Ethics,justice, and fair treatment in HR managment

CSR & EthicsCSR & Ethics

• Ethics and Ethics and • Corporate ValuesCorporate Values• BasedBased• on CH 14on CH 14

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 14–1

Employee Justice Employee Justice

• In this lecture we will examine employee justice, safety, In this lecture we will examine employee justice, safety, and union relations. and union relations.

• The main purpose is to explain ethics, justice, and fair The main purpose is to explain ethics, justice, and fair treatment in human resource management, matters treatment in human resource management, matters essential for positive employee relations. essential for positive employee relations.

• Topics include ethics and fair treatment at work, factors that Topics include ethics and fair treatment at work, factors that shape ethical behavior at work, and managers’ roles in shape ethical behavior at work, and managers’ roles in fostering improved workplace ethics, employee discipline, fostering improved workplace ethics, employee discipline, and dismissals.and dismissals.


Todays Tutorial number 11 Todays Tutorial number 11

• On Friday I asked you to read the Nike case study article I On Friday I asked you to read the Nike case study article I placed on the website placed on the website www.-uwcentre.ac.cn/hhu

• Discussion Questions in LSGs Discussion Questions in LSGs • Q.What is the meaning of ethics and fairness at work why is it Q.What is the meaning of ethics and fairness at work why is it

important? [Chapter 14].important? [Chapter 14]. Using the NIKE case study article Using the NIKE case study article • Q.What were the problems at NIKE factories in Vietnam - Q.What were the problems at NIKE factories in Vietnam -

Indonesia and China? Indonesia and China? • Q.What Corporate Social Responsibility Goals has NIKE set for Q.What Corporate Social Responsibility Goals has NIKE set for

its operations around the world not just in China?its operations around the world not just in China?


Tomorrows tutorial Tomorrows tutorial

• Read the Application Case in Ch 1 : Jack Nelson's ProblemRead the Application Case in Ch 1 : Jack Nelson's Problem • Discuss Discuss • 1. What do you think was causing some of the problems in the bank 1. What do you think was causing some of the problems in the bank

home office and branches? home office and branches? • 2. Do you think setting up a HR unit in the main office would help? 2. Do you think setting up a HR unit in the main office would help? • 3. What specific functions should it carry out? What HR functions 3. What specific functions should it carry out? What HR functions

would then be carried out by supervisors and other line managers? would then be carried out by supervisors and other line managers? What role should the Internet play in the new HR organization?What role should the Internet play in the new HR organization? ..

• •


Revision notes Revision notes

• I have put some revision notes on the web site these will help I have put some revision notes on the web site these will help you with the exam please read them .you with the exam please read them .

• www.-uwcentre.ac.ch/hhuwww.-uwcentre.ac.ch/hhu


Ethics and HRMEthics and HRM

• ““Why include ethics in a module on human resource Why include ethics in a module on human resource management ?” management ?”

• For two reasons: First, ethics is not theoretical. Instead, it is For two reasons: First, ethics is not theoretical. Instead, it is essential to make businesses work.essential to make businesses work.

• Second, and more specifically, managers’ human resource Second, and more specifically, managers’ human resource decisions are usually full with ethical consequences.decisions are usually full with ethical consequences.



Ethics and Fair Treatment at WorkEthics and Fair Treatment at Work

• The Meaning of EthicsThe Meaning of Ethics The principles of conduct governing The principles of conduct governing

an individual or a group. an individual or a group.

The standards you use to decide The standards you use to decide what your conduct should be.what your conduct should be.

Ethical behavior depends on Ethical behavior depends on a person’s frame of reference.a person’s frame of reference.

• Ethical DecisionsEthical Decisions Normative judgmentsNormative judgments

Morality Morality

Unethical Behaviors Unethical Behaviors

• Table 14-1Table 14-1 which follows presents the percentage of which follows presents the percentage of employees observing various unethical behaviors at employees observing various unethical behaviors at work.work.



