Chapter 4: Ethics and Social Responsibility
71
Chapter 4: Ethics and Social Responsibility
Pedagogy Map
This chapter begins with the learning outcome summaries and terms covered in the chapter, followed by a
set of lesson plans for you to use to deliver the content in Chapter 4
• Lesson Plan for Lecture (for large sections)
• Lesson Plan for Group Work (for smaller classes)
• Assignments with Teaching Tips and Solutions
What Would You Do Case Assignment – American Express
Self-Assessment – An Ethical Baseline
Management Decision – Responding to Tragedy
Highlighted Assignments
Key Points
What Would You Do?
American Express is considering not hiring smokers in an
effort to stem rising medical costs.
Management Team Decision
As a hotel management team, students must decide how to
respond to local government’s plan to limit development of
exclusive beach-front property.
Practice Being a Manager
The objective of this exercise is to improve students’ skill in
analyzing a situation involving ethics and responsibility
issues.
Develop Your Career Potential
Students examine a nonprofit organization of their choosing.
Chapter 4: Ethics and Social Responsibility
72
Supplemental Resources
Where to Find Them
Course Pre-Assessment
IRCD
Course Post-Assessment
IRCD
Learning Outcomes
1 Identify common kinds of workplace deviance.
Ethics is the set of moral principles or values that define right and wrong. By contrast, workplace
2 Describe the U.S. Sentencing Commission Guidelines for Organizations and explain how
they both encourage ethical behavior and punish unethical behavior by businesses.
Under the U.S. Sentencing Commission Guidelines, companies can be prosecuted and fined up to $300
3 Describe what influences ethical decision-making.
Three factors influence ethical decisions: the ethical intensity of the decision, the moral development of
the manager, and the ethical principles used to solve the problem. Ethical intensity is strong when
4 Explain what practical steps managers can take to improve ethical decision-making.
Employers can increase their chances of hiring ethical employees by testing all job applicants. Most large
companies now have corporate codes of ethics. In addition to offering general rules, ethics codes must
also provide specific, practical advice. Ethics training seeks to increase employees’ awareness of ethical
Who Wants to Be a Manager game
IRCD and online
Chapter 4: Ethics and Social Responsibility
73
5 Explain to whom organizations are socially responsible.
Social responsibility is a business’ obligation to benefit society. According to the shareholder model, a
6 Explain for what organizations are socially responsible.
Companies can best benefit their stakeholders by fulfilling their economic, legal, ethical, and
discretionary responsibilities. Being profitable, or meeting one’s economic responsibility, is a business’
7 Explain how organizations can choose to respond to societal demands for social
responsibility.
Social responsiveness is a company’s response to stakeholders’ demands for socially responsible
behavior. There are four social responsiveness strategies. When a company uses a reactive strategy, it
8 Explain whether social responsibility hurts or helps an organization’s economic
performance.
Does it pay to be socially responsible? Studies show that there is generally no tradeoff between social
responsibility and economic performance. In most circumstances, there is generally a small positive
Terms
accommodative strategy
concentration of effect
conventional level of moral development
defensive strategy
magnitude of consequences
overt integrity test
personal aggression
personality-based integrity test
Chapter 4: Ethics and Social Responsibility
74
principle of personal virtue
principle of religious injunctions
principle of utilitarian benefits
proactive strategy
shareholder model
social consensus
social responsibility
social responsiveness
Lesson Plan for Lecture
Pre-Class Prep for You:
Pre-Class Prep for Your Students:
• Review chapter and determine what points to
cover.
• Bring PPT slides.
• Bring book.
various definitions on the board. Then, ask students to describe some deviant behavior
Begin Chapter 4 by asking students to define ethics in their own words. Capture the
Lecture slides: Make note of where you stop so you can pick up at the next class
meeting. Slides have teaching notes on them to help you as you lecture.
Topics
PowerPoint Slides
Activities
What is Ethical &
Unethical Workplace
Behavior
1 Ethics and the Nature of
Management Jobs
1: Ethics and Social
Responsibility
2: What Would You Do?
3: Ethics
4: What is Ethical and
2 Workplace Deviance
7: Workplace Deviance
8: Types of Workplace
Deviance
9: Production Deviance
10: Property Deviance
Ask students what role
culture plays in workplace
deviance. Is workplace
deviance a fact of life for
companies, or can it be
Chapter 4: Ethics and Social Responsibility
75
How Do You Make Ethical
Decisions?
4 Influences on Ethical
Decision Making
4.1 Ethical Intensity of
the Decision
17: How Do You Make
Ethical Decisions?
18: Ethical Answers
Depend On…
19: Ethical Intensity
Depends On…
20: Stages of Moral
25: Principle of
Government
Requirements
26: Principle of
Utilitarian Benefits
Ask students what they
would do as the manager
handling the Addessi case
at IBM.
