ffd8ffe000104a46494600010201005700550000ffe20c584943435f50524f46494c4500010100000c484c696e6f0210 00006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000000494543207352474200 00000000000000000000000000f6d6000100000000d32d485020200000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000000116370727400000150000000336465736300000 1840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a000 0022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c400000088767565640 000034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636 8000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74657 87400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e7 90000646573630000000000000012735247422049454336313936362d322e310000000000000000000000127352474 22049454336313936362d322e31000000000000000000000000000000000000000000000000000000 ffd8ffe000104a46494600010201005700550000ffe20c584943435f50524f46494c4500010100000c484c696e6f0210 00006d6e74725247422058595a2007ce00020009000600310000616373704d53465400000000494543207352474200 00000000000000000000000000f6d6000100000000d32d485020200000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000000116370727400000150000000336465736300000

1840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a000 0022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c400000088767565640 000034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c000000247465636 8000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c74657 87400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e7 90000646573630000000000000012735247422049454336313936362d322e310000000000000000000000127352474 22049454336313936362d322e31000000000000000000000000000000000000000000000000000000

BUSS116
CHARLESAYOMASCHOOLOFBUSINESS

ffd8ffe000104a46494600010101005700560000ffee000e41646f626500640000000001 ffdb0043000c08090b09080c0b0a0b0e0d0c0e121e1412111112251b1c161e2c272e2e2b 272b2a3137463b313442342a2b3d533e42484a4e4f4e2f3b565c554c5b464d4e4bffdb00 43010d0e0e121012241414244b322b324b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b 4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4b4bffc000110 800c100c503012200021101031101ffc4001f0000010501010101010100000000000000 000102030405060708090a0bffc400b5100002010303020403050504040000017d01020 300041105122131410613516107227114328191a1082342b1c11552d1f0243362728209 0a161718191a25262728292a3435363738393a434445464748494a535455565758595a6 36465666768696a737475767778797a838485868788898a92939495969798999aa2a3a4 a5a6a7a8a9aab2b3b4b5b6b7b8b9bac2c3c4c5c6c7c8c9cad2d3d4d5d6d7d8d9dae1e2e3e 4e5e6e7e8e9eaf1f2f3f4f5f6f7f8f9faffc4001f0100030101010101010101010000000000 000102030405060708090a0bffc400b5110002010204040304070504040001027700010 2031104052131061241510761711322328108144291a1b1c109233352f0156272d10a16 2434e125f11718191a26

DISTANCELEARNINGMATERIAL

PUBLISHEDBYKENYAMETHODISTUNIVERSITY P.O. BOX26760200,MERU Email:[Link]@[Link] TEL:25406430301,31146/0736752262

[Link],challenging,[Link] hichwelearniscomplex,andduringthiscoursewewillbeencouragingyoutoreflectonyourownlearningprocess. Tobegin,[Link],formala [Link],lectures,setexercises,solitar ystudyperiods,groupactivities,[Link]:Adulteducationcl asses,demonstrations,correspondencecoursesetc. [Link],butlearningandbeingtaughtare [Link],butwemayn othavelearntwhatwasintended. Thepurposeofthisintroductionistodescribe Therequirementforthisunit Howtostudyforthisunit Generalassessmentrequirements Theexaminationprocess Requirementsforthisunit: [Link] ne. Wewillbespending12weekstogetherlearningaboutEthicsandCorporateSocialResponsibilityand,onsuccessfulcompletio noftheunit,youwillbeableto:(Asappearsoncourseoutline) Sohowwillweachievethis? WewillachievethisusingacombinationofLectureNotes,OnlineActivities,SelfAssessmentTests,andQuestionstoreflecton

aswellaslecturerstudentfacetofacetutorialsatleasttwiceasemester. RequirementsforthisUnit Assessmentconsistsofthefollowing: Assignment(30%) FinalExamination(70%) HowtoStudyforthisUnit Eachlecturehas4components: 1Selfassessmenttests 2Questionstoreflectonwhathasbeenlearnt. 3Lecturenotesandonlineinformation 4Lecturerandstudentfacetofacetutorialstwiceasemester. LearningSuccess [Link],readingsando [Link] [Link] ndyouwillbeintimatedonline. UnitStudy Readthroughyourlecturenotescarefullyastheymaybeprovidingextrainformationthatwillnotbeintextbooksbutyouwillbee [Link] maycomefromyourtextbookreadings;lecturenotesorothersources. [Link] ncludesomeofthefollowing: Additionquestionsfromyourtextbook.(Rememberthemoreyoudothemoreyouwilllearn) Lecturenotestoassistintheparticulartopiconaweeklybasis Anyextrareadingsrequiredandinstructionsforaccessingthemfromaparticularonlinedatabaseornewspaper Linkstoothersiteswhichareacomponentfortheunit. Pleasenotethatthiscoursehastwocomponents,BusinessEthicsandCorporateSocialResponsibility.Eachisonpages6and72r [Link]. COURSEOUTLINE Coursepurpose Thepurposeofthiscourseistostrengthenstudents`abilitytoanticipate,criticallyanalyzeandappropriatelyrespondtothecruci [Link]

[Link],supplementedbybothtopicalandphilosophicalarticlesan [Link],thecourseintroducesstudentstotheprincipalproblemsandtheoriesofethicsandhowmightapplytoreallifesitua [Link],howethicaljudgmentsarem ade,[Link]( CSR&S)andhowcompanieshavebeenrespondingtodemandsformoreethicalbehaviour,andsocialandenvironmentalrespo nsibilities. CourseObjectives Identifyingandevaluatingtheimportanceofresourcesprovidedbypublicstakeholders. 1Evaluatingtheroleofthemoralmanagerinmakingpublicandprivatesectordecisionsincludingresolvingtradeoffsamong stakeholders. 2Evaluatingthesocialcontractbetweenthefirmandpublicstakeholdersandevaluatinghowthissocialcontractshouldguidede cisionmaking. 3Applyingaformalethicalframeworkthatincorporatespersonalvaluesandbroaderutilitarian,rights/duties,andjusticeconsi derationsintomakingdecisions. CourseContent

1. BusinessEthics
DefiningofBusinessethicsandsocialResponsibility. WhystudybusinessEthics? AframeworkforunderstandingEthicalDecisionMakinginBusiness. RelationshipinValues,AttitudeandBehaviours ClassificationofethicalIssues ConflictofInterest HonestyandFairness Communications Technology EthicalIssuesrelatedtoparticipantsandFunctionalareasofBusiness:Owners,Finance,Employees,Management,Consumers,MarketingandAccounting. OrganizationalStructureandBusinessethics:centralizedanddecentralizedorganizations. Groupdimensions:Formal,informal,GroupNorms. 1. ImplementationandManagementofEthics. 2. InternalEthicsaudit,ethicscommittee,CodesofEthics,SocialAudits,andEthicalOmbudsman. ImprovingEthicsDecisionMakinginBusiness/ReducingUnethicalbehaviourinBusinessOrganization. Driversofdecisionsthatbusinesspeoplemake. CreatinganEthicalFrameworkforBusiness

2. CorporateSocialResponsibility
SocialResponsibility:Legal,environmental,ethical,economicPhilanthropicdimensions ThePracticeorCSR ThedebateoverCSR CSRbestpractices:Stakeholders&standardsetting/auditing EconomictheoryandCSRasamodelforopportunityrecognition TheriseofthesustainabilityandCSRSmovements

ReflectionsonCSR MotivationsforCSR&S BeyondCSR DimensionofCorporateSocialPerformance

Reference: 1PincusHartman,PerspectivesinBusinessEthics([Link])1998. 2Bateman,Zeithane,(1993),Management:Functionsandstrategy,[Link]. th 3Longeneclker,[Link],(2000),smallBusinessManagement:AnEntrepreneurEmphasis,11 Edition. nd 4Robins,StephenP,(2000)ManagingToday,2 Edition,PrenticeHall,Inc,USA 5Zikmund,WilliamG,etal(1995),Business:ChallengesforGlobalCompetitiveness. th [Link],Businessandsociety,(Management,PublicPolicyandEthics,5 Edition,1976. th [Link],Management,6 Edition,1999. [Link](SultanChandandSons),BusinessP)olicy,strategicPlanningandManagement,Delhi1996. rd [Link]&[Link].,StrategicManagement,(StrategyFormulationandImplementation),3 Edition,1988. [Link],[Link],BusinessPolicy,[Link],B usiness,1989.

TABLEOFCONTENTS
INTRODUCTION.............................................................................................................2COURSEOUTLINE............. ............................................................................................5Week1.................................................................................. ............................................10Topic1..........................................................................................................................10 BusinessValuesandEthics........................................................................................10ReasonswhywestudyBusinessEthi cs.....................................................................12CharacteristicsofHighlyEthicalOrganization......................................... ..............14Week2..............................................................................................................................19Topic2................. .........................................................................................................19GuidelinesforManagingEthicsintheWorkplace..... .............................................19DevelopingCodesofEthics........................................................................................20Su mmaryofthelecture...........................................................................................22Week3................................................... ...........................................................................25Topic3................................................................................................. .........................24Reducingunethicalbehaviourinanorganization...................................................24Topic4................... .......................................................................................................26AFrameworkforUnderstandingEthicalDecisionMa kingInBusiness...............26Week4..............................................................................................................................33T opic5..........................................................................................................................33ClassificationofEthicalIssuesand ProblemsinBusiness......................................33Topic6...................................................................................................... ....................38EthicalIssuesRelatedtoParticipantsandFunctionalareasofBusiness............38Week5................................ ..............................................................................................43Topic7:ApplicationofMoralPhilosophies/TheoriestoBus inessEthics..............43Topic8..........................................................................................................................51Organiz ationalStructureandBusinessEthics.........................................................51Topic9............................................................ ..............................................................55TheRoleofCorporatecultureinEthicaldecisionmaking.....................................

55Week6..............................................................................................................................66 Topic10........................................................................................................................66EthicalDilemmas...................... ...................................................................................66MethodstoResolveEthicalDilemmas:.......................................... ...........................66EthicsTools:ResolvingEthicalDilemmas(withRealtoLifeExamples).............66Week7..............................................................................................................................75To pic11........................................................................................................................75EthicsintheBusinessDisciplines.... ..........................................................................75Topic12................................................................................................ ........................79ApplicationofEthicsinHiringandPromotion.......................................................79Week8..................... .........................................................................................................81Topic13................................................................. .......................................................81CorporateSocialResponsibilityinBusiness............................................................. 81CorporateSocialResponsibilityinBusinessEthics.................................................84Week9........................................... ...................................................................................90Topic14....................................................................................... .................................90CorporateSocialResponsibility&Profitability......................................................90Topic15........ ................................................................................................................94SatisfyingCorporateSocialResponsibility...... .........................................................94Topic16................................................................................................................. .......98EvolutionofCorporateSocialResponsibility...........................................................98Topic17................................ ......................................................................................100ModelsonCorporateSocialResponsibility.............................. ..............................100Topic18......................................................................................................................105Corporat ePowersandIssues...................................................................................105Week10........................................................ ..................................................................109Topic19...................................................................................................... ................109RelationshipoftheFirmtoStakeholders...............................................................109Week11....................... ...................................................................................................123Topic20..................................................................... .................................................123SocialResponsibility&ManagementFunctions....................................................123 FactorsthatinfluenceBusinessEthicalBehaviour....................................................128

Week 1 Topic 1 1.0 BusinessValuesandEthics

Lectureobjectives UnderstandingBusinessValuesandEthics Toexploretheconceptualizationofbusinessethics AppreciatingthestudyofBusinessValuesandEthics OutliningcorevaluesinBusinessEthics Explainingtheinterrelationshipbetweenvalues,attitudesandbehaviourinbusiness 1.1 Introduction BusinessEthicsisoneofthemostimportantyetperhapsmostmisunderstood,[Link]

[Link],shouldasalesp ersonomitfactsaboutaproductspoorsafetyrecordinasalespresentationtoclient? Shouldanaccountantreportinaccuraciesdiscoveredinanauditofaclient,knowingthatthecompanywillprobablybefiredbyth eclientfordoingso? Shouldanautomobiletiremanufacturerintentionallyconcealsafetyconcernstoavoidamassive,andcostly,tirerecall? Shouldpharmaceuticalcompanieswidelyadvertiseimprovedlifestylewonderdrugsthatshouldonlybeprescribedtoasmal lpercentageofthepopulation?Additionallyatwhatcostdotheselifestyleimprovementscome? Regardlessoftheirlegality,theactionstakeninsuchsituationswillsurelybejudgedbyothersasrightorwrong,ethicalorunethic [Link],thefieldofbusinessethicsiscontroversialandthereisnouniversallyacceptedapproachforsolvingethicali [Link],[Link] [Link] evaluestotheiremployeestodevelopanethicalclimateintheorganization. Beforewegetstarted,[Link] [Link],althoughitprovidesanoverviewofgroupandindividualdecisionmakingprocess,[Link],thismaterialwillnotmakeyoum oreethical,[Link] rentvaluesandconvictionsinmakingbusinessdecisions,tothinkabouttheeffectsofyourdecisionsonbusinessandsociety,and [Link] [Link] ionalethicaldecisionsaremadeandonwaystheorganizationcanimproveethicalconduct. 1.1.1 Definitionofbusinessethics Ethicshasbeendefinedasinquiryintothenatureandgroundsofmoralitywherethetermmoralityistakentomeanmoraljudgm ent,[Link] erminationofrightandwrong. TheAmericanHeritagedictionaryoffersthisdefinitionofethicsasthestudyofthegeneralmoralchoices,moralphilosophyan dtherulesorstandardsgoverningtheconductofmembersofaprofession. Mostpeoplewouldagreethathighethicalstandardsrequirebothbusinessandindividualstoconformtosoundmoralprinciples. However,[Link],tosurvive,businessmustmakeprofi [Link],[Link],businessmustbalancet [Link] [Link],societyhasdevelopedruleswhicharebothlegalandimplicit(hidden rules)toguidebusinessintheireffortstoearnprofitsinwaysthatdonotharmindividualsandsocietyasawhole.

Inanutshell,[Link] ficrequiredbehaviourisrightorwrong,ethicalorunethicalisoftendeterminedbystakeholderssuchasinvestors,interestgroup s,employees,[Link],theirjudgmentsinfluenceits activities. 1.1.2 Definitionofbusinessvalues [Link] [Link] [Link] itoperatesserveasyardsticksagainstwhichtheenterpriseisjudgedaseitheroperatingethicallyorunethically. 1.1.3 WhyStudybusinessethics Ethicalwrongdoingisincreasinglyaconcerntodaywhethermadeinscience,[Link] ghtorwrong,[Link], whethercorrectlyornot,[Link], itisimportanttounderstandbusinessethicsandrecognizeethicalissues. [Link] ethicalvalues,[Link] [Link],[Link] [Link] mally,abusinessdoesnotestablishrulesorpoliciesonpersonalethicalissuessuchassex,ortheuseofalcoholoutsidetheworkpl ace. Indeed,insomecases,[Link] [Link] nshipbetweenlegalandethicaldecisionsbecausejustbeingagoodpersonhavingsoundpersonalethicsinyourownviewmayn otbesufficienttohandleethicalissuesthatariseintheorganization. 1.1.4 Reasonswhywestudybusinessethics Companiesandbusinesspeoplewhowishtothrivelongtermmustadoptsoundethicaldecisionmakingpractices. Ethicsprogramshelpmaintainamoralcourseinturbulenttimes. Ethicsprogramscultivatestrongteamworkandproductivity Ethicsprogramssupportemployeegrowthandmeaning. Ethicsprogramsareaninsurancepolicy;theyhelpensurethatpoliciesarelegal. Ethicsprogramshelpmanagevaluesassociatedwithqualitymanagement,strategicplanninganddiversitymanagement;thisb enefitneedsfarmoreattention. Ethicsprogramspromoteastrongpublicimage. Thereisanoverallbenefitsofethicsprograms:

1.1.5 Corevaluesinbusinessethics
Thefollowingarethecorebusinessvalues: Acceptresponsibilityandbeaccountableforactions. Respectandpromotehumanrightsinallourdealings Honouragreementsandcommitments Treateveryonebeingdealtwithfairly,honestlyandwithdignityandrespect Conductbusinessinanenvironmentallyresponsiblemannerinaccordancewiththeprinciplesofsustainabledevelopment. Obeyalllawsthatgovernbusiness Operateinallcountriesinaccordancewiththeprinciplesandstandardsbeingappliedinbusinessactivities Manageactivitiesforthebenefitofstakeholders Communicatetoallstakeholdersinhonestandstraightforwardmanner Carryoutactivitiesinasociallyresponsiblemannerthatbenefitthelocalcommunityinwhichthebusinessoperates Workingwithemployeestocreateenvironmentsthataresafeandhealthy Selectandtreatemployeesinafairandequitablemanner Establishaworkenvironmentthatisfreefromdiscrimination,harassment,intimidationandhostilityofanykind Respectingprivacyofemployeesandtheirfamilies 1.1.6 Characteristicsofhighlyethicalorganizations [Link] thegoodofthesestakeholdergroupspartoftheorganizations'owngood. [Link]'interestscountasmuchastheirown. Responsibilityisindividualratherthancollective,withindividualsassumingpersonalresponsibilityforactionsoftheorganiz ation. Theseorganizations'groundrulesmandatethatindividualsareresponsibletothemselves. [Link] dpurposetiestheorganizationtoitsenvironment. Thereexistsaclearvisionandpictureofintegritythroughouttheorganization. Thevisionisownedandembodiedbytopmanagement,overtime. Therewardsystemisalignedwiththevisionofintegrity. Policiesandpracticesoftheorganizationarealignedwiththevision;nomixedmessages. Itisunderstoodthateverysignificantmanagementdecisionhasethicalvaluedimensions. Furtherreading MarkPastin,inTheHardProblemsofManagement:GainingtheEthicsEdge(JosseyBass,1986),providestheaboveprinciplesforhighlyethicalorganizations.

1.2 InterrelationshipbetweenValues,AttitudesandBehaviourinBusiness
Therelationshipbetweenvalues,attitudesandbehaviourinbusinessisevidencedbythefactthatonesvalues(beliefs)leadstoon edevelopingcertainattitudes(inclinationstoact)andfinallyacertainbehaviourisportrayed(actions/decisions). Businessexecutiveswhohavepositivevalueswillthereforetendtodeveloptherightattitudesandsotendtopropelthebusinesst [Link]: 1Values thesearefundamentalbeliefsystemsthatformthebasisforthedevelopmentoradaptationofethicalpatternsofbehavioure.g.I believeinajustandhonestsociety(MartinLutherKingJnr.). 2Attitudes

[Link] [Link]. 3Behaviour [Link] withcompetitorswillforexample,organizecommonpurchasesystemswiththecompetitorstotakeadvantageofeconomiesof scaleunlikethatwhichharbourshatredforcompetition. ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f02100 0006d6e74725247422058595a2007ce00020009000600310000616373704d534654000000004945432073524742000 0000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001 840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000 022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c4000000887675656400 00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002474656368 000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c746578 7400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79 0000646573630000000000000012735247422049454336313936362d322e3100000000000000000000001273524742 2049454336313936362d322e31000000000000000000000000000000000000000000000000000000 a) Desireforqualitylife qualityproducts. b) Desireforawellconservedenvironment desire to contribute in environment al desiretocreatequalityproducts creation of hig h

conservationparticipationinenvironmentalactivities(orsocialresponsibilityactivities).Thesequentialnatureofthe processaboveisimportantandshouldbeemphasizedwhenadvisingafirmthatwishestodevelopethicalbehaviourinitsoperati [Link]/strangewillmostcertainlybringforthskewedbehaviouralactions.