TABLE 14–1 Specific Observed Unethical Behaviors

Abusive or intimidating behavior toward employees 21%

Lying to employees, customers, vendors, or to the public 19%

A situation that places employee interests over organizational interests 18%

Violations of safety regulations 16%

Misreporting of actual time worked 16%

E-mail and Internet abuse 13%

Discrimination on the basis of race, color, gender, age, or similar categories 12%

Stealing or theft 11%

Sexual harassment 9%

Provision of goods or services that fail to meet specifications 8%

Misuse of confidential information 7%

Alteration of documents 6%

Falsification or misrepresentation of financial records or reports 5%

Improper use of competitors’ inside information 4%

Price fixing 3%

Giving or accepting bribes, kickbacks, or inappropriate gifts 3%

Legal Behaviour Legal Behaviour

• Legal behavior isn’t always ethical and ethical behavior Legal behavior isn’t always ethical and ethical behavior sometimes may not be legal. sometimes may not be legal.

• For example, the civil rights movement in the USA For example, the civil rights movement in the USA challenged legalized segregation with civil disobedience challenged legalized segregation with civil disobedience behaviors that resulted in a societal change in legal and behaviors that resulted in a societal change in legal and ethical attitudes toward the legality of discriminationethical attitudes toward the legality of discrimination



Ethics and the LawEthics and the Law

A behavior may be legal

but unethical.

A behavior may be illegal but ethical.

A behavior may be both legal and ethical.

A behavior may be both illegal and unethical.

Ethics and Behaviors

FairnessFairness

• Fairness is inseparable from what most people think of Fairness is inseparable from what most people think of as “justice.” as “justice.”

A company that is A company that is just just is, among other things, equitable, is, among other things, equitable, fair, impartial, and unbiased in how it does things. fair, impartial, and unbiased in how it does things.

With respect to employee relations, experts generally With respect to employee relations, experts generally define define organizational justice organizational justice in terms of at least two in terms of at least two components—components—distributive distributive justice and justice and proceduralprocedural justice. justice.


EthicsEthics

• In theory, ethics, justice, and fair treatment may be In theory, ethics, justice, and fair treatment may be separate but related concepts. separate but related concepts.

But in practice most employees probably can’t and won’t But in practice most employees probably can’t and won’t unscramble what is ethical, fair, or just when it comes to unscramble what is ethical, fair, or just when it comes to how they’re treated at work.how they’re treated at work.



Ethics, Fair Treatment, and Ethics, Fair Treatment, and JusticeJustice

Distributive justice

Components of Organizational Justice

Procedural justice


FIGURE 14–2 Perceptions of Fair Interpersonal Treatment Scale

1. Employees are praised for good work Yes ? No

2. Supervisors yell at employees (R) Yes ? No

3. Supervisors play favorites (R) Yes ? No

4. Employees are trusted Yes ? No

5. Employees’ complaints are dealt with effectively Yes ? No

6. Employees are treated like children (R) Yes ? No

7. Employees are treated with respect Yes ? No

8. Employees’ questions and problems are responded to quickly Yes ? No

9. Employees are lied to (R) Yes ? No

10. Employees’ suggestions are ignored (R) Yes ? No

11. Supervisors swear at employees (R) Yes ? No

12. Employees’ hard work is appreciated Yes ? No

13. Supervisors threaten to fire or lay off employees (R) Yes ? No

14. Employees are treated fairly Yes ? No

15. Coworkers help each other out Yes ? No

16. Coworkers argue with each other (R) Yes ? No

17. Coworkers put each other down (R) Yes ? No

18. Coworkers treat each other with respect Yes ? No

What is your organization like most of the time? Circle Yes if the item describes your organization, No if it does not describe your organization, and ? if you cannot decide.

IN THIS ORGANIZATION:

Note: R = the item is reverse scored.


FIGURE 14–3 Some Areas Under Which Workers Have Legal Rights

• Leave of absence and vacation rights

• Injuries and illnesses rights

• Noncompete agreement rights

• Employees’ rights on employer policies

• Discipline rights

• Rights on personnel files

• Employee pension rights

• Employee benefits rights

• References rights

• Rights on criminal records

• Employee distress rights

• Defamation rights

• Employees’ rights on fraud

• Rights on assault and battery

• Employee negligence rights

• Right on political activity

• Union/group activity rights

• Whistleblower rights

• Workers’ compensation rights

What determines ethical behaviour What determines ethical behaviour at work?at work?

