BAD 201 Lecture Chapter 2, Spring 2019

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-1 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-1 Managers, Society, and Sustainability Chapter 2 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-2 • A thorough understanding of the term social responsibility • Insights about the social responsiveness of an organization • Insights for meeting social audit challenges CHAPTER LEARNING OBJECTIVES Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-3 • Thoughts on how to meet philanthropy challenges • Ways for building sustainable organizations • An appreciation for the role that ethics plays in management CHAPTER LEARNING OBJECTIVES Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-4 • Social Responsibility – The managerial obligation to take action that protects and improves both the welfare of society as a whole and the interests of the organization • Areas of Social Responsibility – Urban/Consumer Affairs, Community Volunteerism, Employment Practices – Ecology Conservation FUNDAMENTALS OF SOCIAL RESPONSIBILITY Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-5 • Businesses as a whole are a subset of society • Businesses have a responsibility to help maintain and improve the overall welfare of society • Performing social responsibility activities earns greater organizational profits Arguments FOR Social Responsibility Activities Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-6 • Milton Friedman, Economist – Businesses being socially responsible conflict with profit interests of business owners – Socially responsible public activities conflict with private organizational objectives – Unethical to use owner profits for society’s interests Arguments AGAINST Social Responsibility Activities Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-7 • Businesses and managers should: – Perform all legally required social responsibility activities – Consider voluntarily performing social responsibility activities beyond those legally required – Inform all relevant individuals of the extent to which organizations will be involved in social responsibility activities Conclusions About Being Socially Responsible Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-8 Social Responsibility and Federal Legislation Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-9 • Adhering to legislative mandates is the minimum standard managers must achieve • Managers need to ask themselves how far above the minimum they are willing to go • Managers need a well-defined position and need to communicate that vision Voluntarily Performing Social Responsibility Activities Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-10 • The degree of effectiveness and efficiency an organization displays in pursuing its social responsiveness • The greater the degree of effectiveness and efficiency, the more socially responsive the organization is said to be Social Responsiveness Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-11 • Obligations based on: – Business situation – Impact on stakeholders Determining if a Social Responsibility Exists Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-12 Social Responsiveness and Decision Making Managers must pursue only those responsibilities their organization possesses and has a right to undertake Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-13 • Incorporate social goals into annual planning process • Seek comparative industry norms for social programs • Present reports to owners and stakeholders • Experiment with different approaches • Attempt to measure cost of social programs Approaches to Meeting Social Responsibilities Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-14 • Requirement – Firm only does what is required by law • Recognition – Firm has obligations to pursue both profit and social goals • Believing – Firm has both profit and social goals Approaches to Social Responsibility Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-15 • Process of measuring social responsibility activities to assess organizational performance • Social Audit Steps: – Monitoring – Measuring – Appraising SOCIAL AUDIT CHALLENGE Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-16 • Promote welfare of others through general monetary donations to social causes • Aim to increase well-being of people PHILANTHROPY CHALLENGE Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-17 • The Triple Bottom-Line: – Management should work toward making their organizations sustainable in three areas: • Economy • Environment • Society SUSTAINABLE ORGANIZATION CHALLENGE Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-18 • Increased profits • Increased productivity • Increased innovation Why Sustainability? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-19 • Set sustainability goals • Hire organization members who can help organization become more sustainable • Reward employees who contribute to organization's sustainability goals • Track progress in reaching sustainability goals Steps to Sustainability Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-20 • Capacity to reflect on values in the corporate decision-making process, to determine how these values and decisions affect various stakeholder groups, and to establish how managers can use these observations in day- to-day company management MANAGERS AND ETHICS Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-21 • Increased Productivity • Stakeholder Relations • Government Regulation Benefits of Ethics in Management Practices Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-22 • Code of Ethics • Chief Ethics Officer • Training • Ethical Standards – Utilitarian – Rights – Virtues • Sarbanes-Oxley Reform Creating an Ethical Workplace Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2016 Pearson Education Ltd 2-23 • Guide for the ethics of how people should act and make decisions Code of Ethics