SOCIAL RESPONSIBILITY AND BUSINESS ETHICS

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SOCIAL RESPONSIBILITY AND BUSINESS ETHICS
HUMAN RESOURCES
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Chapter Objectives

• Describe changing attitudes toward social
  responsibility and business ethics.
• Describe concept of corporate social
  responsibility.
• Explain attempts at legislating social
  responsibility.
• Explain what is meant by stakeholder analysis and
  the social contract.
• Understand the model of ethics and describe human
  resource ethics.
• Understand the importance of a code of ethics and
  describe ethics and the HR manager.

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Changing Attitudes Toward Social Responsibility
and Business Ethics

• 1 out of 9 dollars that is professionally managed
  is involved in socially responsible investing

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Changing Attitudes Toward Social Responsibility
and Business Ethics

• It includes.
• Foundations
• Religious organizations
• Community Development
• (Source Social Investment Forum)

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Changing Attitudes Toward Social Responsibility
and Business Ethics

• To meet societys expectations, managers will
  need to be more socially responsible.
• Most of 500 largest U.S. corporations now have a
  code of ethics.

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Corporate Social Responsibility (CSR)

• Defined
• The implied, enforced, or felt obligation of
  managers, acting in their official capacity, to
  serve or protect the interests of groups other
  than themselves.

• Simple Terms
• How a company behaves towards society

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Corporate Social Responsibility

• What is Rule 14?
• When in doubt, do whats right!

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Corporate Social Responsibility

• Companies leading the charge
• Patagonia
• (1 of net sales for socially and environmentally
  initiatives)
• Norm Thompson
• Keen Footwear
• Timberland Footwear
• Nike

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Legislating Ethics and Social Responsibility

• Procurement Integrity Act of 1988
• --passed after reports of military contracts for
  500 toilet seats
• Federal Sentencing Guidelines for Organizations
  (FSGO)
• --softer punishments for companies that have an
  ethic program in place

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Stakeholder Analysis and the Social Contract

• Worker Adjustment and Retraining Notification Act
  of 1988
• --firms employing 100 or more to give 60 -days
  notice when a plant is closing or layoffs off
  affecting 50 or more 90 days notice

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Legislating Ethics and Social Responsibility
(Continued)

• Corporate and Auditing Accountability,
  Responsibility and Transparency Act
• --known as Sarbanes Oxley Act, primary focus is
  to redress accounting and financial reporting
  abuses in light of recent corporate scandals
• --provides a whistle-blower protection

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Legislating Ethics and Social Responsibility

• What is new in corporations
• 90 have written ethics program
• Hired an Ethics Officer
• --Collaborate with Management
• --Implement strategies to reinforce conduct
• --Work with employees across all levels to
  determine the right course of action
• Holding professionals accountable

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Stakeholder Analysis and the Social Contract

• Organizations, profit and non
• profit have large number of
• stakeholders

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The Social Contract
Individuals
The Organization
Other Organizations
Government
Society
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The Social Contract

• Organizational Stakeholder
• --individual or group whose interests are
  affected by organizational activities
• Social Contract
• --set of written and unwritten rules and
  assumptions about acceptable interrelationships
  among various elements of society - hiring
  minorities
• Obligations to Individuals
• --certain obligations to organizations
  employees- Voting and Jury Duty

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The Social Contract

• Obligations to Other Organizations
• --managers must be concerned with relationships
  with other organizations, both like their own
  (such as competitors) and very different ones
• Obligations to Government
• --expect to work with government agencies

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The Social Contract

• Businesses are expected to help Society Meet
• Eliminate poverty
• Quality health-care
• Standards of having a clean environment
• Job opportunities
• Improve the quality of working life
• Save livable communities

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Social Audit

• Systematic assessment of a
• companys activities in terms of its
• social impact

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Social Audit Three Types

• Inventory of activities
• --Minority employment and training
• Compilation of social expenditures
• --Corporate giving's
• Social Impact
• --Involvement in selected communities

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Ethics

• What is Ethics?
• --Discipline of dealing with what is good and
  bad, or right and wrong, or with moral duty and
  obligation
• Sources of Ethical Guidance
• --a number of sources to determine what is right
  or wrong, good or bad, moral or immoral

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Ethics

• Type I Ethics
• --strength of relationship between what an
  individual or an organization believes to be
  moral and correct and what available sources of
  guidance suggest is morally correct
• Type II Ethics
• --strength of relationship between what one
  believes and how one behaves

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A MODEL OF ETHICS
Sources of ethical guidance
Our beliefs about what is right or wrong
Lead to
Determine
Our actions
Type I Ethics
Type II Ethics
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Human Resource Ethics

• The application of ethical principles to human
  resource relationships and activities
• A Code of Ethics
• --establishes the rules by which the
  organizations lives

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Human Resource Ethics

• Code of Ethics
• --Easy to talk the talk but harder to execute
• Must breathe it
• Train its people
• Communicate the code
• --Topics for Code of Ethics
• Business conduct and Fair competition
• Workplace and HR issues

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Human Resource Ethics

• Reinforcing the Code of Ethics
• --Committee is established w/
• Legal
• HR, Corporate Compliance
• Corporate Communication
• External Affairs
• Training and Development
• Baldrige National Quality Award are changing
  criteria

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Ethics and HR Manager

• The Role
• Restore trust in the organization
• Help instill ethical practices in cultural
• SHRM Code of Ethics
• As HR professionals, we are responsible for
  adding value to the organizations we serve and
  contributing to the ethical success of those
  organizations

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Ethics and HR Manager

• Surveys of HR and Trust
• HR effective 62 believe the company is
  trustworthy
• HR ineffective 8 believe company is not
  trustworthy
• 79 HR Executives blow the whistle over legal
  violation
• 83 HR Executives take strong action against
  legal violation

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Ethics and HR Manager

• What Can HR Do?

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Ethics and HR Management

• 2 areas where HR can have a major impact on
  ethics

• Corporate Governance

• Executive Compensation

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Ethics and HR Manager

• Corporate Governance

• Enforce polices and implementation methods to
  ensure executive integrity and effectiveness
• Employees should know what is ethical and
  unethical

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Ethics and HR Manager

• Executive Compensation

• HR can provide the greatness impact in this area
• HR should make sure that the compensation
  committee has relevant data for decision making
  
  
  
  

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Ethics Case Study and Exercise