UNIVERSITY OF TECHNOLOGY, JAMAICA
SCHOOL OF BUSINESS ADMINISTRATION
Introduction to Management (MAN1006)
UNIT 5 – LECTURE NOTES
Managerial Ethics and Corporate Social Responsibility
Managerial Ethics
• Ethics: The code of moral principles and values that governs the behaviors of a person or
group with respect to what is right or wrong.
• Ethical Issue: Arises when the actions of a person or organization may harm or benefit
others.
• Ethical Dilemma: A situation where all alternative choices or behaviors are undesirable
due to potentially negative consequences.
• Moral Agent: The individual who must make an ethical choice in an organization.
Categories of Human Behavior
• Domain of Codified Law (Legal Standard): Values and standards are written into the
legal system and enforceable in the courts.
• Domain of Ethics (Social Standard): No specific laws, but standards of conduct based
on shared principles and values about moral conduct.
• Domain of Free Choice (Personal Standard): Behavior about which the law has no say
and for which an individual or organization enjoys complete freedom.
Normative Ethics Approaches
• Utilitarian Approach: Moral behaviors produce the greatest good for the greatest
number.
• Individualism Approach: Acts are moral when they promote the individual's best long-
term interests, leading to the greater good.
• Moral-Rights Approach: Asserts that human beings have fundamental rights and
liberties that cannot be taken away by an individual's decision.
• Justice Approach: Moral decisions must be based on standards of equity, fairness, and
impartiality.
Factors Influencing Ethical Decision Making
• Individual Factors:
o Personality
o Personal Traits
o Personal Needs
o Family Influence
o Religious Background
o Stages of Moral Development (Pre-conventional, Conventional, Post-
conventional)
• Organizational Factors:
o Organizational Culture
o Ethical Climate
o Code of Ethics
o Ethical Structures
o Whistle-Blowing Protection
Corporate Social Responsibility (CSR)
• Definition: The obligation of organization management to make decisions and take
actions that will enhance the welfare and interests of society as well as the organization.
• Stakeholders: Any group within or outside the organization that has a stake in the
organization's performance.
• Criteria for Evaluating CSR:
o Economic Responsibility
o Legal Responsibility
o Ethical Responsibility
o Discretionary Responsibility
Creating Ethical Organizations
• Ethical Leadership: Managers must provide strategy and be role models for ethical
behavior.
• Code of Ethics: A formal statement of the organization's values regarding ethics and
social issues.
• Ethical Structures: Systems, positions, and programs to implement ethical behavior.
• Whistle-Blowing Protection: Encouraging employees to report unethical practices
without fear of reprisal.
Corporate Social Audit
• Definition: A formal assessment of a company's social responsibility practices and
performance.
• Importance:
o Measures and evaluates social performance.
o Increases corporate accountability and transparency.
o Provides direction for future improvements.
o Enhances corporate image.
o Attracts customers and business partners.
o Promotes a socially responsible culture.
• Benefits:
o Mitigates risks related to social responsibility.
o Identifies gaps between performance and objectives.
o Enables development of improvement measures.
o Meets stakeholder expectations.
o Improves transparency and accountability.
o Attracts ethically conscious customers and partners.
o Fosters a socially responsible culture.
• Limitations:
o Limited access to data and information.
o Potential bias in audit results.
o Resource-intensive process.
o Social responsibility may not be the sole driver of consumer or supplier behavior.
Conclusion
Managerial ethics and corporate social responsibility are integral to sustainable business
practices. By understanding ethical principles, navigating ethical dilemmas, and actively
engaging in socially responsible initiatives, organizations can create a positive impact on society
while achieving their business objectives.