• Several things determine an individual employee’s ethical Several things determine an individual employee’s ethical behavior at work.behavior at work.



What Influences Ethical Behavior At What Influences Ethical Behavior At Work?Work?

• Ethical behavior starts with Ethical behavior starts with moral awarenessmoral awareness..

• ManagersManagers strongly influence ethics by carefully cultivating the strongly influence ethics by carefully cultivating the right norms, leadership, reward systems, and culture.right norms, leadership, reward systems, and culture.

• Ethics slide when people undergo Ethics slide when people undergo moral disengagementmoral disengagement..

• The most powerful morality comes from The most powerful morality comes from withinwithin..

• ..

• Offering Offering rewardsrewards for ethical behavior can backfire. for ethical behavior can backfire.

• Don’t inadvertently reward someone for Don’t inadvertently reward someone for bad behaviorbad behavior..

• Employers should Employers should punish unethical behaviorpunish unethical behavior..

• The degree to which employees The degree to which employees openly talk about ethicsopenly talk about ethics is a good predictor of ethical conduct.is a good predictor of ethical conduct.

• People tend to alter their People tend to alter their moral compassesmoral compasses when when they join organizations.they join organizations.



What Determines Ethical Behavior What Determines Ethical Behavior at Work?at Work?

Individual Factors

Organizational FactorsEthical Work

Behaviors

Ethical Policies and Codes

The Boss’s Influence

Organizational Culture


FIGURE 14–4How Do My Ethics Rate?


FIGURE 14–5 Using the Company Web site to Emphasize Ethics

Organisational Culture Organisational Culture

• We can define We can define organizational culture organizational culture as the as the “characteristic values, traditions, and behaviors a “characteristic values, traditions, and behaviors a company’s employees share.” company’s employees share.”

• A A value value is a basic belief about what is right or wrong, or is a basic belief about what is right or wrong, or about what you should or shouldn’t do.about what you should or shouldn’t do.



What Is Organizational Culture?What Is Organizational Culture?

• Organizational CultureOrganizational Culture

The characteristic values, traditions, and The characteristic values, traditions, and behaviors a firm’s employees sharebehaviors a firm’s employees share

• How Managers Can Support an Ethical CultureHow Managers Can Support an Ethical Culture

Clarifying expectations with respect to critical valuesClarifying expectations with respect to critical values

““Walking the talk” in having their actions align with valuesWalking the talk” in having their actions align with values

Providing physical support through the use of ethical managerial Providing physical support through the use of ethical managerial valuesvalues

Leading subordinates astrayLeading subordinates astray

• Here are examples of how supervisors knowingly (or Here are examples of how supervisors knowingly (or unknowingly) can lead subordinates astray.unknowingly) can lead subordinates astray.



Telling staffers to do whatever is necessary to achieve results

Overloading top performers to ensure that the work gets done

Looking the other way when wrongdoing occurs

Taking credit for others’ work or shifting blame

Leading Employees

Astray

The Boss’s Influence on Ethical The Boss’s Influence on Ethical BehaviorBehavior

Question Question

Ethics refers to the ________.Ethics refers to the ________.• A) basic beliefs about what is right or wrongA) basic beliefs about what is right or wrong• B) values, traditions, and behaviors a company's B) values, traditions, and behaviors a company's

employees shareemployees share• C) principles of conduct governing an individual or groupC) principles of conduct governing an individual or group• D) standards used by the organization to decide upon D) standards used by the organization to decide upon

proper conductproper conduct• E) standards of behavior accepted by societyE) standards of behavior accepted by society• AnswerAnswerCopyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 14–27

Answer Answer

• : Answer C: Answer C• Explanation: Ethics refers to "the principles of conduct Explanation: Ethics refers to "the principles of conduct

governing an individual or a group; specifically, the governing an individual or a group; specifically, the standards you use to decide what your conduct should standards you use to decide what your conduct should be. A normative judgment means that something is right be. A normative judgment means that something is right or wrong. Morals are society's highest accepted or wrong. Morals are society's highest accepted standards of behavior.standards of behavior.


