Principles of Management Chapter Review
Ashley B. Faison MGMT 1100-Princples of Management
Chapter 4: Ethics and Social Responsibility
Ethics is the set of moral principles or values that define right and wrong. Workplace deviance is behavior that violates organizational norms about right and wrong and harms the organization or its workers. There are four different types of workplace deviance. Production deviance and property deviance harm the company, whereas political deviance and personal aggression harm individuals within the company. Under the U.S. Sentencing Commission Guidelines, companies can be prosecuted and fined up to $300 million for employee’s illegal actions (fines are computed by multiplying the base fine by a culpability score). Three factors influence ethical decisions: the ethical intensity of the decision, the moral development of the manager, and the ethical principles used to solve the problem. Ethical intensity is high when decisions have large, certain, immediate consequences and when the decision maker is physically or psychologically close to those affected by the decision. There are three levels of moral development; at the preconventional level, decisions are made for selfish reasons. At the conventional level, decisions conform to social expectations. At the postconventional level, internalized principles are used to make ethical decisions. Each of these levels has two stages within it. Managers can use a number of different principles when making ethical decisions: long term self interest, personal virtue, religious injunctions, government requirements, utilitarian benefits, individual rights, and distributive justice.
Social responsibility is a business’s obligation to benefit society. According to the shareholder model, a company’s only social responsibility is to maximize shareholder wealth by maximizing company profits. According to the stakeholder model, companies must satisfy the needs and interests of multiple corporate stakeholders, not just shareholders.
Chapter 4: Ethics and Social Responsibility
Ethics is the set of moral principles or values that define right and wrong. Workplace deviance is behavior that violates organizational norms about right and wrong and harms the organization or its workers. There are four different types of workplace deviance. Production deviance and property deviance harm the company, whereas political deviance and personal aggression harm individuals within the company. Under the U.S. Sentencing Commission Guidelines, companies can be prosecuted and fined up to $300 million for employee’s illegal actions (fines are computed by multiplying the base fine by a culpability score). Three factors influence ethical decisions: the ethical intensity of the decision, the moral development of the manager, and the ethical principles used to solve the problem. Ethical intensity is high when decisions have large, certain, immediate consequences and when the decision maker is physically or psychologically close to those affected by the decision. There are three levels of moral development; at the preconventional level, decisions are made for selfish reasons. At the conventional level, decisions conform to social expectations. At the postconventional level, internalized principles are used to make ethical decisions. Each of these levels has two stages within it. Managers can use a number of different principles when making ethical decisions: long term self interest, personal virtue, religious injunctions, government requirements, utilitarian benefits, individual rights, and distributive justice.
Social responsibility is a business’s obligation to benefit society. According to the shareholder model, a company’s only social responsibility is to maximize shareholder wealth by maximizing company profits. According to the stakeholder model, companies must satisfy the needs and interests of multiple corporate stakeholders, not just shareholders.