MGMT1001 Chapter Notes - Chapter 7: Organizational Culture, Profit Margin, Longrun
Social Responsibility and Ethics
1. Classical and Socioeconomic Views of Social Responsibility
• Classial: aageets ol soial esposiilit is to aiise pofits
opeatig the usiess ith ol the shaeholdes iteest i id
• Socioeconomic: manageets esposiilit goes eod akig pofits to
ilude potetig ad ipoig the soiets elfae aiisig pofit is
the ogaisatios seod pioit. B aitaiig the elfae of the soiet,
the organisation will be able to retain more financial return in the long run.
2. Role Stakeholders Play in The 4 Stages of Social Responsibility
• Stage 1: owners and management
Managers follow classical view while complying with all rules and obligations
• Stage 2: employees (managers want to attract, keep, and motivate good
employees)
The epad eploees ights, iease jo seuit ad fous o hua
resource concerns
• Stage 3: constituents in the specific environment
Managers expand their responsibility to other stakeholders mainly customers
and suppliers by including fair prices, high-quality products and services, safe
products (meet the needs of the stakeholders)
• Stage 4: broader society (managers feel a responsibility to a society as a
whole)
They view their business as a public entity and feel that it is important to
advance public good: managers actively promote a social justice, preserve
the environment, and support social and cultural activities even though they
might negatively affect the profit margin by doing so.
3. Arguments For and Against Of Being Socially responsible
a. For:
• Public support
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• Long-run profits
• It is the ethical thing to do
• Public image
• Better environment
• Will have less government regulations if companies are socially responsible
• Balance of responsibility and power
• Will improve shaeholdes pies i the log-run
• Superiority of prevention over cure
b. Against:
• Violation of profit maximisation
• Dilution of purpose: economic productivity
• Costs
• If a powerful company pursues social goals, they will have even more power
• Lack of skill
• Lack of accountability
4. Social obligation, responsiveness, responsibility
a. social obligation: when a firm engages in social actions because of its obligations
to meet the certain economic and legal responsibilities
b. social responsiveness: the capacity of a firm to adapt to changing societal
conditions because of social responsibility trends or social norms.
c. Soial esposiilit: a usiess itetio, eod hat is euied the la o
economics, to pursue long-term goals that are good for society → managers do
things that make the society better and not do those that could make it worse.
Many companies in Australia practice social responsiveness because they believe
that social responsiveness is more tangible and achievable objective than social
responsibility. Managers identify the prevailing social norms and then change
their social involvement to respond to changing societal conditions.
find more resources at oneclass.com
find more resources at oneclass.com
