UNIT 2Social and Ethical Responsibilities ofManagementOverviewIncreasingly, organizations are expected to be socially and environmentally responsible and behave in ethically accepted ways as they operate in their global environments. Social issues that concern stakeholders directly and indirectly will influence how they
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UNIT 2
Social and Ethical Responsibilities of
Management
Overview
Increasingly, organizations are expected to be socially and environmentally responsible and
behave in ethically accepted ways as they operate in their global environments. Social issues
that concern stakeholders directly and indirectly will influence how they make decisions. The
choices they make in dealing with these types of issues may have both short and long term
consequences for the future survival of their business entity. Society expects organizations to
operate in ways that are acceptable for the preservation and sustainability of the entity and the
environment in which it operates. In this unit we will explore some of the main issues including
social responsibility, ethics and corporate culture that impact an organization and how it
functions.
Unit 2 Learning Objectives
By the end of this Unit you will be able to:
1. Explain what is meant by corporate social responsibility;
2. Outline the classical and socioeconomic view of corporate social responsibility
3. Discuss the role that a code of ethics plays in business.
4. Describe how ethical dilemma may arise for a manager
This Unit is divided into two sessions as follows:
Session2.1:
Session2.2: | Corporate Social Responsibility
Corporate/Managerial EthicsReading Resources
Required Reading
MGMT1001 Principles of Management Unit 2_Version 1 Page 2
Boundless.com (n.d.). Maintaining Ethical Standards. Lecture Slides. Adapted from:
https://www.boundless.com/management/textbooks/boundless-‐managementtextbook/ethics-‐in-‐business-‐13/maintaining-‐ethical-‐standards-‐97/maintaining-‐ethicalstandards-‐97-‐powerpoint-‐templates/
Boundless.com (n.d.). Corporate Social Responsibility. Lecture Slides. Adapted from:
https://www.boundless.com/management/textbooks/boundless-‐managementtextbook/ethics-‐in-‐business-‐13/corporate-‐social-‐responsibility-‐98/corporate-‐socialresponsibility-‐98-‐powerpoint-‐templates/
Education-‐Portal.com (n.d.) Business Ethics: Corporate Social Responsibility. Retrieved from
https://www.youtube.com/watch?v=xoE8XlcDUI8
The Saylor Foundation (n.d.). Principles of Management. Chapter 3, Section 3.5, pages 123 to
128. Retrieved from:
http://www.saylor.org/site/textbooks/Principles%20of%20Management.pdf
Licensed under a Creative Commons Attribution-‐NonCommercial-‐ShareAlike 3.0 License
The Saylor Foundation (n.d.). Exploring Business. Chapter 2, Section 2.5 Corporate Social Responsibility,
pgs.78 to 88. Retrieved from: http://www.saylor.org/site/textbooks/Exploring%20Business.pdf
Licensed under a Creative Commons Attribution-‐NonCommercial-‐ShareAlike 3.0 License
MGMT1001 Principles of Management Unit 2_Version 1 Page 3
Session 2.1
Corporate Social Responsibility
Introduction
Stakeholder management implies that an organization will be sensitive to the environment,
safety, diversity and other issues that are of concern to society, while still keeping its attention
on business objectives and the satisfaction of key stakeholders such as shareholders, customers,
and employees. You will recall the discussion on stakeholders in Unit 1. The focus in this
session is mainly related to the firm’s interaction with external stakeholders and the importance
of corporate social responsibility as a key aspect of management practice.
What is Corporate Social Responsibility?
How is Corporate Social Responsibility (CSR) defined? Let us look at a few definitions to guide
your review of this topic and its key role in management.
"Corporate Social responsibility is a management concept whereby companies integrate social
and environmental concerns in their business operations and interactions with their
stakeholders…It is understood as being the way through which a company achieves a balance
of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at
the same time addressing the expectations of shareholders and stakeholders."
(The United Nations International Development Organization [UNIDO] n.d. "What is CSR?"
para.1).
This definition points to at least two dimensions of corporate social responsibility: sustainable
development and social responsibility.
Sustainable development can be defined as development that meets the needs of the
present without compromising the ability of future generations to meet their own needs.
It contains within it two key concepts:
MGMT1001 Principles of Management Unit 2_Version 1 Page 4
• the concept of needs, in particular the essential needs of the world's poor, to which
overriding priority should be given; and
• the idea of limitations imposed by the state of technology and social organization on the
environment's ability to meet present and future needs."
Also, UNIDO (n.d.) notes that for an organization to be sustainable, it must be financially
secure, minimize (or ideally eliminate) its negative environmental impacts and act in
conformity with societal expectations.
Social responsibility for an organization refers to the approach that an organization
takes in balancing its responsibilities toward different stakeholders when making legal,
economic, ethical, and social decisions. (Collins, pg.78).
The definitions and key point above suggest that a properly implemented CSR concept has the
potential to bring along a variety of competitive advantages, such as enhanced access to capital
and markets, increased sales and profits, operational cost savings, improved productivity and
quality, efficient human resource base, improved brand image and reputation, enhanced
customer loyalty, better decision making and risk management processes.
Opposing Views of Corporate Social Responsibility
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