Question Question

According to surveys, which of the following is the most According to surveys, which of the following is the most commonly observed unethical behavior in the workplace? commonly observed unethical behavior in the workplace?

• A) misuse of confidential informationA) misuse of confidential information• B) abusive behavior towards workersB) abusive behavior towards workers• C) falsification of financial recordsC) falsification of financial records• D) e-mail or Internet abuseD) e-mail or Internet abuse• E) sexual harassmentE) sexual harassment• AnswerAnswer


Answer Answer

• Answer BAnswer B• Explanation: Abusive or intimidating behavior towards Explanation: Abusive or intimidating behavior towards

employees is the most commonly observed unethical employees is the most commonly observed unethical behavior in the workplace according to surveys. Choices behavior in the workplace according to surveys. Choices A, C, D, and E occur as well but with less frequency.A, C, D, and E occur as well but with less frequency.


Question Question

What are the two components of organizational justice?What are the two components of organizational justice?• A) distributive justice and normative judgmentsA) distributive justice and normative judgments• B) procedural justice and distributive justiceB) procedural justice and distributive justice• C) normative justice and ethical treatment C) normative justice and ethical treatment • D) interactional justice and moralityD) interactional justice and morality• E) interpersonal justice and fairnessE) interpersonal justice and fairness• AnswerAnswer


Answer Answer

• : Answer B: Answer B

• Explanation: Experts generally define organizational justice in Explanation: Experts generally define organizational justice in terms of at least two components—distributive justice and terms of at least two components—distributive justice and procedural justice. Distributive justice refers to the fairness and procedural justice. Distributive justice refers to the fairness and justice of the decision's result. Procedural justice refers to the justice of the decision's result. Procedural justice refers to the fairness of the process.fairness of the process.


Ethics TestEthics Test

• Some companies urge employees to apply a quick Some companies urge employees to apply a quick ethics ethics test test to evaluate whether what they’re about to do fits the to evaluate whether what they’re about to do fits the company’s code of conduct.company’s code of conduct.



Fostering Ethical Work BehaviorsFostering Ethical Work Behaviors

Provide manager and employee ethics training

Adopt a strong ethics code

What Employers Can Do

Establish whistleblower

policies


Employees and Ethical DilemmasEmployees and Ethical Dilemmas

• Questions employees should ask when faced with ethical Questions employees should ask when faced with ethical dilemmas:dilemmas:

Is the action legal?Is the action legal?

Is it right?Is it right?

Who will be affected?Who will be affected?

Does it fit the company’s values?Does it fit the company’s values?

How will it “feel” afterwards?How will it “feel” afterwards?

How will it look in the newspaper?How will it look in the newspaper?

Will it reflect poorly on the company?Will it reflect poorly on the company?

Ethics Test Ethics Test

• Some companies urge employees to apply a quick Some companies urge employees to apply a quick ethics ethics test test to evaluate whether what they’re about to do fits the to evaluate whether what they’re about to do fits the company’s code of conduct.company’s code of conduct.

• Managers interviewing applicants also need to make sure Managers interviewing applicants also need to make sure the screening process is fair. the screening process is fair.

• For all practical purposes, ethics training is mandatory. For all practical purposes, ethics training is mandatory. Federal sentencing guidelines reduced penalties for Federal sentencing guidelines reduced penalties for employers accused of misconduct who implemented employers accused of misconduct who implemented codes of conduct and ethics training.codes of conduct and ethics training.



