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CHAPTER 5 MANAGING ETHICS AND SOCIAL RESPONSIBILITY CHAPTER OUTLINE What is Your Your Level of Ethical Maturity? I. What hat Is Is Man Manag ager eriial Ethi Ethics cs?? A. Ethical Management Today B. The Business Case or Ethics and !ocial "es#onsi$ility II. II. Ethi Ethical cal %ile %ilemm mmas as&& Wha Whatt Woul Would d 'ou 'ou %o? %o? III. III. (ram (rame) e)or or*s *s or or Eth Ethic ical al %ecis %ecisio ion n Ma* Ma*in ing g I+. I+. The The Ind Indi, i,id idua uall Man Manag ager er and and Ethi Ethica call Choi Choice cess A. The !tage !tagess o Moral Moral %e,el %e,elo#m o#ment ent B. -i,ers +ersus Ta*ers New Manager Self-Test: Self-Test: Are Are You You a Giver or a Taer? Taer? +. +. What What Is Is Cor# Cor#ora orate te !ocial !ocial "es#ons "es#onsi$i i$ilit lity? y? A. rgan rgani/a i/atio tional nal !ta*ehold !ta*eholders ers B. The The -ree -reen n Mo, Mo,em emen entt C. !ustaina$il !ustaina$ility ity and the Tri#l Tri#lee Bottom Bottom 0ine +I. E,alua E,aluatin ting g Cor#or Cor#orate ate !oci !ocial al "es#o "es#onsi nsi$il $ility ity +II. +II. Managi Managing ng Com#a Com#any ny Ethi Ethics cs and and !ocia !ociall "es#o "es#onsi nsi$il $ilit ity y A. Code Code o o Ethi Ethics cs B. Ethi Ethical cal !tr !truc uctu ture ress C. Whis Whistl tle1B e1Blo lo)i )ing ng

ANNOTATED LEARNING OBJECTIVES Ater studying this cha#ter2 students should $e a$le to& 3. !efine ethics an" e#$lain how ethical %ehavior relates to %ehavior governe" %y law an" free free choice& Ethics is diicult diicult to deine in a #recise )ay. )ay. In a general sense2 ethics is the code o moral #rinci#les and ,alues that go,ern the $eha,iors o a #erson or grou# )ith res#ect to )hat is right or )rong. Ethics sets standards as to )hat is good or $ad in conduct and decision ma*ing. 4uman $eha,ior alls into three categories. The irst is codiied la)2 la)2 in )hich ,alues and standards are )ritten )ritten into the legal system and enorcea$le in the courts. The domain o ree choice is at the o##osite end o the scale and #ertains to $eha,ior a$out )hich la) has no say and or )hich an indi,idual or organi/ation en5oys com#lete reedom. Bet)een these domains lies the area o ethics. This domain has no s#eciic s#eciic la)s2 yet it does ha,e standards o conduct $ased on shared #rinci#les and ,alues a$out moral conduct that guide an indi,idual or com#any. 638 Cengage 0earning. All "ights "eser,ed. May not $e scanned2 co#ied or du#licated2 or #osted to a #u$licly accessi$le )e$site2 in )hole or in #art .

oruse as #ermitted in a license distri$uted )ith a certain #roduct or ser,ice or other)ise on a #ass)ord1#rotected )e$site or classroom use. .

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6. !iscuss why ethics is i'$ortant for 'anagers an" i"entify i"entify recent events that call for a renewe" co''it'ent to ethical 'anage'ent& The #er,asi,eness o ethical la#ses during the irst decade o this century has $een astounding. Although #u$lic conidence in $usiness managers in #articular is at an all1time lo)2 #olitics2 s#orts2 and non1#roit organi/ations organi/ations ha,e also $een aected. aected. In the $usiness )orld2 )orld2 the names o once1re,ered cor#orations ha,e $ecome synonymous )ith greed2 deceit2 irres#onsi$ility2 and lac* o moral conscience. Managers carry a tremendous res#onsi$ility res#onsi$ility or setting setting the ethical climate in an organi/ation organi/ation and can act as role models or others. The )ides#read ethical la#ses o the #ast decade ha,e #ut managers under increasing scrutiny. !ome o these ethical la#ses include the ailures that occurred at AI-2 0ehman Brothers2 Enron2 Bear !terns2 Country)ide2 and Worldcom. :nethical decisions made $y managers at these and other com#anies2 resulted in losses o huge sums o money $y stoc*holders2 em#loyees2 and in,estors. In some cases2 cases2 the com#any itsel itsel )as destroyed. destroyed. ;. E#$lain the utilitarian( in"ivi"ualis'( 'oral rights( )ustice( )ustice( virtue ethics( an" $ractical a$$roaches for 'aing ethical "ecisions& The utilitarian a$$roach holds a$$roach holds that moral $eha,iors #roduce the greatest good or the greatest num$er. num$er. In this a##roach2 a decision ma*er is e#ected to consider the eect eect o each decision alternati,e on all #arties and select the one that o#timi/es satisaction or the greatest num$er o #eo#le. The in"ivi"ualis' a$$roach contends a$$roach contends that acts are moral )hen they #romote the indi,idual
oruse as #ermitted in a license distri$uted )ith a certain #roduct or ser,ice or other)ise on a #ass)ord1#rotected )e$site or classroom use. . .

