1. Ethics and Social Responsibility
Chapter 5
Wijaya Kusuma S – Sindotv.Com.

2. Ethics and Social
Responsibility
l Ethical values
l Social responsibility
l Fundamental approaches to ethical issues
Wijaya Kusuma S – Sindotv.Com.
2

3. Ethics
l The code of moral principles and values
that govern the behaviors of a person or
group with respect to what is right or
wrong.
Wijaya Kusuma S – Sindotv.Com.
3

4. Ethical Dilemma
l A situation that arises when all alternative
choices or behaviors have been deemed
undesirable because...
l potentially of negative ethical consequences,
making it difficult to distinguish right from
wrong
Wijaya Kusuma S – Sindotv.Com.
4

5. Criteria For
Ethical Decision Making
Most ethical dilemmas involve
Conflict between needs of the part & whole
- Individual versus the organization
- Organization versus society as a whole
Managers use normative strategies to guide
their decision making - norms and values
Wijaya Kusuma S – Sindotv.Com.
5

6. Corporate Responsibility Crisis...
l “Suddenly, investors are obsessed with lies,
greed and dodgy accounting. It began with
the scandal that toppled Enron. Now it has
engulfed big and small companies, eroding
the markets, investor confidence and
America’s image as the economy to
emulate.”
-MSNBC “A Guide to Corporate Scandals: Companies Under the Microscope,”
http://www.msnbc.com/news/corpscandal_front.asp?odm=C2ORB. Accessed
Copyri
ght
9/24/2002.
O.C.
and
Linda Wijaya Kusuma S – Sindotv.Com.
Ferrell,
6
2002

7. Individualism Approach
● Acts are moral when they promote the individual's
best long-term interests, which ultimately leads to
the greater good
● Individual self-direction paramount
● Individualism is believed to lead to honesty &
integrity since that works best in the long run
● Examples: Top executives from WorldCom, Enron,
Tyco demonstrate flaws of approach
Wijaya Kusuma S – Sindotv.Com.
7

8. Moral-Rights Approach
l Moral decisions are those that best
maintain the rights of those people
affected by them.
l An ethical decision is one that avoids
interfering with the fundamental rights of
others
Wijaya Kusuma S – Sindotv.Com.
8

9. The Ethical Organization
● Ethical individuals = honest, have integrity,
strive for a high level of moral development
● Ethical leadership = provides the necessary
actions, committed to ethical values and
helps others to embody those values
● Organizational structure = embodies a code
of ethics, and methods to implement ethical
behavior
Wijaya Kusuma S – Sindotv.Com.
9

10. Levels of Personal Moral
Development
Wijaya Kusuma S – Sindotv.Com.
10

11. Social Responsibility
l Organization’s obligation to
make choices and take actions
that will contribute to the welfare
and interests of society and
organization
l Being a good corporate citizen
l Difficulty in understanding –
issues can be ambiguous with
respect to right and wrong
Wijaya Kusuma S – Sindotv.Com.
11

12. Environmental Responsibility
Commitment
The Shades of Activist
Approach
Corporate Green
Stakeholder
Approach
Market Approach
Legal Approach
Wijaya Kusuma S – Sindotv.Com.
12

13. Total Corporate Responsibility
Economic Legal Ethical Discretionary
Responsibility Responsibility Responsibility Responsibility
Ethical Dilemma: Should We Go Beyond the Law?
Wijaya Kusuma S – Sindotv.Com.
13

14. How does ethical decision making
occur in organizations?
l The #1 influencer of ethical/unethical behavior
is the influence of significant others & the
corporate culture
l Business ethics in an organization relates to a
corporate culture of values, programs,
enforcement & leadership
l Stakeholders must support organizational
Copyri
ethics initiatives—it’s good business
ght
O.C. – Stop focusing on the short term!!!
and
Linda Wijaya Kusuma S – Sindotv.Com.
Ferrell,
14
2002

15. Developing Trust & Confidence in
Business...
4 Individuals alone did not cause our current
crisis
4 Many stakeholders were involved in
supporting deception, fraud & destruction
– Board members – Regulators
– Top management – Politicians
– Attorneys – Mass media
– Accounting firms – Investors
Copyri
ght
– Securities analysts – Colleges of business
O.C.
and
Linda Wijaya Kusuma S – Sindotv.Com.
Ferrell,
15
2002

16. The implementation in TV
Industries
l Rules from KPI, P3SPS
– No violation
– No sexual harashment, program classification,
– Door stepping pushing to get information
– Enforcing
l Chief Editor in command
– No bribe, exp. election
– Grease bribe,
Wijaya Kusuma S – Sindotv.Com.
16

17. Improving Global Business Ethics
Seven Moral Guidelines for MNCs
l Inflict no intentional l Pay their fair share of
or direct harm taxes
l Produce more good l Respect local cultural
than bad for the host beliefs that do not
country violate moral norms
l Contribute to host l Cooperate with the
country’s government to develop
development
and enforce
l Respect the human background institutions
rights of their
Wijaya Kusuma S – Sindotv.Com.
employees