Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
CHAPTER 3
Ethics and Social Responsibility
Character doesn’t stay at home when we go to work
Chapter Overview
Each Chapter contains several inset features designed to assist the student reader in applying the
concepts to relevant examples. Management Live illustrates how experiences and activities relate
to work performance. Choices turns to the issue of quotas in Europe to get more women on
company boards. Ethics Check profiles examples of ethical issues in management. Facts to
Consider introduces data on behavior of managers which may be key to an ethical workplace
that can be used for class discussion in the classroom or online for distance learning. Hot Topic
explores topic on on-demand workers seeking more employment rights. Insight profiles
individual character as a confidence builder. Quick Case presents a fourth grade child’s cheating
scenario for class analysis and discussion.
Chapter three provides a thorough review of ethics and corporate social responsibility. The
chapter begins with a discussion of the importance of ethics and its practice in the workplace.
Various approaches to what is considered ethical are explored. How ethical dilemmas occur at
work and how people tend to rationalize unethical behavior is discussed. As personal influencers
of ethical decision making, Lawrence Kohlberg’s levels of moral development are reviewed.
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
Takeaway Questions
• Takeaway 3.1: How do ethics and ethical behavior play out in the workplace?
• Takeaway 3.3: How can we maintain high standards of ethical conduct?
• Takeaway 3.3: What should we know about the social responsibilities of organizations?
Chapter Outline
• Takeaway 3.1: How do ethics and ethical behavior play out in the workplace?
o Ethical Behavior is values driven.
• Takeaway 3.2: How can we maintain high standards of ethical conduct?
o Personal character and moral development influence ethical decision making.
• Takeaway 3.3: What should we know about the social responsibilities of
organizations?
o Social responsibility is an organization’s obligation to best serve society.
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
Supporting Materials
Figures
• Figure 3.1: How Do Alternative Moral Reasoning Approaches View Ethical Behavior?
• Figure 3.2: How Do Cultural Relativism and Moral Absolutism Influence International
Business Ethics?
• Figure 3.3: What Are the Stages in Kohlberg’s Three Levels of Moral Development?
• Figure 3.4: Who Are the Stakeholders of Organizations?
What’s Inside?
• Management Live: Curbing Work Hours to Improve Performance
Applications
• Test Prep 3
• Skill Building Portfolio
o Self-Assessment 3: Terminal Values Survey
DISCUSSION TOPIC
You can start the discussion of this chapter by asking students to identify examples of ethical and
unethical business practices that they have read about, heard about, personally witnessed or
experienced. Ask the students how these practices seem to have been viewed by the public at
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
Lecture Outline
Takeaway Question 3.1
How Do Ethics and Ethical Behavior Play Out in the Workplace?
Question 3
Pick up any business newspaper and the headlines profile business scandals, financial failures,
criminal charges, exploitation and greed. It can seem pervasive. This leaves us just a tad bit
jaded about executive leadership in our society. This is why it is more important than ever to
understand the moral and social implications of behavior in and by organizations. We begin with
a discussion of ethics and ethical behavior.
• Ethics is a code of moral principles that sets standards of good or bad, or right or wrong,
• Ethical behavior is values driven.
✓ Values are the underlying beliefs and judgments regarding what is right or desirable and
that influence individual attitudes and behaviors. Psychologist Milton Rokeach
distinguishes between terminal and instrumental values:
• Views differ on what constitutes moral behavior
✓ Figure 3.1 summarizes the four philosophical views of ethical behavior
✓ Utilitarian view considers ethical behavior to be that which delivers the greatest good
to the greatest number of people
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
✓ Justice view considers a behavior to be ethical when people are treated impartially and
fairly, according to legal rules and standards
● Procedural justice involves the fair administration of policies and rules
✓ Moral-rights view considers behavior to be ethical when it respects and protects the
fundamental rights of people. See the margin for:
DISCUSSION TOPIC
Ask students for examples of each of the above views of ethical behavior. These can be either
hypothetical examples, from current events or situations they have encountered in their own
• What is considered ethical can vary across cultures.
✓ Cultural relativism suggests that there is no one right way to behave and that ethical
behavior is determined by its cultural context. The classic rule of “when in Rome, do as
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
• Ethical dilemmas are tests of personal ethics and values.
✓ An Ethical dilemma is a situation requiring a decision about a course of action that,
although offering potential benefits, may be considered unethical. Ethical dilemmas arise
as tests of personal ethics and values.
➢ May be no clear consensus on what is “right” or “wrong”
➢ See Table 3.1 inset of common examples of unethical behavior at work,
which include:
➢ Discrimination or denying people a promotion due to reasons
not relevant to job performance (i.e., race, religion, gender,
age).
➢ Sexual Harassment or making a co-worker feel uncomfortable
DISCUSSION TOPIC
A good way to get students thinking about ethical dilemmas and to generate a lively discussion is
to ask students how they would respond to the following three dilemmas. The range of student
Case 1: foreign payment. A governmental official of a foreign nation asks you to pay a
$300,000 consulting fee. In return for the money, the official promises special assistance in
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
DISCUSSION TOPIC
Ask small groups of students to identify an ethical dilemma that commonly occurs for students
as they pursue their educations. Each group should focus on a different dilemma. Then have each
group discuss how their dilemma should be handled, given the checklist for making ethical
decisions.
• Managers as positive role models can inspire ethical conduct.
• The way top managers approach ethics issues can have a powerful effect on what
happens in their organizations
➢ Policies that set high ethics standards
➢ Set a personal example of the behavior you expect, “Walk the talk”.