Give students a
5 Practical Steps to
Ethical Decision
Making
5.1 Selecting and
29: Practical Steps to
Ethical Decision Making
30: Selecting and Hiring
31: Code of Ethics
Ask students, “Can ethics
be taught?” Or, “If you
can’t hire entirely ethical
employees, can you teach
What Is Social
Responsibility (SR)?
6 To Whom Are
Organizations Socially
Responsible?
7 For What Are
35: What Is Social
Responsibility?
36: What Is Social
Responsibility?
37: To Whom Are
Organizations Socially
Push students to consider
whether companies can
reconcile oppositional SR
demands by different
stakeholders. Does an
inability to do so mean that
Chapter 4: Ethics and Social Responsibility
76
Responsibility
42: Social Responsibility
and Economic
Performance
43:Biz Flix – Emperor’s
Assignments:
1. Sustainability is a hot topic in the debate surround corporate social
what actually happened at Interface.
2. If you have finished covering Chapter 4, assign students to review Chapter 4 and
read the next chapter on your syllabus.
Lesson Plan for Group Work
Pre-Class Prep for You:
Pre-Class Prep for Your Students:
• Review material to cover and modify the
lesson plan to meet your needs.
• Set up the classroom so that small groups
of 4-5 students can sit together.
• Bring book.
Begin Chapter 4 by asking students to define ethics in their own words. Capture the
Lecture on What Is Ethical and Unethical Workplace Behavior (Sections 1-3).
Break for group activity:
“USSC Guidelines”
Divide the class into small groups of 4 to 5 students. Using a case that was recently in
the press, give students the basic facts in the case and have them decide a level for the
Segue into a lecture on Influences on Ethical Decision Making (Section 4).
Chapter 4: Ethics and Social Responsibility
77
Break for the following activity (activity involves a follow-up described in the
Assignment section below):
“Campus Cheating”
Divide the class into small groups of 3 to 4 students. Tell each group to come up with
Lecture on Practical Steps to Ethical Decision Making (Section 5).
Break for the following activity:
“Code of Ethics”
Divide the class into groups of 4-5 students. Allow 5 to 7 minutes for groups to write
Segue into presenting the content on Social Responsibility (SR) (Sections 6-8).
Ask students “What is SR?” Students may have a distinct or limited view of SR, such as
environmentally sound practices or donating time to community outreach. Push them to
Finish by lecturing on SR and Economic Performance (Section 9).
Ask students if they would be willing to pay more for products made by socially
responsible companies to create a stronger connection between SR and economic results.
Start pushing students to think in terms of “how much more.” Perhaps give them a string
of examples, such as:
• Pay $7 gallon for gas as a way to reduce demand for petroleum (current gas
Assignments:
1. As an assignment, have students conduct the poll they created in class on campus
for a couple of days. Groups will need to get together on their own time to
aggregate their data before the next class session, during which groups will share
their results. You can start the next class session by engaging your students in a
Chapter 4: Ethics and Social Responsibility
78
Additional Activity
Out-of-Class Activity: “Ethics Game.” Assign groups of students to develop a rudimentary ethics game.
The game can take any format (board game, quiz game, video game). Depending on the time available,
Assignment Teaching Tips and Solutions
Case Assignment – What Would You Do?
What Really Happened? Solution
AMERICAN EXPRESS
In the case, you learned that American Express was considering a policy of not hiring smokers, a
practice followed by 6,000 companies nationwide. In fact, this case is not about American
Well, with the meeting just a month away, you’ve got to prepare for the Board of Directors’
questions. For example, on what basis the company should decide whether or whether not to
hire smokers? Should the decision be based on what’s in the best interest of the firm, what the
law allows, or what affirms and respects individual rights? The Board is interested in making
good decisions for the company, but “doing the right thing” is also one of its core values.
According to professor LaRue Hosmer, a number of different ethical principles can be used
to make business decisions: long-term self-interest, personal virtue, religious injunctions,
Chapter 4: Ethics and Social Responsibility
79
According to the principle of long-term self-interest, you should never take any action that is
not in your or your organization’s long-term self-interest. Although this sounds as if the principle
When it comes to smokers, however, firms have clearly decided that reducing smoking at
work, or hiring fewer workers, is in their best interest. For example, according to survey data
from the United Kingdom, 73% of employers would choose a non-smoking candidate over a
smoker, 70% of employers plan to prevent employees from smoking at the entrances to their
businesses, and 76% will fine or otherwise discipline employees who break smoking bans.
According to the principle of government requirements, the law represents the minimal moral
standards of society, so you should never take any action that violates the law. So, under this
principle, we ask, “Is it legal to not hire smokers?” The answer is that it depends. Federal law
seems to suggest that it is legal to not hire smokers. Unlike race, gender, ethnicity, religion, and
sexual preference, smokers are not a protected class. Furthermore, smokers are generally not
protected by the Americans with Disability Act (ADA). Chris Kuczynski, assistant legal counsel
The principle of individual rights holds that you should never take an action that infringes on
others’ agreed-upon rights. Like the principle of government requirements, the principle of
individual rights can lead to different answers. Those answers are guided by whether smoking is
viewed as an individual right. We’ll explore that in more detail in the last question.