How Managers Use Personnel How Managers Use Personnel Methods To Promote Ethics and Methods To Promote Ethics and Fair TreatmentFair Treatment

Emphasizing ethics and fairness in personnel selection

Disciplining all instances of unethical

conduct

Providing mandatory employee

ethics training

Ensuring fair and objective performance

appraisals

HRM Practices that Promote Ethics


HRM-Related Ethics ActivitiesHRM-Related Ethics Activities

• SelectionSelection Fostering the perception of fairness in the processes Fostering the perception of fairness in the processes

of recruitment and hiring of people:of recruitment and hiring of people:

Formal hiring procedures that test job competenciesFormal hiring procedures that test job competencies

Respectful interpersonal treatment of applicantsRespectful interpersonal treatment of applicants

Feedback provided to applicantsFeedback provided to applicants

• Training EmployeesTraining Employees How to recognize ethical dilemmasHow to recognize ethical dilemmas

How to use ethical frameworks to resolve problemsHow to use ethical frameworks to resolve problems

How to use HR functions in ethical waysHow to use HR functions in ethical ways

Fairness and standardsFairness and standards

• To send the signal that fairness is paramount, standards To send the signal that fairness is paramount, standards should be clear, employees should understand the basis should be clear, employees should understand the basis upon which they will be appraised, and the appraisal itself upon which they will be appraised, and the appraisal itself should be objective. should be objective.

• To the extent that behavior is a function of its To the extent that behavior is a function of its consequences, the manager needs to reward ethical consequences, the manager needs to reward ethical behavior and penalize unethical behaviorbehavior and penalize unethical behavior



HRM-Related Ethics Activities HRM-Related Ethics Activities (cont’d)(cont’d)

• Performance AppraisalPerformance Appraisal Appraisals that make it clear that the company adheres to high Appraisals that make it clear that the company adheres to high

ethical standards by measuring and rewarding employees who ethical standards by measuring and rewarding employees who follow those standards.follow those standards.

Standards are clearly defined.Standards are clearly defined.

Employees understand the basis for appraisals.Employees understand the basis for appraisals.

Appraisals are objective.Appraisals are objective.

• Reward and Disciplinary SystemsReward and Disciplinary Systems The organization swiftly and harshly punishes unethical conduct. The organization swiftly and harshly punishes unethical conduct.

Perceptions of fairnessPerceptions of fairness

• What seems “fair” to one person may seem unfair to What seems “fair” to one person may seem unfair to another. Supervisory actions do influence employees’ another. Supervisory actions do influence employees’ perceptions of fairness.perceptions of fairness.



Fostering Employees’ Fostering Employees’ Perceptions of FairnessPerceptions of Fairness

Involvement in decisions

Understanding through

explanation

Perceptions of fair treatment depend on:

Setting expectations and

standards

Discouraging unwanted behaviorDiscouraging unwanted behavior

• The employer wants its discipline process to be both The employer wants its discipline process to be both effective (in terms of discouraging unwanted behavior) effective (in terms of discouraging unwanted behavior) and fair. and fair.

• Employers base such a process on three pillars: clear Employers base such a process on three pillars: clear rules and regulations, a system of progressive penalties, rules and regulations, a system of progressive penalties, and an appeals process.and an appeals process.



Restrictions on Workplace Restrictions on Workplace MonitoringMonitoring

• The Electronic Communications The Electronic Communications Privacy Act (ECPA)Privacy Act (ECPA) Restricts employer interception Restricts employer interception

and monitoring of oral and wire and monitoring of oral and wire communicationscommunications

““business purpose exception”business purpose exception”

““consent exception”consent exception”

• Common lawCommon law Provides protections against invasion Provides protections against invasion

of privacyof privacy


FIGURE 14–10 Sample E-Mail Monitoring Acknowledgment Statement

True of false True of false

Distributive justice refers to the manner in which Distributive justice refers to the manner in which managers conduct their interpersonal dealings with managers conduct their interpersonal dealings with employees.employees.

• AnswerAnswer


• : FALSE: FALSE

• Explanation: Distributive justice refers to the fairness and Explanation: Distributive justice refers to the fairness and justice of the decision's result (for instance, did I get an justice of the decision's result (for instance, did I get an equitable pay raise?). Procedural justice refers to the equitable pay raise?). Procedural justice refers to the fairness of the process.fairness of the process.


True or False True or False

Unfortunately, employers have no tools for measuring Unfortunately, employers have no tools for measuring the ethics of an individual during the applicant screening the ethics of an individual during the applicant screening process, so employers do not realize they have hired an process, so employers do not realize they have hired an unethical person until it is too late. unethical person until it is too late.