SelfAssessmentActivities Citeanyservicesoraproductwhereamanufacturerfollowstheabovesequence.

1.2.1 Howtoresistrequeststoactunethically RecognizeUnethicalRequestsandBiases BuyTime FindaMentor&PeerSupportGroup FindWinWinSolutions WorkwithintheFirmtoStoptheUnethicalAct PreparetoLoseYourJob(Lastresortb/citsdifficulttomakechangeeffectivelyfromtheoutside.)

SelfAssessmentActivities
IwantyoutothinkofaprojectinKenyawhichcouldnotgettoitsimplementationstageseitherduetopublicpressureorotherinter

[Link],cometoyourmind? Whatweretheissuesraisedbythevillagersorstakeholdersandotherinterestgroupsthatdelayeditsimplementation? Whatdoesthattellyouaboutpeoplesroleasfarasshapingandadoptionofethicsbyorganizationsareconcerned? Whyisethicsimportantinaworkplace? Whatarethecommonunethicalbusinesspractices?

SelfAssessmentActivity

[Link].P erhapsholditinyourattentionasyougothroughtheday,[Link]. Letsapplywhatyouvelearnedfromthechaptertoacontextmanyofyoumaybefamiliarwith: DownloadingCopyrightedMusicFilesfromtheInternetatsiteslikeNapster,KazaaandMorpheus. Downloadingcopyrightedmusicfileswithoutpermissionofthecopyrightownerisclearlyillegal,yetthepracticecontinues. Why? [Link] entifythepossiblefallaciesineach. Excuse#1:Everybodydoesit. Excuse#2:[Link],yetcharge15to20dollarsatretai l. Excuse#3:IwouldntbuytheCDanyway. Excuse#4:Musiciansandlabelsmakeenoughmoneyalready. Excuse#5:ImmerelysamplingthemusictodecideifIlikeit,justasItestdriveacarbeforeIbuyit. ..Canyouaddexamplesofmoreexcusestothelist?

Summary Ethicsinvolveslearningwhatisrightorwrong,andthendoingtherightthingwhilevaluesarethefundamentalbeliefsystemthatl [Link] ence,[Link] ticesForthisreasonalone,itisimportanttounderstandbusinessethicsandrecognizeethicalissues. Manypeoplethinkthatifanorganizationhiresgoodpeoplewithstrongethicalvalues,[Link]

[Link],shouldbeapplicationofrulesa [Link] emmasastheseissuesaffectapersonsabilitytofunctiononthejob.

FURTHERREADING
PeopleofgoodcharacterareTRRFCC.(Pronouncedterrific) CanyouidentifytheseSixPillarsofCharacter?Goto[Link] TheJosephsonInstituteofEthics[Link] AStepbyStepGuidelinkatthebottomofthepage.

GLOSSARY
Ethics:Learningwhatisrightorwronganddoingtherightthing. Values:Fundamentalbeliefsystem,amission,oraphilosophythatismeaningful. Behaviour:Actualizedattitudeorphysicalportrayalofcertainattitudes. Policy:Aplanofactionorprinciplechosenandagreedonbyanorganizationtobefollowedtoachieveparticularorganizationala imsandobjectives. Winwinsituation:Asituationwhereneitherpartylosesorgains.

Week 2 Topic 2 2.0 GuidelinesforManagingEthicsintheWorkplace

Lectureobjectives Toanalyzeguidelinesformanagingethicsintheworkplace Toappreciatetheroleofemployeesandmanagementinmanagingethics OutliningdetailsonDevelopingCodesofEthics Tounderstandtopmanagementsroleinsupportingethicsprogram Toidentifythekeystosuccessfulethicstraining Tounderstandtheroleofcodesofethicsinidentifyingkeyriskareasfortheorganization Tounderstandtheroleofcontinuousimprovementinimplementingethicalcomplianceprogram Thefollowingguidelinesensuretheethicsmanagementprogramisoperatedinameaningfulfashion: 1Recognizethatmanagingethicsisaprocess. 2Thebottomlineofanethicsprogramisaccomplishingpreferredbehavioursintheworkplace. 3Thebestwaytohandleethicaldilemmasistoavoidtheiroccurrenceinthefirstplace. 4Makeethicsdecisionsingroups,andmakedecisionspublic,asappropriate. 5Integrateethicsmanagementwithothermanagementpractices. 6Usecrossfunctionalteamswhendevelopingandimplementingtheethicsmanagementprogram.

7Valueforgiveness.

SelfAssessmentActivity
1. Assuminganorganizationhasdevelopedacodeofethicswhichdidnothavetheinputofemployeesorcrossfunction aldepartments,inyourviewwhatwouldbethelikelyscenarioasfarasadoptionandsustainabilityand/oreffectiven essof 2. suchcodeofethics? Citeatleasttwoindicatorsshowingthatindeedthisorganizationhasaneffectivecodeofconduct. Notethattryingtooperateethicallyandmakingafewmistakesisbetterthannottryingatall.

2.1 DevelopingCodesofEthics
Lectureobjectives Analyzingissuesthatneedconsiderationincodeofethicsformulation Outliningdifferentethicalissues Appreciatingtheroleofpersonnelincodeofethicsformulation Identifyingandreinforcingpreferredbehaviourinthecodeofethics. Notethatifyourorganizationisquitelarge,e.g.,includesseverallargeprogrammesordepartments,youmaywanttodevelopan overallcorporatecodeofethicsandthenaseparatecodetoguideeachofyourprogramsordepartments. AlsonotethatcodesshouldnotbedevelopedoutoftheHumanResourceorLegaldepartmentsalone,[Link] [Link] ent. Notethatcodesofethicsandcodesofconductmaybethesameinsomeorganizations,dependingontheorganization'sculturean doperationsandontheultimatelevelofspecificityinthecode(s). Considerthefollowingguidelineswhendevelopingcodesofethics: 1Reviewanyvaluesneedtoadheretorelevantlawsandregulations; 2Reviewwhichvaluesproducethetopthreeorfourtraitsofahighlyethicalandsuccessfulproductorserviceinyourarea, 3Identifyvaluesneededtoaddresscurrentissuesinyourworkplace. 4Identifyanyvaluesneededbasedonfindingsduringstrategicplanning. 5Consideranytopethicalvaluesthatmightbeprizedbystakeholders. 6Collectfromtheabovesteps,thetopfivetotenethicalvalueswhicharehighprioritiesinyourorganization(seeitem#7belowfo rexamples). 7. Examplesofethicalvaluesmightinclude FurtherReading (thefollowinglististhe"SixPillarsofCharacter"developedbyTheJosephsonInstituteof Ethics,3103061868):a)Trustworthiness:honesty,integrity,promise-

keeping,loyaltyb)Respect:autonomy,privacy,dignity,courtesy,tolerance,acceptance c)Responsibility:accountability,pursuitofexcellenced)Caring:compassion,consideration,giving,sharing,kindness,l ovinge)Justiceandfairness:proceduralfairness,impartiality,consistency,equity,equality,dueprocessf)Civicvirtueand citizenship:lawabiding,communityservice,protectionofenvironment 1Composeyourcodeofethics;attempttoassociatewitheachvalue,twoexamplebehaviourswhichreflecteachvalue. 2Includewordingthatindicatesallemployeesareexpectedtoconformtothevaluesstatedinthecodeofethics. 3Obtainreviewfromkeymembersoftheorganization. 4Announceanddistributethenewcodeofethics(unlessyouarewaitingtoannounceitalongwithanynewcodesofconductanda ssociatedpoliciesandprocedures). 5Updatethecodeatleastonceayear. 6Notethatyoucannotincludevaluesandpreferredbehavioursforeverypossibleethicaldilemmathatmightarise. QUESTIONSTOREFLECTON Whataretheindicatorsorwarningsignsoflackofcodeofethicsataworkplace,samplethefollowing;Noonewilleverknowwh atwehavedone,soletuscontinuedoingit. Itdoesntmatterhowitsdonesolongasitisdone...Everyonedoesit ..ShredthatdocumentLetushideit Noonewillgethurt .[Link] .. Canyoukeepthelistgoing?Pleaseaddmore.

Summaryofthelecture
Managingcodeofethicsisnotanendtoitselfrather,[Link] organizationthatgeneratesfairandjustbehaviour,inotherwords,[Link] notarefacedwithethicaldilemma,whichofcourseisexpectedinanyidealsituation,butitsimperativetheiroccurrencesareavoi dedatallcost. Forethicsprogramtobepopularandseethelightofthedayitsimportantthatyouincludeallmembersaswellascrossfunctionald [Link],beca useifyouwantyouremployeestoremainethical,youasamanagermustalsobepreparedtoforgive,andthatiswhatreinforcingc

[Link],socodeofethicsmustaswellbereviewedatleastyearlytoreflectcircumstantial changesdeemedfit.

FURTHERREADING
Optional:AlsoseeintheFreeManagementLibraryat[Link] org:GuidetoPersonnelManagementPoliciesat: ([Link] 1OrganizationalCulturereviewtogetabasicunderstandingof"personalities"oforganizations 2StrategicPlanningspecifictodevelopingaValuesStatement 3ValuingDiversitytoconsiderthatthereareothervaluesandperspectives

GLOSSARYCodeofEthics:EthicalrulesofoperationsStrategicPlanning:Systematicanalysisoffactorsassociatedwithc
ustomersandcompetitors(theexternalenvironment)andorganizationitself(internalenvironment)toprovidethebasisforreth [Link]:TocriticizesomebodystronglyinpublicEthicaldilemma:Problemsinresol [Link]:AnacronymforStrength,Weakness,Opport unity,[Link]:Beingmindfulofenviron mentalintegrity,communityserviceandgoodcitizenshipVacuous:Showingnosignsofintelligenceorfeelings

Week 3 Topic 3 3.0 ReducingUnethicalBehaviourinanOrganization

Lectureobjectives Outlininghowtoreduceunethicalbehaviourinanorganization Differentiatebetweenbusinessethicsandethicalbusiness [Link] recrucialinthereductionofunethicalbehaviourinanorganization:Consistentleadership whentheorganizationsleadershipchanges,[Link] lyaffectedbymanagementsuccessions.

Traditionsstandardsshouldbemaintainedthroughatraditionofintegrity. CodeofEthicswrittencodesofethicsshouldgiveexplicit(clear)guidelinesforemployeestofollow. Trainingperiodictrainingshouldclarifytheintentofcorporatepoliciesandreenforcetheseriousnessofethicalvalues. Rewardsperformanceevaluationandcompensationshouldconsidertheemployeesbehaviourwithrespecttocodeofethics. OpenClimate decisionmakingdiscussionsshouldwelcomeorconsiderdifferencesofopinionsandconsiderationoftheethicalstandards. Controls Acontrolsystemfortified/[Link] attheorganizationtrusttheycanworkandrelateethicallybutalsoletthemknowthatcontraventionofthecodeofethicswontgo [Link](CCTV)tomonitorthemovementofemployeeswit hintheorganization. Punishmentviolatorsofthelawoftheorganizationscodeofethicsshouldreceivestrictandpublicpunishment. 3.1 DifferencebetweenbusinessethicsandethicalbusinessBusinessethics [Link] uctionofnuclearweaponscanbedoneethically,prostitutioncanalsobepracticedethically. Ethicalbusiness [Link] [Link] thicallydoesnotjustifyitasanethicalbusinessinKenya,prostitutioncanbedoneethicallybutdoesnotmakeitanethicalbusines sinKenya.

SelfAssessmentActivity
Nowthatyoucandistinguishethicalbusinessfrombusinessethics,Inowwantyoutociteasmanyexamplesaspossible Citeexamplesofbothethicalandunethicalbehaviourdrawnfromyourknowledgeofcurrentbusinessevents. Howwouldyoudescribethecontemporarystateofbusinessethics? Howcanbusinessselfinterestalsoservesocialinterests?

Topic4

4.0 AFrameworkforUnderstandingEthicalDecisionMakingInBusiness
Lectureobjectives Understandingindividualsbehaviourinbusinessethicsdecisionmakingprocess Analyzingethicalissuesthatmakepreferenceforparticularbehaviour Identifyingtheimpactofeachframeworkonbusiness Toprovideacomprehensiveframeworkforethicaldecisionmakinginbusiness Todescribethestagesofcognitivemoraldevelopmentforindividualethicaldecisionmakinginbusiness Toexplainhowknowledgeabouttheethicaldecisionmakingframeworkcanbeusedtoimprovebusinessethics Haveyoueverwonderedwhybusinessmeninthesamebusinessareadomakedifferentbusinessdecisions? Itisplausibletoimaginethatwhentwoindividualsdothesamebusinesstheywouldinvariablymakesimilarbusinessdecision. [Link],formsthebasisforustoexaminewhypeoplebehavedifferentl y,afterwhichitwillenableusseehowanindividualwouldimproveethicaldecisionprocess. Toimproveethicaldecisionmakingwithinabusinessorganization,onemustfirstunderstandhowindividualsmakeethicaldec [Link],socialscientistsandotheracademicshaveattemptedtoexplaintheethicaldecisionmakingprocessi nbusinessbyexaminingthefollowing: 1. Ethicalissueintensity Thiscanbedefinedastheperceivedrelevanceorimportanceofanethicalissuetotheindividual,[Link] [Link] haveshownthatonaveragewomenhavemoreethicalintentionsthanmen(Doyouagreewiththisstatement? Supportyourresponse).Theperceptionofethicalissueintensitycanbeinfluencedbymanagementwhichcanuserewardsandp unishment,[Link],managerscanaffecttheperceivedi mportanceofanethicalissuethroughpositiveornegativeincentives.

SelfAssessmentActivity
Discriminationbasedonrace,sex,tribeoragesareconsideredethicalissuesbymostfirmsinKenyayetthepracticeissorampant. Howisthisso?Canyoutrytoexplainyouranswerbasedonethicalissueintensityperspective? Inyourownconsideredpinionhowelseshouldafirmensurethewrongpracticeisavoidedornippedinthebud? 2. IndividualMoralPhilosophies(KohlbergsModelofCognitiveMoralDevelopment) AccordingtoKohlbergsmodelofcognitivemoraldevelopment,differentpeoplemakedifferentdecisionsinsimilarethicalsit uationsbecausetheyareindifferentstagesofmental(cognitive)[Link] opthroughthefollowingsix(6)stages: Stage1:ThestageofPunishmentandObedience Apersoninthisstagewillrespondtorulesandconsidersgoodandbadintermsofthephysicalpowerofthosewhodetermines [Link],rightandwrongarenotassociatedwithanypersonalphilosophybutratherwithapersonwhohaspower

.Thisstageisusuallyassociatedwithchildrenbutsignsofthisstagearealsoevidentinadults.

SelfAssessmentActivity
Youmayhavenoticedinyourplaceofworkofasituationwherebyyourcolleagues,evenyou,exhibitdifferentialrespecttoyour ablebodiedbossvisaavisthephysicallychallengedbosswhoprobablyisamidget! CiteanotherexampleandlookatitinthelightofthisfirststageofKohlbergscognitivemoraldevelopment InlightofthisfirststageofKohlbergsModel,explainhowrespectforrulesand [Link] ?

Stage2:ThestageofIndividualInstrumentalPurposeandExchange:Anindividualinthisstagedefineswhatisrightasthatwhic [Link],theindividualnolongermakesmoraldecisionsonthebasisofspecificrulesora [Link]/[Link],itmaybewrongforabusine [Link] [Link],heobservestheprincipleofYouscratchmyback,Iscratchyours.

SelfAssessmentActivity
Asashopattendantyouareconfrontedwiththetemptationofreceivingagiftfromasalespersonyetyouknowverywellt heorganizationforbidsit?Howwouldyouhandlethesituation?

Stage3:ThestageofMutualInterpersonalExpectations,RelationshipsandConformity [Link],aproductionmanagermaybeaskedbythe [Link] rfollowstheorder,hedoesnotonlydosotopreservehisjobbutputshimselfinthemanagementsandemployeesshoes(situatio n).

SelfAssessmentActivity

Howdoesthisstagedifferfromstagetwo Acompanyonthevergeofclosureisfacedwiththedilemmaofeither retrenchingsomeemployeesorretainingeveryoneontheunderstandingthatthosewhoaretoberetainedaccepthalfsalariestoc [Link] pment. Stage4:ThestageofSocialSystemandConscienceMaintenance:Anindividualinthisstagedetermineswhatisrightbyconside ringhis/[Link] esthefocalpointofthisperson,[Link].

SelfAssessmentActivity
Employeesattimesuseofficecomputersforthepurposesoffraudlikeinsidertrading,industrialespionageandperhaps sendingpersonalmails? Woulditbeinorderforthecompanytousecomputersecuritysoftwaretofindouteverythingaboutelectronicconversati onbetweenemployeesoncetheyhavelefttheirofficeforhome? Whatarethemeritsanddemeritsofsuchdecisionbythemanagement? Stage5:ThestageofPriorRightsandSocialContractorUtility Inthisstage,anindividualisconcernedwithupholdingthebasicrights,[Link] sstagefeelasenseofobligationor/andcommitment(socialcontract)toothergroupsandrecognizesthatinsomecaseslegaland [Link] verallutility.

SelfAssessmentActivity
IwantyounowtoconsiderinthiscontextaManagingDirectorofafirmwhoinitiatesenvironmentalconservationprogr am,whenthisMDdoesthishowwouldyouarticulatehisactionwiththisKohlbergsstageofmoraldevelopment? Whatisheorshetryingtoachieveorpreempt? Stage6:TheStageofUniversalEthicalPrinciples [Link]

[Link] spersoninthisstagemightconsidertodiscontinueaproductthathascauseddeathandinjurybecausetheinalienablerighttolife [Link] eproduct.

SelfAssessmentActivity
Doahypotheticalcasescenarioofsay,whentiresarerecalledbyatiremanufacturingcompanybecausethecompanyha [Link]. SummaryofKohlbergssixstages [Link] hismodel,aspeopleprogressthroughthestagesofmoraldevelopmentandwithtime,education,andexperiencetheymaychang [Link] ultureespeciallyethicstraining. 3. CorporateCulture Thiscanbedefinedasasetofvalues,beliefs,goals,[Link] imepassesacompanyororganizationcometobeseenasalivingorganismwithamindandawillofitsown,[Link],WaltD isney(cartoons),MacDonaldsCorp.,IBM,Proctor&Gamble,SouthWestAirlines(efficiency),GeneralMotors(GM) (salesmanship).[Link] tudescanbereinforcedthroughofferingcourses/[Link] urecanbethoughtasthecharacterordecisionmakingprocessesusedtodeterminewhetherresponsestoissuesarerightorwrong .

SelfAssessmentActivity
[Link] [Link] matwork? WhichorganizationsinKenyathatmaycometoyourmindwhichareverysynonymouswithpositiveornegativecorporatecultu res? Significantothers Thosewhohaveinfluenceinaworkgroup,includingpeers,managers,coworkers,[Link] ssionoverlunchorwhenthebossisaway.

