Individual Report Business Organization And Management Chapter 5 Managing Ethics & Social Responsibility.pdf

INTERNATIONAL SCHOOL VIETNAM NATIONAL UNIVERSITY, HANOI INDIVIDUAL REPORT BUSINESS ORGANIZATION AND MANAGEMENT CHAPTER 5: MANAGING ETHICS & SOCIAL RESPONSIBILITY Full name : Nguyén Phuo

INTERNATIONAL SCHOOL VIETNAM NATIONAL UNIVERSITY, HANOI

INDIVIDUAL REPORT BUSINESS ORGANIZATION AND MANAGEMENT

CHAPTER 5: MANAGING ETHICS & SOCIAL RESPONSIBILITY

Full name : Nguyén Phuong Nhàn

Student ID : 21070839

Class : INS2019 08

Lecturer :_Th§ Nguyễn Thị Kim Duyên

Semester: 2022- 2023

CHAPTER OUTLINE

Part 1:

1 What Is Managerial Ethics?

Ethical Dilemmas: What Would You Do?

Frameworks for Ethical Decision Making

The Individual Manager and Ethical Choices What Is Corporate Social Responsibility?

Evaluating Corporate Social Responsibility

7 Managing Company Ethics and Social Responsibility? Part 2:

1 Minamata

2 Vedan

3 Formosa

Part 3: Conclusion

Part 1:

1 What Is Managerial Ethics?

Ethics Definition: Ethics is difficult to define in a precise way In a general sense, ethics is the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong Ethics sets standards as to what is good or bad in conduct and decision making Managerial ethics: is a basic part of business ethics It is the set of moral principles or beliefs that affect the behavior of employees Doing the right thing for employees and customers and demonstrating the willingness to go the extra mile also falls under managerial ethics Compensation and benefit packages, community involvement and corporate giving are all components of managerial ethics The rules establish the minimal standards that corporate executives expect from their employees and communities

Example: Harry Stonecipher, former CEO of Boeing, to have a consensual extramarital affair with a female executive, but his behavior violated Boeing's code of ethical conduct, and Stonecipher was replaced Many other managers have had problems with the simplistic assumption that decisions are guided by either law or free choice

=>> A better choice is to acknowledge moral standards as a potent force for good that can regulate behavior both inside and outside of organizations

=> Ethical Management Today

Ethics have become an organizational priority

In the 21st century, ethics is neither a luxury nor an option There is a growing impatience within society with selfish and irresponsible actions that impoverish some, while enriching the crafty

Importance of Managerial Ethics today:

Managerial ethics is critical for every business because people will follow what their leaders do Even if a corporation has ethics regulations in place, when senior leaders disregard these norms, it ripples throughout the organization Employees may feel unappreciated if they do not believe their leaders care about doing the right thing

* The Business Case for Ethics and Social Responsibility

Social responsibility (SRC): An organization's obligation to act for benefit of society at large

Pros of social and ethical behavior

Meet and exceed expectations

Positive public image

Increase profitability

Create desirable workplace environment

Increase customer interest

Cons

Loss of interest and motivation

Costly, timely and complex

Difficult to maintain and keep up with the quickly changing standards created

by our society

Business Case: Apple

Apple has many commitments including eco-friendly practices providing safe equipment training and employs engineers to prevent workplace disputes using energy efficient products to reduce their greenhouse gasses and recycling Fact: Apple manufacturers are from China, who constantly face health problems caused by pollution and unsafe working conditions 8000 workers went out to work to produce more than 10000 iPhones per day Workers are given only one cup of tea and one cookie in a 12-hour workday

In 2012, due to public outcry over the conditions at its facilities as a result of a thorough analysis from the Fair Labor Association, Apple was forced to establish labor reform measures for its manufacturers

Ethical Dilemmas:

In ethical dilemmas, a decision must be made between 2 or more courses of action All of which being considered ethically appropriate but each of which

would lead to different outcomes usually involve weighing competing priorities against one another

Choosing between 2 or more ethically responsible courses of action, cach leading to a different outcome

Example: United Airlines

It's difficult to forget the controversy that United Airlines had after security personnel hauled a customer off of an overbooked flight Although it is completely lawful for airlines to overbook flights and just as legal for them to ask some passengers to deplane, many customers claim they were dissatisfied with the way the firm handled the matter The ethical conundrum of how to deal with a disobedient customer revealed a lot about United Airlines' business culture Additionally, many customers found the CEO of United Airlines apology and remarks to be lackluster The apologies didn't exactly express sorrow or guilt about the incident, but it did seem to support the employees Customers wanted to hear that their corporate practice featured putting customers and consumers first in this issue of business ethics Many customers ripped up their United Airlines loyalty cards as a result of the entire ethical affair