TIPS TO REMEMBER
Checklist for Dealing with Ethical Dilemmas
•Step 1. Recognize the ethical dilemma.
• Spotlight Questions:
➢ How would I feel if my family found out about my decision?
➢ How would I feel if my decision was reported in the local newspaper or posted on
the internet?
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
➢ What would a person I know who has the strongest character and best ethical
judgment say about my decision?
Step 7. Take action.
• Protection of whistleblowers can encourage ethical conduct.
✓ Whistleblowers are people who expose organizational misdeeds in order to preserve
ethical standards and protect against wasteful, harmful, or illegal acts
✓ The very nature of organizations as power structures creates potential barriers to whistle-
blowing
DISCUSSION TOPIC
Ask students to describe what they would do if they happened to be in a situation where they
could become whistleblowers. Then share the following practical tips for whistleblowers:
1. Do make sure you really understand what is happening and that your allegation is absolutely
correct.
• Formal codes of ethics set standards for ethical conduct.
✓ Codes of ethics formally state the values and ethical principles that members are
expected to display
➢ Some require employees to read and agree as a condition of employment
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
STUDY GUIDE / TAKEAWAY 3.2
Questions for Discussion
1) Is it right for organizations to require ethics training of employees?
It is not only right for a company to require ethics training; it is the responsible action
2) Should whistleblowers have complete protection under the law?
Whistleblowers are entitled to complete protection and are protected by law and policies.
3) Should all managers be evaluated on how well they serve as ethical role models?
Career Situation
One of your first assignments as a summer intern for a corporate employer is to design an ethics
training program for the firm’s new hires. Your boss says that the program should familiarize
newcomers with the corporate code of ethics. But, it should go beyond this to provide them with
a foundation for handling ethical dilemmas in a confident and moral way. What will your lesson
plan for the training program look like?
Students’ answers will vary based upon their personal views and individual experiences.
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
Takeaway Question 3.3
What Should We Know About the Social Responsibilities of Organizations?
Organizations are becoming increasingly aware that they do not exist separate from society.
Corporate social responsibility and triple bottom line are concepts which many students already
have become familiar with through daily interactions as consumers making purchases at both
large and small companies.
• Stakeholders, all of whom have varying interests, are affected in some way by how an
• Figure 3.4 lists stakeholders as:
➢ Customers
➢ Suppliers
➢ Stockholders
➢ Federal, State, local
• Social responsibility is an organization’s obligation to best serve society.
✓ Corporate Social Responsibility (CSR) advocates organizational behavior that serves
• Perspectives differ on the importance of corporate social responsibility
✓ In academic and public policy circles, there is much debate over corporate social
Schermerhorn & Bachrach / Exploring Management 6th edition Instructor’s Manual
✓ One of the problems with the pro and con CSR debate is that it pits the interests of
shareholders and owners against other stakeholders in a win-lose fashion.
• Shared value integrates corporate social responsibility into business strategy
✓ Shared value approaches business decisions with understanding that economic gains
and social progress are interconnected. This approach integrates corporate social
responsibility into business strategy.
• Social businesses and social entrepreneurship point the way in social responsibility.
• Social responsibility audits measure the social performance of organizations.
✓ A social responsibility audit measures and reports on an organization’s performance in
various areas of corporate social responsibility.
• Sustainability is an important social responsibility goal.
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Copyright © 2018 John Wiley & Sons, Inc. 3-14
✓ Sustainability is a goal that addresses the rights of present and future generations as
co-stakeholders of present-day natural resources.
✓ Sustainable business is where firms operate in ways that both meet the needs of
customers and protect or advance the well-being of our natural environment.
✓ Sustainable development describes the practices that make use of environmental
resources to support societal needs today while also preserving and protecting the
environment for future use for future generations.
✓ Environmental Capital or Natural Capital, an increasingly popular and useful term
in conversations about sustainable development, is the available natural resources
✓ Atmosphere, land, water, air, minerals
➢ ISO 14001 is a global quality standard for organizations that have objectives
for sustainable business practices.
➢ Human Sustainability socially responsible organizations must consider the
effect of management practices on employees.
DISCUSSION TOPIC
Discuss ways in which businesses can protect the environment and save money at the same time,
such as grocery stores selling low-priced canvas bags to replace paper or plastic ones; coffee
shops encouraging patrons to bring in their own cups; and fast food restaurants providing
recycling bins so customers can sort their trash. Ask students for other examples.
STUDY GUIDE / TAKEAWAY 3.3
Questions for Discussion
1. Choose an organization in your community. What questions would you ask to complete
an audit of its social responsibility practices?
The social audit would include criteria to assess the organization’s performance in terms
of the impact a wide range of stakeholder groups. Criteria would include Economic
Responsibility, Legal Responsibility, Ethical Responsibility and Discretionary
Copyright © 2018 John Wiley & Sons, Inc. 3-15
2. Is the logic of the virtuous circle a convincing argument in favor of corporate social
responsibility?
3. Should government play a stronger role in making sure organizations commit to
sustainable development?
Recent corporate governance failures of AIG and other financial institutions may tip
Career Situation
It’s debate time, and you’ve been given the task of defending corporate social responsibility.
Make a list of all possible arguments for making CSR an important goal for any organization.
For each item on the list, find a good current example that confirms its importance based on real
events. In what order of priority will you present your arguments in the debate? Next, what
arguments “against” CSR will you be prepared to defend against?
Teaching Notes
In this section, ideas, exercises, and assignments are provided to assist you in integrating the
concepts in Exploring Management 6e for your students, especially the special features of the
text.