MGMT 3000 1st Edition Lecture15Outline of Last Lecture I. Ethics II. Influences on Ethical Decision making III. Ethical decision making model IV. US Sentencing Commission Outline of current lecture I. Social responsibility introduction II. Different types of social responsibility III. Social responsiveness IV. Personal ethical decision making Current Lecture Social Responsibility A business’ obligation to pursue policies, make decision, and take actions that benefit society 2 Perspectives: 1. Shareholder model: only social responsibility that businesses have is to maximize profits 2. Stakeholder Model: management’s most important responsibility is not just maximizing profits, but firm’s long term survival Dr. Milton Friedman’s view: Believed that it was irresponsible for companies to divert money and time from maximizing profits to social causes Also believed that it led to undermine market efficiency Agency theory: Corporate executive is an employee and agent of shareholders and has obligation to maximize profits of those that hired him Unlevied tax: The diversion of corporate resources for social ends is a pernicious tax, the proceeds of which are allocated according to the unreliable whims and preferences of individualexecutives. If corporate social responsibility is more than rhetoric it must mean that the employee is acting in some way that is not in the interest of shareholders Ex. Lowering pollution more than required Stakeholder model of responsibility: Stakeholders are people or groups whoa re interested and affected by the organization 1. Primary stakeholders: groups on which organization depends for long term survival: These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.a. Shareholders, employees, customers, suppliers, local communities 2. Secondary stakeholders: Influence or be influenced by a company and can affect public perceptions about a company a. Media, special interest groups Social responsibilities Economic: Making a profit by producing a product valued by society - Most basic social responsibility Legal: Company’s responsibility to obey laws and regulations Ethical: responsibility not to violated accepted principles of right and wrong when conducting business Discretionary: social roles that businesses play in society beyond the other 2 - Voluntary, not considered unethical if they don’t do it - Ex Helping earthquake victims Social responsiveness is a company’s strategy to respond to stakeholder’s economic, legal, ethical or discretionary expectations regarding social responsibility Problem occurs when company’s actions do not meet stakeholder expectations Social response strategies: Reactive: Do less than what society expects Defensive: Admits responsibility for a problem but does the least required to meet societal expectations Accommodative: Accepts responsibility for problem and take progressive approach by doing all that could be expected to solve problem Proactive: anticipates responsibility for problem before it occurs and do more than expected to address it There is no trade off between social responsibility and performance Usually does pay to be socially responsibly but no guarantee that it will lead to profits Steps of personal, ethical decision making: 1. Gather facts 2. Define the ethical issues 3. Identify stakeholders 4. Identify consequences a. Long term vs. short term b. Symbolic consequences: every action stands for something c. Consider consequences of secrecy 5. Identify obligations 6. Consider your character 7. Think creatively about actions: look for creative alternatives8. Check your gut feeling: are you comfortable with
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