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considered acce#ta$le $y the #roessional community2 one the manager )ould not hesitate to #u$lish on the e,ening ne)s2 and one that a #erson )ould ty#ically eel comorta$le e#laining to amily and riends. . !escri%e the factors that sha$e a 'anager*s ethical "ecision 'aing( inclu"ing levels of 'oral "evelo$'ent& Indi,idual managers $ring s#eciic #ersonality and $eha,ioral traits to the 5o$. Personal needs2 amily inluence2 and religious $ac*ground all sha#e a manager
638 Cengage 0earning. All "ights "eser,ed. May not $e scanned2 co#ied or du#licated2 or #osted to a #u$licly accessi$le )e$site2 in )hole or in #art .


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!ustaina$ility reers to economic de,elo#ment that generates )ealth an d meets the needs o the current generation )hile sa,ing the en,ironment so uture generations can meet their needs as )ell. With a #hiloso#hy o sustaina$ility2 managers )ea,e en,ironmental and social concerns into e,ery strategic decision2 re,ise #olicies and #rocedures to su##ort sustaina$ility eorts2 and measure their #rogress to)ard sustaina$ility goals. The trp!e "#tt#$ !%e reers to measuring an organi/ation


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acti,ities include #hilanthro#ic contri$utions that oer no direct inancial #ay$ac* to the com#any and are not e#ected. >. !iscuss how ethical organi,ations are create" through ethical lea"ershi$ an" organi,ational structures an" syste's& Management is res#onsi$le or creating and sustaining conditions in )hich #eo#le are li*ely to $eha,e themsel,es. Managers must ta*e acti,e ste#s to ensure that the com#any stays on an ethical ooting. Management methods or hel#ing organi/ations $e more res#onsi,e include leadershi# $y eam#le2 codes o ethics2 ethical structures2 and su##orting )histle1$lo)ers.

LECTURE OUTLINE WAT +S Y./0 LE1EL .2 ET+3AL MAT/0+TY? It #ro$a$ly )on
W4AT I! MAA-E"IA0 ET4IC!?

Ehi$it .3

Eth&' is the code o moral #rinci#les and ,alues that go,ern the $eha,iors o a #erson or grou# )ith res#ect to )hat is right or )rong. Ethics sets standards as to )hat is good or $ad in conduct and decision ma*ing. Ethics deals )ith internal ,alues that are a #art o cor#orate culture and sha#e decisions concerning social res#onsi$ility )ith res#ect to the eternal en,ironment. 4uman $eha,ior alls into three categories. 





3o"ifie" law. +alues and standards are )ritten into the legal system and are enorcea$le in the courts. 0a)ma*ers ha,e ruled that #eo#le and cor#orations must $eha,e in a certain )ay such as o$taining licenses or cars or #aying taes. 2ree choice. (ree choice #ertains to $eha,ior a$out )hich la) has no say and or )hich an indi,idual or organi/ation en5oys com#lete reedom. Ethics. Ethics lies $et)een the domains o codiied la) and ree choice. It has no s#eciic la)s2 $ut does ha,e standards o co nduct that are $ased on shared #rinci#les and ,alues a$out moral conduct that guide an indi,idual or com#any. Because ethical standards are not codiied2 disagreements and dilemmas a$out #ro#er $eha,ior oten occur.



