Fundamentals of Management: Ethics and Social Responsibility

Topics: Ethics Pages: 12 (1388 words) Published: September 19, 2015
• Lecture 03:

• Ethics & Social Responsibility

 The environment creates uncertainty for
 Managers must respond and design adaptive
 Uncertainty – managers do not have sufficient
information about environmental factors to
understand and predict environmental needs
and changes

Management as an Integrating Activity
Individuals – Organization – Environment
(Design )
Individuals / Groups
Conflicts in
Needs & Demands
Opportunities & Risks
to the Organization

Critical Thinking

• What do you need to know
to manage an organization
efficiently & effectively?
– Organization (nature &
– People (behavior)
– Working together (dynamics)
in the various intertwined
organizations through
– Division of labour (structure)

Ethics & Social
Change, etc.

Personality, values, attitudes, needs,
goals, motivation, learning,
perceptions, emotions, stress, etc.

An organization is a collection of people who must
work together through divisions of labor to
achieve a common purpose
Group dynamics, teams,
leadership, communication,
decision-making, trust,
conflict, negotiation,
influence, power, politics,

Organizational design
(structure), job design
(job satisfaction,
motivation), etc.

• Why should managers be concerned
with Ethics & Social Responsibility?

An Organization has a moral obligation
to be ethical and be
a responsible citizen to the society.
Do you know?
The society (marketplace) makes up the
external environment of an organization

What is Ethics?


Ethics can be defined
as the study of what
constitutes right or
wrong behavior.

Ethics is a branch of philosophy
which seeks to address
questions about morality.

In simpler terms

The Nature of Ethics
Ethics is made up of the inner-guiding
moral principles, values, and beliefs that
people can use to analyze or interpret
a situation and then decide what
is the “right” or
appropriate way
to behave.

• What do managers do
to manage “Ethics”?

• Ethics – code of moral principles and values
that govern the behaviors of right or wrong
• Standards about good/bad
• Ethical issues can be complex
• People in organizations have divergent views
about right/wrong


What’s Is the Right Thing To Do?

Sources of
Ethical Standards
Duty-based ethics:

Outcome-based ethics:

Ethics based on
religious beliefs and
philosophical reasoning,
such as that of
Immanuel Kant.
Example: Ten

Ethics based on the
desirability of results and
philosophical reasoning,
such as that of
Jeremy Bentham and
John Stuart Mill.

Example: utilitarianism

Ethics & Corporate Governance

Immanuel Kant
• Kant maintained that each of us has a worth or a dignity that must be respected. This dignity makes it wrong for
others to abuse us or to use us against our will.
• Kant expressed this idea in a moral principle: humanity
must always be treated as an end, not merely as a means.
• To treat a person as a mere means is to use a person to
advance one's own interest. But to treat a person as an
end is to respect that person's dignity by allowing each the freedom to choose for himself or herself.

Ethics & Corporate Governance

Jeremy Bentham &
John Stuart Mill
• Bentham's famous formulation of utilitarianism is known
as the "greatest-happiness principle". It holds that one
must always act so as to produce the greatest happiness
for the greatest number of people, within reason.
• One of Mill's major contributions to utilitarianism is his argument for the qualitative separation of pleasures.
• Bentham treats all forms of happiness as equal, whereas
Mill argues that intellectual and moral pleasures are
superior to more physical forms of pleasure....
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