Aworkerlearnsethicalorunethicalbehaviourthroughinteractionswithpeoplewhoarepartofhisorherintimatepersonalgroup [Link]. Opportunity [Link] [Link] [Link] [Link] theindividualtothedegreethattheybringsocialapproval,statusandesteem. Summary Thekeycomponentsoftheethicaldecisionmakingframeworkprovidedinthischapterincludeethicalissueintensity,individu alcognitivemoraldevelopment,corporateculture,[Link] ebusinessethicsevaluationsandintentionswhichresultinethicalorunethicalbehaviour.

FURTHERREADING
Ferrell,F.F.(2005).BusinessEthics:EthicalDecisionMaking&[Link].

GLOSSARYCognitiveDevelopment:MentalProcessesofunderstandingor
learningEthicalIssueIntensity:Theperceivedrelevanceorseriousnesswithwhi chanindividualaccordsaparticularethicalissueEthicalMoralDevelopment:Th eprocessesorstagesoflearningethicalissuesInstrumentalPurpose:Theunderly ingreasonswhyanindividualdecidestobehaveinaparticularunethicalwayCon scienceMaintenance:Takingaparticulardecisionwhilemaintainingconscienc eabouttheintegrity,respectorprivacyofotherpeopleSignificantOthers:Thosei ndividualswhohaveanimpactoncertainissuesthoughtheytheminority

Week 4 Topic 5 5.0 ClassificationofEthicalIssuesandProblemsinBusiness

Lectureobjective Identifyingethicalissuesinbusiness Classifyingethicalissues Appreciatinghowethicalproblemsareassociatedwithethicalissues Aconstructivesteptowardsidentifyingandresolvingethicalissuesistoclassifytheissuesrelevanttomostbusinessorganizatio [Link],honestyandfairness,[Link] classificationsdoprovideanoverviewofsomemajorethicalissuesthatbusinessdecisionmakersdoface. (i) Conflictofinterest

SelfAssessmentActivity
Wheneverthetermconflictofinterestismentioned,wefindittobeverysynonymouswithorganizationespeciallypurc [Link] owthishappensorhowitleadstocorruptioninthepurchasingdepartmentsincludingingovernmentsdepartmentsonth eKenyanscene.CanyourememberwhywhenNARCgovernmentcametopowerin2002thefirstgovernmentdepartm entstobeearmarkedforreformwaspurchasingdepartment?Areyoufamiliarwiththegoingsoninsuchdepartments? Whatarethemalpractices? Conflictofinterestexistswhenanindividualmustchoosewhethertoadvancehis/herowninterests,thoseoftheorganizationort [Link] [Link] tries,itisgenerallyrecognizedthatemployeesshouldnotacceptbribes,personalpayments,giftsorspecialfavoursfrompeople thathe/[Link] beenassociatedwiththedownfallofmanymanagers,legislatorsandgovernmentofficials. [Link] [Link] aircompetitionamongbusinesses. (ii) HonestyandFairness Honestyreferstotruthfulness,[Link],[Link] [Link] [Link],theyshouldnotknowinglyharmcustomers,clientsoremployeesthroughdeception,mis representationorcoercionnorshouldtheyharmtheircompetitors.

SelfAssessmentActivity
Iwantyounowtoexplainbrieflyinthiscontextthefollowingscenarios: WhenunscrupulousmeathawkersinNaivashatownsoldforbiddengamemeattounsuspectingcustomers Whenacarteloftraderscolludetoreducepricesoftheiritemstopushoutrival/competitoroutofbusiness. Whenabigtimeentrepreneuropensasupermarketinavillageshoppingcentre Althoughpeopleinbusinessoftenactintheirowneconomicselfinterest,ethicalbusinessrelationsshouldbegroundedonfairne ss,[Link] ctationsortoabidebylawsandstandardsdestroystrustandmakesitdifficultifnotimpossibletocontinuebusinesstransactions. (iii) Communication

QuestionsToReflectOn
Communicationisaverypowerfultoolfortransferringinformationfromonepersontoanotherorfromonecomputertoanother. [Link] [Link] mmunicationthathaveraisedethicalissues? Areyouawarethatthefollyofcommunicationisnotlimitedtofraud? Doyouagreewithmethatwesometimesusethiscommunicationtooffendotherswhetherintentionalornot? [Link] singmessagesandinformationaboutaproductsafety,[Link] [Link].F [Link] [Link],aswhenanadvertisementstatesthatac [Link] alissuesthatmustberesolvedincourt.

SelfAssessmentActivity
InKenyaforexample,thetimingofsomeadvertisementsontelevisionhaveraisedethicalconcernsliketheadvertisementofHa [Link]. Anotherformofadvertisingabuseinvolvesmakingambiguousstatementswhosewordsaresoweakthattheviewers,readers,li [Link],helpssight,[Link] [Link]. (iv) Technology

QUESTIONSTOREFLECTON

Weallneedadvancedtechnologytomakeourworkeasier,quicker,andaccuratebutyouwillagreewithmeithasbecomemoreof [Link] eshavegoodintentionsbutwemaygooverboardsuchthatasweuseit,[Link] mayhavehappenednowthatweviewtechnologyinbadlight? Iwantyoutodiscusstheuseofinternet,closedcircuittelevision,patentpropertyrightsandanyotherformoftechnologicaladvan cesthathaveelicitedethicalissuesandcitewayswithwhichwecanavoidunethicalissuesarisingfromitsuse. Thefinalcategoryofethicalissuesrelaterstotechnologyandthenumerousadvancesmadeintheinternetandotherformsofelect [Link] whousetheinternetincreases,[Link] essincludemonitoringofemployeesuseofavailabletechnology,consumerprivacy,onlinemarketingandlegalprotectionofintellectualpropertyrightssuchasmusic,[Link] [Link] ceandtechnologicaladvancesthatpermitemployeemonitoringandsurveillanceprovidecompanieswithopportunitiestoobta [Link] urveyconductedintheUSindicatesthatagoodpercentageofemployeessurfnonworkrelatedsitesconstantlyduringworkingh [Link] [Link] [Link] ngawellcommunicatedanduniformlyimplementedpolicyonconsumerprivacyandimplementationofinformationgatherin gpracticesthatsupportsbusinessneedswhileintrudingonemployeesprivacyaslittleaspossible.

Topic 6 6.0 EthicalIssuesRelatedtoParticipantsandFunctionalareasofBusiness

Lectureobjectives Identifyingethicalissuesinrelationtoparticipantsandfunctionalareasofbusiness Analyzingthenatureofethicalissues Outliningimpactsoftheethicalissues Explorewaysinsolvingtheissues (i) OwnersofBusiness Ownershaveanobligationtothesocietyandshouldbeconcernedabouttheenvironment,butsomeeitherdonotseeitsrelevance [Link] odonotunderstandtheethicalissuesthattheircustomersorsocietyingeneralconsidermaypayfortheirlackofunderstandinginl [Link]. SelfAssessmentQuestions

[Link] rFinanceannounced120%impositionofexcisedutyontheproductionofplasticbagsabovetherecommendedthicknes [Link]. (ii) Finance Becauseofownersofabusinesshavetheresponsibilityofprovidingfinancialresourcesforitsoperations,ownersandfinancear [Link] [Link] edanddeployedcancreateanunethicalandevenlegalissues. Otherfinancialissuesrelatetohowcompaniesfinancialpositionsarereportedtocurrentandpotentialinvestors,governmentag [Link] [Link],whetherintentionalornot,lawsuitsandcriminalpenalties mayresult. Anotherfinancialissuerelatestowhetherbanksshouldbeheldresponsibleforknowingwhetherlargecashdepositsarebeingl aunderedtohidethedepositorsinvolvementindrugtrafficking.

QuestionsToReflectOn
SomelocalaswellasmultinationalbankshavebornethebruntofclosurefollowinggovernmentofKenyasuspicionthattheban [Link](BCCI)[Link] erfinancialinstitutionsthatcometoyourmindwhosefateresultedintosimilarconsequence? Doyoubelievethegovernmentshouldforcebankstorevealdetailsabouttheirclientssourcesoffinancesaswellasdetailsofthei rfinancialtransactions?Discussyourviewpoint. (iii)EmployeesUnlikesabotage,[Link] [Link],manystoreshavefocusedsecuritycamerasonbackroomsandcash registers.

QuestionstoReflecton
UchumisupermarketchainandKenyaMeatCommissionwereunderreceivershipacoupleofyearsago,whatwerethemanyrea sonscitedfortheirdismalperformancethatculminatedintotheirtemporaryclosure? Respondtothisbasedonemployeesbehaviours. Theremayalsobesituationsinwhichanemployeeisawarethebosshasbeensexuallyharassinganotheremployeebuthasnowa [Link] speakingoutmakethingsworsefortheemployee?Andwhatwillhappentothecoworkerwhoisthevictim? [Link] kout?

(iv) Management

QuestionstoReflecton
Privatizationofgovernmentownedenterprisesisanewworldeconomicorder,citesomeofthegovernmentofKenyaen terprisesthatfaceddifficultiesduringprivatizationprocessandwhy?Andwhatdoyouthinkshouldbedonetopreemptthechancesofreoccurrenceofresistancetoprivatizationinthefuture? [Link] ethicalissuesrelatetothemanagersobligationstoowners,especiallyintheareasoftakeovers,[Link] usinessfacestheprospectofbeingboughtortakenoverbyanothercompanyorindividual,themanagersdutiestothecurrentow nersmayconflictwiththeirownpersonalinterestandobjectives(jobsecurity,incomeandpower).Theirloyaltytotheorganizat [Link] [Link] ernedaboutethicalissuesthatrelatetoemployeediscipline,dismissal,discrimination,healthandsafety,privacy,technology,e mployeebenefits,drugandsubstanceabuseintheworkplace,theenvironmentimpactoftheorganization,codesofethicsandse lfgovernancerelationswithlocalcommunities,plantclosingsandlayoffs. [Link] sumerswouldfinditaninvasionofprivacytohavemultiplecompaniesknowwhatitemstheyhadpurchasedatastore,thestateof mentalorphysicalhealthorwhatmedicationtheyaretaking. (v) Consumers [Link],businessmustconsider notonlyconsumersimmediateneedsbutalsotheirlongtermdesires e.g. althoughpeoplewantefficient,lowcostenergytopowertheirhomes,theydonotwantenergygenerationtopolluteair,water,kil lwildlifeorcausediseases.

Questionstoreflecton
WheneveradevelopmentprojectintheruralareasofKenyaareproposed,localresidentsattimesputupresistancesucht [Link] siblefortheirdelaysinimplementation?Howdoyouappreciatetheroleofconsumersinthis?

(vi) Marketing

QuestiontoReflecton Whataresomeoftheethicalissuesthatmayariseinthecourseofmarketingaproduct?
Doyounoticeanysimilaritiesbetweencommunicationandmarketingasfarasethicalissuesareconcerned? Ethicalissuesmayariseinrelationtothesafetyofproducts,theadvertisingandsellingofproducts,pricingordistributionchanne lsthatdirectstheflowofproductfromthemanufacturertotheconsumer e.g. CocacolacompanyhadtotalktotheMexicanofficialstotrytoavoidalegalbattleoveritssalesandmarketingpracticesintheMex icanmarketbecauseitwasbelievedCocacolacompanywasengagedinpracticesthatmeanttokickoutthelocalcompetition. (vii) Accounting [Link] [Link] [Link] hatacorporationmayappearmoreprofitablethanitactually.

Questionstoreflecton
RecentlyinKenyascandalsofmonumentalmagnituderockedsomeofthemicroandsmallfinancialinstitutions,explai nreasonsthatmighthaveledtothequagmiretheseinstitutionfoundthemselvesintoaswellastheconsequencessuffere dbytheirclients. Summary [Link] ludeconflictbetweenmanagersdutiestotheownersofbusinessandtheirowninterestsandtheseparationofownershipandcon trolofbusiness. [Link] [Link] [Link] andmarketingincludeprovidingaselectionofsafer,reliablehighqualityproductsatreasonablepriceswithoutharmingthecust omerortheenvironment.

Accountantsalsowithintherealmofbusinessethicsfacesuchpressuresascompetition,advertisingandalsodataexaggeration.

FURTHERREADING
Ferrell,Freadrick,Ferrell.(2005).BusinessEthics:EthicalDecisionMaking&[Link]

Week 5 Topic7.0:ApplicationofMoralPhilosophies/TheoriestoBusinessEthics
Lectureobjectives Understandinghowmoralphilosophiesareappliedinbusiness Identifyingstrengthsandweaknessineachphilosophy Doingcasescenariostodemonstratetheapplicationofthemoralphilosophies [Link] hersareguidelinesfordetermininghowconflictsinhumaninterestaretobesettledandforoptimizingmutualbenefitofpeopleli [Link] [Link] [Link] [Link],thesuc cessofaneconomicsystemdependsonbothitsphilosophicalframeworkandonthepresenceofindividualswhomaintainmoral philosophiesthatbringpeopletogetherinacooperative,efficientandproductiveworkplace. Thefollowingaresomeofthetheoriesthatexplaintheindividualsbehaviourthatdeterminesdecisionsheorshemakesinbusin ess;

(a) TeleologicalTheory
[Link] [Link] inedsolelybytheamountofgoodconsequences. [Link] hereforefundamentalinteleologicaltheoryandtheconceptofrightnessorobligationsaredefinedintermsofgoodness. Anexampleofateleologicaltheoryisthetheoryofutilitarianismwhichholdsthatourobligationsordutyinanysituationistoperf [Link] alsoberightlyreferredtoasgood.

Componentsofutilitarianprincipleare: (i) Consequentialism [Link] [Link];youaresellingprovisionsinyourshop,attimessomeoftheitemsmaybe comescarceinthemarketinthefuturesay,[Link] [Link] ,youhavedonejustdonethat! Accordingtoyourclientsthepracticeisdeplorable,butasfarasyouareconcerned,[Link],ju stifyyouractionofhordingthiscommodityalongthegoodnessthatyouhavegained. (ii) Maximalism Thisutilitarianprincipleholdsthatarightactionisonethathasnotmerelysomegeneralconsequencesbutthegreatestamountof goodconsequencespossiblewhenthebadconsequencesarealsotakenintoconsideration. QUESTIONSTOREFLECTON Letusassumethatamrunningafactorythatmanufacturespens,asyoumaybewellaware,thereisnofoolprooffactorythatwi [Link] [Link] [Link] ulesinthecourseofindustrialoperations? (iii) Universalism [Link] itarianprinciple,youmighttherefore,considertodiscontinueaproductthathascauseddeathandinjuryinyourfactorybecauset [Link] [Link],thecompanyinwhichyouaretheproductionmanager isnotdoingwellunlessyouastheproductionmanagerworkovertimeforincreasedproductiontoreturnthecompanytoitsfeetag [Link],selfdenialforcommongood! (iv) HedonismThisprincipleholdsthattherightnessofactionisthatwhichproducespleasureandleisureandnopain. QUESTIONTOREFLECTON Thechurchandthegovernmenthavebeenatloggerheadsonsexeducationinschoolsandmoresocondomdistributioninanatte mpttocontainunwantedpregnanciesandthefightagainstHIV/[Link] nsthechurchmaynotbecomfortablewithcondommanufacturingandsubsequentdistribution,inlightofthiscontroversyhow willthecondomsmanufacturersargueandhowdoesthisbehaviourrelatestothisutilitariancomponent? Assumingyourunabarbusinesswithintheestatewhereyoulive,chancesthatresidentswillcomplainofnoisefromyourbarori [Link] barproprietor,[Link] tanceinthislineofargument?Backyourviewpoint. Prostitutionisregardedasillegalandethicalbusinesspracticeinsomanycountries,yetthepracticeisstillrampant,whatwouldd

oyouthinkisthelineofargumentbythosewhopracticeitbasedonthisutilitariancomponent? AdvantagesofTeleologicalTheories Theyagreewithourordinarymoralreasoning. [Link],lying,etc. [Link].

(b) DeontologicalTheory
[Link] [Link] therwords,thistheoryfocusesonthepreservationofindividualrightsandontheintentionsassociatedwithaparticularbehavio [Link] [Link],moral [Link] le,hegavethisexample [Link] [Link] hconsciencetoaskhimselfwhetheritisnotimproperandopposedtothedutytorelievehimselfofthedistress(theneedformoney ).Whatshallhedo?

SelfAssessmentActivity
[Link] [Link] uthereisnoexcuseforignoranceofthelawandyouareboundtosuffertheconsequencejustliketheonewhodeliberately committedacrime?Trytoarticulatetheaforementionedwithdeontologicaltheory. [Link] onsideritwrongtokillaninnocentpersonorcommitaseriousinjustice againstapersonnomatterhowmuchutilitymightresultfromdoingsobecausesuchactionwouldinfringeonthatpersonsrighta sanindividual. Theutilitarianhowevermightconsideracceptableanactionthatresultedinapersonsdeathifthatactioncreatedsomegreaterut [Link],adeontologistmightsaythatthe methodofproductionmustbecorrectednomatterwhatthecostevenifitmeansbankruptingthecompanyandthuscausingallthe [Link]

sanddecidesonthatbasis. AdvantagesofDeontologicalTheory [Link]. [Link]. [Link],deontologistsregardthenatureofmoralprinciplesaspermanentandstab [Link] tainabsoluterights: 1Freedomofconscience 2Freedomofconsent 3Freedomofprivacy 4Freedomofspeech 5Dueprocess(justice) Todeterminewhetherbehaviourisethicaldeontologistslookforconformitytomoralprinciples. MainDifferencebetweenTeleologyandDeontology Teleologyphilosophiesconsidertheendassociatedwiththeactionwhereasdeontologicalphilosophiesconsiderthemeans.

SelfAssessmentActivity
[Link] [Link] [Link] [Link] actwasbindingsuchthateveniftherewasnothingtopayfor,[Link] findrelevanceofthistheorytothissituation? Canyounoticeanyweaknessofthistheoryasfarastheabovecasescenarioisconcerned?

(c) TheRelativisticTheory
Fromtherelativisticbehaviourdefinitionofethicalbehaviourarederivedsubjectivelyfromtheexperiencesofindividualsand [Link] [Link] [Link] minethegroupconsensusbeforedecidingwhethertotellprospectivebuyersaboutsay,defectsonthenails,boltsandironsheets.

SelfAssessmentActivity

CanyourememberinstanceswhenbuildingsespeciallyinurbancentresofKenyawerecollapsinginthecourseoftheirc onstruction? [Link] elievesellersofsuchbuildingmaterialswerenotawareoftheproductdefects? Iftheydid,whattheorywouldyouwanttoattributetothis?Justifyyourviewpoint. (d) VirtueEthicsTheory [Link] [Link] hatismoralinagivensituationisnotonlyconventionalmoralityormoralrulessayhoweverjustifiedbutalsowhatmatureperson [Link] [Link], employeeswhoadheretothevirtuesoftrustandtruthfulnesswouldconsideritwrongtosellunneededsparepartsdespitetheorg [Link],inordertorationalizetheirownbehaviour,judges [Link] [Link],thisargumentismeaninglessfortheyb elieveintheuniversalrealityoftheelementsofvirtue.

SelfAssessmentActivity
Youhavenowlearntwhatvirtueethicsareallabout,wouldyoubeabletorecognizethatbecauseofvirtueethicssomeindividuals [Link] kthestatement? ThegovernmentintroducedtheofficeoftheOmbudsman;doyouthinkthismightenhanceobservanceofvirtueethics,ifyes/no, how?

