© emily & jian, mgto120 summer 2006, hkust 1 very important topics today!!! part ii defining...

© Emily & Jian, MGTO120 Summer 2006, HKU© Emily & Jian, MGTO120 Summer 2006, HKUSTST

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Very IMPORTANT topics today!!! Very IMPORTANT topics today!!!

Part II Part II

Defining the Manager’s TerrainDefining the Manager’s Terrain

Ch.3 Organizational CultureCh.3 Organizational Culture

Ch.4 Global EnvironmentCh.4 Global Environment

Ch.5 Social Responsibility and Ch.5 Social Responsibility and

Managerial EthicsManagerial Ethics


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Today’s AgendaToday’s Agenda

Short review – org. cultureShort review – org. culture (Ch.3) (Ch.3) & global environment (Ch. 4)& global environment (Ch. 4)

Ch.5 – social responsibility and Ch.5 – social responsibility and managerial ethicsmanagerial ethics

Tutorial – video, group Tutorial – video, group discussion (start your group work discussion (start your group work as early as possible!)as early as possible!)

Class ends on 4:00pm today! Class ends on 4:00pm today!


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Ch.5 Social Responsibility Ch.5 Social Responsibility and Managerial Ethicsand Managerial EthicsLearning objectives:Learning objectives:

1.1. UnderstandUnderstand the classical and the classical and socioeconomic views of social responsibility.socioeconomic views of social responsibility.

2.2. Understand social obligation, social Understand social obligation, social responsiveness, and social responsibilityresponsiveness, and social responsibility

3.3. Contrast the four views of managerial ethicsContrast the four views of managerial ethics4.4. Discuss the fDiscuss the factors actors tthat hat aaffect ffect mmanagerial anagerial

eethicsthics5.5. Discuss various ways organizations can Discuss various ways organizations can

improve ethical behaviorimprove ethical behavior

© Emily & Jian, MGTO120 Summer 2006, HKUST

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Where We Are TodayWhere We Are Today

Management (Robbins & Coulter)

Part 1Basic

Concepts(Ch1)

Part 2

Context(ch3-5)

Part 1

Retrospect(ch2)

Part 3

Planning(ch6-9)

Part 4

Organizing(Ch10-13)

Part 5

Leading (Ch 14-17)

Part 6

Controlling(Ch 18,19)


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Business Ethics – IMPORTANT to managers and everyone!


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" Many energy companies have invested in closed or repressive countries – arguing that their investment would help develop the local economy and thereby improve the human rights situation.”

What are ethical problems?

环境污染致人死——癌症村与夺命 GDP

“The manager of a Mexican firm bribes several high-ranking government officials in Mexico City to secure a profitable government contract....is a standard business practice in Mexico.” (textbook)


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What Is Social Responsibility?• Classical view - maximize

profits

Milton Friedman – managers’ only job is to serve stockholders

• doing “social good” adds costs

• costs have to be passed on to consumers Nobel Prize winner ! ?

• Socioeconomic view - serve society

– Management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare.

– Corporations are not independent entities responsible only to stockholders.

– Firms have a moral responsibility to larger society to become involved in social, legal, and political issues.

– “To do the right thing”


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To Whom is Management Responsible?

Different views at different stages


9Exhibit 3.11Exhibit 3.11

Organizational Stakeholders


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SocialSocial Obligation Obligation,, ResponsivenessResponsiveness, and , and ResponsibilityResponsibility • Social Obligation

The obligation of a business to meet its economic and legal responsibilities and nothing more.

• Social ResponsivenessThe capacity of a firm to adapt to changing societal conditions through the practical decisions of its managers in responding to important social needs.

• Social ResponsibilityA firm’s obligations as a moral agent extends beyond its legal and economic obligations, to the pursuit of long-term goals that are good for society.