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A. Ethical Management Today

Ehi$it .6

3. The #er,asi,eness o ethical la#ses during the irst decade o this century has $een astounding. Although #u$lic conidence in $usiness managers in #articular is at an all1time lo)2 #olitics2 s#orts2 and non1#roit organi/ations ha,e also $een aected. In the $usiness )orld2 the names o once1re,ered cor#orations ha,e $ecome synonymous )ith greed2 deceit2 irres#onsi$ility2 and lac* o moral conscience. 6. Managers carry a tremendous res#onsi$ility or setting the ethical climate in an organi/ation and can act as role models or others. The )ides#read ethical la#ses o the #ast decade ha,e #ut managers under increasing scrutiny. ;. ne hot1$utton ethical issue concerns ecessi,e eecuti,e com#ensation. B. The Business Case or Ethics and !ocial "es#onsi$ility 1. The relationship of ethics and social responsibility to an organization’s nancial #erormance concerns has generated hundreds o studies. !tudies ha,e #ro,ided ,arying results2 $ut they ha,e generally ound a #ositi,e relationshi# $et)een ethical and socially res#onsi$le $eha,ior and a irm
6. Com#anies are ma*ing an eort to measure the noninancial actors that create ,alue. Researchers ind that #eo#le #reer to )or* or com#anies that demonstrate a high le,el o ethics and social res#onsi$ilityD thus2 these organi/ations can attract and retain high1=uality em#loyees. II. ET4ICA0 %I0EMMA!& W4AT W:0% ': %? An eth&a! )!e$$a arises in a situation concerning right or )rong )hen ,alues are in conlict and right and )rong cannot $e clearly deined. The indi,idual )ho must ma*e an ethical choice in an organi/ation is the 'oral agent . %iscussion uestion F3& +s it reasona%le to e#$ect that 'anagers can 'easure their social an" environ'ental $erfor'ance on the sa'e level as they 'easure their financial $erfor'ance with a tri$le %otto' line? !iscuss& TE! GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

III. C"ITE"IA (" ET4ICA0 %ECI!I MAHI-



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Managers aced )ith tough ethical choices oten $eneit rom a normati,e strategy $ased on norms and ,alues to guide their decision ma*ing. ormati,e ethics is $ased on norms and ,alues. (i,e a##roaches are rele,ant or managers in ma*ing ethical decisions. A. :tilitarian A##roach 3. The *t!tara% appr#a&h holds that moral $eha,ior #roduces the greatest good or the greatest num$er. The decision ma*er is e#ected to consider the eect o each decision alternati,e on all #arties and select the one that )ill o#timi/e satisaction or the greatest num$er o #eo#le. B. Indi,idualism A##roach 3. The %)+)*a!'$ appr#a&h contends that acts are moral )hen they #romote the indi,idual

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3. The pra&t&a! appr#a&h sideste#s de$ates a$out )hat is right2 good2 or 5ust and $ases decisions on #re,ailing standards o the #roession and the larger society2 ta*ing the interests o all sta*eholders into account. A decision )ould $e considered ethical i it is one that )ould $e considered acce#ta$le $y the #roessional community2 one the manager )ould not hesitate to #u$lish on the e,ening ne)s2 and one that a #erson )ould ty#ically eel comorta$le e#laining to amily and riends. %iscussion uestion F& Managers at so'e %ans an" 'ortgage co'$anies have argue" that $rovi"ing su%$ri'e 'ortgages was %ase" on their "esire to give $oor $eo$le a chance to $artici$ate in the A'erican "rea' of ho'e ownershi$& What is your o$inion of this e#$lanation in ter's of ethics an" social res$onsi%ility? TE! GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG

I+.

T4E I%I+I%:A0 +. MAA-E" A% ET4ICA0 C4ICE! rgani/ational actors such as an unethical cor#orate culture and #ressure rom su#eriors and colleagues can induce em#loyees to $eha,e unethically. Moreo,er2 )hen #eo#le e#erience organi/ational #ressure to go against their sense o )hat is right2 they ty#ically $ecome rustrated and emotionally ehausted. The manager $rings s#eciic #ersonality and $eha,ioral traits to the 5o$. Personal needs2 amily inluence2 and religious $ac*ground all sha#e a manager
Ehi$it .;

3. 4reconventional level . At this le,el a manager is concerned )ith eternal re)ards and #unishment and o$eys authority to a,oid detrimental #ersonal conse=uences. These managers are li*ely to $e autocratic or coerci,e. 6.

3onventional level . At this le,el managers learn to conorm to e#ectations o good $eha,ior as deined $y colleagues2 riends2 amily2 and society. These managers are interested in inter#ersonal relationshi#s and coo#eration.

