Social_Responsibility_and_Managerial_Ethics

Social_Responsibility_and_Managerial_Ethics - Chapter 5...

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    Chapter 5 Social Responsibility and  Managerial Ethics
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    Objectives What is Social Responsibility? Social Responsibility and Economic  Performance Explain what “Greening” of management  is. What is value-based management? What is ethics. Explain why ethical leadership is  important.
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    What is social responsibility? The classical view  is the view that holds that  management’s only social responsibility is to  maximize profits (create a financial return) by  operating the business in the best interest of  the stockholders.  Expending the firm’s resources on doing  “social good” unjustifiably increases costs  that lower profits to the owners and raises  prices to consumers.
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    What is social responsibility?  (Cont…) Milton Friedman  is the most outspoken  advocate of this view.  He argues that manager’s primary  responsibility is to operate the business in  the best interest of the stockholders.
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    What is social responsibility? The  socioeconomic view  is the view that holds that  management’s social responsibility goes well beyond  making profits to include protecting and improving  society’s welfare. The reasoning behind this view is that corporations are  not independent entities responsible only to  shareholders.  Firms have a moral responsibility to larger  society to become involved in social, legal, and  political issues.
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    Argument for and Against Social  Responsibility For Public expectations Long-run profits Ethical obligation Public image Better environment Discouragement of further  government regulation Balance of responsibility  and power Stockholders interests Possession of resources Superiority of prevention  over cures Against Violation of profit  maximization Dilution of purpose Costs Too much power Lack of skills Lack 
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    Stages of Social Responsibility Stage 1: manager follows classical view of social  responsibility. Obeys all laws and regulations while caring  for stockholder’s interests. Stage 2: managers expand their responsibility to  another important stakeholders – employees. They want to attract, keep, and motivate good  employees. They improve working conditions, expand  employee rights, increase job security, and  focus on human resource concerns. 
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  Stages of Social Responsibility  (Cont…) Stage 3 managers expand their responsibilities  to other stakeholders in the specific  environment: customers and suppliers. Responsible action might include; fair prices, 
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Social_Responsibility_and_Managerial_Ethics - Chapter 5...

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