• Answer:Answer:


Answer Answer

• FALSEFALSE• Explanation: Employers can use recruitment materials that Explanation: Employers can use recruitment materials that

emphasize ethics, such as honesty tests and background emphasize ethics, such as honesty tests and background checks. Asking behavioral questions also measures an checks. Asking behavioral questions also measures an applicant's ethical nature. applicant's ethical nature.


Influences on the strategy of an Influences on the strategy of an organisation organisation

Figure 4.1 Influences on strategic purpose

Slide 4.51

Johnson, Whittington and Scholes, Exploring Strategy, 9th Edition, © Pearson Education Limited 2011

Who are the stakeholders?Who are the stakeholders?StakeholdersStakeholders are those individuals or groups are those individuals or groups

who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends.who depend on an organisation to fulfil their own goals and on whom, in turn, the organisation depends.

Mission statementsMission statements

• A mission statement A mission statement aims to provide aims to provide employees and stakeholders with clarity about employees and stakeholders with clarity about the overriding purpose of the organisationthe overriding purpose of the organisation

• A mission statement should answer the A mission statement should answer the questions: questions:

‘‘What business are we in?’What business are we in?’

‘‘How do we make a difference?’How do we make a difference?’

‘‘Why do we do this?’Why do we do this?’

Vision statementsVision statements

• A vision statement A vision statement is concerned with the is concerned with the desired future state of the organisation; an desired future state of the organisation; an aspiration that will enthuse, gain commitment aspiration that will enthuse, gain commitment and stretch performance.and stretch performance.

• A vision statement should answer the question A vision statement should answer the question ::

‘‘What do we want to achieve?’What do we want to achieve?’

Statement of corporate valuesStatement of corporate values

• A statement of corporate values A statement of corporate values should communicate should communicate the underlying and enduring core the underlying and enduring core ‘principles’‘principles’ that guide that guide an organisation’s strategy and define the way that the an organisation’s strategy and define the way that the organisation should operate.organisation should operate.

• Such core values should remain intact whatever the Such core values should remain intact whatever the circumstances and constraints faced by the organisation.circumstances and constraints faced by the organisation.

ObjectivesObjectives

• ObjectivesObjectives are statements of specific outcomes are statements of specific outcomes that are to be achieved.that are to be achieved.

• Objectives are frequently expressed in: Objectives are frequently expressed in: financial financial terms terms (e.g. desired profit levels)(e.g. desired profit levels)

market terms market terms (e.g. desired market share)(e.g. desired market share)

and increasinglyand increasingly

social terms social terms (e.g. corporate social(e.g. corporate social

responsibility targets)responsibility targets)

Corporate governanceCorporate governance

Corporate governance Corporate governance is concerned with the structures and systems of control by which managers are held accountable to those who have a legitimate stake in an organisation.is concerned with the structures and systems of control by which managers are held accountable to those who have a legitimate stake in an organisation.

The growing importance of The growing importance of governancegovernance

• The separation of ownership and management control – The separation of ownership and management control – defining different defining different roles in governance.roles in governance.

• Corporate failures and scandals Corporate failures and scandals (e.g. Enron) – focussing attention on (e.g. Enron) – focussing attention on governance issues.governance issues.

• Increased accountabilityIncreased accountability to wider stakeholder interests and the need for to wider stakeholder interests and the need for corporate social responsibility (e.g. green issues).corporate social responsibility (e.g. green issues).

