Chapter 5 (Managing Social Responsibility And Ethics)

Ethics refers to the principles, values, and beliefs that guide individuals or groups in determining what is right and wrong behavior. It involves making moral judgments and decisions based on these principles. Ethics provides a framework for individuals to evaluate their actions and ensure they align with their personal or societal values. It helps in promoting fairness, honesty, and integrity in various aspects of life, such as business, medicine, and politics. By following ethical principles, individuals can contribute to a more just and moral society.

The classical view of management holds the belief that the sole social responsibility of management is to maximize profits. According to this perspective, the primary goal of a business is to generate financial returns for its shareholders, and any other social or environmental concerns are deemed secondary. This viewpoint aligns with the traditional capitalist approach, where the pursuit of profit is seen as the driving force behind business operations. The classical view emphasizes the importance of economic efficiency and the free market system, advocating for minimal government intervention and regulation in business affairs.

Social responsiveness refers to a firm's ability to address and adapt to popular social needs or concerns. It involves taking proactive measures to meet societal expectations and demands. By engaging in social actions, such as supporting charitable causes or implementing environmentally friendly practices, the firm demonstrates its commitment to being socially responsible. This can enhance its reputation, build trust with stakeholders, and contribute to long-term success.

Green management refers to the practice of incorporating environmentally-friendly principles and practices into the operations and decision-making processes of an organization. This includes considering the impact of the organization on the natural environment and taking steps to minimize negative effects, such as reducing waste, conserving resources, and implementing sustainable practices. By considering the impact on the natural environment, managers can make informed decisions that prioritize environmental sustainability and contribute to a more sustainable future.

Social screening refers to the practice of applying social criteria or screens to investment decisions. This means that when making investment choices, investors consider factors such as a company's environmental impact, labor practices, human rights record, and involvement in controversial industries. Social screening allows investors to align their investment portfolios with their personal values and beliefs, supporting companies that have a positive social impact while avoiding those that engage in harmful or unethical practices. By incorporating social criteria into investment decisions, social screening promotes responsible investing and encourages companies to adopt more sustainable and socially responsible practices.

Social responsibility refers to a business's voluntary commitment to act ethically and contribute to the well-being of society, going beyond its legal and economic obligations. It involves considering the impact of business decisions on various stakeholders, including employees, customers, communities, and the environment. By practicing social responsibility, businesses aim to make a positive difference in society, address social issues, and promote sustainable development. This can be achieved through initiatives such as corporate philanthropy, ethical sourcing, environmental sustainability, and fair treatment of employees.

Social obligation refers to the responsibility of a firm to engage in social actions due to its economic and legal obligations. This means that the firm recognizes its duty to not only focus on profit-making but also to contribute to society and fulfill its legal responsibilities. By engaging in social actions, such as philanthropy or environmental sustainability initiatives, the firm demonstrates its commitment to being a responsible corporate citizen and meeting its social obligations.

Locus of Control refers to a personality attribute that assesses the extent to which individuals believe they have control over the outcomes of their lives. People with an internal locus of control believe that they have control over their own fate and that their actions can influence the results they achieve. On the other hand, individuals with an external locus of control tend to believe that external factors or luck determine their outcomes, and they have little control over their own destiny.

The stages of moral development are categorized into three levels: preconventional, conventional, and principled. In the preconventional stage, individuals make decisions based on self-interest and avoiding punishment. In the conventional stage, individuals make decisions based on societal norms and expectations. Finally, in the principled stage, individuals make decisions based on their own ethical principles and values. Therefore, the correct order of the stages is preconventional, conventional, and principled.