(e) JusticeTheory
[Link] [Link] [Link]: (i) Distributivejustice [Link] oworkersforthesamework,theyhaveconcernsaboutdistributivejustice. (ii) Proceduraljustice isbasedontheprocessesandactivitiesthatproduceoutcomes/[Link] [Link] orkplaceattitudesandbehavioursrelatedtoworkgroupcohesion. (iii) Interactionaljustice

[Link]

essincommunicationandoftenentailstheindividualrelationshipwiththebusinessorganizationbasedontheaccurateinformat [Link] [Link] nyoufakeyourmedicalstatustostayawayfromworkorasanapplicantoremployeebeingmisledtoapplylateforajobwhosedea dlineislonggone. Summary [Link] eevaluationsresultsinrestitution(payingbackascompensation)seekingrelationshipbuildingandgaugingoffairnessinthebu sinessrelationship.

GLOSSARYTeleology:IsaderivativefromtheGreekwordTelosmeaningEndinEnglish
Deontology:IsaderivativefromtheGreekwordDeonmeaningDutyinEnglish Justice:Fairness

Topic 8 8.0 OrganizationalStructureandBusinessEthics

Lectureobjectives Analyzingissuesofbothorganizationalstructures Identifyingstrengthsandweaknessesineachcase Identifyingorganizationsineachstructure Appreciatingtheroleplayedbyeachstructureoftheorganization Outliningethicalissuesthatarisefromeachstructure. 8.1 Introduction Thestructureofanorganizationisimportantinthestudyofbusinessethicsbecausebymeansofjobdescriptionsandvariousrole s,[Link] ations: 8.1.1 Centralizedorganization Inacentralizedstructureororganization,decisionmakingauthorityisconcentratedinthehandsoftoplevelmanagersandlittlea [Link]. Thisstructureisonlysuitablefororganizationsthatare: [Link] ms,army,nuclearpowerstationsetc. [Link],teapicking.

Centralizedorganizationsstressformalrules,[Link] [Link] wshis/[Link] tors(GM)ofU.S.,Army,CocacolaandProctorandGambleareexamplesofsomeofmultinationalcompaniesthatwereusedtot [Link] hetopare: BlameshiftingorScapegoating Peoplemaytrytotransferblamefortheiractionstootherswhoarenotresponsible. SpecializationandSignificantDivisionoflabour Employeesmaynotunderstandhowtheiractionscanaffecttheoverallorganizationbecausetheyworkinisolationorin [Link] aviourbecausetheycannotunderstandtheoveralleffectofsuchbehaviourtotheorganization. TopDownApproach Becauseofthetopdownapproachincentralizedorganizationsandthedistancebetweenemployeesandthedecisionma kersunethicalactmayoccur. Bureaucracy Ifthecentralizedorganizationisverybureaucraticsomeemployeeswillactaccordingtotheletterofedict(setsoutrules) insteadofthespirit(conscience,discretion). Withholdingusefulinformation(Littleupwardcommunication) [Link] ampleinKenyasflowerfarms,MagadiSaltMiningCompany,[Link] mmunicationbecausesometimesusingforcedimmigrantlabour,childlabourwithattimesworking1215hourshiftswithlittlepay,[Link] nleadingretailersstoresandthereforebeatormatchglobalcompetitiveprice,[Link] [Link],topmanagersmayclaimnottobeawareofho wtheproductsweremade. Additionallytheproblemofpoorcommunicationbetweenacompanyandasubcontractorincentralizedorganizationscanalso [Link]. Ifthesubcontractorfailstocommunicatedataontheproductsdefects,themanufacturerwillbeunabletoaddressperformance qualityissuesbecauseoflackofinformation;withholdingsuchinformationwouldbeunethical.

SelfAssessmentActivity
Iwantyoutothinkofaproductthatinyourviewfailstomeetendusersstandardsexpectationsandyoumaywantattributetolacko fupwardcommunication. WhatcanyousayaboutthedoorhandlesofFrenchPeugeotscars? CanyousaysomethingaboutMarshallCompanyinconnectiontothis?

8.1.2 Decentralizedorganizations [Link] ralizedorganizationsareNike theyarecharacterizedbycreativity,freedom,informality;SouthWestAirlinesofUSAcharacterizedbyteamwork,orientatio n,[Link],fastdevelopment,[Link]: Relativelyfewformalrulesandcoordinationandcontrolareusuallyinformalandpersonal. Theyfocusinsteadonincreasingflowofinformation. Theyadaptandrecognizechangesintheexternalenvironment. Thefollowingaretheweaknessesnoticedindecentralizedorganizations: Theyhavedifficultyinrespondingquicklytochangesinpolicyandproceduresestablishedbytopmanagement. Independentprofitcentreswithindecentralizedorganizationsmaydeviatefromorganizationalobjectives. [Link],ifafirmthatproducestoxicwa stesleavesthedecisionsondisposaltolowerleveloperatingunits,thesemanagersmayfeelthattheyhavesolvedtheirproblems [Link] [Link] [Link] calwhenRuirumunicipalityobjectsthepractice.

QuestionsToReflectOn
Atyourownverypersonallevel,canyougiveanaccountofyouractionswherebyyouhadenoughconsciencetotellyour selfthatyouractionisunethicalbutyoucontinuedwiththeaction,youonlychangeyourwaysofdoingthingswhensome oneraisesaconcern? Thefollowingarestrengthsofdecentralizedorganizations: Theygiveemployeesautonomyandextensivedecisionmakingbecausemanagementempowersemployees. Theymaybeabletoavoidethicaldilemmasbytailoringtheirdecisiontothespecificsituations, laws,[Link] uresarisingfromcorporateculturethatpermitorencourageworkerstodeviatefromacceptedstandardsorculturesthatfailt oembracecorporateethicsandignorelegalandethicalresponsibilities.

SelfAssessmentActivity
YouarefamiliarwithNikeproductsandwehavejustdiscussedthatitscharacterizedbycreativity,freedomandformalit y,Inowwantyoutooutlinesomeoftheproductsthatsetsitapartfromothercompetitorsandexplainfurtherhowtheseattr

ibutesprobablyresponsibleforitpositioninthesportswearmarketplace.

Topic 9 9.0: TheRoleofCorporatecultureinEthicaldecisionmaking

Lectureobjectives Toassessorganizationalstructureanditsrelationshiponbusinessethics Toexaminetheinfluenceofcorporatecultureonbusinessethics Todeterminehowleadership,motivation,andpowerrelatetoethicaldecisionmakinginorganizations Toexplorehowtheworkgroupinfluenceethicaldecisions Todiscusstherelationshipbetweenindividualandgroupethicaldecisionmaking. 9.1 Introduction Acorporate(ororganizational)culturecanbedefinedasasetofvalues,beliefs,goals,norms,andritualsthatmembersoremplo [Link],asinthecase [Link],concepts,values,ceremonies,andritualsthattakep [Link],beliefs,customs,rules,andceremon iesareaccepted,sharedandcirculatedthroughouttheorganization,theyrepresentitsculture,allorganizations,notjustcorporat ions,havesomesortofculture. [Link] [Link] [Link],founderofFordMotorCo.,leftalegacyemphasizingtheimpor tanceoftheindividualemployee. Oneconcreteexampleofthishighvalueplacedonemployeeswashisannouncementthatemployeesworldwidewouldbeprovi dedwithacomputer,printerandInternetconnectionforjust$5permonth. Corporatecultureisoftenexpressedinformally forexample,throughcomments,bothdirectandindirect,[Link],sha redvaluesareexpressedthroughinformaldresscodes,workinglate,[Link] ulturecanevenbeexpressedthroughgestures,looks,labels,promotions,andlegends(orthelackofthese).Forexample,somepr oductionworkershavebeenaskedtowearstickersontheirhardhatstohelpinteambuildingandgettingalong. 9.1.1 Leadership

SelfAssessmentActivity

[Link] [Link],[Link] dleadershiporanacquiredleadership? [Link],yo ucanaswellsupportyourviewpointlateron. [Link]? Doyouconsidersomeonewholeadspeopleastrayasaleader?Ithinkso! Yes,becausewewereinagreementwithyouthataleaderisonewhocaninfluencepeoplesviewpointoropinionshapersforthat [Link],thenIinviteyoutherefore,toreconstructanotherparallelworkingdefinitionofaleader .Isleadershiponlyconfinedtopoliticians?Areyoualeader? Doyouthinkthecurrentproblemsfacinghumanityespeciallyordinarypeopleintheworldcanbeblamedentirelyonpoorleader ship? Letmebefairforonce,[Link]? Arentwetheoneswhoelectthem,thenturnroundandblamethem? Whenevertheyspeaktousinpublicweapplaud,evenifitstrash?Doesthatmeanwevalidateandendorsetheirleadershipstyle? Nowwherecanweputtheblame? Pleasereflectontheaboveasyouexplorewaysinwhichaleadercanindeedberegardedaleader,andwhatleadershipisallabout. Leadership,theabilityorauthoritytoguideanddirectotherstowardsachievementofagoalhasasignificantimpactonethicalde cisionmakingbecauseleadershavepowertomotivateothersandenforcetheorganizationsrulesandpoliciesaswellastheirow [Link]. [Link] hipstylesthatarebasedonemotionalintelligencetheabilitytomanageourselvesandourrelationshipseffectively havebeenidentifiedbyDanielColeman. (1) TheCoerciveleaderdemandsinstantaneousobedienceandfocusesonachievement,initiative,[Link],crisis,orcompanyturnaround,itotherwisecreatesanegati veclimatefororganizationalperformance. (2) TheAuthoritativeleader,consideredtobeoneofthemosteffective,inspiresemployeestofollowavision,facilitateschange,an dcreatesastronglypositiveperformanceclimate. (3) TheAffiliativeleadervaluespeople,theiremotions,andtheirneedsandreliesonfriendshipandtrusttopromoteflexibility,inno vation,andrisktaking. (4) [Link] [Link] lymotivatedindividualswhovalueachievementandtaketheinitiative.

(5) [Link] quickresultsfromhighlymotivatedindividualwhovalueachievementsandtaketheinitiative. (6) [Link] [Link] cisionswhichaffecttherightsandinterestsofothers,[Link] [Link] neenterprisemaydifferincomparisontoanotherfirm,evenofthesamesizeandnature. However,entrepreneurswhocareaboutethicalperformanceintheirfirmscanusetheirinfluenceasleadersandownerstoencou [Link] adersinallorganizations,andthoseatlowerlevelstaketheircues/directionsregardingproperbehaviourfromthepronounceme ntsandconductoftoplevelmanagement. Insmallfirms,unlikeinlargeones,theroleofaleaderismorepronouncedandhisethicalinfluenceiseasilyassertedandpassedri [Link],theroleoftheleaderofalargefirminthedisseminationanddiffusionofhisinterpre tationofethicalbehaviourtolowercadrecanbedifficultbecausehisprecepts(consensus)mustfirstbeacceptedandsharedbyot [Link] yofthefirmsethicalstandardsfromtopmanagementtothelowestlevels. [Link],forexample,the [Link] vesintruthfulness,honestyandintegritycaneasilyinsistthatthosevaluesbefollowedthroughouttheorganization. Itthereforeholdsthatthepersonalintegrityofthebusinessownerisprobablythegreatestforceinensuringethicalperformanceo [Link] m. Leadershipisalsoimportantbecausemanagerscanuserewardsorpunishmentstoencourageemployeebehaviourthatsupport [Link] ment.

SelfAssessmentQuestion
1. WhatisyourtakeonMauForestComplexinvasionandimpendingevictiononleadership? Doyouseeanythingwrongwiththissituation?Ifyes,whatkindof 2. leadershipisneededhere?Remember!Thereareseveraltypesofleadership,whichonearethese? Andwhichoneisappropriatetothistopicalissue?

In1997theUnitedStateofAmericarefusedtosign/[Link] [Link] [Link] [Link] dership? Reward Performance [Link],suchasrecognitionandpraise,forsubordinatesgood [Link],asubordinatemightbepraisedfordoingtheright,orethical,thingeventhoughprofitswerenot maximized. Performance [Link],suchasreprimands,forsubordinatespoorperfor [Link] withholdingthecommission. [Link] manager,forinstance,mightignoreunethicalbehaviourorpoorqualityworkandbeaniceguytoeveryone. [Link] mple,afinancemanagermightpunishaworkerwhopointedoutthatsomefinancialdocumentsrequiredbyagovernmentregula toryagencywereinaccurate. [Link],[Link],withnoncontingentrewardbehaviourdeliveringmixedresults. 9.1.2 Motivation [Link] [Link],anorganizationoffersincentivestoen [Link] hers,[Link],apersonwhoaspirestohigherpositionsinanorganizationmaysa [Link](moti vation)toriseintheorganization. Asbusinesspeoplemoveintomiddlemanagementandbeyond,higherorderneeds(social,esteem,andrecognition)tendtobec omemoreimportantrelativetolowerorderneeds(salary,safety,andjobsecurity).Researchhasshownthatcareerstage,age,organizationsize,andgeographiclocati onvarytherelativeimportanceofrespect,selfesteemandbasicphysiologicalneeds.

Fromanethicsperspective,[Link] seorhelpsolveproblems,[Link],ju niorexecutivesmightinflatepurchaseorsalesorders,overbilltimeworkedonprojects,[Link] ueuptheladderandareabletofulfiltheseneeds,[Link],thesemanagersmay gobacktoobeyingcompanypolicyorcultureandbemoreconcernedwithinternalrecognitionandachievement. 9.1.3 Power [Link] [Link] [Link]. Asuperiorinanauthoritypositioncanputstrongpressureonemployeestocomply,evenwhentheirpersonalethicalvaluesconfl [Link],amanagermightsaytoasubordinate,Iwanttheconfidentialdataaboutourcompeti torssalesonmydeskbyMondaymorning,[Link] realizetheethicalquestionsinvolvedinthetaskmayfeelpressuretodosomethingunethicaltoobtainthedata. Therearefivepowerbasesfromwhichonepersonmayinfluenceanother: 1RewardPower:Rewardpowerreferstoapersonsabilitytoinfluencethebehaviourofothersbyofferingthemsomethingdesir [Link],status,[Link],forexample,aretailsalespersonthathastwowatches(aT imexandaCasio)[Link] houtanyformofrewardpower,[Link],ifCasiogavehimane xtra10percentcommission,[Link] [Link],however,itisnotaseffectiveasc oercivepower. 2Coercivepower:[Link],coercivepow [Link],supposeavaluableclientasksanindustrialsalespersonforabribeandinsinuat [Link],sheh [Link] nifcertainactionsarenotperformed. 3LegitimatePower:Legitimatepowerstemsfromthebeliefthatacertainpersonhastherighttoexertinfluenceandothershavea [Link] [Link],sometimescommittingactsthatarecontraryt otheirbeliefsandvalues.

SelfAssessmentTest
Inbusiness,ifasuperiortellsanemployeetoincreasesalesnomatterwhatittakesandifthatemployeehasastrongaffiliat iontolegitimatepower,[Link]. 4.

ExpertPower:Expertpowerisderivedfromapersonsknowledge(ortheperceptionthatthepersonpossessesknowledge).Exp [Link],andthusexpertpower,ispositivelyrelatedt othenumberofyearsapersonhasworkedinafirmorindustry,thepersonseducation,orthehonoursreceivedforperformance.E xpertpowerispositivelyrelatedtothenumberofyearsapersonhasworkedinafirmorindustry,thepersonseducation,orthehon [Link] [Link]. [Link],lawyers ,[Link] bouttheaccuracyoffinancialdataprovidedinanaudit.

SelfAssessmentTest
Whatarethemainconcernsofthegeneralpublicasfarasthecredibilityandintegrityofprofessionalslikelawyers,docto rs,[Link]? [Link] culateyourviewpointwiththistypeofpower. ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f02100 0006d6e74725247422058595a2007ce00020009000600310000616373704d534654000000004945432073524742000 0000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001 840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000 022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c4000000887675656400 00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002474656368 000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c746578 7400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79 0000646573630000000000000012735247422049454336313936362d322e3100000000000000000000001273524742 2049454336313936362d322e31000000000000000000000000000000000000000000000000000000 5. ReferentPower:Referentpowermayexistwhenonepersonperceivesthathisorhergoalsorobjectivesaresimilartoanothers. [Link],whenrefe rentpowerisused,onepersonsattemptstoinfluenceanothersdecisionwillbeseenasbeneficial.

Questiontoreflecton


Considerthefollowingsituation:LisaJones,amanagerintheaccountingdepartmentofamanufacturingfirm,hasaske dMichaelWong,asalesperson,tospeedupthedeliveryofsalescontracts,whichusuallytakeaboutonemonthtoprocess [Link] Michaelscommissionchecks(coercivepower),[Link],andth eydiscusssomeoftheirworkconcerns,[Link],[Link] [Link],andwithinseveralweeksthecontr [Link],andMichaelgetshiscommissionchecksalittlefaster. 9.2 GroupdimensionsoforganizationalstructureandcultureTypesofGroups AnInformalgroupisdefinedastwoormoreindividualswithacommoninterestbutwithoutanexplicitorganizationalstructure.

9.2.1 FormalGroups
1. Committees:[Link] thetask,ormanagementmaybelievethatacommitteecanrepresentdifferentconstituenciesandimprovecoordinationandimp lementationofdecisions. [Link],onanautomotiveassembl yline,oneworkgroupmightinstalltheseatsandinteriordesignelementsofthevehiclewhileanothergroupinstallsallthedashbo [Link]. 2. InformalGroups Thesegroupsareusuallycomposedofindividuals,oftenfromthesamedepartment,whohavesimilarinterestsandwhobandtog [Link],fouro rfivepersonswhohavesimilartastesinoutdooractivitiesandmusicmaydiscusstheirinterestswhileworkingandtheymaymee toutsideworkfordinner,concerts,sportsevents,[Link] ngaunion,improvingworkingconditionsorbenefits,gettingamanagerfiredorprotestingworkpracticestheyviewasunfair. 3GroupNorms [Link] delinesformembersoftheentireorganization,sogroupnormshelpdefineacceptableandunacceptablebehaviourwithinagrou p;inparticular,groupnormsdefinethelimitondeviationfromgroupexpectations. Mostworkorganizations,forexample,developnormsgoverningtheirrateofproductionandcommunicationwithmanageme

nt,aswellasageneralunderstandingofbehaviourconsideredrightorwrong,ethicalorunethical,[Link], [Link] membersofthegroupmayglareattheinformant,whohasviolatedagroupnorm,andrefusetotalktoorsitbyhimorher. Summary Corporateculturereferstothepatternsandrulesthatgovernthebehaviourofanorganizationanditsemployees,particularlythei rsharedvalues,beliefs,customs,concepts,ceremonies,[Link] [Link],itishelpfulto [Link],delineatingtheorganizationalcu ltureascaringintegrative,apathetic,[Link] [Link],peoplewithinthecompanyaremorelikelytoactunethically. Leadership,theabilityorauthoritytoguideotherstowardachievementofagoal,hasasignificantimpactontheethicaldecisionmakingprocessbecauseleadershavepowertomotivateothersandenforcetheorganizationsrulesandpoliciesaswellastheiro [Link] [Link],authoritative,affiliative,democ ratic,pacesetting,[Link];leadershipisimportantbecausemanagershavethepowertorewardofpunishempl [Link] contingentrewardsandpunishmentsaremostproductiveinencouragingethicalbehaviour. Motivationisaninternalforcethatfocusesanindividualsbehaviourtoachieveagoal;itcanbecreatedbyincentivesanorganiza [Link]. [Link] [Link],incontrast,penalizesac [Link],whe [Link] [Link] edtomotivateindividualseitherethicallyorunethically. Inadditiontothevaluesandcustomsthatrepresentthecultureofanorganization,individualgroupswithintheorganizationofte [Link] whichincludecommittees,workgroups,teams,andqualitycircles [Link] [Link]

group,[Link] ulesprescribedbytheorganizationsculture.