->> Instead of choosing to satisfy the needs and satisfaction of passengers, United Airline chooses to invite passengers to get off the plane to secure another flight, for its commercial purposes

& Frameworks for Ethical Decision Making

Most ethical dilemmas involve conflict between needs of the part & whole Individual versus the organization

Organization versus society as a whole

Managers benefit from a normative strategy to guide their decision making- norms and values

Five of these approaches that are relevant to managers are the utilitarian approach, individualism approach, moral-rights approach, justice approach and practical approach

Utilitarian Approach

The utilitarian approach, espoused by the nineteenth-century philosophers Jeremy Bentham and John Stuart Mill, holds that moral behavior produces the greatest good for the greatest number

Under this approach, a decision maker is expected to consider the effect of each decision alternative on all parties and select the one that optimizes the benefits for the greatest number of people

In the trolley dilemma above, for instance, the utilitarian approach would hold that it would be moral to push one person to his death in order to save five In organizations, because actual computations can be complex, simplifying them

is considered appropriate

For instance, calculating dollar costs and dollar benefits could be used as a basic economic frame of reference

- Individualism Approach

e The individualism approach contends that acts are moral when they promote the individual’s best long-term interests The action that is intended to produce

a greater ratio of good to bad for the individual

e compared with other alternatives is the right one to perform

e In theory, with everyone pursuing self-direction, the greater good is ultimately served because people learn to accommodate each other in their own long-term interest

e@ Individualism ultimately leads to behavior toward others that fits standards of behavior people want toward themselves

e This approach is closest to the domain of free choice

- Moral-Rights Approach

e Moral decisions are those that best maintain the rights of those people affected

by them

e An ethical decision is one that avoids interfering with the fundamental rights of others

e Six moral rights should be considered during decision making:

1.The right of free consent Individuals are to be treated only as they knowingly and freely consent to be treated

2.The right to privacy Individuals can choose to do as they please away from work and have control of information about their private life

3.The right of freedom of conscience Individuals may refrain from carrying out any order that violates their moral or religious norms

4 The right of free speech Individuals may truthfully criticize the ethics or legality of actions of others

5.The right to due process Individuals have a right to an impartial hearing and fair treatment

6.The right to life and safety Individuals have a right to live without endangerment or violation of their health and safety

e To make ethical decisions, managers need to avoid interfering with the fundamental rights of others

- Justice Approach

e The justice approach holds that moral decisions must be based on standards of equity, fairness, and impartiality

e Three types of justice are of concern to managers

Distributive justice requires that different treatment of people not be based on arbitrary characteristics Individuals who are similar in ways relevant to a decision should be treated similarly Thus, men and women should not receive different

Procedural justice requires that rules be administered fairly Rules should be clearly stated and consistently and impartially enforced

Compensatory justice argues that individuals should be compensated for the cost of their injuries by the party responsible Moreover, individuals should not

be held responsible for matters over which they have no control over

- Practical Approach

e Sidesteps debates about what is right, good, or just, and bases decisions on prevailing standards of the profession and the larger society, taking the interests

of all stakeholders into account

e Managers may combine elements of the utilitarian, moral rights, justice, and virtue ethics approaches 1n their thinking and decision making

+ The Individual Manager and Ethical Choices

> The Stages of Moral Development

- Manager’s ability to make ethical decisions are influenced by several factors Specific personality and behavioral traits brought by individuals into the jobs Manager’s value system is shaped by personal needs, family influence, and religious background What enables the managers to make ethical choices are ego strength, self-confidence, and strong sense of independence

- Stage of moral development is one model of the vital personal traits A simplified version of one model of personal moral development is shown in the chart below

- Kohlberg’s research yielded three levels of moral development Each level consisted of two stages, leading to six stages in total

e@ Level 1: Preconventional Morality

Stage |: Punishment and Obedience Orientation

Stage 2: Individualism and Exchange

e@ Level 2: Conventional Morality

Stage 3: Good Interpersonal Relationships

Stage 4: Maintaining the Social Order

e Level 3: Postconventional Morality

Stage 5: Social Contract and Individual Rights

Stage 6: Universal Principles

5 What Is Corporate Social Responsibility?

- Corporate social responsibility is a type of business self-regulation with the aim

of social accountability and making a positive impact on society Some ways that a company can embrace CSR include being environmentally friendly and

eco-conscious; promoting equality, diversity, and inclusion in the workplace; treating employees with respect; giving back to the community; and ensuring business decisions are ethical

