Managerial ethics and corporate Social responsibility

Ethics and social responsibility are hot topics for today's managers. The ethical domain of behavior pertains to values of right and wrong. Ethical decisions and behavior are typically guided by a value system. Four value-based approaches that serve as criteria for ethical decision making are utilitarian, individualism, moral rights, and justice. For an individual manager, the ability to make correct ethical choices will depend on individual and organizational characteristics. An important individual characteristic is the level of moral development. Corporate culture is an organizational characteristic that influences ethical behavior. Strong ethical cultures become more important in turbulent environments because they help people make the right choices in the face of confusion and rapid change.

Corporate social responsibility concerns a company's values toward society. How can organizations be good corporate citizens? The model for evaluating social performance uses four criteria: economic, legal, ethical, and discretionary. Evaluating corporate social behavior often requires assessing its impact on corporate social behavior often requires assessing its impact on organizational stakeholders. One issue of growing concern is environmental responsibility. Organizations may take a legal, market, stakeholder, or activist approach to addressing environmental concerns. Sustainability is growing movment that emphasizes economic development that meets the needs of today while preserving resources for the future.

Ethical organizations are supported by three pillars: ethical individuals, ethical leadership, and organizational structures and systems, including a code of ethics, ethics committees, chief ethics officers, training programs, and mechanisms to protect whistle-blowers. Ethical and socially responsible companies perform as well as – and often better then – those that are not socially responsible. Social entrepreneurship is burgeoning as new leaders create innovative organizations that blur the boundaries between business and welfare, these organizations may or may not make a profit but the overriding goal is to improve society.

Timberland decided to continue its commitment to social cases. In fact, later the same year that Swartz was faced with this dilemma, the company doubled the number of hours it underwrote for employees to do community service. That number has increased to a full 40 hour week, plus the company offers paid sabbaticals for people to work six months full time in community nonprofits. This commitment to discretionary responsibility has contributed to exceptional loyalty many employees because people feel good about the work they do. One vice president says she has turned down lucrative offers from other companies because at timberland she doesn't feel as if she has to check her values at the door. Timberland consistently ranks in fortune magazine's survey of the 100 best companies to work for, and more than 50 percent of timberland's employees say the focus on community is the main reason they work there. However, some people felt that timberland should have cut out the charity activities to focus on meeting its economic responsibilities when company hit difficult times. In addition, some felt that the company was failing to meet its ethical responsibilities by spending money on community service when it was laying people off and shipping jobs overseas. Some employees bluntly asked, "Doesn't charity begin at home?" Swartz said he believe, however that cutting out community service would damage morale and lower commitment without solving the financial problems. Fortunately, Timberland rebounded from its difficulties and continued to grow. However, managers will continue to face challenges concerning how to best meet their responsibilities to all stakeholders.