Management Chapter 4 Homework The Argument The Other Side Might That

Managing Ethics and Social Responsibility •

91

INSTRUCTOR’S NOTES___________________________________________________________

______________________________________________________________________________

A. A model for evaluating corporate social performance indicates that total corporate social

responsibility can be subdivided into four primary criteria: economic, legal, ethical, and

discretionary responsibilities.

Exhibit 4.5: Criteria of Corporate Social Performance

1. The first criterion of social responsibility is economic responsibility. Economic

2. Legal responsibility defines what society deems important with respect to appropriate

3. Ethical responsibility includes behaviors that are not necessarily codified into law and

Discussion Question #7: Do you believe it is ethical for organizational managers to try to get

access to and scrutinize Facebook pages of employees or job applicants? Discuss.

4. Discretionary responsibility is voluntary and guided by a company’s desire to make

social contributions not mandated by economics, law, or ethics. Discretionary

• Chapter 4

92

Discussion Question # 9: Lincoln Electric considers customers and employees to be more

important stakeholders than its shareholders. Is it appropriate for management to define some

stakeholders as more important than others? Should all stakeholders be considered equal?

VIII. MANAGING COMPANY ETHICS AND SOCIAL RESPONSIBILITY

INSTRUCTOR’S NOTES___________________________________________________________

______________________________________________________________________________

Exhibit 4.6: Building an Ethical Organization

A. Code of Ethics

1. A code of ethics is a formal statement of the company’s values concerning ethics and

social issues. It communicates to employees what the company stands for. Codes of

ethics tend to exist in two types.

a. Principle-based statements are designed to affect corporate culture. They define

2. By offering guidelines for ethical questions, a code of ethics gives employees the

B. Ethical Structures

1. Ethical structures represent the various systems, positions, and programs a company

can undertake to implement ethical behavior.

Managing Ethics and Social Responsibility •

93

a. An ethics committee is a group of executives appointed to oversee the

translate the values stated in a code of ethics into everyday behavior.

2. The ethics program must be merged with day-to-day operations, encouraging ethical

decisions throughout the company.

C. Whistle-Blowing

1. Whistle-blowing is the disclosure by an employee of illegal, immoral, or illegitimate

2. Companies must view whistle-blowing as a benefit to the company and make

Business Blooper: Countrywide

Countrywide’s CEO Angelo Mozilo’s desperation to be Number One led to a race to the bottom

as the mortgage crisis spun out of control and he was unwilling to give up any of his control.

IX. THE BUSINESS CASE FOR ETHICS AND SOCIAL RESPONSIBILITY

A. Most managers now realize that paying attention to ethics and social responsibility is as

B. Managers are often concerned about whether good citizenship will hurt performance.

• Chapter 4

94

C. Companies are making an effort to measure the nonfinancial factors that create value.

Answers to Discussion Questions

1. Dr. Martin Luther King, Jr., said, “As long as there is poverty in the world, I can never be

rich…As long as diseases are rampant, I can never be healthy…I can never be what I ought

to be until you are what you ought to be.” Discuss this quote with respect to the material in

this chapter. Would this idea be true for corporations, too?

Dr. King subscribed to the justice approach of ethics. Moral decisions must be based on

2. What various stakeholder groups did oil giant BP have to respond to in regard to the massive

2010 oil spill in the Gulf of Mexico? From what you know about the BP oil spill, how would

you evaluate BP executives’ behavior in terms of corporate social responsibility?

It would be very difficult to provide an exhaustive list of the stakeholders to whom BP needed to

3. Imagine yourself in a situation of being encouraged to inflate your expense account. What

factors do you think would influence your choice? Explain.

4. Is it socially responsible for organizations to undertake political activity or join with others

in a trade association to influence the government? Discuss.

Generally speaking, most students will probably agree that it is socially responsible for

5. Managers at some banks and mortgage companies have argued that providing subprime

mortgages was based on their desire to give poor people a chance to participate in the

American dream of home ownership. What is your opinion of this explanation in terms of

ethics and social responsibility?

6. A noted business executive said, “A company’s first obligation is to be profitable.

Unprofitable enterprises can’t afford to be socially responsible.” Discuss why you agree or

disagree with this statement.

The business executive’s statement is a bit of a red herring. Of course, for-profit organizations

7. Do you believe it is ethical for companies to try to get access and scrutinize the Facebook

pages of employees or job applicants? Discuss.

Under the moral-rights approach, such activity could be viewed as a violation of the right of free

8. Which do you think would be more effective for shaping long-term ethical behavior in an

organization: a written code of ethics combined with ethics training or strong ethical

leadership? Which would have more impact on you? Why?

Codes of ethics and ethics training are important within an organization; however, simply

9. Lincoln Electric considers customers and employees to be more important stakeholders than

its shareholders. Is it appropriate for management to define some stakeholders as more

important than others? Should all stakeholders be considered equal?