;. 4ostconventional level @also called $rinci$le" level . At this le,el indi,iduals de,elo# an internal set o standards and ,alues and )ill diso$ey rules or la)s that ,iolate these #rinci#les. Internal ,alues are more im#ortant than e#ectations o signiicant others. These managers ty#ically use a transormati,e or ser,ant leadershi# style.



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. The great ma5ority o managers o#erate at the con,entional le,el. A e) managers ha,e not ad,anced $eyond the #recon,entional le,el. nly a$out 6 #ercent o American adults reach the #rinci#led le,el o moral de,elo#ment. B. -i,ers +ersus Ta*ers 3. When managers o#erate rom a higher le,el o de,elo#ment2 they may use a orm o ser,ant leadershi#2 ocusing on the needs o ollo)ers and encouraging others to thin* or themsel,es. 6. "esearch has sho)n that #eo#le )ill )or* harder and more eecti,ely or #eo#le )ho #ut others< interests and needs a$o,e their o)n ;. The shit to)ard admiring and re)arding gi,ers o,er ta*ers can $ring signiicant #ositi,e changes )ithin organi/ations. The sim#le categories o giver and taer hel# #eo#le understand ho) they might contri$ute to or detract rom an organi/ation
Ehi$it .

3. Enlightened organi/ations ,ie) the internal and eternal en,ironment as ha,ing a ,ariety o sta*eholders. A 'ta3eh#!)er is any grou# )ithin or outside the 638 Cengage 0earning. All "ights "eser,ed. May not $e scanned2 co#ied or du#licated2 or #osted to a #u$licly accessi$le )e$site2 in )hole or in #art .


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organi/ation that has a sta*e in the organi/ation6 #ercent thin* that $usinesses should im#lement en,ironmentally riendly #ractices. C. !ustaina$ility and the Tri#le Bottom 0ine 3.

Many cor#orations are em$racing an idea called sustaina$ility or sustaina$le de,elo#ment. S*'ta%a"!t/ reers to economic de,elo#ment that generates )ealth and meets the needs o the current generation )hile sa,ing the en,ironment so uture



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generations can meet their needs as )ell. With a #hiloso#hy o sustaina$ility2 managers )ea,e en,ironmental and social concerns into e,ery strategic decision2 re,ise #olicies and #rocedures to su##ort sustaina$ility eorts2 and measure their #rogress to)ard sustaina$ility goals. 6.

The trp!e "#tt#$ !%e reers to measuring an organi/ation
+I. E+A0:ATI- C"P"ATE !CIA0 "E!P!IBI0IT'

Ehi$it .

A. Economic "es#onsi$ility 3. The irst criterion o social res#onsi$ility is econo'ic res$onsi%ility. The $usiness institution is the $asic economic unit o society. Its res#onsi$ility is to #roduce the goods and ser,ices that society )ants and to maimi/e #roits or its o)ners and shareholders. 6. Economic res#onsi$ility carried to etreme is called the $rofit-'a#i'i,ing view2 ad,ocated $y o$el economist Milton (riedman. This ,ie) argues that the cor#oration

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C. Ethical "es#onsi$ility 3. Ethical res$onsi%ility includes $eha,iors that are not necessarily codiied into la) and may not ser,e the irm
%iscretionary "es#onsi$ility 3. D'&ret#%ar/ re'p#%'"!t/ is ,oluntary and guided $y a com#any
%iscretionary res#onsi$ility is related to #r-a%at#%a! +rt*#*'%e'' 2 )hich means that an organi/ation #ursues a #ositi,e human im#act2 moral goodness2 and unconditional society $etterment or its o)n sa*e

%iscussion uestion F9& The techni
Ehi$it .8

A. Code o Ethics 3. A &#)e #6 eth&' is a ormal statement o the com#any


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$. 4olicy-%ase" state'ents outline the #rocedures to $e used in s#eciic ethical situations such as mar*eting2 conlicts o interest2 o$ser,ance o la)s2 #ro#rietary inormation2 #olitical gits2 and e=ual o##ortunities. %iscussion uestion F>& Which "o you thin woul" %e 'ore effective for sha$ing long-ter' ethical %ehavior in an organi,ation: a written co"e of ethics co'%ine" with ethics training or strong ethical lea"ershi$? Which woul" have 'ore i'$act on you? Why? TE! GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG B. Ethical !tructures 3. Ethical structures re#resent the ,arious systems2 #ositions2 and #rograms a com#any can underta*e to im#lement ethical $eha,ior. a. An eth&' &#$$ttee is a grou# o eecuti,es a##ointed to o,ersee the organi/ation than a =taer> will translate into greater career success for these 'anagers? !iscuss TE!GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG



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S*--e'te) A%'er' t# E%),O6,Chapter D'&*''#% 9*e't#%' 3. +s it reasona%le to e#$ect that 'anagers can 'easure their social an" environ'ental $erfor'ance on the sa'e level as they 'easure their financial $erfor'ance with a tri$le %otto' line? !iscuss& With a #hiloso#hy o sustaina$ility2 managers )ea,e en,ironmental and social concerns into e,ery strategic decision so that the inancial goals are achie,ed in a )ay that is socially and en,ironmentally res#onsi$le. Managers that em$race sustaina$ility measure #erormance in terms o inancial #erormance2 social #erormance2 and en,ironmental #erormance2 reerred to as tri#le $ottom line. This is sometimes called the three Ps& Peo#le2 P lanet2 and Proit. Based on the #rinci#le that )hat you measure is )hat you stri,e or and achie,e2 using a tri#le $ottom line a##roach to measuring #erormance ensures that managers ta*e social and en,ironmental actors into account rather than $lindly #ursuing #roit2 no matter the cost to society and the natural en,ironment. 6. +n Se$te'%er 6789( Toyo Electric 4ower 3o'$any Te$co; re$orte" highly conta'inate" water leaing fro' a storage tan at the 2uushi'a nuclear $o wer $lant cri$$le" in a March 6788 earth
While most students )ill #ro$a$ly )ant to ans)er that they )o uld $e most aected $y their indi,idual moral de,elo#ment2 this may $e an idealistic eaggeration. As #ointed out $y the tet2 most managers ha,e not ad,anced $eyond the con,entional le,el )here one eels that good $eha,ior is li,ing u# to )hat is e#ected $y others and the social system. Many are still on the #recon,entional le,el and )ould act in accordance )ith their o)n sel1interests. Persons on $oth o these le,els )ould #ro$a$ly go ahead and inlate their e#ense accounts. nly #ersons on the #rinci#led le,el )ould resist the #ressure and not inlate the e#ense account i they elt it )as ethically )rong.



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. +s it ethical an" socially res$onsi%le for large cor$orations to lo%%y against an SE3 rule re

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Chapter 5

The *ey to determining the ethics o such acti,ity may lie in )hether com#anies ,ie) only )hat is #u$licly authori/ed or ,ie)ing $y the em#loyee or a##licant2 or uses tactics designed to circum,ent the em#loyee. Which "o you thin woul" %e 'ore effective for sha$ing long-ter' ethical %ehavior in an organi,ation: a written co"e of ethics co'%ine" with ethics training or strong ethical lea"ershi$? Which woul" have 'ore i'$act on you? Why? Codes o ethics and ethics training are im#ortant )ithin an organi/ationD ho)e,er2 sim#ly #osting a code o ethics and holding ethics training once a year or e,en once a month )ill not suice. Creating an ethical culture in an organi/ation re=uires that ethics $e #art o ,irtually e,erything a com#any does. Ethics should $e em#hasi/ed in daily meetings2 )ee*ly meetings2 monthly meetings2 at luncheons2 during the hiring #rocess2 during the orientation and sociali/ation #rocesses2 during #romotion ceremonies2 and during retirement ceremonies. That )ill only ha##en )ith strong ethical leadershi#. The $ottom line is that em#loyees )ill do )hat their managers do2 so managers must consistently and continuously demonstrate that ethical $eha,ior is im#ortant. 9. The techni than a =taer> will translate into greater career success for these 'anagers? !iscuss When managers o#erate rom a higher le,el o de,elo#ment2 they may use a orm o ser,ant leadershi#2 ocusing on the needs o ollo)ers and encouraging others to thin* or themsel,es. "esearch has sho)n that #eo#le )ill )or* harder and more eecti,ely or #eo#le )ho #ut others< interests and needs a$o,e their o)n. The shit to)ard admiring and re)arding gi,ers o,er ta*ers can $ring signiicant #ositi,e changes )ithin organi/ations. The



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sim#le categories o giver and taer hel# #eo#le understand ho) they might contri$ute to or detract rom an organi/ation
App!/ Y#*r S3!!': E;pere%ta! E;er&'e Eth&a! 7#r3 C!$ate'

4a,e students com#lete the sel1eamination o Ethical Wor* Climates. ote that ethical climates can range rom a$o,e  @,ery #ositi,e ethical climate to $elo) 6 @,ery #o or ethical climate. %iscuss ethical changes students could ma*e as a #racticing manager. A teaching suggestion is to discuss the our a##roaches to ethical dilemmas& utilitarian a##roach2 indi,idualism a##roach2 moral1rights a##roach2 and 5ustice a##roach.

