Management Ethics and Social Responsibility

The branch of knowledge that deals with the ideas of good and bad, apart from moral duty and obligation is defined as ethics and is concerned with everybody in business, colleges, enterprises, and so on.

Ethics, especially, business ethics is associated with truth and justice and has multiple dimensions like social responsibility, public relations, society’s expectation, consumer autonomy, fair competition, advertising, and corporate behavior in the country, as well as, in the foreign. Resources, information, and influence are the cause of competition among the managers in organizations.

The likelihood of conflict in the selection of outcomes as well as endeavors is not too difficult to understand and the concern, what things guide the ethical behavior, turns extremely vital. Three fundamental moral theories – utilitarian, rights theory, and justice theory – have been developed. Utilitarian theory says that consequences should equate plans and action. The theory of rights postulates that everybody should have basic rights. And, the theory of justice suggests that the decision makers should maintain equity and fairness.

Managers, and especially top-level, are accountable for creating an environment in the organization that facilitates decision-making based on ethics by internalizing it, which apply and integrate ethical concepts with daily actions, and, use conferences and seminars as a platform.

This objective can be achieved in three ways, first, by establishing an appropriate company policy or a code of ethics, second, by appointing an ethics committee, and third, by teaching ethics in management programs. But, the most favorite way to institutionalize ethics is to launch a code of ethics.

A statement of rules, policies, and principles to guide behavior is a code which should mould behaviors of persons in every organization in everyday life. Communicating the code of ethics is not sufficient and appointing an ethics committee with internal and external directors is crucial for fulfilling the purpose. The functions of the committee is, to hold regular meetings, communicating the code of ethics, checking for possible violation of code, enforcing the code, rewards and punishment, reviewing and updating, and reporting activities.

The mission of business firms was solely economic during in the early 1900s. Due to the interdependencies of various groups, today, in our society the social participation of business has increased several-folds. The idea of social responsibility is not novel.

Even though, the concept was considered in the early part of the 20th century, the modern discussion got a major boot with the book “Social Responsibilities of the Businessman” by Howard R. Bowen, in which he postulated that businesses should take into account the social outcomes of their business.

There is no consensus on one definition, but the following definition that “Corporate Social Responsibility is seriously considering the impact of the company’s action on society.” Social responsiveness is a newer idea and similar to social responsibility.

Social responsiveness is “the capability of a corporation to relate operation and policies to the social environment in ways that are mutually beneficial to the company and society.” Corporations are the focus of the both definitions. But, it should be extended (1) to include the enterprises other than businesses and (2) to entail the relationship with an enterprise. The distinction between social responsibility and social responsiveness is that social responsibility implies action and “how the enterprise responses.”

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