Week 6 Topic 10 10.0: EthicalDilemmas

Analyzingethicaldilemmasbasedonpreferredframework Solvinganethicaldilemma Appreciatingtheroleofaframeworkfordilemmaresolution. 10.1 DefinitionofanEthicalDilemma Perhapstoooften,businessethicsisportrayedasamatterofresolvingconflictsinwhichoneoptionappearstobetheclearchoice. Forexample,casestudiesareoftenpresentedinwhichanemployeeisfacedwithwhetherornottolie,steal,cheat,abuseanother, breaktermsofacontract,[Link],ethicaldilemmasfacedbymanagersareoftenmorerealtolifeandhighlycomplexwithnoclearguidelines,whetherinlaworofteninreligion. Whenwearepresentedwithanadministrativesituationcallingforanalysisandjudgment,certainquestionssuggestthemselve snaturallyasaninitialinventory. Ethicsinvolveslearningwhatisrightorwrongandthendoingtherightthing. 10.1.1 MethodstoResolveEthicalDilemmas: EthicsTools:ResolvingEthicalDilemmas(withRealtoLifeExamples) [Link],ethicaldilem masshouldberesolvedbyagroupwithintheorganization,e.g.,anethicscommitteecomprisedoftopleaders/managersand/or [Link],[Link] essethicaldilemmas. ([Link] manyoftheworldreligions.) 10.1.2 MethodOne 1Definetheproblem 2Identifythestakeholders 3Identifythepracticalalternatives 4Determinethemeasurableeconomicimpactofeachalternative 5Identifytheimmeasurableeconomicconsequencesofeachalternative. 6Arriveatalternativedecision(canyousleepoverit!!!) [Link] erfacedwithanethicaldilemmainareallifesituation. [Link],whensolvingtheproblem,Ihavetoidentifytheproblemwelltoknowwhetheritislegalbyex

[Link],Iammorallyexpectedtotakeactionthatc [Link] [Link] [Link] [Link],shoulditbeacceptedornotinorderforthecompanyto getwhatitwantsornotacceptitandfindotherwaysindealingwiththesituation. [Link] sandonwhom,inturn,[Link], customers,vender,thelocalcommunity,financialinstitutions,customers,suppliers,[Link] esshasmoralresponsibilitiestothestakeholdersbecausestakeholdershavearightoftherunningoftheinstitutionandth eyalsohavecertainrightswithregardtohowthebusinessoperatesanddecisionsmade. [Link] [Link] [Link]? Itisimportanttoobtainalltherelevantfactsregardingstakeholdersperspectiveviewstakingintoconsiderationtheiru nderstandingofthefactsofthematter,themeaningofthekeyconceptsandtheconflictsintheirdifferenceviewsofthesit uation. [Link] [Link] onmakingbecausewhatevertheoutcomeistheywillberesponsibleandthedecisionhastorespecttherightsofeveryone . [Link] [Link] rdsthoseconcretepersonswithwhomwehavespecialandvaluablerelationshipsandthemoralimportanceofrespondi ngtosuchpersonsasparticularindividualswithcharacterthatdemandaresponsetothemthatwillnotextendtoothers. [Link] [Link] [Link] henthechoosingofthealternativethatbestmeetsthedesiredcriteriaisdoneandthereshouldbenolimittowhathaswork edwellbecauseproblemsarenotthesameandeachproblemishandleddifferently. [Link] ,[Link] whichordainslegislationcomposedbyajudgeormagistrateofcourtsoflawinacountryorstatewithobjectivetoprotect victimsandpursueperpetratorslawfully.

Whatshouldbetakenintoconsiderationaretheeffectsofthecourseofactionandwhichalternativewillresultasthebesto [Link]? Theotherviewpointsmustalsobetakenintoaccountandgettheareasofmoralagreement. [Link],yougettok [Link] onofthecompanyandifso,[Link] odifitisworse? [Link] amountexpectedknown. [Link] [Link] equencesarenotmeasurablebutitisimportanttonotetheirexistencesothatthecompanyitreadytoplananddealwiththe [Link]. [Link](Canyousleepoverit!!!)Aftertakingalltheimportantfactsintoconsideration,Icometoaconclu [Link] [Link] [Link]? Thispositionwillbevalidforalongperiodoftimeandamwillingtodiscusstheproblemwiththeaffectedpartieswithcon [Link] cision. [Link] [Link] [Link],focusingontheprincipalsandstandardsinmakingthedecisionssothedecisiontakentreatsever [Link] onandtheimplementationplanisinprocess. 10.1.3 MethodTwo ThinkingThroughaCaseSituation Whenwearepresentedwithanadministrativesituationcallingforanalysisandjudgment,certainquestionssuggestthemselve snaturallyasaninitialinventory: Arethereethicallysignificantissuesinthiscaseanddotheycallforadecision? Iswhatweearliercalledteleopathyapersonaloranorganizationalhazardinthiscase? DoIunderstandthesourceorgenesisoftheproblemsinthecasehowtheycametobe?

CanIdiscernamidstthesometimescomplexissuesinthecasesituationthosethatarethemost central,themostsignificantfortheresolutionofalltheothers?Isthereamostsalientormostbasicmoralchallenge? Whatareseveralrealisticalternativesoroptionsthatthedecisionmakerinthiscasemustchooseamonginrespondingtothe mostsalientchallenge? Howdoeseachoftheseoptionslookthroughthenormativelensesofthefouravenuesofethicalreasoning? Whataremyrecommendeddecisionandmysuggestedactionplanforimplementingit? CanIgivemyselfandothersareasonablejustificationfortheselectionofthisalternativeoroptionfromamongthoseavaila ble?Ifeachavenuerepresentsamoralvoice,arethevoicesinharmonyoraretheyindiscord? Ifharmony,doesthisfitwithmymoralcommonsense? Ifdiscord,whichavenueshouldreceivemoreemphasis,i.e.,whichshouldpr evailoroverride?CanIexplainwhy? AmIpreparedtoseethiskindofresolutioninsimilarcaseswhenthesameaven uesappeartobe in conflict? Inordertomaketheapplicationoftheaboveinventoryofquestionsmoredirectandeasiertoremember, wecanorganizethemintoafivestepcaseanalysisprocess(the5Dsinthefigurebelow). FiveDsforCaseAnalysis FiveElementsofaCaseAnalysis10.1.4 RealtoLifeExamplesofComplexEthicalDilemmas ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f02100 0006d6e74725247422058595a2007ce00020009000600310000616373704d534654000000004945432073524742000 0000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001 840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000 022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c4000000887675656400 00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002474656368 000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c746578 7400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79 0000646573630000000000000012735247422049454336313936362d322e3100000000000000000000001273524742 2049454336313936362d322e31000000000000000000000000000000000000000000000000000000 ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f02100 0006d6e74725247422058595a2007ce00020009000600310000616373704d534654000000004945432073524742000 0000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001 840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000 022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c4000000887675656400 00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002474656368 000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c746578 7400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79 0000646573630000000000000012735247422049454336313936362d322e3100000000000000000000001273524742 2049454336313936362d322e31000000000000000000000000000000000000000000000000000000

BelowaresomeoftheelevencasesofethicaldilemmaswhichIwantyoutolookateachoneofthemcarefullyandtrytosolveatleas [Link] choosethemethodofsolvingthedilemma.

Selfassessmentactivities
[Link] llowingsituations? 1)Yourenegotiatingcontractwithaverylargecustomerwhoserepresentativehashintedthatyoucouldalmostcertainlybeass uredofgettinghisbusinessifyougavehimandhiswifeanallexpense [Link],butyouhavethedis [Link]? 2)YouhavetheopportunitytostealKshs.100,000/=fromyourcompanywithabsolutecertaintythatyouwouldnotbedetectedo [Link]? 3)YourcompanypolicyonreimbursementformealswhiletravellingonCompanybusinessisthatyouwillberepaidforyourou tofpocketcosts,nottoexceedKshs.860/=[Link] [Link],youtendtoeatatfastfoodplaceandrarelyspendinexcessofKshs.100/=a [Link].300/=toKshs.500/=adayregardlessofwha [Link]? 4)Anotherexecutive,whoispartofasmallplanningteaminwhichyoureamember,frequentlyhasthesmellofalcoholonhisbre [Link]. Whatwouldyoudo? 5)Acustomer(orclient)askedforaproduct(orservice)[Link],hesaidhecouldn'[Link] [Link]?Whatshouldyoudo? 6)[Link],[Link],he 'salreadypaidatthetopofthesalaryrangeforhisjobgradeandyourcompanyhastoomanypeopleinthegradeabovehim,soy oucan'[Link]? 7)[Link].H owever,you'reconcernedthatyourcustomerswon'[Link] shouldyoudo?" 8)[Link],asaChristian,hecouldnotuseaproductbuiltbyacompanythatprovidedbenefitstoth [Link]'dbasicallycuthimselfofffromyourteam,creatingamajorobstacletoyourproduc

[Link]? 9)Yourbosstoldyouthatoneofyouremployeesisamongseveralotherstobelaidoffsoon,andthatyouarenottotellemployeeyet [Link],youheardfromyouremployeethathep [Link]? 10)Yourcomputeroperatortoldyouhe'dnoticedseveralpersonallettersprintedfromacomputerthatyouwereresponsibletom [Link],[Link] [Link]'dwrittenthelettersonherowntimetopracticeusingyourwordproce [Link]?

FURTHERREADING
Optional:alsoseeintheFreeManagementLibraryat[Link] 1Feedback 2Listening Questioning 3Conflict(interpersonal) 4Negotiating 5ValuingDiversity

GLOSSARY Dilemma:[Link]:To [Link]:Directcommunicationofthoughtfrompersontoanotherw [Link]:Whentwoormorethingsarenotinharmony.

Week 7 Topic 11 11.0: EthicsintheBusinessDisciplines

Lectureobjectives Outliningethicalissuesinthebusinessdisciplines Appreciatingthemagnitudesofdilemmas Outliningwaystosolvetheethicaldilemmas 11.1 Ethics&HumanResourceManagement [Link],perspectiveschangebutsimilarconflictsand [Link].g. Drugtesting

SelfAssessmentActivity
Ifyouwereanemployerofanorganization,howethicalorunethicalisitforyoutohaveallyourworkerstestedfordrugabuse? Whatwouldbetheeffectsandimplicationsofthetesttoonewhohasneveruseddrugs? 1. Compensation [Link] meacademicqualification,equaltreatmentforallincludingdifferentsexes,races,colours,nationalitiesetc 2. Comparablework Thiscallsforthedeterminationofthecompensationtobepaidtoapositionbasedonthejobsintrinsicvalueincomparisontowag esbeingpaidforothersrequiringcomparableskills,effortandresponsibilityandhavingcomparableworthtotheorganization. [Link]:Quidpr oquowhereasupervisoroffersajobinexchangeofsexualactivityorrefusestogivedeservingbenefitsforanemployeetillhe/shecom pliessexually. 4. Directdiscrimination Somefirmsexercisedirectdiscriminationwherebysomeraces,colours,gendersarenotemployedoronlyemploysuchpeople smallnumberse.g.blacksAmericaearly19 century.
th

SelfAssessmentActivity
Incaseswheresomefirmspracticediscriminationandothersdonot,thosediscriminatingwouldhavejustasmallcrosssectionofpeopletoemployleavingundiscriminatingonestogetmorequalifiedpeopletoemployandsoproducingmorequality [Link](oranoptiontocloseorchange ).Howdoyouagreeordifferwiththisstatement,discussthemeritsanddemerits? [Link] reewithmyview?Justify. 5. Employeesprivacy [Link] [Link] .Somepeoplearecompletelyopposedtodrugtestingwithanargumentthatthereisinaccuracyofthetestsand(sogivingfalseimp ressionofthetestedperson),itsinconveniencing,possibleviolationsofprivacy,fearofjoblossondetection,andtheoverallcost .

SelfAssessmentActivity Whatsprivacyasfarasanemployeeisconcerned?Whatsnotpartofprivacy?
Howethicalorunethicalisittogetintoonesprivacy? [Link]? 6. EmployeeLoyaltyWhistleBlowing

Whistleblowingoccurswhenanemployeeinformsthepublicofinappropriateactivitiesgoingoninsidetheorganizatione.g. [Link] easrequiredbytheexecutive. Acertainschoolofthoughtcontendsthatwhistleblowingisnotjustifiedunlessthefollowingcharacteristicsarepresent: a. Itsdonewiththerightmoralmotive. b. Theindividualhasexhaustedallinternalavenuesfordissent. c. Theindividualsbeliefregardinginappropriateconductisbasedonevidencethatwouldpersuadeareasonableperson. d. Theindividualhascarefullyanalyzedthesituationtodeterminetheseriousnatureoftheviolation,theimmediacyofthespecific ityoftheviolation. e. Theindividualsactioniscommensuratewithresponsibilityforavoidingand/orexposingmoralviolations. f. Theactionhassomechanceofsuccess,exposingand/avoidingthemoralviolation.

SelfAssessmentActivity
AstudycarriedoutintheUSrevealedthatoutof1,423individualemployeessurveyed,49%feltthatitwasacceptabletotakestapl ersfromwork,14%feltthatpenswereappropriate,while13%feltthatitwasallrighttotakehomecomputerdiskettesforpersona [Link]. Howethicalorunethicaldoyouconsiderthistobe? Whatdoyouthinkmakesworkersfeelthatthefirm(s)owethemsomethinginadditiontotheirsalaries? Whatcouldbedonetoincreaseordecreasealoyaltyfeeling? Whistleblowersarethereforepersonswhosoundanalarmfromwithintheveryorganizationinwhichtheywork,aimingtospot lightneglectorabusesthatthreatenthepublicinterest. Keythings Actsforpublicinterest. Drawsattentiononthepubliconapointworthytheirconcernratherthanjustinterestoramere information. NB:Hedoesallthisatariskofbeingfired,demoted,ostracized,orbeingattackedoftheythatheisaccusing.

SelfAssessmentActivity
Howethicalorunethicaldoyouthinkitistosacksuchkindofaperson? Howethicalorunethicalishisact? Whatcanboththewhistleblowersandcorporationdotofosterreasonedtrustandtoavoidvictimization? Whataboutsituationinwhichtheemployeesfeelthattheyhavetogooutsidethecompanytogetconcernsaddressed? OutlinecasesofwhistleblowinginKenyaandhowfartheissuewentandwhetheritisworthdoingsoinacountrylikeKenyawher eimpunityistheorderoftheday?

Topic 12 12.0: ApplicationofEthicsinHiringandPromotion

Lectureobjectives
Identifyingdilemmasinhiringandpromotion Outlinesolutionstotheemergingethicalissues

SelfAssessmentActivity Inconnectionwithhumanresourcemanagement,whatdoyouthinkismeantbydownsizingofafirm?
Isdownsizingeverethical?

Theveryactofforcingpeopletoleavetheiremploymentisheadoncollisionwithethicsrelatedquestions. Thetruthisthatunlessanorganizationwasdesignedexpresslyandovertlyforthepurpose,itsnotinbusinesstoprovideemploy [Link],nottheirintendedoutput. [Link],itsnowfacinghighcostsinproductionandinotherareaso [Link]/solutionsintheirsituation.

SelfAssessmentActivity
Whatfactorswouldyouadvisethemtoconsiderintheirdownsizing? Whatdoyouthinkwouldbeeffectsandthefeelingsoftheythataredownsized?(thosewholeave) 1. Whatdoyouthinkwouldbeeffectsandfeelingsonthepartthatareleftafter 2. downsizing? Whatdoyouconsidertobeofgreatimportanceinconsiderationforafirmthatwantstopromotesomeofitsmembersofstaff? [Link],thecompanyhasapromotionwithinpolicyandd atingamongemployeescouldresultinamajorconflictofinterestinthefuture. Becausemanyoftheemployeessocializewithoneanotherafterworkinghours,[Link],fireyourassistantmanagerandortickettakerortransferthelessvaluableemployee(thetickettaker).Whatwouldyoudo?

PART II

Week 8 Topic 13

13.0: CorporateSocialResponsibility CourseOutline

Rationale Thebasicideaofsocialresponsibilityemanatesfromtherealizationoftheimportanceoftherelationshipbetweenbusinessorg [Link] cernedtoavoidconflictsofinterestsinpursuanceofthegoalsandaimsofeachofthestakeholders. Courseobjectives Bytheendofthiscourse,youareexpectedtobeableto: Understandtherelationshipbetweenbusinessenterprisesandtheirvariousstakeholders. Understandtheevolutionandvariousmodelsonsocialresponsibility. Appreciatetheroleandexpectationofeachstakeholderinsocialresponsibility. Appreciatetheimportanceofsocialresponsibilityinbusiness. Understandtheimportanceofthestakeholderapproachtosocialresponsibility. Explainthecontinuumofsocialresponsibilityandtheeffectofvariousoptionsoncompanyprofitability. Describeasocialauditandexplainitsimportance. DiscusstheeffectoftheSarbanesOxleyActof2002ontheethicalconductofbusiness. ComparetheadvantagesofcollaborativesocialinitiativeswithalternativeapproachestoCSR. Explainthefiveprinciplesofcollaborativesocialinitiatives. Comparethemeritsofdifferentapproachestobusinessethics. Explaintherelevanceofbusinessethicstostrategicmanagementpractice. CourseContent 1. Introduction Meaningofsocialresponsibility Approachestosocialresponsibility 2. Evolutionofsocialresponsibility Profitmaximizationmanagement Trusteeshipmanagement Qualityoflifemanagement 3. Modelsofsocialresponsibility Economicmodel Socialeconomicmodel 4. Mainareasofsocialresponsibilityinbusiness Argumentsforsocialresponsibility Argumentsagainstsocialresponsibility Whymoremanagersareconcernedwithsocialresponsibility Fivepropositionsofsocialresponsibility 5. Corporatepowersandissues Socialaudit Roleofgovernmentinsocialresponsibility

6. Relationshipoffirmtostakeholders Employees Consumers Competitors Stockholders Dealers Suppliers [Link] 7. Socialresponsibilityandmanagementfunctions Planningforsocialresponsibility Organizingforsocialresponsibility Controlfunction 8. Socialresponsibilityandbusinessethics Socialresponsibilityandmarketingethics Factorsinfluencingbusinessethicalbehaviour ConsumerethicsandsocialresponsibilityReferences [Link],ManagingCorporateSocialResponsibility 2ThombariHenry,BusinessandSociety [Link] 4BoatrightJohnR.(S.T)EthicsandConductofBusiness 5DrummongJohn(S.T)ManagingBusinessEthics 6Guy,MaryE.(S.T)EthicalDecisionMakinginEverydaySituation [Link],PrivateEnterpriseandPublicPolicy

13.1 CorporateSocialResponsibilityinBusinessEthics
Lectureobjectives UnderstandthemeaningofCSR IdentifydifferenttypesofCSR OutlinestakeholdersinCSR QUESTIONSTOREFLECTONAslongasthereispovertyintheworld,Icanneverbereach..Aslongasdiseasesarera mpant,Icanneverbehealthy [Link]. Theabovewasafamousquotebythelatecivilrightsadvocate,[Link] eryessenceofCorporateSocialResponsibility,canyoufindouthow? CorporateSocialResponsibilitycanbedefinedasthemanagementsobligationtomakedecisionsandtotakeactionsthatwillen hancethewelfareandinterestofthesocietyaswellastheorganizations.

