ Principle of religious injunctions
§ Economic responsibility
§ Principle of government
requirements § Legal responsibility
§ Principle of utilitarian benefits § Ethical responsibility
§ Principle of individual rights § Discretionary responsibilities
§ Principle of distributive justice § Social responsiveness
§ Overt integrity test § Reactive strategy
§ Personality-based integrity test § Defensive strategy
§ Whistleblowing § Accommodative strategy
§ Social responsibility § Proactive strategy
§ Shareholder model
§ Stakeholder model

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