MODULE%205%20SOCIAL%20RESPONSIBILITY%20AND%20GOVERNANCE

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MODULE 5SOCIAL RESPONSIBILITY AND GOVERNANCE
Organizations have ethics, too

• What should we know about organizational
  environments and social responsibility?
• What are current issues in corporate governance?

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SOCIAL RESPONSIBILITY AND GOVERNANCEOrganizationa
l Environments And Social ResponsibilityMODULE
GUIDE 5.1

• Organizations operate within conditions set by
  the general environment.
• The specific environment includes an
  organizations stakeholders.
• Social responsibility is an organizations
  obligation to best serve society.
• Social performance by organizations can be
  evaluated in different ways.
• Scholars argue cases for and against corporate
  social responsibility.
• Organizations follow different social
  responsibility strategies.
• Failures of ethics and social responsibility
  prompt calls for stronger governance.

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ORGANIZATIONAL ENVIORNMENTS AND SOCIAL
RESPONSIBILITY Organizational Environments

• General Environment
• Consists of cultural, economic, legal, political
  and educational conditions
• Specific Environment
• Consists of the people and groups with which an
  organization interacts
• Stakeholders
• People and Institutions most directly affected by
  an organizations performance

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ORGANIZATIONAL ENVIRONMENTS General Environment

• Economic
• Health of the economy in terms of inflation,
  income levels, gross domestic product,
  unemployment, and job outlook
• Sociocultural
• Norms, customs, and social values on such matters
  as human rights, trends in education and related
  social institutions, as well as demographic
  patterns in society
• Legal-political
• Prevailing philosophy and objectives of the
  political party or parties running the
  government, as well as laws and government
  regulations
• Technological
• Development and availability of technology,
  including scientific advancements
• Natural
• Nature and conditions of the natural environment,
  including levels of public concern expressed
  through environmentalism

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ORGANIZATIONAL ENVIRONMENTS Specific Environment
Specific Environment The people and groups with
whom an organization interacts.
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ORGANIZATIONAL ENVIRONMENTS Social Responsibility

• Corporate Social Responsibility
• The obligation of an organization to serve its
  own interest and those of its stakeholders
• Social Responsibility Audit
• Assesses an organizations performance in the
  area of social responsibility

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ORGANIZATIONAL ENVIRONMENTS Social Responsibility
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ORGANIZATIONAL ENVIRONMENTS Social Responsibility

• The Case In Favor Of Corporate Social
  Responsibility
• Responsibility Increases long-run profits
• Improves public image
• Helps avoid government regulation
• Businesses have resources and ethical obligations
  to act responsibly

• The Case Against Corporate Social
  Responsibility
• Reduces business profits Creates higher business
  costs
• Dilutes business purpose Gives too much social
  power to business

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ORGANIZATIONAL ENVIRONMENTS Social Responsibility

• Strategies

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SOCIAL RESPONSIBILITY AND GOVERNANCECorporate
GovernanceMODULE GUIDE 5.2

• Failures of ethics and social responsibility
  prompt calls for stronger governance.
• Weak corporate governance can result in more
  government regulation.
• Moral management builds capacities for
  self-governance in organizations.

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CORPORATE GOVERNANCE Corporate Governance

• Corporate Governance
• The oversight of top management by a board of
  directors
• Weak corporate governance leads to government
  regulation
• Boeing
• WorldCom
• Enron

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CORPORATE GOVERNANCE Corporate Governance
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CORPORATE GOVERNANCE Government Regulations

• Government Regulations
• Sarbanes-Oxley Act 2002
• Goal is to see that top CEOs oversee the
  financial conduct of their organizations
• Occupational and Safety Act (OSHA) 1970
• Goal is to protect employees from workplace
  injuries
• Equal Opportunity Act (EEO) 1972
• Goal is to protect minorities against
  discrimination
• Consumer Product Safety Act 1972
• Goal is to protect consumers from harmful products

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CORPORATE GOVERNANCE Moral management

• Moral Management
• Moral Manager
• Considers ethical behavior as a personal goal
• Amoral Manager
• Is unethical but unintentionally
• Immoral Manager
• Chooses to behave unethically

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CORPORATE GOVERNANCE Moral Management
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CORPORATE GOVERNANCE Ethics Mindfulness

• Ethics Mindfulness
• Enriched awareness that leads to consistent
  ethical behavior

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MANAGEMENT TIPS

• A social responsibility audit assesses an
  organizations accomplishments in areas of social
  responsibility.
• Discretionary Responsibility
• Contribute to Community
• Ethical Responsibility
• Do What Is Right
• Legal Responsibility
• Obey the Law
• Economic Responsibility
• Be Profitable