[Link],wouldyoubeabletodrawap arallel?[Link]? Orwhatyousymbolize? [Link]? Ifyes/no,supportyouranswer. Ifindeedthereisaparallel,thenthatvalidatestheveryreasonwhycorporationsneedtoenhancethewellbeingofasociety. Corporatesocialresponsibility(CSR)canbedefinedasthemanagementsobligationtomakedecisionsandtotakeactionsthat [Link] ationiscreatedandoperateswithinasocietyandshouldthereforecontributetothedevelopmentandwellbeingofthatsociety. [Link] [Link],ethical,economic,discretionaryandphilanthropic. 13.2 Typesofsocialresponsibilities 1. EconomicResponsibilities Thedutyofmanagers,asagentsofthecompanyowners,[Link] [Link],someeconomistsseetheseastheonlylegitimatesocialresponsibi [Link] tialresponsibilityofbusinessisassumedtobeprovidinggoodsandservicestosocietyatareasonablebyprovidingproductivejo bsforitsworkforce,andtaxpaymentsforitslocal,state,andfederalgovernments..

2. LegalResponsibilities ThefirmsobligationstocomplywiththelawsthatregulatebusinessactivitiesLegalresponsibilitiesreflectthefirmsobligatio [Link] blicattentionontheneedforsocialresponsibilityinbusinessbylobbyingforlawsthatgovernbusinessintheareasofpollutionco [Link] [Link] proceduresforbusiness,theTruthinLendingActthatregulatestheextensionofcredittoindividuals,andtheConsumerProduct SafetyActthatprotectsconsumersagainstunreasonablerisksofinjuryintheuseofconsumerproducts. [Link] entofexistingenvironmentalprotectionsanditspurredthepassageofnew,morecomprehensivelawssuchastheNationalEnvi ronmentalPolicyAct,whichisdevotedtopreservingtheUnitedStatesecologicalbalanceandmakingenvironmentalprotecti

[Link] m,anditestablishedtheCouncilonEnvironmentalQualitytoguidebusinessdevelopment. 3. EthicalResponsibilities [Link] [Link],butnotrequired,[Link] [Link],[Link],manyconsiderthecontinuedsaleofcigarettestobeunethical. 4. DiscretionaryResponsibilities Responsibilitiesvoluntarilyassumedbyabusiness,suchaspublicrelations,goodcitizenship,andfullcorporateresponsibility .[Link] activities,goodcitizenship,[Link],managersattempttoen hancetheimageoftheircompanies,products,[Link] [Link],publicserviceadv ertisingcampaigns,[Link],teamsintheNationalFootballLeagueprovidetimeoffforplaye rsandotheremployeesafflictedwithdrugoralcoholaddictionswhoagreetoenterrehabilitationprograms. 5. PhilanthropicDimension [Link](4) majorbenefitstosocietybyimprovingthequalityoflife,reducinggovernmentinvolvement,developingthestaffleadershipski [Link],thearts(TuskerProjectFame), [Link] tion,RattansiFoundation,e.t.c.

SelfAssessmentActivity Nameasmanycharitableorganizationsaspossibleyoudeemhavebeencarryingoutphilanthropicresponsibilities
13.3 TheStakeholdersApproachtosocialresponsibility Indefiningorredefiningthecompanymission,[Link] [Link] decustomers,suppliers,governments,unions,competitors,localcommunities,[Link] oupshasjustifiablereasonsforexpecting(andoftenfordemanding)[Link] eral,stockholdersclaimappropriatereturnsontheirinvestment;employeesseekbroadlydefinedjobsatisfactions;customers

wantwhattheypayfor;suppliersseekdependableBuyers;governmentswantadherencetolegislation;unionsseekbenefitsfort heirmembers;competitorswantfaircompetition;localcommunitieswantthefirmtobearesponsiblecitizen;andthegeneralpu blicexpectsthefirmsexistencetoimprovethequalityoflife. Stockholders:Participationindistributionofprofits,additionalstockofferings,assetsonliquidation;voteofstock;inspection ofcompanybooks;transferofstock;electionofboardofdirectors;andsuchadditionalrightsashavebeenestablishedinthecontr actwiththecorporation. Creditors:Legalproportionofinterestpaymentsdueandreturnofprincipalfromtheinvestment,Securityofpledgedassetandr elativepriorityineventofliquidation,Managementandownerprerogativesifcertainconditionsexistwiththecompany(sucha sdefaultofinterestpayments).Employees:Economic,social,andpsychologicalsatisfactionintheplaceofemployment,Freed [Link],freedomtojoinunionandp articipateincollectivebargaining,individualfreedominofferinguptheirservicesthroughanemploymentcontract,Adequate workingconditions. Customers:Serviceprovidedwiththeproduct;technicaldatatousetheproduct;suitablewarranties;sparepartstosupportthepr oductduringuse;R&Dleadingtoproductimprovement;facilitationofcredit. Suppliers:Continuingsourceofbusiness;timelyconsummationoftradecreditobligations;professionalrelationshipincontra ctingfor,purchasing,andreceivinggoodsandservices. Governments:Taxes(income,property,andsoon);adherencetotheletterandintentofpublicpolicydealingwiththerequireme ntsoffairandfreecompetition;dischargeoflegalobligationsofbusinesspeople(andbusinessorganizations);adherencetoanti trustlaws. Unions:Recognitionasthenegotiatingagentforemployeesandopportunitytoperpetuatetheunionasaparticipanttothebusine ssorganization. Competitors:Observationofthenormsforcompetitiveconductestablishedbysocietyandtheindustryandbusinessstatesman shiponthepartofpeers. Localcommunities:[Link] mmunityaffairs,provisionorregularemployment,fairplay,reasonableportionofpurchasesmadeinthelocalcommunity,inte restinandsupportoflocalgovernment,supportofculturalandcharitableprojects. Thegeneralpublic:Participationinandcontributiontosocietyasawhole;creativecommunicationsbetweengovernmentalan

dbusinessunitsdesignedforreciprocalunderstanding,assumptionoffairproportionoftheburdenofgovernmentandsocietya ndfairpriceforproductsandadvancementofthestateofthearttechnologythattheproductlineinvolves.

SelfAssessmentActivities
[Link] urexampleonthebasisofyourdefinition. [Link]? Whatkindofstakeholderrolesdoyouexpecttoplayinthefuture? Whatsetstheaffirmativephilosophyapartfromthestakeholderphilosophyofsocialresponsibility? Inwhatareasdothetwophilosophiesoverlap?

Week 9 Topic 14 14.0: CorporateSocialResponsibility&Profitability

Abusinesshasadutytoserveitsclientsaswellasthefinancialinterestofstakeholders. Lectureobjectives UnderstandwhytherewasresurgenceofCSR CompareprofitabilityofCSRvisavissocialresponsibility ToappreciatetheroleofCRSonmissionstatement 14.1 CSRandthebottomline [Link],however,[Link] lresponsibility(CSR),[Link] e,[Link] canbemorestraightforwardmeasured. Thedynamicawareness(CSR)andsuccess(profit)[Link];notmutuallyexclusiveoftheother,it [Link],itmaybebettertoview CSRasacomponentinthedecisionmakingprocessofbusinessthatmustdetermine,amongotherobjectives,howtomaximizeprofits. Performance Toexploretherelationshipbetweensociallyresponsiblebehaviourandfinancialperformances,animportantquestionmustfir stbeanswered:Howdomanagersmeasurethefinancialeffectofcorporatesocialperformance? CriticsofCSRbelievethatcompaniesthatbehaveinasociallyresponsiblebehaviourandfinancialperformance,animportantq uestionmustfirstbeanswered:Howdomanagersmeasurethefinancialeffectofcorporatesocialperformance?

CriticsofCSRbelievethatcompaniesthatbehaveinasociallyresponsiblemanner,andportfolioscomprisingthesecompanies securities,[Link] irms,[Link],traditionalportfoliotheoryholdsthatinvestorsminimizeriskandmaximizereturnbybeingable [Link],criticsargue,be [Link]. 14.2 CSRtoday [Link] llbydoinggood,atleastthreebroadtrendsaredrivingbusinesstoadoptCSRframeworks:theresurgenceofenvironmentalism ,increasingbuyerpower,andtheglobalizationofbusiness. 1. Theresurgenceofenvironmentalism TheCoalitionforEnvironmentallyResponsibleEconomies(CERES)wasformedtointheUStoestablishnewgoalsforenviro [Link] [Link] iplespledgetogovoluntarilybeyondtherequirementsofthelaw. 2. Increasingbuyer Theriseoftheconsumermovementhasmeantthatbuyersconsumersandinvestors [Link] [Link] [Link] [Link] [Link] mirrortheirbeliefs. 3. Theglobalizationofbusiness Managementissues,includingCSR,havebecomemorecomplexascompaniesincreasinglytranscendnationalborders:Itisdif ficultenoughtocometoaconsensusonwhatconstitutessociallyresponsiblebehaviourwithinoneculture,letalonedeterminec [Link],thehighbarriersfacinginternationalCSRinclude differingcorporatedisclosurepractices,inconsistentfinancialdataandreportingmethods,andthelackofCSRisgrowingabro ad.TheUnitedKingdomhas30ethicalmutualfundsandCanadaoffers6sociallyresponsiblefunds. [Link], [Link] [Link],oftenChinese,[Link] dards,eventhoughtheyareextremelycompetitivebyChinesepayrates.

[Link] eignmanufacturedgoods,[Link] .[Link] .Somehumanrightsadvocatesarguethattheworkingconditionsandlivingstandardsofforeignworkersaresosubstandardwhe [Link],advocatesapplypressureonsuchcompaniesasCitiban k,CocaCola,IBM,andUnocaltoforcetheircontractortoimprovehumanrightsconditionsfortheiremployees.

SelfAssessmentActivity

1. Namefivepotentiallyvaluableindicatorsofafirmssocialresponsibilityanddescribehowcompanyperformanceinea chcasecouldbemeasured.

14.3 CSRseffectonthemissionstatement
Themissionstatementnotonlyidentifieswhatproductorserviceacompanyproduces,howitproducesit,andwhatmarketitserv es,[Link],itisessentialthatthemissionstatementrecognizethelegitimateclaims ofitsexternalstakeholders,whichmayincludecreditors,customers,suppliers,government,unions,competitors,localcomm unities,[Link], [Link],government,stockholders,employ ees,andsociety,inthatorder,werethestakeholdersthesedirectorsperceivedasmostimportant. Indevelopingmissionstatements,managersmustidentifyallstakeholdergroupsandweightheirrelativerightsandabilitiestoa [Link],makingitanintegralpartoftheirraisondtre(e .g.,Ben&Jerrysicecream);othersarereactive,adoptingsociallyresponsiblebehaviouronlywhentheymust(e.g.,Exxonafter theValdezincident). 14.3.1 Socialaudit [Link] [Link],oneconductedbyanoutsideconsultantwhowillimposeminimalbiase [Link],[Link] bilityisessentialifmanagementistotaketheresultsseriouslyandifthegeneralpublicistobelievethecompanyspublicrelation spronouncements. Careful,accuratemonitoringandevaluationofacompanysCSRactionsareimportantnotonlybecauseCSRactionsbytheirna

[Link],acompanymayconductasocialaudit ofitsperformance. Oncethesocialsauditiscomplete,itmaybedistributedinternallyorbothinternallyandexternally,dependingonthefirmsgoal [Link];otherspublishasep arateperiodicreportontheirsocialresponsiveness.

Topic 15 15.0: SatisfyingCorporateSocialResponsibility

Bytheendofthislecture,youshouldbeableto: UnderstandeffortsbycompaniesinsatisfyingCSR Appreciatethebenefitofmutualcollaborativesocialinitiatives Outlineprinciplesofmutualcollaborativesocialinitiative ToappreciatethelimitsofCSR [Link] ssueisnotwhethercompanieswillengageinsociallyresponsibleactivities,[Link],thechallengeishowb [Link] principlesthatunderscorebetteroutcomesforsocietyandforcorporateparticipants.

SelfAssessmentActivity Doyouthinkabusinessorganizationintodayssocietybenefitbydefiningasociallyresponsibleroleforitself?
Whyorwhynot?

15.1 ThecoreoftheCSRdebate TheproperroleofCSR theactionsofacompanytobenefitsocietybeyondtherequirementofthelawandthedirectinterestsofshareholders hasgeneratedacenturysworthofphilosophicallyandeconomicallyintriguingdebates. [Link] [Link],forinstancehasbeencriticizedasnarrow,selfserving,andoftenmotivatedtoimprovethecorporationsreputationandkeepnongovernmentalorganization(NGO)[Link],redirectingthecompanytowardasociallyrespo nsiblemission,whileseeminglyattractive,mayhavetheunintendedconsequencesofdivertingbothmanagersandemployeesf

romtheircoremission. 15.1.1 Mutualadvantagesofcollaborativesocialinitiatives [Link] mpaniesincompetitivecommercialenvironmentstellsusthateachpartnerbenefitswhentheotherbringsresources,capabiliti es,[Link] [Link] mthoseresources,generatinginnovativeresponsestorapidlyevolvingenvironments. 15.1.2 Fiveprinciplesofsuccessfulcollaborativesocialinitiatives TherearefiveprinciplesthatarecentraltosuccessfulCSIs,[Link] eseelements,companiescanindeedmaximizetheeffectsoftheirsocialcontributionswhileadvancingbroaderstrategicgoals. WhilemostCSIswillnotachievecompletesuccesswithallfiveelements,[Link] arethefiveprinciples,alongwithexamplesofcompaniesthathaveadheredtothemwell. 1IdentifyalongtermdurablemissionCompaniesmakethegreatestsocialcontributionwhentheyidentifyanimportant,[Link] eclearlyimportanttosocietyswelfareandthatrequiresubstantialresourcesaresignallingtointernalandexternalconstituenci [Link] emandattentionforyearstocomearehunger,inadequatehousing,illhealth,substandardeducation,anddegradationoftheenvi ronment. 1. 2. ContributeWhatWeDoCompaniesmaximizethebenefitsoftheircorporatecontributionswhentheyleveragec orecapabilitiesandcontributeproductsandservicesthatarebasedonexpertiseusedinorgeneratedbytheirnormal [Link] 2. thepartners;thesocialpurposeinitiativesreceivethemaximumgainswhilethecompanyminimizescostsanddiversions. [Link],public,ornonprofitorganizationsarealsoactivehaveaneffectthatgoesbeyondtheirlimitedcontributions. 3WeighgovernmentsinfluenceGovernmentsupportforcorporateparticipationinCSIs oratleastitswillingnesstoremovebarriers [Link],liabilityprotection,andotherformsofdirectandindirectsupportforb usinessallhelptofosterbusinessparticipationandcontributetothesuccessofCSIs. 4AssembleandvaluethetotalpackageofbenefitsCompaniesgainthegreatestbenefitsfromtheirsocialcontributionswhenthe [Link] [Link] byconsumers,suppliers,employees,regulators,interestgroups,andotherstakeholders isdrivenbygenuinecommitmentratherthanepisodicorsporadicinterest;consumersandotherstakeholdersseethroughnomin [Link][aCSReffort]isnotlegitimate. 15.2 ThelimitsofCSRstrategies Researchsuggeststhatsuchsingle-

mindeddevotiontoCSRmaybeunrealisticforlarger,[Link],someanalystshavesuggest edthattheintensefocusonsocialresponsibilitygoalsbythemanagementteamatLeviStrauss&[Link] anyfromitscoreoperationalchallenges,acceleratingthecompanysclosureofallofitsNorthAmericanmanufacturingoperati ons. Largercompaniesmustmovebeyondtheeasyoptionsofcharitabledonationsbutalsosteerclearofoverreachingcommitments .Thisisnottosuggestthatcompaniesshouldnotthinkbig [Link],itsuggeststhatcompaniesneedtoviewthei rcommitmentstocorporateresponsibilityasoneimportantpartoftheiroverallstrategybutnotletthecommitmentobscuretheir broadstrategicbusinessgoals. 15.3 ThefutureofCSR [Link],CSRprogramscanconfersignificantbenefitstop articipantsintermsofcorporatereputation;intermsofhiring,motivation,andretention;andasameansofbuildingandcementin [Link],thebenefitsextendwellbeyondtheboundariesoftheparticipatingorganizations,enric hingthelivesofmanydisadvantagedcommunitiesandindividualsandpushingbackonproblemsthatthreatenfuturegeneratio ns,otherspecies,andpreciousnaturalresources. [Link],corporationswill [Link],employeeswillcontinuetohavetheirsay,andshareholderswillp assjudgmentwiththeirinvestmentsandtheirvotes. Thechallengeformanagement,then,istoknowhowtomeetthecompanysobligationstoallstakeholderswithoutcompromisi ngthebasicneedtoearnafairreturnforitsowners.

SelfAssessmentActivity
Whichofthethreebasicphilosophiesofsocialresponsibilitywouldyoufindmostappealingasthechiefexecutiveofalargecorp oration?Explain DoyouthinksocietysexpectationsforcorporatesocialresponsibilitywillChangeinthenextdecade?Explain

Topic 16 16.0: EvolutionofCorporateSocialResponsibility

Lectureobjectives Bytheendofthislecture,youshouldbeableto:

Discussevolutionofsocialresponsibilityinbusiness Identifymodelsonsocialresponsibility Analyzedifferencesbetweeneconomicandsocioeconomicmodels [Link] [Link] [Link] ontentionherethatconceptsofsocialresponsibilityhavemovedthroughthreedistinctphases: 1. ProfitMaximizingmanagementThisconceptwasthebeliefthatbusinessenterprisesandtheirmanagementaswellhavebutone th [Link].Itwaswidelyacceptedasaconceptthroughoutthe19 th centuryandtheearlypartofthe20 [Link] [Link],thesocietyhasbeenfacedbytheproblemofeconomicscarcity;therefore,economicgrowt handaccumulationofwealthwereprimarynationalgoals. [Link] [Link] rsonalproblemsshouldbeleftathome. 2. TrusteeshipmanagementThisphaseemergedinthe1930sanditresultedfromstructuralchangesinbothbusinessinstitutionsa [Link] ormaintaininganequitablebalanceamongthecompetingclaimsofcustomers,employees,suppliers,creditorsandthecommu nity. [Link] [Link],customers,e mployees,[Link] nagersalsorecognizedthevalueofgroupparticipation. 1QualityoflifemanagementThequalityoflifemanagementbelievedinenlightenedselfinterest,contributioninterestsandthe [Link] [Link] stributingproductsinsufficientquantitiesattherighttimeandrightplacewiththenecessaryqualityinformationandservicesne [Link] ners,[Link],theybelievedhastobesatisfiedandthatgroupparticipationisfundamentaltot heirsuccess. [Link] [Link],butthevaluesarenotthesamef [Link],oncetheyareingrainedinthemanager,theydonotchangeexceptoveraconsiderableperiodoftime. Summary [Link] [Link] [Link] [Link] onesofhisactions.