Next, is this an issue of ethics or social responsibility? Ethical decision making is concerned
with doing right and avoiding wrong, whereas social responsibility is a business’s obligation to
pursue policies, make decisions, and take actions that benefit society.
Ethics is the set of moral principles or values that defines right and wrong for a person or group.
Chapter 4: Ethics and Social Responsibility
80
By contrast, social responsibility is a business’s obligation to pursue policies, make decisions,
and take actions that benefit society. So while ethics focuses on what’s right and wrong for
Why do these difference matter? What difference does it make if we frame not hiring smokers
from an ethical or social responsibility perspective? The difference, and it’s a meaningful one, is
Note the difference, however, when we return to an ethical perspective that focuses on individual
choices or the impact of policies on individuals. For instance, Ellen Vargyas, chief counsel for
So, is not hiring smokers an issue of ethics or social responsibility? Is it an issue where we put
individuals or society first?
Finally, given that it so much cheaper to not hire smokers, the board will want to know whether
it’s ethical to or whether not hiring smokers is a form of discrimination?
Our first question examined how different ethical principles can lead to very different ethical
actions or decisions. The question of whether not hiring smokers is most closely related to the
Chapter 4: Ethics and Social Responsibility
81
number of things that we all do privately that have negative impact on our health is endless. If
it’s not smoking, it’s beer. If it’s not beer, it’s cheeseburgers. And what about your sex life?”
Another key part of any kind of discrimination is that non-performance relevant criteria are used
to make decisions about who to hire, fire, train, or promote in a company. Viewed from this
perspective, is there a significant difference between ageism, sexism, racism, and smokism? In
Is it discriminatory to not hire smokers? Nurse Mandy Carroll, whose parents died from
smoking-related illnesses, and who smokes a pack a day herself, believes that hospitals and other
organizations should not “discriminate” against her and other smokers. Says Carroll, “Obviously
we know the effects of smoking, we see it every day in the hospital. It’s a stupid choice, but it’s
a personal choice.”
Self-Assessment
AN ETHICAL BASELINE
This assessment is meant to show students how ethical they are using three subscales combined into one
instrument. The research from which this inventory is drawn comes from J. E. Wanek, P.R. Sackett, &
D.S. Ones, “Towards an Understanding of Integrity Test Similarities and Differences: An Item-Level
Analysis of Seven Tests,” Personnel Psychology 56 (2003) 873-894.
In-Class Use
Have students open their books to page 150 of the text and give them 5 to 7 minutes to complete the
inventory. Use the Self-Assessment PowerPoint slides and have students raise their hands as you read off
Chapter 4: Ethics and Social Responsibility
82
Scoring
The total inventory is comprised of three subscales that measure antisocial behavior,
orderliness/diligence, and positive outlook. The range for the antisocial scale is 1 to 65, with an average
score being 32. The range for orderliness and diligence is smaller, 1 to 20, with average scores falling
around 10. And the range for positive outlook is 1-30, with an average at 15.
The themes of anti-social behavior are thoughts and admissions of theft, lack of self-control,
Management Decision
RESPONDING TO TRAGEDY
Purpose
The purpose of this exercise is for students to assess how a mine operating company approaches its social
responsibility following the heels of a disaster. It asks students not only to analyze what the company has
Setting It Up
You can use this assignment as a team exercise in class or as an individual take-home assignment.
Questions
1. How would you describe Massey’s current approach to its ethical and social responsibility?
Recall from the text that there are four strategies for responding to social responsibility issues. A
company using a reactive strategy will do less than society expects. It may deny responsibility for a
problem or fight any suggestions that the company should solve a problem. A company using a
Chapter 4: Ethics and Social Responsibility
83
2. Which approach to social responsibility would you recommend that Massey take in the future?
Students’ responses to this question will vary, but they should recognize that there are four strategies
that can be taken to respond to social responsibility issues, as noted above. They should also include
3. How might the temporary closure of dangerous mines and the investment of funds into new safety
systems be an economic stimulus for Massey
As described in the text, it usually does pay to be socially responsible, and that relationship becomes
stronger when a company has a strong reputation for social responsibility. The costs of being socially
Management Team Decision
ENVIRONMENT AND BUSINESS IN ST. TROPEZ
Purpose
With ever-increasing concerns about environmental issues, companies can no longer go about doing
Setting It Up
You can introduce this case by reminding students that while every company has a certain social
Questions
1. How would you respond to the mayor’s plan? Would you support its concern to protect the
environment, even if it meant the closure of your hotel? Would you oppose it and risk being
perceived as uninterested in fulfilling social responsibility?
2. Can you come up with a scenario where the hotel could stay in business and still address the mayor
office’s environmental concerns?