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From Obligation to Responsiveness to Responsibility

Levels of social involvement:

Social Obligation

SocialResponsibility

SocialResponsiveness

e.g. Johnsons & Johnsons – Tylenol

e.g. Café de Coral – non-smoking areas

e.g. Tobacco manufacturers – health warning on the packing


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Social Responsibility versus Social Responsiveness

Social Responsibility Social Responsiveness

Major consideration Ethical Pragmatic

Focus Ends Means

Emphasis Obligation Responses

Decision framework Long term Medium and short term


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corporate social responsibility economic performance

Does Social Responsibility Pay?

• Studies appear to show a positive relationship between social involvement and the economic performance of firms.

• A general conclusion is that a firm’s social actions do not harm its long-term performance.


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Values-Based ManagementValues-Based Management

An approach to managing in which An approach to managing in which managers establish and uphold managers establish and uphold an organization’s shared valuesan organization’s shared values..

ValuesValues reflect what the reflect what the organization stands for and what organization stands for and what it believes init believes in

The Purposes of Shared ValuesThe Purposes of Shared Values


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Purposes of Shared Values

– Serving as guideposts for managerial decisions– Shaping employee behavior by communicating what the

organization expects of its members– Influencing the direction of marketing efforts– Building team spirit


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Xian Janssen(video if time allows)


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CEO exchange –

What does “social responsibility” mean to Jack

Welch? And what do you think?


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Managerial EthicsManagerial Ethics

Utilitarian ViewUtilitarian View Ethical decisions are made solely on the basis Ethical decisions are made solely on the basis

of their outcomes or consequences such that of their outcomes or consequences such that the greatest good is provided for the greatest the greatest good is provided for the greatest number.number.

Encourages efficiency and productivity and is Encourages efficiency and productivity and is consistent with the goal of profit maximization.consistent with the goal of profit maximization.

Rights ViewRights View Concerned with respecting and protecting Concerned with respecting and protecting

individual liberties and privacy.individual liberties and privacy. Seeks to protect individual rights of conscience, Seeks to protect individual rights of conscience,

free speech, life and safety, and due process.free speech, life and safety, and due process.


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Managerial Ethics Managerial Ethics (cont’d)(cont’d)

The Theory of JusticeThe Theory of Justice Organizational rules are enforced fairly and Organizational rules are enforced fairly and

impartially and follow all legal rules and impartially and follow all legal rules and regulations.regulations.

Protects the interests of underrepresented Protects the interests of underrepresented stakeholders and the rights of employee.stakeholders and the rights of employee.

Integrative Social Contracts TheoryIntegrative Social Contracts Theory Ethical decisions should be based on existing Ethical decisions should be based on existing

ethical norms in industries and communities in ethical norms in industries and communities in order to determine what constitutes right and order to determine what constitutes right and wrong.wrong.

Based on integration of the general social contract Based on integration of the general social contract and the specific contract between community and the specific contract between community members.members.


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Why employeeWhy employee would behave would behave eethicthically or unethically?ally or unethically?

Individual characteristicsIndividual characteristics Organizational characteristicsOrganizational characteristics Issue IntensityIssue Intensity


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Factors That Affect Ethical and Unethical Behavior


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Individual Characteristics Individual Characteristics Affecting Ethical BehaviorsAffecting Ethical Behaviors

Stage of Moral DevelopmentStage of Moral Development A measure of an individual’s A measure of an individual’s

independence from outside influencesindependence from outside influences ValuesValues

Basic convictions about what is right or Basic convictions about what is right or wrong on a broad range of issueswrong on a broad range of issues

Personality VariablesPersonality Variables Ego strength Ego strength Locus of ControlLocus of Control


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Stages of Moral Development


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OrganizationOrganizational Characteristics al Characteristics Affecting Ethical BehaviorsAffecting Ethical Behaviors

Performance appraisal systemsPerformance appraisal systems Reward allocation systemsReward allocation systems Behaviors (ethical) of managersBehaviors (ethical) of managers OOrganizationrganizationalal culture culture

Good structural design minimizes ambiguity and uncertainty and fosters ethical behavior.


