Management Chapter 3

• Social Responsibility (of the managers) - The managerial obligation to take action that protects and improves both the welfare of society as a whole and the interests of the organization
• Areas of Social Responsibility

  • Urban affairs
  • Consumer affairs
  • Community volunteerism
  • Ecology conservation
• Arguments for Social Responsibility Activities

  •Businesses as a whole are a subset of society

  •Businesses have a responsibility to help maintain and improve the overall welfare of society

  •Performing social responsibility activities earns greater organizational profits
• Milton Friedman - said buss. being socially responsible conflict with the interests of business owners, "unethical use of owners profits for society's interests
• Conclusions about being socially responsible

  • Perform all legally required social responsibility activities
  • Consider voluntarily performing social responsibility activities beyond those legally required
  • Inform all relevant individuals of the extent to which organizations will be involved in social responsibility activities
• Difference between effectiveness and efficiency

  A) why

  B) what needs

  C) process

  D) objectives

  E) goals

  F) subjective visioning

  G) objective analysis

  
• Social Responsiveness - the degree of effectiveness and efficiency an organization displays in pursuing its social responsiveness
• The greater the degree of effectiveness and efficiency, the more socially responsive the organization is said to be
• Business situation - Managers typically face a challenge determining which specific social obligations are implied by their business situation
• Impact on stakeholders - Any individual or group that is directly or indirectly affected by an organization’s decisions
• Examples of stakeholders

  • c- customers
  • c- competitors
  • l- local communities
  • e- employees/unions
  • s- stockholders/owners
  • s- suppliers
• An effective and efficient socially responsive organization works with wasting resources in the process
• •Managers must pursue only those responsibilities their organization possesses and has a right to undertake
• Approaches to Meeting Social Responsibilities

  Different managerial approaches

  • Requirement: Firm only does what is required by law
  • Recognition: Firm has obligations to pursue both profit and social goals
  • Believing: Firm has both profit and social goals
• Social Audit Challenge - Process of measuring social responsibility activities to assess organizational performance
• Social Audit Steps

  • Monitoring
  • Measuring
  • Appraising
• Example of Social Audit Challenge

  Environmental Area – A measure of the usage of environmental resources (Starbucks)
• Community Area – A measure of promoting community service, creating jobs, and supporting youth activities (Starbucks Youth Action grants)
• Responsible Buying Area - A measure of the social responsibility of an organization’s suppliers and partners. Suppliers protect workers’ right and comply with child labor
• Wellness Area – A measure of activities focused on improving the health of individuals in communities in which the organization operates
• Philanthropy Challenge - Promote welfare of others through general monetary donations to social causes. Increase on the well-being of the people.
• Philantrophy challenge focuses on supporting the arts, education, world peace, and disaster relief
• •Sustainability - The degree to which a person or entity can meet its present needs without compromising the ability of others to meet their needs
• Challenges of crafting sustainable orgs: conserving national resources, reducing waste, recycling, and protecting threatened species
• Sustainable Organization – An organization that can meet their present needs without compromising future generations ability to meet theirs
• The Triple Bottom-Line

  • Economy
  • Environment
  • Society
• Management should work toward making their organizations sustainable in three areas:

  • Economy - Minimizing waste by not overproducing goods and generating fair profits for stakeholders§Environment
  • Protecting natural resources
  • Society - Maintaining the well-being and protection of the communities in which it does business
• Three reasons why managers should build sustainable organizations

  • Increased profit
  • Increased Productivity
  • Increased innovation
• Steps to sustainability

  1. Set sustainability goals
  2. Hire organization members who can help organization become more sustainable
  3. Reward employees who contribute to organization’s sustainability goals
  4. Track progress in reaching sustainability goals
• Ethics - the capacity to reflect on values in the corporate decision-making process, to determine how these values and decisions affect various stakeholder groups, and to establish how managers can use these observations in day-to-day company management
• Ethical managers strive for management practices that are fair and just.
• Ethical business practices can lead to these benefits

  • Increased Productivity
  • Improved Stakeholder Relations
  • Minimizing Government Regulation
• Code of Ethics - A formal statement that acts as guide for how employees should act and make decisions
• A Code of Ethics cannot be expected to cover all behavior and should be evaluated and refined periodically
• Ethical Standards

  • Utilitarian
  • Rights
  • Virtue
• Utilitarian - Ethical behavior provides the most good or least harm for the greatest number of people
• Rights - Ethical behavior promotes the respect and rights of others
• Virtue - Behaviors are ethical if they reflect high moral values such as honesty, fairness, and compassion