Human Resource Management 11th Edition Chapter 2 BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY

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GTH en Accin: Siendo Estratgica con Responsabilidad Social Corporativa

Los gerentes de talento humano han mejorado su desempeo haciendo que su trabajo afecte positivamente la esencia de la organizacin, orientando sus actividades con RSC Los gerentes de TH que son lderes de las actividades de RSC se proyectan en un nivel directivo superior Aprox. 2/3 partes de los gerentes de TH estn implicados directamente en actividades de RSC
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tica
Disciplina que trata con lo que es bueno o malo, o con los deberes y las obligaciones morales

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Un Modelo de tica
Sources of ethical guidance Our beliefs about what is right or wrong

Lead to

Determine

Our actions

Type I Ethics

Type II Ethics

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Sources of Ethical Guidance

Number of sources to determine what is right or wrong, good or bad, moral or immoral Bible and other holy books Conscience Significant others Codes of Ethics Sources of ethical guidance should lead to our beliefs or convictions about what is right or wrong
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Type I Ethics
Strength of relationship between what individual or organization believes to be moral and correct and what available sources of guidance suggest is morally correct Example: HR manager believes it is acceptable not to hire minorities, despite fact that almost everyone condemns this practice
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Type II Ethics
Strength of relationship between what one believes and how one behaves Example: Manager knows it is wrong to discriminate, but does so anyway
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Legislating Ethics
Procurement Integrity Act Federal Sentencing Guidelines for Organizations (FSGO) Corporate and Auditing Accountability, Responsibility and Transparency Act
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Procurement Integrity Act of 1988

Prohibits release of source selection and contractor bid or proposal information Restrictions on former employees Passed after reports of military contracts for $500 toilet seats Also $5,000 hammer
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Federal Sentencing Guidelines for Organizations (FSGO) of 1992

Outlined effective ethics training program Promised softer punishments for wayward corporations that had ethics programs in place Executives needed to be proactive Organizations responded by creating ethics officer positions, installing ethics hotlines, and developing codes of conduct
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Corporate and Auditing Accountability, Responsibility and Transparency Act of 2002

Known as Sarbanes-Oxley Act, primary focus to redress accounting and financial reporting abuses in light of recent corporate scandals Criminalized many corporate acts Whistle-blower protections Prohibits loans to executives and directors
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Corporate and Auditing Accountability, Responsibility and Transparency Act of 2002 (Cont.)
Management may not discharge, demote, suspend, threaten, harass, or discriminate against an employee protected by the Act Protects any employee who lawfully provides information to governmental authorities concerning conduct he or she reasonably believes constitutes mail, wire, or securities fraud; violations of any rule or regulation issued by the SEC; or violations of any other federal law relating to fraud against shareholders
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2003 - Bechtel v Competitive Technologies Inc.

Supreme Court case involving wrongful termination under SarbanesOxleys whistle-blower-protection rule Court ruled that the company violated Act by firing two employees and ordered them reinstated

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Code of Ethics
Statement of values adopted by company, its employees and directors; sets official tone of top management regarding expected behavior Code of ethics establishes rules by which organization lives and becomes part of organizations corporate culture
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Ethics Officer
Larger firms appoint ethics officer Keeps code on front burner for employees Ethics committee often established
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Baldrige National Quality Award

Increased emphasis on ethics in leadership Criteria: Senior leaders should serve as role models to rest of organization
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Adolph Coors Company Example

Developed one of the nations most comprehensive ethics programs Company offers its employees considerable resources including interactive online courses, ethics leadership training, decision map, highly detailed set of policies, and help line. Goal of program is to step beyond rules and guidelines and teach employees how to think, clarify, and analyze situations.
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Human Resource Ethics

Application of ethical principles to HR relationships and activities Code of Ethics Many companies have a code of ethics
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Human Resource Ethics (Cont.)

Throughout your text, there are many topics where HR professionals can have a major impact on ethics (examples below) Do you strive to create a diverse workforce? Do you strive to recruit and select the best qualified applicant for the job?
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Ethics Training
Federal Sentencing Guidelines for Organizations Act outlined effective ethics training program Educate employees in companys standards and procedures through publications and training Ethics training should be for everyone from top to bottom
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Professionalization of Human Resource Management

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Profession
A vocation characterized by existence of: Common body of knowledge Procedure for certifying members of profession
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HR Professional Groups
Society for Human Resource Management - Largest national professional organization for HR management individuals Human Resource Certification Institute - Recognize HR professionals through certification program
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HR Professional Groups (Cont.)