Topic 17 17.0: ModelsofCorporateSocialResponsibility

1EconomicModel 2Socioeconomicmodel 17.1 EconomicModel [Link] [Link],socialresponsibilityisgovern [Link]. 17.1.2 SocioEconomicModel Itbelievesthatbusinesshasresponsibilitynotonlytostockholdersbutalsotocustomers,[Link] [Link]: 1Manyfirmswerebeginningtotakeprideintheiractivity. 2Businessisdominatedbycorporateformofownershipandthesecorporationsarecreatorsofsociety. 3Itisbesttotakeinitiativetoavoidlegalinitiativeagainstthem. Differencesbetweeneconomicandsocioeconomicmodels Economic Socioeconomic 1. Exploitnaturalresources 1. Conservenaturalresources 2. Decisionsareinternalbased 2. Decisionsaremarketbased 3. Profit/economicreturnsaretheir 3. Qualityoflifeistheirmajorconcern majorconcern 4. Theyareinterestedinthewellbeingofthefirm 4. Moreinterestedonthefirmitself andalsothecommunity 5. Indirectlyresponsibletotheneedsof 5. Theyfeeltheyaredirectlyresponsibletothe thesociety needsofthesociety. 17.2 WhymoreManagersareconcernedaboutSocialResponsibility. 1Theexpectationsofthesocietyaboutsocialresponsibilityarenotcrystallizedintoaconsensusbutthereiseverysignwithsocia [Link] publictakesmoreofaninterestinitbecauseithasgreaterimpactonthesociety,therefore,managersseektomaintainproperimag eoftheircompanyinthepublicmind. [Link],improvingrelationsinworkplacese [Link]:.Therecanbenoprofitsforanycorporationinadisintegratingcommun itytogether,improveitandmakeitmoresatisfactoryaplacetolive,[Link] nthesewords:Undercurrentconditionsmanagementcannoteffectivelydischargeitslonglearnedresponsibilitiestosharehol

dersunlessitalsobehavesresponsiblytowardsemployees,customers,government,[Link] tyofacorporationtoprotectandenhancethestakeholdersequitydependscruciallyupontheprosperity,goodwillandconfiden [Link],goodaswellasg oodcitizenship. 3Businesshasgreaterpowerandifthispowerisnotusedinsociallyresponsibleways,[Link] anttobeinvolvedinsocialresponsibilityactivitiestosurvive. [Link]. 5Youngmenandwomenwhohavedifferentviewsabouttheexerciseofcorporatepowerareenteringtheranksoftopmanageme [Link]. 6Somemanagersmayfeelthatcertainsocialresponsibilitieswillbringalegitimacytheydonotthinktheyhavefromthepublicin asituationwherestockdispersalleavesthemincontrolofpropertytheydonotownorwholestockholdersdonotcontrolthem. [Link],managersarenotonlywillingbu tareeagertousethisknowledge.

SelfAssessmentActivity
HowmuchshouldsocialresponsibilitybeconsideredinevaluatinganOrganizationsoverallperformance? Isitnecessarythatanactionbevoluntarytobetermedsociallyresponsible?Explain Doyouthinkanorganizationshouldadheretodifferentphilosophiesofcorporateresponsibilitywhenconfrontedwithdifferen tissues,orshoulditsphilosophyalwaysremainthesame?Explain. 17.3 Currentperspectiveonsocialresponsibility [Link] [Link],marketsh avebecomemorecomplexandinternationalinscopeanddifficultnewproblemsofsocialissuesandsocialresponsibilityhavea risen. Afteralongperiodofcontroversy,[Link] y,adegreeofuniformsupportisdevelopingforcertainsocialpropositionstoguidetheconductofbusinessaswellasofotherinsti [Link]. [Link] suchareasasemployment,[Link],then,ajustrelationshipdemandsthatbusinessal [Link] nesssocietysresourcesandtherefore,businessisexpectedtomanagetheseresourcestoaccomplishitsmissionsaswilltrusteef [Link],consumers,ore mployees. nd 2. AnopensysteminterfaceThe2 basicpropositionisthatbusinessshalloperateasatwowayopensystemwithopenreceiptofinputfromsocietyandopendisclosu [Link] postulatesapolicyoffulldisclosureinwhichbothproductsandsocialdataaboutafirmareavailableinthesamewaythateconomi [Link],[Link] [Link] [Link],acheckandbalanceonmismanage mentofresourcesandanopendisclosuretothoseinterestedinsocialperformance. rd 3. CalculationofSocialCostsThe3 basicpropositionisthatsocialcostsaswellasbenefitsofanyactivity,product,orserviceshallbethoroughlycalculatedandconsi [Link],thetwofactorsconsideredwere:

Technicalfeasibility Economicprofitability Now,businesshasathirdfactortoconsider [Link],socialcostswillbegivensignifican [Link] ostsandbenefitsandifnecessary,onlyafterthesegroupsaffectedhavebeeninvolved. 1TheUserPaysThe4 propositionisthatthesocialcostsofeachactivity,productorserviceshallbepricedintoitsothattheconsumerortheuserpaysfor [Link] [Link],societyorsomeoneelsehashadtobearthesesocialcostswhiletheconsumerbenefitedfro [Link],whentheburdenbecameheavyforthesocietytobear,itwasfeltthattheconsumershouldpayfort heconsumptions,includingthecostsinthenameinthepublicinterestpassingoncoststotaxpayersratherthantousersofthatpart icularproductorservice,[Link],thereforelowcostofproduct [Link]. th 2SocialResponsibilityasCitizenA5 basicpropositionisthatbeyondsocialcostsbusinessinstitutionsascitizenshaveresponsibilitiesforsocialinvolvementinarea [Link] ialproblems,butnevertheless,[Link] [Link] [Link],businesshasaresponsibilitytorecognizesocialproblemsoractively [Link] cientassistance. Conclusion Thesociallyresponsibleorganizationsbehaveissuchawaythatitprotectsandimprovesthesocialqualityoflifealongsideitsow nqualityoflife. Inessencequalityoflifereferstothedegreetowhichpeopleliveinharmonywiththeirinnerspirit,theirfellowmenandnaturesp hysicalenvironment. [Link],s ocialresponsibilitymodelseekstoimprovethequalityoflifethroughthe5propositions. Certainobservationscanbemadeconcerningtheimplementationofthesocialresponsibilitymodel.i)Itappliestoallorg [Link]. * Itappliestoallpersonsinalloftheirliferoles. ii) Themovementtowardsgreatersocialresponsibilityisnotafadbutafundamentalchangein [Link]
th

socialresponsibilityismerelysomethingtobeassignedtoathirdassistantwithactiontobe takenonlywhenabsolutelynecessaryandwhentheorganizationisbackedintoacorner. iii) [Link] freerideoramatterofsimplegoodwill.

Topic 18 18.0: CorporatePowersandIssues

Lectureobjectives Discusscorporatepowersandissues UnderstandtheroleofgovernmentinCSR IdentifydimensionMixModelforAchievingGreaterCorporateSocial 18.1 Thesepowersinclude: 1Economicpower 2Socialpower 3Politicalpower Economicpower Thisistheabilityoftheholdertoinfluenceevents,activitiesandpeoplebyvirtueofcontrolovereconomicpressures,particularl yproperty. Socialpower Thisistheabilitytoinfluencesocialactivities,valuesandsystems. Politicalpower [Link],[Link] exercisethesepowersinternallyoveremployeesandtheuseofresourcesandexternallyovercustomers,suppliers,competitors ,government,investorsandthecommunityatlarge. SocialAudit:[Link] [Link] ver,thereisnogeneralagreementonwhetherfirmsshouldmakesuchsocialauditspublicvoluntarilybutwillberequiredatoneti meortheothertorevealsuchinformationtothegovernment. Thus,itsimportantfororganizationstodevelopsocialauditsvoluntarily. Socialauditsinorganizationscanalsobeusefulforselfappraisalintermsof: Bringinggreaterawarenessofpotentialsocialvulnerabilitiesandopportunitiesinthemarket. Developeffectivecontrol,evaluationandrewardsystems. Gaingreatercredibilityexternally. Sixmajorsegmentsofasocialaudit

1Employment,trainingandadvancementofminority(handicapoftheunderprivileged). 2Theanalysisoftheenvironmenthowhavetheyhelpedreducepollution? Howhavetheycomeintomaintainagoodenvironment?Whataretheirenvironmentalactivities? 3Consumerism involveshealth,safetyandintegrityofproductsandservicessoldreliableinformationasabasisforconsumerchoice,andaplatf ormfromwhichaconsumercanbeheard. 4Businessconcernwithcommunityhousing,education,culture,recreationandbetterfunctionoflocalandnationalgovernme nt. 5Provisionofsociallyneededservices. 6Employingtheunderprivilegedinanofficeorsectiontohandlethesocialconcernsissues. 18.2 TheroleofgovernmentinSR Inmanycases,governmentseffortstogetbigcorporationstobecomemoresociallyresponsibleareoftengreatlytamperedbyth [Link],corporationsareusingthegovernme [Link],largepoliticalcampaignsco ntributions,otherwaysinwhichcorporationstheirleadersandownershelptoelectpoliticians,lobbyinginappointingandcontr ollingregulationsetc. Itisthereforeimportanttosubstantiallylimitthesocialpowerofcorporationsandinparticulargovernmentsshouldenforcethef ollowinginsupportofgreatersocialresponsibility. 1Thereisneedforstifferpenalties,criminalprosecutionsandindividualaccountability. 2Thereisneedformoreeffectivegovernmentregulationsandcontrol. 3Thegovernmentshouldensuregreatercompulsorypublicdisclosure. 4Thegovernmentcouldgiveincentivestothosefirmsthataresociallyresponsive([Link],subsidies,andl owcostsloans). 5Thegovernmentshouldparticipatethusencouragingotherstodolikewise. 18.3 Adynamicsevendimensionmixmodelforachievinggreatercorporatesocialresponsibility Inawayofsynthesisandsummary,[Link],thereisnooneeasiestorbestwaytoachievegreaterandmoree ffectivecorporatesocialaction:[Link] scontainedinoneparticulardimensionatagiventimemayshifttootherdimensionsovertime. [Link] muchtobringaboutgreateraccountabilityandchangethemotivationofcorporationsasawhole,aswellasthosewhoownmana geandrunthem. 2GovernmentControls,Regulations,StandardsandPenaltiesThiswouldinvolvecompulsorycorporateactionandcomplian ceinsuchareasasemployment,pollution,landuse,[Link],quotasand [Link] mentarerequiredthannowexistforvariouskindsofviolationsandabuses. 3GovernmentIncentivesandSupportProgramsGovernmentincentivesfortheprivatesectormaybedesirabletohelpcreatean ddevelopsocialmarketforlowcosthousing,stimulatevariouskindsofcorporatetrainingandadvanceprograms,butmuchmor [Link] [Link]

estospecificindustriesandtypesoffirmsisalsoimportant. 1. 4. SocialIndicatorsandSocialNormsThedevelopmentofsocialindicatorsandnormsatthenational,provincial,distr ictandthelocallevels,aswellasfordifferentsectorsandindividualcorporationscoulddomuchtoencouragecorpor [Link] quiredtomakethisworkmoreeffective,e.g.,foroilindustries,paperindustries,automobile 2. industries,etc,[Link] [Link],[Link],Beecham,[Link],thereshouldbep roductandserviceeffectivenessindicatorswhicharenoteffectivelycoveredbythegovernmentstandardsorregula [Link],buildingmaterials,housing,transportation,banking,thereshouldb eindicatorsinvolvingurbanrenewalanddevelopment. 4AFreeMarketforSocialResponsibilityFirmsshouldbefreetodeterminehowmuchandwhatkindofsocialinvolvementtobei nvolvedin,theyshouldtakeintoaccounttheirpotentialcomparativeandcompetitiveadvantagesaswellasthelikelyreactionsa [Link],greaterpublicexposureisrequired. [Link] involves,notonlydevelopingnewproductsandservicestoservesocialmarkets,butitalsoinvolvesselfwareinnovationsofthemanagerialandorganizationaltypes,[Link],newinformationsystems,newtoolsandtechniq ues,[Link]. 6ChangingCorporateIdeologiesandManagerialAttitudeintheDirectionofGreaterSRCorporationsshouldbeengagedinSR responsibilitiesnotonlybecauseofsocialpressureorthreatofgreatergovernmentcontrol,butbecauseitisproperandgoodfort [Link] [Link],va lues,andattitudesofthosewhorunandmanagethem. Week 10

Topic 19 19.0: RelationshipoftheFirmtoStakeholders

Lectureobjectives Outlinerelationshipofthefirmtostakeholders Discussresponsibilitytotheenvironment OutlineadvantagesanddisadvantagesofCSR 19.1 Relationshipofthefirmtothestakeholders A)RelationshipoftheEmployeetotheFirmDuetothechangingexpectationsandstandardsoflife,employeesaremoreconcern edabouttheirrights,[Link],theyconsiderthefollowingwhenlookingforjobs:goodworkingconditions,goods alary,jobsecurity,worksatisfaction,childcareissues,otherbenefits(loans,housing),andemployeetreatment. SpecificDevelopmentsintheWorkAffectingEmployees 1Computersretrenchment 2Increasedmobilityofemployeesinsearchofgreenerpasturesbetterjobs. 3Professionalswithdividedloyalty,[Link] RightsSourcesofrights: 1Law

2Employeesunions 3ContractsoremployerspromisesGeneralrights 1Freedomofexpression 2Fairtreatment 3Righttoajobandnottobefiredwithoutcause 4Privacy,safetyandhealthActionsthataManagerConsideronJobClaim 1Whenoneisfireditshouldbewithagoodreasonwhichshouldbesupportedbydocumentedfacts. 2Dealingoodfaithwithallemployees. 3Themanagershouldinvestigateanyclaimfully. [Link] iveanimpartialreviewofhisclaimsandgivenfairtreatment,[Link] [Link] 1Theremustbeaprocedureorrulestofollow. 2Itmustbesufficientlyvisibleandwellknown. 3Itmustbeeffective. 4Itmustbeinstitutionalized. [Link] 1Thereshouldbeanopendoorpolicybytopmanagement. 2Assignhumanresourceexecutiveresponsibilitytoinvestigateemployeegrievances. [Link] [Link],illegal,uneth [Link]: 1Thewhistleblower 2Theorganizationtowhichitismadeagainst. 3Thepartytowhomitismade. 4Theactorcomplainitself. Awhistleblowerisanemployeeofanyinstitutionwhobelievesthateitherhasbeenorderedtoperformsomeactorhasobtainedk nowledgethattheinstitutionisengagedinactivitieswhich:a)Arebelievedtocauseunnecessaryharmtothirdparties.b)Areinvi olationtohumanrights.c)[Link]. ConsequencesofWhistleBlowing 1Exclusiontomeetingsyouearlierattended. 2Lossofbenefitsandprivileges. 3Assignmentoflessdesirablework 4Pressuretodropchargesagainstthecompany. 5Thereismorestringentcriticismatworkeverythingthewhistleblowerdoesismuchcriticized. MeasurestoPreventWhistleBlowers 1Assureemployeesthattheorganizationwillnotinterferewiththeirpoliticalfreedom. 2Theorganizationsgrievancesprocedureshouldbestreamlinedsothatemployeescanviewtheirfeelingsinsteadofwhistlebl owing. 3Theorganizationshouldnotdealharshlywiththewhistleblowers. 4Theorganizationshouldrecognizeandcommunicaterespectforindividualfeelingsandconcernfortheiremployees. 5TheorganizationconceptforSRshouldbeinterpretedtoemployeestoensurethatitisnotbeinginterpretedwrongly.

SelfAssessmentActivity
[Link] eblowingthatoccurreddecadesago? Whathavebeentheconsequencesofsomeofthewhistleblowersthatyouknowof? Canyoualsoevaluatetheoutcomeintermsofthesuccessofwhistleblowing?Hasitbornefruit? Privacy,SafetyandHealthTheemployerhastherighttokeeppersonalaffairstooneselfandtoknowhowinformationabouthise [Link] ss,itreferstotherighttobeleftaloneorrelatedrighttoautonomy,independenceorrightsofindividualsorgroupstogetforthemse lveswhen,[Link])Collection anduseofpersonaldetailsbyemployers: Informationcollectedfromemployeesshouldnotbeacommoditytobesold,exchangedorreleasedwithouttheownersconsen t. Informationcollectedshouldbethatwhichisabsolutelynecessaryandnotmore. Theemployeesshouldhaveaccesstotheinformationthatiskeptbytheemployer.b)Honestytesting Canbeusedthroughtheuseof: Formeremployer Referees Otheremployeesc)Totestfordrugusetheyassumethatdrugaddictsmightbeunproductive.d)Useofpolygraphs machinesthatrecordcertainbodilychangestoshowwhenyouarelying. RightstoHealthinWorkPlacesTherearetwocontroversialissuesinthisline: 1Aids 2Smoking 19.2 Discussionquestions 1. HowshouldAIDSvictimsbetreatedatworkplace? Acceptedandlookedatpositively. Allowedtoworkwithothers. Caredforandunderstood. Allowedtoworkinareasoflessstrain. Counsellingprograms. Sickoffsshouldbeprovidedwhentheyneedthem. Allowedtoleaveworkwhentheycantworkanylonger. Goldenhandshakersiftheycantworkanylonger. Encouragethemtoenrolinorganizationsdealingwithsuchpeople. Themanagementshouldkeeptheirdiseasesecretifitisnotyetknown. 2. ShouldtheemployerortheemployeerevealthattheyhaveHIVAIDS? Foremployers,theymaynotneedtorevealthesickness. EmployeesneedtorevealthattheyhaveAIDS

3. WhatPoliciesthatneedtobeimplementedtohelp/caterforAIDSvictims? Thefollowingmustfirstbeconsidered: PatternsofbehaviourthatleadtoAIDS. Thosewhoaremostlyaffected. PoliciesStrategies 1EducateAIDSpatientsandthesociety 2Counselling 3Costsharing 4Supportcentresstartedbytheorganization 5Theymustnotbeisolated 4. Shouldsmokingbeencouragedordiscouragedattheworkplace? Shouldbediscouraged: [Link]. 2Smokingcanbeasourceofdangerfire,pollutionetc. 3Smokingcanbeacauseofcontaminationespeciallyinfoodmanufacturingcompanies. 4Smokingisasourceofabadpictureofanorganization. 5Smokingisharmfultothehealthofpeople. 6Pollutestheenvironment. IsitrighttobetestedifyouhaveAIDS?Argumentsfor: 1. [Link] 1Disclosureshouldbevoluntary. 2Decreasesteamworkduetostressandfrustration. 3Increasesharassmentforsufferers. 4Leadstojobinsecurity. 5Killsthevictimfasterduetostigma 6Mayresultinothersocialevilslikedrinkingordrugabusetocoverupfrustrations. 7Mayleadtobiasnessduringpromotionsandjobrotation. 8Mayleadtoretrenchment,sackingorearlyretirement FamilyRelationshipinBusiness Themainpurposeofabusinessistocreateacustomerandtherefore,thecustomerandnottheproductisthemajorfocusofanybusi [Link]. ConsumerismConsumerismhasbeendefinedassocialmovementseekingtoaugmentstherightsandpowersinrelationtoselle [Link] [Link]. RightsofsellersInafreeenterpriseeconomicsystem,sellersareassumedtohavecertainrights: Righttoofferforsaleanyproductstheywishinanysizeorstyle,[Link] provided. Righttopriceproductsanywaytheywishsolongasitdoesnotviolateantitrustlawsorgovernmentpolicies.