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Intensity of the ethical issue


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How Managers Can Improve Ethical How Managers Can Improve Ethical Behavior in An OrganizationBehavior in An Organization

1.1. Hire individuals with high ethical standards.Hire individuals with high ethical standards.

2.2. Establish Establish codes of ethicscodes of ethics and decision and decision rules.rules.

3.3. Lead by example.Lead by example.

4.4. Delineate job goals and performance Delineate job goals and performance appraisal mechanisms.appraisal mechanisms.

5.5. Provide ethics training.Provide ethics training.

6.6. Conduct independent social audits.Conduct independent social audits.

7.7. Provide support for individuals facing Provide support for individuals facing ethical dilemmas.ethical dilemmas.


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Many organizations are now having their “Codes of conduct”

http://welcome.hp.com/country/us/en/welcome.html


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JUSTICE (practical, by John, not in text)

a model of Ethical Decision criteria1. Justice: all follow same rule

2. Utilitarianism: greatest good

3. Spiritual values: do unto others as you would want them to do to you

4. TV rule: defend openly on TV

5. Influence: any influence of your action?

6. Core: important to you, your core values

7. Emergency: urgency of situation


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“Parable of the Sadhu”

• What is the ethical issue? What are the dilemmas?

• What do you think Buzz McCoy did?

• What would YOU do? Why? (apply the JUSTICE model?)


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• true story: Parable on ethics. During a climbing expedition in Nepal, a man encounters a dying pilgrim - a sadhu, an Indian holy man. Members of several groups do what they can - food, warm clothes, etc. - but none made sure that he would be safe. Should someone have stopped to help the sadhu to safety? Would it have done any good? Was the group responsible?

Parable of the Sadhu


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• characters: Wall Street New York Banker Buzz McCoy, good-hearted mountain climber Steven, the “Sherpa” (local guide) and the Sadhu (a Monk, a Holy man)

• Some strange English:“Mate”: Australian/ New Zealander for friend“Good Samaritan” (from Samaria) helped victim (Bible story)altitude sicknessNepal (country at top of Himalayas)32 degrees is freezing in Fahrenheit scale

• put yourself in other person’s shoes – the dilemma, what did they do, what should they do, and what would you do?


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Why did it happen?

• Stress• Goal Obsession• Failures of leadership

– value conflicts– buck passing: no one takes final responsibility– decision by technicians

• bad examples• alien cultural environments• blaming the victim• failure of individual moral responsibility


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• Enron“The downfall of Enron Corporation is one of the most

infamous and shocking events in financial world in the whole history of the mankind, and its reverberations were felt on global scale.”

• Anderson (Textbook page 125)• Search information about the cases of Worldcom, Tyco

International, Imclone...what were the ethical issues involved?

• HK cases?? • http://www.businessethics.ca/enron/• http://articles.pointshop.com/ethics/Read more articles in google, searching with key works like “Business Ethics”,

“managerial ethics”, and “Enron”, “Anderson”, etc. Tons of articles!

Cases

http://www.businessethics.ca/enron/



http://articles.pointshop.com/ethics/




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Homework Homework (remember, this course is (remember, this course is to to HELPHELP you to think critically you to think critically, but i, but it is t is

YOUYOU who who THINK THINK):): Think about social responsibility Think about social responsibility

and ethics issues in your life – and ethics issues in your life – (un)ethical things that you (un)ethical things that you observed/encountered/did? Why observed/encountered/did? Why and in what sense it is (un)ethical?and in what sense it is (un)ethical?

How HKUST can improve campus How HKUST can improve campus ethical behavior?ethical behavior?

Plan ahead ! – mid-term exam, Plan ahead ! – mid-term exam, group movie projectgroup movie project


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Starting next class...Starting next class...

We will talk about We will talk about PPOLC in OLC in greater detail.greater detail.

Part III Part III PPlanninglanning

Read Ch.6 & 7Read Ch.6 & 7

© emily & jian, mgto120 summer 2006, hkust 1 very important topics today!!! part ii defining...

Documents

managerial ethics slide

mgto120 summer

emily jian

views of managerial

social responsiveness

social obligation

business ethics important

ethical behavior slide