Corporate social responsibilityCorporate social responsibility

Corporate social responsibility (CSR) Corporate social responsibility (CSR) is the commitment by is the commitment by organisations to ‘behave ethically and contribute to economic organisations to ‘behave ethically and contribute to economic development while improving the quality of life of the workforce and development while improving the quality of life of the workforce and their families as well as the local community and society at large’.their families as well as the local community and society at large’.11

11 World Business Council for Sustainable Development. World Business Council for Sustainable Development.

Corporate social responsibility Corporate social responsibility stancesstances

Table 4.2 Corporate social responsibility stances

Questions of corporate social Questions of corporate social responsibility – internal aspects (1)responsibility – internal aspects (1)

Table 4.3 Some questions of corporate social responsibility

Questions of corporate social Questions of corporate social responsibility – external aspects responsibility – external aspects (2)(2)

61

Table 4.3 Some questions of corporate social responsibility (Continued)

The ethics of individuals and The ethics of individuals and managersmanagers

Ethical issues Ethical issues have to be faced at the individual level have to be faced at the individual level ::• The responsibility of an individual who believes The responsibility of an individual who believes that the that the strategy of the organisation is unethical strategy of the organisation is unethical – resign, ignore it – resign, ignore it or take action.or take action.• ‘‘Whistle-blowing’ Whistle-blowing’ - divulging information to the - divulging information to the authorities or media about an organisation if authorities or media about an organisation if wrong doing wrong doing is suspected.is suspected.

Texas instruments’ guidelinesTexas instruments’ guidelines

• Is the action legal? . . . If no, stop immediately.Is the action legal? . . . If no, stop immediately.• Does it comply with our values? . . . If it does not, stop.Does it comply with our values? . . . If it does not, stop.• If you do it would you feel bad? . . . Ask your own If you do it would you feel bad? . . . Ask your own

conscience if you can live with it.conscience if you can live with it.• How would this look in the newspaper? . . . Ask if this goes How would this look in the newspaper? . . . Ask if this goes

public tomorrow would you do it today?public tomorrow would you do it today?• If you know it’s wrong . . . don’t do it.If you know it’s wrong . . . don’t do it.• If you are not sure . . . ask; and keep asking until you get If you are not sure . . . ask; and keep asking until you get

an answer.an answer.

Stakeholders of a large Stakeholders of a large organisationorganisation

Figure 4.3 Stakeholders of a large organisationSource: Adapted from R.E. Freeman, Strategic Management: A Stakeholder Approach, Pitman, 1984. Copyright 1984 by R. Edward Freeman.

Stakeholder conflicts of Stakeholder conflicts of expectationsexpectations

Table 4.4 Some common conflicts of expectations

What is CSR?What is CSR?

• Concept of CSR often criticized because of lack of legally Concept of CSR often criticized because of lack of legally defined or commonly accepted definition. defined or commonly accepted definition.

• Is this criticism justified?Is this criticism justified?

• Should it matter that CSR is not legally defined or subject to a Should it matter that CSR is not legally defined or subject to a single universal definition? single universal definition?


• Despite the lack of a single definition, research has shown that by examining different definitions from around the world, it is clear that there are Despite the lack of a single definition, research has shown that by examining different definitions from around the world, it is clear that there are commonly held understandings about what constitutes CSR.commonly held understandings about what constitutes CSR.

CSRCSR

Let’s firstly examine some of these definitions----- then Let’s firstly examine some of these definitions----- then we can seek a common understanding. we can seek a common understanding.



Canadian Government:Canadian Government:

““CSR is generally understood to be the way a company CSR is generally understood to be the way a company achieves a balance or integration of economic, environmental achieves a balance or integration of economic, environmental and social imperatives while at the same time addressing and social imperatives while at the same time addressing shareholder and stakeholder expectations.” shareholder and stakeholder expectations.”


UK Government:UK Government:

““The Government sees CSR as the business contribution to our sustainable The Government sees CSR as the business contribution to our sustainable development goals. Essentially it is about how business takes account of its development goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates – maximising the economic, social and environmental impacts in the way it operates – maximising the benefits and minimising the downsidesbenefits and minimising the downsides.”.”


European Union:European Union:

““[CSR is] a concept whereby companies integrate social and [CSR is] a concept whereby companies integrate social and environmental concerns in their business operations and in their environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.”interaction with their stakeholders on a voluntary basis.”


World Business Council for Sustainable Development: World Business Council for Sustainable Development:

““We define CSR as business' commitment to contribute to sustainable We define CSR as business' commitment to contribute to sustainable economic development, working with employees, their families, the economic development, working with employees, their families, the local community, and society at large to improve their quality of life.”local community, and society at large to improve their quality of life.”