Mauuseasmuchmoneyastheywishtoadvertisetoinducebuyerstopurchaseanduseanymessagethatisnotmisleadingordishonest. [Link] Righttobuyornotbuyastheychoose. Righttoexpectproductstobesafeandtoexpecttheproducttobewhatthesellertellsthemitwill [Link] [Link] getocongress,[Link] rbillofrights. 1Therighttosafetytobeprotectedagainstthemarketingofgoodswhicharehazardoustohealthorlife. 2Therighttobeinformed tobeprotectedagainstfraudulent,deceitfulorgrosslymisleadinginformation,advertising,labellingorotherpracticesandtob egiventhefacts(needed)tomakeaninformedchoice. 3Therighttochoose tobeassured,wheneverpossibleaccesstoavarietyofproductsatcompetitivepricesandthoseindustrieswherecompetitionisn otworkableandgovernmentregulationissubstitutedtobeassuredsatisfactoryqualityandserviceatfairprices. 4Therighttobeheard tobeassuredthatconsumerinterestswillreceivefullandsympatheticconsiderationinformulatingofgovernmentpolicyandfa irandexpeditionstreatmentinitsadministrativetribunals. FourBasicRightsofaCustomer 1Righttosafety 2Righttobeinformed 3Righttomakeachoice 4Righttobeheard WhatBusinessOweCustomers 1Qualityproductsandoffairvalue. 2Productsthatsatisfyreasonableexpectations. 3Fulldisclosureofproductsspecifications. 4TruthfulandHonestadvertisementofproducts. 5Safeproductsandwarningofpossibledangers. ExamplesofConsumerProblems 1Misleadinginformation 2Absenceofreliableinformationaboutgoodsandservices. 3Highpricesofmanyproducts. 4Poorqualityproducts. 5Failureofcompanytoliveuptotheirpromises. 6Misleadingpackagingorlabelling. 7Inadequateguaranteeandwarrants. 8Theconsumernotknowingwhattodowhentheproductisfaultyorwrongorexpired. AdvertisementsCriticsagainstAdvertisements 1Exaggerationinformation(some)maynotbenecessary. 2Increasespriceofproduct. 3Misleading 4Cancausecustomerstobuywhattheydidntintendtobuy.

Benefits 1Creatingawareness 2Entertainment 3Clearaccurateandeducativeinformation 4Createsemployment. 5Increasesstandardoflivingthroughawarenessandcustomersatisfaction. 6Qualityimprovementasaresultofcompetition. 7Reductionof/betterprices 8Providesvarietytocustomerstherearemanysimilarproductsadvertised(comparisonbuyingisenhanced) AbusesinAdvertisements 1Therecouldbeconcededfactsinwhichcasetheadvertisementscouldnotbetellingthetruthorcouldbehidingsomefacts. 2Ambiguousadvertisingunclearadvertisementsmeansdifferentthings. 3Psychologicalappeals someadvertisementsdesignedtopersuadethecustomersonthebasisofhumanemotionsandemotionalneedsinsteadofreasoni ng. 4Exaggeratedclaimssomeproductsdontachievewhattheyaresaidtoachieve,inadvertisements. C)RelationshipofFirmtoCompetitorsAcompetitorisordinarilynotanenemybutarival. Howshouldbusinesspeopletreatcompetitors? 1. [Link] ircumstances,however,youcangivesuchinformation: Tostopacompetitorfromusingunfairpractices. Topreventacompetitorfromcheatingorharmingaconsumer 2. Competitorsshouldenjoyfaircompetitioninregardtopricing,advertisingetc. D)RelationshipoffirmtoStockholdersStockholdershavethefol lowingresponsibilities 1Helptosupportleisureclass. 2Provideresourcesfornoncommercialinstitutionalactivities. 3Theycanformareserveofliquidpropertytoprovideforoldage. Responsibilitiesoftheorganization/firmtothestockholders/rights: 1Rightoffullinformationaboutcompensationtogetherwiththeinformationaboutitspotentialimpactonearningsandthevalu eofstock. 2Righttoinformationaboutdividendsandretailedearningsandthevalueforstock. 3Righttohavethereportphrasedinawaythatanordinarystockholdercanunderstandandmakesomeintelligentjudgment. E)RelationshipofFirmtoDealersThedealerhasthef ollowingrights: 1Toobtaingoodsontimewhenordered.

2Contractsshouldbehonoured. 3Righttochasetheproducts. 4Rightforfairprices 5Rightforfulldisclosureaboutproducts. F)[Link] sinclude: 1Responsibilitytosupplytherightquantityattherighttime. 2Paymentsshouldbeprompt. 3Thesuppliershouldnotbreachthecontract. 4Suppliersdeservefair. G)BusinessandthepollutedenvironmentRelevantquestio nsare: Whyshouldwebeconcernedaboutpollution? WhatshouldbethenationalconcerninKenya? [Link] [Link] 1Sedimentsfromlanderosion. 2Mineralsandchemicalsfromtheindustries. 3Radioactivesubstances. 4Organicchemicals 5Domesticsewageandotheroxygendemandingwastes 6Petroleumcompounds 7Agriculturewaste Effects 1Diseases 2Deathofplantsandanimals 3Reductionofsafedrinkingwater AirPollutionCauses/sourcesTheyareeithermanmadesourcesornaturalcauses Manmadesources [Link],nitrogenetc. 2Transportation 3Solidwastedisposal Naturalsources 1Volcaniceruptions 2Cyclonesandtornados 3Smokeparticlesfromforestfires 4PollengrainsParticularPollutants 1Dusteithermanmadeornatural 2Fumesfromindustries 3Mistandfog

[Link] 1Economiclossesdamagetoproperty,rust([Link])rot,discoloration,affectvegetation([Link]) 2Increasedrisksofaccidents. [Link],bronchitis,etc. 4Effectondomesticanimals 5Affectsthepsychologyofpeople. ClassificationPollutantsareeither:[Link] Whatcanbedonetocheckpollution?[Link]/sources 1Factories 2Automobiles 3Clubsloudmusic * Somearemanmade(industries)[Link]. Effects 1. Impairshearinginthelongrun(damageeardrums) Solutiontotheproblemofnoisepollution 1Useofsoundproofwallsinindustries. 2Replacingoldmachines 3Provideemployeesinnoisyindustrieswithearplugs. 4Interruptthepathofnoisebyusingawalletc. CommunitynoisecontrolSourcesofcommunitynoisearefrom: 1Aircraft 2Traffic(highwaytraffic)hooting,exhaustnoise 3Construction Controlofhighwaynoises 1Makingquietervehicles 2Highwayscouldberoutedawayfrompopulatedareas. 3Loweringspeedlimits. 4Divertingtheflightpathsawayfromthepopulatedareasandwhenevernecessarytohavepilotsuselessthanmaximumpower whenthetakeoffcarriesthemoveranoisesensitivearea. 5Manufacturersshouldproducequieteraircrafts. 6InstallaircompressorsSolidwasteThisinclude:a)Domesticwaste foodwaste,rubbish,cans,glass,paper,plastic.b)Commercialwaste agriculturewaste,abandonedvehicles,constructionrubble. DangersofSolidwaste 1Causediseasesthereareatleast22diseasescausedbysolidwaste. 2Killplantsandpreventothersfromgrowing [Link].

Solidwastemanagement 1Collectionprivateorpubliccollectors([Link],municipalcouncils). 2Disposalburning,reducingthevolumethatyoudispose. 3Compostpits. 4Recoveryrecycling,usingthemforotherpurposes. Solidwasteproblemsshouldbeattackedfrombothendsthesourceandthedisposalmethods.

AdvantagesofCorporateSocialResponsibility 1Improvesthefirmspublicimage 2Meetsthepublicsexpectations 3Fulfilsitsethicalobligationtosociety 4Givesbusinessachancetosolvesocialproblems 5Createsabetterenvironmentforall 6Placestheresourceswheretheproblemsarefinancialandnonfinancial 7Createsabalancebetweenresponsibilityandpower [Link] [Link] 10Businessescontributetosocialproblemssoitisonlyfairthattheyhelpsolvethem. DisadvantagesofCorporateSocialResponsibility 1Givesbusinesstoomuchpower 2Violatestheprofitmaximizationprinciple 3Businesslacksthenecessarysocialskills [Link] 5Itisadiversionoforganizationalgoals 6Canmakeagovernmentcomplacent(layback)initsroleofofferingsocialservices [Link] eyapartforcommunityprojects 8Businessesarenotaccountabletothesocietybuttotheirshareholders 9Returnsoccurringasaresultofcorporatesocialresponsibilitiescannotbemeasured/quantified. Week 11

Topic 20 20.0: SocialResponsibility&ManagementFunctions

Lectureobjective Bytheendofthislecture,youshouldbeableto: Discussocialresponsibilityandmanagementfunctions AnalyzeSocialResponsibilityIssues Outlinecurrentmodelofsocialaudit IdentifySpecialProgram UnderstandcorporateSocialResponsiveness

DefinitionofSocialForecastingItisasystematicprocessofidentifyingsocialtrendsandtheirunderlyingattitudes,analyzingth [Link] verecognizedtheneedforforecastingsocialtrendsinthesocietyandhavemobilizedtheirplanningenergiesinthisdirection. 20.1 Socialforecastingisinfourphases: 1Recognitionofneed [Link] forecast. 1. 2. Assessment managementassessesthetrendsinsocialenvironmentintermsoftheirrelevancetotheorganization. 2. Italsoinvolvesthedesignandutilizationofamethodologybywhichdevelopmentinthesocialenvironmentcouldb eidentifiedandappraisalastheirpotentialrelevancetothefirmsoperations. 2Analysis thiswouldnecessitatethatthisdevelopmentbesubjectedtoapenetratingthoroughanalysisaimedatdeterminingtheprobablec onsequencesandimpactonthefirm. 3Implementationrequirethatthesocialfocusbeintegratedintothestrategicplanningfunctionoftheenterprise. 20.2 Evidenceshowingthatmanyorganizationshaveinstitutionalizedsocialforecasting Acompanythathasformalizedsocialforecastingshouldhavethefollowing: 1Itmustidentifysocialtrendsandanalyzesocietalchangeforrelevancetotheorganizationonformalbasis. 2Thefindingsofthesocialforecastingeffortareintegratedwithotherforecasts. 3Thechiefexecutiveisperceivedbyorganizationmembersashavingapersonalconvictionwhichrecognizesthatthesocialenv ironmenthasagreatimpactontheorganization. 4Thetimehorizonusedforforecastingsocialtrendscoverfiveormoreyears. 5Differenttimehorizonswillbeusedintheidentificationanalysisandintegrationphasesofthesocialforecastingprocess. 6Itwilluseinternaltechniquestosupplementtheexternalidentificationofsocialchange. 7Theanalysisofsocialtrendstogetorganizationalrelevancemakesuseofmultipleinternaltechniques. 8Multipletechniqueswillbeimplementedtodevelopapriorityassessmentoffuturesocialdemandsandissues. 9Theprocessisdirectedbyapersonreportingdirectlytotheexecutive,deputyGM,GM,orChairmanoftheboard. 10Socialforecastisdevelopedbyseveral(atleast3forecasts)inthesamedepartment. 11Managerialpersonnelfromatleast3differentdepartmentswillassistinformulatingthesocialforecast. 20.3 Organizingforsocialresponsibility Theorganizingfunctionismoreconcernedwithcreatingastructuralframeworkwithinwhichplanscanbecarriedoutandgoals [Link],[Link] [Link] lityIssuesAsoneanalysisthesocialresponsibility,heshould: 1Identifyanddefineperformancecategoriesrelevanttothesocialresponsibilityreviewofthecompany. 2Brieflyreviewperformanceacrossallactivitycategoriesinordertoidentifyareasofhighopportunityandtogetanoverviewfo rresourceallocationdecisionsthatmustbemadelater. 3Selectthemostcriticalactivityareaandpreviewperformanceindepthinthem. 4Developabasicstrategyforeachactivityarea. 5Setspecificbutrealisticobjectivesfornewprogramsorforrevisionsinexistingactivities. 6Develop,implementandmonitortheneworrevisedprograms. 7Integratethisprocess/approachintothebasicmanagementprocess.

Variablethatshowshowacompanyorganizesitssocialactivityefforts 1Thequalityofpersonnelinvolved. 2Thedegreeoftheircommitmenttothesocialresponsibilityissues. 3Theirabilitytosecuretheirlinemanagementinputandsupportforpolicychanges. 4Theircapacitytofollowthroughanimplementingnewprogramsetc. PossibleapproachesinorganizingSRefforts 1Theofficer:[Link] pportedbythestaff.Sometimestherecouldberotationdependingonthepolicyofthecompanycouldbe2years,5yearsetc. 2Thetaskforce:[Link] [Link]. 3Thepermanentboardcommittee:[Link] [Link] ow. 4Permanentmanagementcommittee:Consistsofemployeesofthatfirmbutmoresowiththetopmanagement. 5Permanentorganizationgroup:Agroupthatcontinuouslyengagesinanalyzing,resolvingandrespondingtocorporatesocial [Link],[Link] disadvantageisthattheycaneasilydriftfromthemainstreamofactivityandbecomenarrowlyfocusedonanissue. 20.4 Controlfunction [Link]: 1Definitionmeasurementofcompanysprogresstowardssocialgoals. 2Purposethefirmsevaluationofitssocialperformance. 3. Apparentmotive Satisfyingthecorporateconscience Improvingfinancialwisdomofsocialprograms Publicrelations Enhancecredibilityofthebusinessfirm 4. Natureofissuesaudited Companyperformanceinminorityemployment. Pollutionoftheenvironment Workingconditions Communityrelations Consumerismissues 3Useofsocialaudit [Link],[Link],itshouldbeapublicdocument. 4Methodology [Link]. 5Bywhoitshouldbeconductedaconsultantorinternal. 20.5 Formatofasocialperformancereport Thereporthastwoparts: 1Mainstreamissues 2Specialprogram MainstreamIssues 1Whatarethekeypublicissuesfacingthecommunity? 2Whichoneshavethegreatestpotentialtoadverselyaffectprofitabilityandwhichonespresentsomemarketingopportunities. 3Whataretheproblemsencounteredandprogressmadeduringthepreviousyearindealingwitheachmajorissue? 4Inrelationtothecompetitors,whatistheirpositioninpublicpolicyarea?

20.6 Specialprogram Thispartshouldpresentsolutionto: 1Howmuchdoourspecialsociallyorientedprogramcosttheorganizationcomparedtoalternativeusesoffunds? 2Arethesespecialprogramsmeetingtheirsocialobjectives? 3Aretheylikelytoprovidealongrangetotheorganization? 20.7 Corporatesocialresponsiveness Corporatesocialresponsivenessmeansknowinghowtomanageacompanysrelationswithexternalsocial,politicalandgover [Link] sthatwillbemutuallybeneficialtothecompanyandthesociety. [Link] ompanies: 1AdaptiveStrategy:[Link] omesignificantsocialchangeisalreadyunderway. 2ProactiveStrategy:[Link] hateverchangesthatisoccurringintheirenvironment. 3InteractiveStrategy:Firmstriestofindwaystoharmonizeacompanysowngoalswiththechangingneedsandexpectationsof thepublic.

21.0: ConsumerEthicsandSocialResponsibility
Thesocietalmarketingconceptstressesmarketingsocialresponsibilitybynotonlysatisfyingtheneedsofconsumersbutalsopr [Link] ygiventhediversityofvaluespresentindifficultsocietal,businessandorganizationalcultures. 21.1 NatureandSignificanceofMarketingEthics [Link] deonhowtoactnightlyandjustlywhenfacedwithmoraldilemmas.

Agoodstartingpointforunderstandingthenatureandsignificanceofethicsisthedistinctionbetweenlegalityandethicalityofb [Link] [Link] allimits,[Link]?

ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f02100 0006d6e74725247422058595a2007ce00020009000600310000616373704d534654000000004945432073524742000 0000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001 840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000 022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c4000000887675656400

00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002474656368 000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c746578 7400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79 0000646573630000000000000012735247422049454336313936362d322e3100000000000000000000001273524742 2049454336313936362d322e31000000000000000000000000000000000000000000000000000000 UnethicalIllegalLegalityLegal Therehasbeenpublicoutcryaboutethicalpracticesofbusinesspeople.InUnitedStatespublicopinionsurveysshowthat58%a dultsratetheethicalstandardsofbusinessasonlyfairorpoor&90%thinkwhitecollarcrimesisverycommon. 21.1.2 Factorsthatinfluencebusinessethicalbehaviour ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484c696e6f02100 0006d6e74725247422058595a2007ce00020009000600310000616373704d534654000000004945432073524742000 0000000000000000000000000f6d6000100000000d32d4850202000000000000000000000000000000000000000000 000000000000000000000000000000000000000000000000000001163707274000001500000003364657363000001 840000006c77747074000001f000000014626b707400000204000000147258595a00000218000000146758595a0000 022c000000146258595a0000024000000014646d6e640000025400000070646d6464000002c4000000887675656400 00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002474656368 000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c0000080c746578 7400000000436f70797269676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79 0000646573630000000000000012735247422049454336313936362d322e3100000000000000000000001273524742 2049454336313936362d322e31000000000000000000000000000000000000000000000000000000 Personalmoralphilosophy&Ethicalbehaviour Researchershaveidentifiedthefollowingasthemajorcategoriesoffactorsthatinfluenceethicalbehaviour. 1SocietalCulture&Norms:Culturereferstothesetofrefers,ideas&attitudesofahomogenousgroupofpeoplethataretransmitt [Link],groupsandtheorganizationsandin [Link],[Link] [Link],trademarksandpatentsareveryimport [Link]&Mexicocopyingisacceptable. 2BusinessCultureandPractices:Businessculturecomprisestheeffectiverulesofthegame,theboundariesb/ncompetitiveand [Link] ionshipb/nsellersandbuyersandincompetitivebehaviouramongsellers. EthicsofCompetition:TwokindsofUnethicalbehaviouraremostcommoninethicsof competitions. a)IndustrialEspionage:IstheclandestinecollectionoftradesecretsorproprietaryInformationaboutcompanycompetiti [Link],pharmaceuticalsetc. b)[Link] isedasgifts,consultantfees,andfavour. 1OrganizationCultureandExpectations:corporateculturereflectsthesharedvalues,beliefs,andpurposesofemployeesthata

[Link]/organizationalcultureofacompanycanbedemonstratedinthedressingcode, mannerofwork,employeerelationship,companycodeofethics&ethicalbehaviourofmanagementandcoworkers. 2PersonalMoralPhilosophyandEthicalBehaviour:Ethicalchoicesarebasedonthepersonalmoralphilosophyofthedecision [Link] withfriendsandfamily,[Link],businessandcorporatecultureinwhi chapersonfindshimorher. 21.2 Consumerethicsandsocialresponsibility Consumeralsohasanobligationtoactethicallyandresponsibilityintheexchangeprocessandintheuseanddispositionofprodu cts. [Link], misredeemingcoupons,makingfraudulentreturnsofmerchandise,recordingcopyrightedmusic,video,cassettesorcompute [Link]. SUMMARY Inthischapter,wehavestudiedcorporatesocialresponsibilitytounderstanditandtolearnhowourbusinesscanoccasionallyus edsomeoftheirresourcestomakedifferential,[Link] ciationfortheimportanceofmaintainingandpromotingsocialvaluesintheworkplace.