For an organization to succeed, its managers must define goals and specify activity that will help

the organization achieve them. In the pursuit of its strategies and goals, managers must make

10. This chapter refers to a survey that shows that many people think cheating is more common

today than it was a decade ago. Do you think cheating is really more common or does it just

seem so? Why?

An argument for those who believe cheating only seems more common today is that, with the

TEACHING NOTES FOR LEARNING EXERCISES

Self-Learning: Ethical Work Climates

Managing Ethics and Social Responsibility •

97

Have students complete the self-examination of Ethical Work Climates. Note that ethical

Group Learning: Current Events of an Unethical Type

Students find newspaper or magazine articles from the past several months relating to someone

Action Learning

Students write down at least three times they were presented with ethical dilemmas and meet as a

group to select three examples to analyze according to the first table presented in the exercise.

Then, each person in the group should think of a time when someone behaved unethically toward

him or her and complete the second table presented in the exercise. After discussing behaviors

and consequences associated with their dilemmas and situations, they are to answer the question,

“Why is it important to be ethical?”

TEACHING NOTE FOR ETHICAL DILEMMA

Should We Go Beyond the Law?

1. Talk to the manufacturing vice president and emphasize the responsibility ChemTech has as

an industry leader to set an example. Present her with a recommendation that ChemTech

participate in voluntary pollution reduction as a marketing tool, positioning itself as the

environmentally friendly choice.

This is the best option because it embodies the utilitarian view of ethics, to provide the greatest

2. Mind your own business and just do your job. The company isn’t breaking any laws, and if

ChemTech’s economic situation doesn’t improve, a lot of people will be thrown out of work.

3. Call the local environmental advocacy group and get it to stage a protest of the company.

CASE FOR CRITICAL ANALYSIS

Empress Luxury Lines

1. When determining what his obligations are to his subordinate, Kevin Pfeiffer, what decision

would Antonio Melendez most likely reach if he applied the utilitarian approach to decision

making? What conclusions would probably result if he employed the individualism

approach?

Under the utilitarian approach, a decision can be made that considers only the people who are

directly affected by the decision, not those who are indirectly affected. With that in mind,

2. Put yourself in Antonio’s position and decide realistically what you would do. Is your

response at a preconventional, conventional, or postconventional level of moral

development? How do you feel about your response?

Students’ responses should indicate an understanding of preconventional, conventional, and

3. If Antonio or Kevin were fired because they reported Empress’s fraud, would they be

justified in removing all traces of their employment at the cruise line from their resumes so

they don’t have to explain to a prospective employer why they were fired? Why or why not?

Both Antonio and Kevin may be justified in removing all traces of their employment at Empress

from their résumés; however, actually doing so may be more difficult, at least for Antonio.

Managing Ethics and Social Responsibility •

99

ON THE JOB VIDEO CASE

Theo Chocolate: Managing Ethics and Social Responsibility

1. What practices at Theo Chocolate embody the concept of sustainability?

Sustainability refers to economic activity that generates wealth and meets the needs of the

current generation while saving the environment for future generations. To implement a

2. What does Vice President Debra Music mean when she says that Theo is a “triple bottom

line” company? How is this different from any other company?

In the video, Debra Music says, “We see ourselves as a triple bottom line company, which means

3. What does the term fair trade mean to the leaders at Theo? What happens if fair trade goals

conflict with a company’s primary responsibility to be profitable?

Fair trade is a financial relationship between producers, sellers, and consumers based on the

principle of equity within the exchange of goods. Joe Whinney says that fair trade is important

since cocoa bean growers traditionally have not received adequate pay and have even been

• Chapter 4

100

BIZFLIX VIDEO CASE: EMPEROR’S CLUB

The Emperor’s Club

Video Case Synopsis

William Hundert (Kevin Kline), a professor at the exclusive Saint Benedict’s Academy for Boys,

believes in teaching his students about living a principled life. He also wants them to learn his

beloved classical literature. A new student, Sedgewick Bell (Emile Hirsch), challenges Hundert’s

principled ways. Bell’s behavior during the seventy-third annual Mr. Julius Caesar Contest

causes Hundert to suspect that Bell leads a less than principled life, a suspicion confirmed years

later during a reenactment of the competition.

Mr. Hundert is the honored guest of his former student Sedgewick Bell (Joel Gretsch) at Bell’s

estate. Depaak Mehta (Rahul Khanna), Bell, and Louis Masoudi (Patrick Dempsey) compete in a

Video Case Discussion Questions and Suggested Answers

1. Does William Hundert describe a specific type of life that one should lead? If so, what are its

elements?

Mr. Hundert describes a life philosophy built on virtue and principled values. He describes

2. Does Sedgewick Bell lead that type of life? Is he committed to any specific view or theory of

ethics?

Sedgewick Bell continues his fondness for unethical behavior that he displayed earlier as a

3. What consequences or effects do you predict for Sedgewick Bell because of the way he

chooses to live his life?

Sedgewick Bell’s political life in the U.S. Senate could backfire politically if he engages in