App!/ Y#*r S3!!': S$a!! Gr#*p Brea3#*t C*rre%t E+e%t' #6 a% U%eth&a! T/pe

This eercise as*s students to start $y inding t)o ne)s#a#er or maga/ine articles rom the #ast se,eral months relating to someone ,iolating $usiness ethics or #otentially ,iolating the la) regarding $usiness #ractices and summari/e the articles. !tudents then meet in grou#s2 share their summaries2 identiy similar themes and sources o unethical $eha,ior2 and ho#ed1or outcomes. (inally2 students discuss )hat managers could do to #re,ent similar unethical $eha,ior in their o)n organi/ations or to i these situations ater they ha##en.

App!/ Y#*r S3!!': Eth&a! D!e$$a Sh#*!) 7e G# Be/#%) the La<

3. Tal to the 'anufacturing vice $resi"ent an" e'$hasi,e the res$onsi%ility 3he'-Tech has as an in"ustry lea"er to set an e#a'$le& 4resent her with a reco''en"ation that 3he'-Tech $artici$ate in voluntary $ollution re"uction as a 'areting tool( $ositioning itself as the environ'entally frien"ly choice& This is the $est o#tion $ecause it em$odies the utilitarian ,ie) o ethics2 to #ro,ide the greatest good to the greatest num$er o #eo#le. By not #olluting the )ater2 the com#any is loo*ing out or uture generations )ho )ill $eneit rom a cleaner en,ironment. The com#any )ould a,oid actions that could harm others. athan )ould gi,e the com#any a #ositi,e o##ortunity to right the )rong as #art o a mar*eting cam#aign. 6. Min" your own %usiness an" )ust "o your )o%& The co'$any isn*t %reaing any laws( an" if 3he'-Tech*s econo'ic situation "oesn*t i'$rove( a lot of $eo$le will %e thrown out of wor&



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

Chapter 5

!ince athan a##ears to $e o#erating at the #ostcon,entional le,el o moral de,elo#ment2 ollo)ing sel1chosen #rinci#les o 5ustice and right2 he )ill not $e comorta$le in an organi/ation that *no)ingly #ollutes the en,ironment. The com#any is o#erating at the con,entional le,el $y u#holding the la). There is a clash $et)een these t)o le,els o moral de,elo#ment. ;. 3all the local environ'ental a"vocacy grou$ an" get the' to stage a $rotest of the co'$any& This is an etreme course o action that athan should ta*e only i o#tion 3 is re5ected and he is )illing to ris* losing his 5o$ o,er it.

App!/ Y#*r S3!!': Ca'e 6#r Crt&a! A%a!/'' T## M*&h I%te!!-e%&e

3. ow has 5en o"ine sha$e" the sales culture at 4ace Technologies? !o you consi"er this culture to %e at a $reconventional( conventional( or $ostconventional level of ethical "evelo$'ent? Why? A ormer military intelligence oicer2 Hen Bodine $rought that Jsnea*yK air into the Pace culture2 adding a $it o ecitement to the day1to1day $usiness o sales. Bodine )anted e,eryonecustomers2 com#etitors2 and the media to see Pace e,ery)here. Bodine encouraged the air o in,inci$ility and com#etiti,e s#irit among the sales stu. This culture is considered to $e #ostcon,entional as it is guided $y Bodine

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O% the J#" V)e# Ca'e A%'er' The# Ch#&#!ate: Managing Ethics and Social Responsibility

3. What #ractices at Theo Chocolate em$ody the conce#t o sustaina$ility? !ustaina$ility reers to economic acti,ity that generates )ealth and meets the needs o the current generation )hile sa,ing the en,ironment or uture generations. To im#lement a #hiloso#hy o sustaina$ility2 managers )ea,e en,ironmental and social concerns into strategic decisions2 re,ise #olicies and #rocedures to su##ort sustaina$ility eorts2 and measure their #rogress to)ard sustaina$ility goals. Theo

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

Chapter 5

E,ery com#any


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Daft12eIM_05_Ch 05.doc

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