American Society for Training and Development - Largest specialized professional organization in human resources WorldatWork - Managerial and HR professionals responsible for establishment, execution, administration or application of compensation practices and policies
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Corporate Social Responsibility

Implied, enforced, or felt obligation of managers, acting in their official capacity, to serve or protect interests of groups other than themselves. When corporation behaves as if it has a conscience How company as a whole behaves toward society
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Trends & Innovations Bayer Corporation: A Quality Example of Corporate Social Responsibility
United States Bayer Corporation continues the tradition of social responsibility its parent company, Bayer AG, began many years ago Company has more than 300 corporate social responsibility programs worldwide Bayers core values involve improving quality of life while harmonizing commercial efficiency, ecology and social commitment
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Who Determines?
Organizations top executives usually determine corporations approach to corporate social responsibility

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Stakeholder Analysis and Social Contract

Most organizations have large number of stakeholders

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Organizational Stakeholder
Individual or group whose interests are affected by organizational activities Society is increasingly holding corporate boards of directors and management accountable for putting interest of stakeholders first Some of the stakeholders for Crown Metal Products, a fictitious manufacturer, are identified Only a few, identified by bold arrows, are viewed as constituencies
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STAKEHOLDERS OF CROWN METAL PRODUCTS

Charitable Organizations Neighbors Stanley Crow (Sole stockholder) Employees and Managers

Unemployed Workers (Potential employees) Guaranty Bank (Lender)

Customers

Crown Metal Products

Competitors Other Banks in Area (Prospective lenders)

Suppliers

U.S. Government

Local Government Agencies

Local Businesses

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Social Contract
Set of written and unwritten rules and assumptions about acceptable interrelationships among various elements of society Embedded in customs of society Social contract often involves quid pro quo Concerns relationships with individuals, government, other organizations, and society

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The Social Contract

Individuals

Other Organizations The Organization Government

Society
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Obligations to Individuals
Certain obligations to employees Expect fair days pay for fair days work, and perhaps much more
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Obligations to Other Organizations

Must be concerned with relationships involving other organizations Commercial businesses are expected to compete with one another on honorable basis Charities such as United Way expect support from business
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Traditional View of Social Responsibility

Businesses best meet obligations through pursuit of their own interests Some companies view social contract mainly in terms of the companys interests

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Obligations to Government
Under auspices of government, companies have license to do business, along with patent rights, and trademarks Expected to recognize need for order rather than anarchy Expected to work with guidelines of governmental organizations such as Equal Employment Opportunity Commission and Office of Federal Contract Compliance Programs
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Obligations to Society in General

Traditional view of business responsibility has been that businesses should produce and distribute goods and services in return for profit Businesses operate by public consent with basic purpose of satisfying needs of society

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Sir Thomas More

Said in 16th century, If virtue were profitable, common sense would make us good and greed would make us saintly. More knew virtue is not profitable, so people must make hard choices from time to time. Corporate strategists are being held to a higher standard than just pursuing their own interests, or even those of stockholders; they must consider the interests of other groups too.
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Social Audit
Systematic assessment of a companys activities in terms of its social impact

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Possible Types of Social Audits

Simple inventory of activities Compilation of socially relevant expenditures Determination of social impact Ideal social audit would involve determining the true benefits to society of any socially-oriented business activity
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Steps for Establishing and Implementing Corporate Social Responsibility (CSR) Program
1. Person assigned responsibility for program; structure developed 2. Review of what company is presently doing regarding CSR 3. Shareholders expectations and perspectives determined 4. Write policy statements covering CSR areas such as environmental, social, and community issues
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CSR Steps (Cont.)

5. Develop set of corporate objectives and action plan to implement policies 6. Create company quantitative and qualitative targets and performance indicators over 2-5 year period, along with measurement, monitoring and auditing mechanisms 7. Communicate direction of CSR to stakeholders and fund managers 8. Determine progress of CSR program 9. Report progress of CSR program
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A Global Perspective: Multinational Whistle-Blowing

In East Asia, corporate members are viewed as family members, so it is wrong to report them In Japan, lifetime employment and strict seniority system discourage workers from questioning management decisions, dictating, instead, that employees show unbounded loyalty to coworkers In China, attempts to introduce corporate hotlines can remind employees of horrors of Cultural Revolution
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