Chapter 5
Social Responsibility
and Ethics
What is social responsibility?
-Decisions that effect the society in general-
-Wages, Prices, Quality, Resources usage,
Employee relations, etc.
There are two opposing views on social responsibility
Classical View -Managers are servants of the stockholders. They must maximize profits
Socioeconomic View-Profits are the secondary priority to a company. Social existence is
primary. This is a long-term outlook.
What is social responsibility?
-Firm’s obligation to pursue LT. goals of society (beyond legal
requirements)
What is social obligation?
Legal and economic obligations
What is social responsiveness?
The company’s ability to respond to social needs
Does social responsibility effect the bottom line?
Yes, Yes, Yes!!!
Reputation index
PRIDE
Corporate Culture/Employee
happiness
Managerial Ethics
Rules and principles that define right and wrong behavior
How to improve Ethical Behavior
Selection- Background checks, personalities, shared values
This is not easy!!!
Creation of a code of ethics
Table 5.6
Top management
Realistic Job Goals
Ethic training
Comprehensive Performance Appraisals
Social Audits
Chapter 5
Social Responsibility
Social Obligation
Ethics