Corporate social activities

Corporate social responsibility includes six types of social activities that a business can perform as follows:

Charity: the company conducts charitable activities, including the donation of cash, goods and services, sometimes through a platform of its own

Volunteering for the community: Volunteer activities organized by the company Selling socially beneficial products: products that are produced and sold ethically, solve a problem for society and attract a certain segment of customers Promoting and promoting campaigns for the community: The company sponsors to carry out campaigns that benefit society

Socially Meaningful Marketing: Make sponsorships or donations based on product sales

Marketing for social behavior change: The company sponsors campaigns to change society's behavior for the better

All six types of social activities of the above business will create a corporate citizenship, which means that the business will be recognized as a citizen living

in the community, in addition to creating a corporate citizenship Economically profitable, the business also fulfills its responsibilities towards the society in which it operates However, only a few CSR activities can reach the level of cause marketing , defined as "a type of corporate social responsibility (CSR), in which the campaign The company's advertising has the dual purpose of increasing profits but also helping society become better."

Companies basically have no profit motive when participating in charity or performing volunteer activities for the community However, participating in such social activities will be considered marketing activities for good purposes, then businesses can both grow profits and receive affection from the community

The issue of corporate social responsibility in the current context

When the era of industrialization and modernization is developing rapidly, many businesses participate in the general economy of the country, changing the face of many regions Not only contributing to the state budget, but also directly contributing to social activities, supporting social security in the project areas

In addition to the opportunities created and created by businesses, there are many businesses that have many activities that affect people and society: the wastewater treatment system is too poor, the exploitation of raw materials, the

transportation of materials materials Damage to infrastructure, pollution of smoke and dust, affecting the environment and society

Not all businesses have a sense of responsibility to the community to minimize the above impacts, typically 2 out of many cases that affect the social environment such as the Formosa Ha Tinh case polluting the environment sea, Vinh Tan 2 Thermal Power Plant pollutes the air

There are also businesses because of the misconception about their profits that they do not know that it is people who are the factors that create long-term profits They have disregarded the labor rights of employees such as not paying social insurance, not ensuring workers' working conditions, not spending money on dusty activities in production

In the research of Ipsos company and 2/5 in the CSR plan that businesses often use in the development process, "Protecting the environment" and “contributing

to society" are the two most important goals most important of CSR

Solutions to improve the state's social responsibility for businesses:

Strengthening information, propaganda and re-education of businesses, so that those involved are aware of the importance of CSR Make business owners see that CSR is not just a legal practice or a certain aspect but must come from the heart of the business, making it the main engine of the long-term direction of the business

Building a legal corridor system that can deter violators, and compel businesses

to implement CSR

Focus more on environmental protection, the training of CSR department managers to perfect the smooth apparatus system

Organize seminars and dialogues to unify the awareness of CSR among management agencies, organizations and enterprises, thereby offering the most rationalization measures for the parties

Businesses should plan specific directions parallel to CSR, can apply the Code

of Conduct CoCs (Code of Conduct)

->> It is necessary to actively carry out social responsibility, pay attention to the working environment Businesses need to install waste treatment systems, industrial dust treatment systems,

> The triple bottom line

In the financial sector, when it comes to a company's profits, we usually refer

to its profits Elkington's TBL framework promotes sustainability in business practices, where companies look beyond profits to include social and environmental issues to measure the full cost of doing business The three endpoints theory states that companies should focus as much on social and environmental issues as they do on financial issues

Profit : This is the traditional measure of business profitability — the profit and loss (P&L) account

People : This measures how socially responsible an organization has been throughout its history

Planet : This measures how responsive a company is for the environment Evaluating Corporate Social Responsibility

Economic criteria as their only measure of responsibility, which is sometimes called the profit-maximizing view, are to produce the goods and services that society wants and to maximize profits for its owners and shareholders Ethical responsibility includes behaviors that are not necessarily codified into law and may not serve the corporation’s direct economic interests To be ethical, organization decision makers should act with equity, fairness, and impartiality, respect the rights of individuals and provide different treatment of individuals only when relevant to the organization’s goals and tasks

Legal responsibility defines what society deems as important with respect to appropriate corporate behavior

Discretionary responsibility is purely voluntary and is guided by a company’s desire to make social contributions not mandated by economics, law, or ethics Discretionary activities include generous philanthropic contributions that offer

no payback to the company and are not expected

Managing Company Ethics and Social Responsibility?

One of the most important steps managers can take is to practice ethical leadership

Ethical leadership:

managers are honest and trustworthy, fair in their dealings with employees and customers

behave ethically in both their personal and professional lives

Managers and first-line supervisors:

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