Professional Documents
Culture Documents
1), a stage 1 manager feels responsible to only the stockholders. At stage 2, managers
and suppliers. Finally, at stage 4, managers feel they have a responsibility to society
as a whole. Social obligation is when a firm engages in social actions because of its
is when a firm engages in social actions in response to some popular social need.
obligations, to pursue long-term goals that are good for society. (See Exhibit 5-3.)
Explain what research studies have shown about the relationship between an
organization’s social involvement and its economic performance.
Explain what conclusion can be reached regarding social responsibility and
economic performance.
Although the majority of the research studies have shown a positive relationship
concerns. And one study showed that social involvement had a neutral impact, while
another study found that social activities not related to the organization’s primary
mutual stock funds, the most meaningful conclusion we can reach is that there is little
evidence to say that a company’s social actions hurt its long-term economic
performance.
Organizations can “go green” by using different approaches. (See Exhibit 5-5.)
The light green approach is simply doing what is required legally, or the social
the market and stakeholder approaches can be viewed as social responsiveness. The
activist or dark green approach involves an organization looking for ways to respect
and preserve the earth and its natural resources, which can be viewed as social
responsibility.
Values-Based Management
Shared values serve four purposes (see Exhibit 5-6): to guide managerial
decisions and actions; to shape employee behavior and communicate what the
organization expects of its members; to influence marketing efforts; and to build team
ethically.
Managerial Ethics
The factors that affect ethical and unethical behavior (see Exhibit 5-8) include: an
– see Exhibit 5-9); individual characteristics (values and two personality variables –
ego strength and locus of control); structural variables (structural design, use of goals,
culture (content and strength); and issue intensity which includes six elements
The more intense an issue is (the larger number of people harmed, the more
agreement that the action is wrong, the greater the likelihood the action will cause
harm, the more immediately the consequences will be felt, the closer the person feels
to the victims, and the more concentrated the effect of the action on the victims), the
effectiveness by recognizing the role that the organization’s leaders play in setting the
ethical tone, by continually reaffirming the importance of the ethics code, by publicly
the code to employees, and by using decision rules in guiding managers as they
Managers play an important ethical leadership role in many ways: through whom
and what are rewarded with pay increases and promotions; by punishing ethical
systems that focus on means as well as ends; by providing ethics training; by using
Ethical leadership is important because the example set by managers has a strong
influence on whether employees behave ethically. Ethical leaders also are honest,
share their values, stress important shared values, and use the reward system
toll-free ethics hotlines; and by establishing a culture where employees can complain
and get heard without fear of reprisal, against which the Sarbanes-Oxley Act offers
approaches. Social entrepreneurs want to make the world a better place and have a
interdependency between business needs and wider social concerns. Thus, as managers
plan, organize, lead, and control, they would ask how their decisions would work in the