The Kennedy School of Government (Harvard University), CSR The Kennedy School of Government (Harvard University), CSR Initiative: Initiative:

““The term [CSR] is often used interchangeably with others, The term [CSR] is often used interchangeably with others, including corporate responsibility, corporate citizenship, social including corporate responsibility, corporate citizenship, social enterprise, sustainability, sustainable development, triple-enterprise, sustainability, sustainable development, triple-bottom line, corporate ethics, and in some cases corporate bottom line, corporate ethics, and in some cases corporate governance. Though these terms are different, they all point in governance. Though these terms are different, they all point in the same direction: throughout the industrialized world and in the same direction: throughout the industrialized world and in many developing countries there has been a sharp escalation in many developing countries there has been a sharp escalation in the social roles corporations are expected to play.”the social roles corporations are expected to play.”


• What do these definitions tell us about CSR? What do these definitions tell us about CSR?

• What are some of the common understandings What are some of the common understandings that emerge?that emerge?

• How does CSR relate to other concepts?How does CSR relate to other concepts?

• What other issues arise?What other issues arise?


Common Understanding One:Common Understanding One:

CSR is an idea whereby companies CSR is an idea whereby companies integrate economic, social and integrate economic, social and environmental concerns in their environmental concerns in their business operationsbusiness operations

Common Understanding One: IntegrationCommon Understanding One: Integration

Economic

SocialEnvironment

Biodiversity

Resource Use

Climate Change

Waste

Human Rights

Governance

Regulation/Policy

Labour/ Workplace

Corruption

Interest Rates

Exchange Rates

Communities

Consumer Confidence

Corporate Social Responsibility: The Integrated Approach to Business in the 21st

Century

Common Understanding Two: Common Understanding Two: Stakeholders Stakeholders

• Common Understanding Two: CSR relates to the idea Common Understanding Two: CSR relates to the idea whereby a business addresses and balances the needs whereby a business addresses and balances the needs of stakeholders.of stakeholders.

• Who/what are stakeholders? Who/what are stakeholders? “Individuals and groups “Individuals and groups who may affect or be affected by the actions, decisions, who may affect or be affected by the actions, decisions, policies, practices or goals of an enterprisepolicies, practices or goals of an enterprise.”.”

Examples:Examples:• Shareholders and other investorsShareholders and other investors• EmployeesEmployees• CustomersCustomers• GovernmentsGovernments• Local communitiesLocal communities• NGOsNGOs• EnvironmentEnvironment

CSR and Related Concepts: CSR and Related Concepts: Sustainable DevelopmentSustainable Development

• Many definitions describe CSR as the business Many definitions describe CSR as the business pursuit of sustainable development.pursuit of sustainable development.

• Sustainable development: Sustainable development: ““development that meets development that meets the needs of the present without compromising the the needs of the present without compromising the ability of future generations to meet their own ability of future generations to meet their own needs.” (1987 Brundtland Report).needs.” (1987 Brundtland Report).

• Like CSR, sustainable development is also Like CSR, sustainable development is also recognised as having three fundamental pillars: recognised as having three fundamental pillars: economic development, social development and economic development, social development and environmental protection.environmental protection.

CSR and Related Concepts: Corporate CSR and Related Concepts: Corporate GovernanceGovernance

Many definitions highlight the link between CSR and corporate governance.Many definitions highlight the link between CSR and corporate governance.

Is CSR a subset of corporate governance or is corporate governance a subset of CSR? Is CSR a subset of corporate governance or is corporate governance a subset of CSR?

Both concepts are closely related which ever way you look at it.Both concepts are closely related which ever way you look at it.

CSR and Other Related ConceptsCSR and Other Related Concepts• The term CSR is often used interchangeably with the terms The term CSR is often used interchangeably with the terms corporate responsibilitycorporate responsibility, , corporate corporate

citizenshipcitizenship and and triple bottom linetriple bottom line. .

• Companies choose the terminology they feel comfortable with.Companies choose the terminology they feel comfortable with.

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Ethics,justice, and fair treatment in HR managment