Social Issues, Corporate Social Responsibility, Performance and Ethics

1. Social Issues, Corporate Social Responsibility, Performance and Ethics From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

2. Does the firm have a social responsibility? YES!! The social Contract (Rousseau etc.) suggests that corporations as citizens of society have a responsibility to give back to that society in fair measure to what they receive from that society. From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

3. Does the firm have a social responsibility? NO!!! Nobel Laureate Economist Milton Friedman argues corporations’ only social responsibility is to make money. • Social issues are in the realm of public policy i.e. government action. • Managers are not trained to make public policy decisions. • Managers have no constituency to whom they are responsible From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

4. According to whom????? • Whose value system dictates what the responsibility is? • Do shareholders/owners have the right to decide? • Do employees or other stakeholders have the right to decide? From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

5. Employee privacy Affirmative action Corporate social performance is that part of the overall strategic management of the organization that focuses specifically on the firm’s posture, stance, strategy or position regarding the public, social and ethical aspects of stakeholders and corporate functioning AIDS Sexual harassment Product safety The Concept of CorporateSocial Performance From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

6. Corporate Social Performance Whether it is true or not society does increasingly expect corporations to “give back.” • Varies by industry • Varies by company • Strategic use of CSP From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

7. Element of Enterprise-Level Strategy Key Questions to Consider • What is the role of our organization in society? • How is our organization perceived by our stakeholders? • What principles or values does our organization represent? • What obligations do we have to society at large? • What are the implications for our current mix of business and allocation of resources? From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

8. The Organization 4.6 The Stakeholder Viewpoint of Social Performance Owners Stockholders Internal Stakeholders Employees Board of Directors Customers Suppliers Creditors Labor Unions External Stakeholders Competitors Special Interest Groups Customer Groups Government Agencies Financial Institutions From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU Adapted from Exhibit 4.4

9. 4.2 Philosophical Principles of Business Ethics Consequences -If no one gets hurt, the decision is ethical. When attempting to decide what is right and wrong, managers can focus on: Duties, obligations, and principles -If a decision violates a universal principle, it is unethical. Integrity -If the person in question has good character, he/she is behaving ethically. From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

10. 4.4 Ethical Temptations and Violations Stealing from employers & customers Greed, gluttony, avarice Illegally copying software Misuse of corporate resources Treating people unfairly Divulging confidential information Sexual harassment Conflict of interest From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

11. Create formal mechanisms to monitor ethics Provide written codes of conduct Offer training programs Talk about the issues Lead by example Confront ethical deviations 4.8 Creating an Ethical andSocially Responsible Work Place From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

12. A DECISION TREE FOR INTERNATIONAL ETHICAL DECISION MAKING1 Would the action be permissible in the home country if it were at the same level of economic development as the host country? NO YES Don’t do the action. Can the firm do business in the host country without doing the action? NO YES Don’t do the action. Is the action a violation of a fundamental human right? NO YES Don’t do the action. Do the action. From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU 1. Adapted from Donaldson, T, 1985, Multinational Decision making: Reconciling International Norms, Journal of Business Ethics, 4, 357-366

13. TOM DONALDSON’S VIEW OF BASIC HUMAN RIGHTS1 • Freedom Of Physical Movement • Ownership Of Property • Freedom From Torture • Fair Trials • Nondiscriminatory Treatment • Physical Security • Freedom Of Speech And Association • Minimal Education • Political Participation • Subsistence 1. Adapted from Donaldson, T., “Moral Minimums for Multinationals, in The Ethics of International Business, Oxford University Press From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU

14. SOME TESTS FOR REORGANIZING1 ETHICAL DECISIONS • Will someone be hurt in this situation? • Is anyone being coerced, manipulated or deceived? • Is there anything illegal about the situation? • Does the situation feel “wrong”? • Is someone suggesting there is an ethical problem? • Would you be ashamed to tell someone important to you about your contemplated actions? • Do the outcomes on balance appear positive or negative? • Do you or others have the right or duty to act in the situation? • Is there some aspect of the situation you are denying or avoiding? 1. Adapted from Wood, Donna, J., Business and Society, Scott, Foresman, 1990 From Dubrin, 2003, J.F. Kurzmicki, CBU. & D. Swanson KSU