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ADMS3660 Summary-Business Ethics

Text of Chapters Summary Adms 3660

  • ADMS 3660 Business Ethics Notes

    Ch 1- Business and Society Relationship

    -aside from corporate wrongdoing, many common issues include

    -corporate abuse of the environment, toxic waste disposal

    -sweatshop conditions, sexual harassment in the workplace

    -corporate power, minority rights

    -drug testing, insider trading, whistle blowing, product liability crises

    -lack of concern for the welfare of consumers (eg. Fast food industries)

    Business and Society

    Business- the collection of private, commercially oriented orgs, ranging in diff sizes

    -big businesses are more widely known in the public eye

    -people in our society often associate size with power

    -when referring business in relation to society, all different business sizes must be kept in mind

    Society- a community, nation or broad grouping of people that have common traditions and values

    -is composed of numerous interest groups, formalized orgs, and a variety of institutions

    Society as the Macroenvironment

    Macroenvironment- the total env outside a firm; is the societal context in which the organization resides

    -composed of four segments

    Social environment- focuses on demographics, lifestyles, social values of the society

    Economic env- nature and direction of the economy in which business operates

    Eg. GNP, inflation, unemployment rates, global trade

    Political env- processes by which laws get passed and officials get elected

    Technological env- total set of tech-based advancements taking place in society

    Our Pluralistic Society

    Pluralism- the diffusion of power among societys many groups and organizations

    -a pluralistic society is one in which there is wide decentralization and diversity of power concentration

    -the power is dispersed among many individuals

    Strengths- prevents power from being concentrated in the hands of a few

    -maximizes freedom of expression and action

    -no single group will dominate

    Weaknesses- diverse institutions pursue own self-interests; no central direction to unify these pursuits

    -there is confusion as to which orgs best serve which functions

    -conflicts among groups when they each try to pursue their own objectives

    -the system isnt very efficient

    Business and Multiple Publics, Systems, and Stakeholders

    -when we speak of business and society relationships, we usually refer either to particular segments, or

    to business and some system in our society

  • Our Special-Interest Society

    Defn- the idea of pluralism to an extreme in which thousands of special interest groups each pursues its

    own limited agenda

    -specialization on the part of interest groups representing all sectors of society

    -including consumers, communities, natural environment, the government

    -these groups have increasingly become active, committed, intense and diverse

    -each of these groups have been able to attract many members, thus increasing revenues

    -at the same time, they also increase the complexity for businesses to operate with them

    Business Criticism and Corporate Response

    Factors in the Social Environment

    Societal Beliefs Regarding Success in Business

    -the belief that material success is derived from some kind of dishonesty

    -tv has suggested that in order to succeed, one has to engage in some kind of dishonesty, manipulation

    -essentially, to get ahead, one needs to step on other people

    Affluence and Education

    -as a society becomes more affluent and better educated, there are also higher expectations

    Affluence- the level of wealth, disposable income, standard of living of society

    -reflects both economic welfare and social elements

    Education- how much one receives in their environment

    -the combo of affluence and education forms the underpinning for a climate where societal criticism of

    businesses arises

    Awareness through the Media

    -newspapers, magazines, television

    -through tv, the audience gets a variety of info that contributes to a climate of business criticism

    Straight News and Investigative News Programs

    -straight news shows that often portray businesses in a negative spotlight/bias

    -journalists see it differently though, they say that when asked, businesses ignore qtns&downplay issues

    Prime-Time TV Programs

    -business people are often cast as evil and greedy

    -is also shown through movies as well


    -are a double edged sword; in SR they may sell more products, but if products are promoted in a

    deceptive way, then LR they will lose credibility

    -the media therefore should be seen as only one major factor that contributes to the env in which the

    business now finds itself

  • Revolution of Rising Expectations

    Defn- belief that each succeeding generation has a standard of living higher than the one before

    Social problem- the gap b/n a societys expectations of social conditions and the actual social realities

    -the nature of rising expectations is such that they outpace the responsiveness of businesses, thus

    creating a predicament that is conducive to criticism

    Entitlement Mentality

    Defn- the general belief that someone is owed something because theyre a member of society

    -the current context of workplace has contributed to making the issue of entitlement more prominent

    Rights Movement

    Defn- comes from the revolution of rising expectations, entitlement mentality, and more

    -activism for rights of other groups, like blacks, women, ethnic minorities, disabled

    Criticisms: Use and Abuse of Power

    -common issue that runs through all complaints is the use and abuse of power

    -the reason that Canadians are less trusting of companies is they feel mistreated and ignored as both

    citizens and consumers

    -some points of friction include CEO pay, high gas and drug prices, poor airline service

    Business power- ability or capacity to produce an effect or to bring influence to people

    -in the context of business criticism, power is perceived as being abused

    Levels of Power

    Macro level corporate system

    Intermediate level groups of corps that act in concert in an effort to produce a desired effect

    -could be to raise prices, control markets

    Micro levellevel of the individual firm; any one major corporation

    Individual levelindividual corporate leader that exerts power; one person

    -as one analyzes corporate power, they should keep in mind the diff levels of power

    Spheres of Power

    -economic power, political power are most common

    -social and cultural; power over the individual; technological; environmental

    Balance of Power and Responsibility

    -the power/responsibility relationship is the foundation for CSR

    Iron law of Responsibility- in the LR, those who do not use power in a manger which society considers

    responsible will lose it

    -when power is out of balance a variety of forces come to bear on business to be more responsible;

    including governmental actions

  • Business Response: Concern and Changing Social Contract

    -social env is also seen as a collection of conditions, events, that reflect how people think and behave

    Social contract- two way understandings that characterizes the r/n between business and society

    -social contract has been changing to reflect societys expectations of business

    Social contract can be articulated through:

    -laws and regulations that the society has established

    -shared understandings to each groups expectations of the other

    -creates more confusion and room for misunderstandings though

    Ch 6- Business Ethics Fundamentals

    The Publics Opinion of Business Ethics

    -there is just a fine line between a business exec and somebody who lies

    Gallup Poll Ranks Business Ethics

    -the poll surveys public opinion of social and political issues

    -quizzes the public on its perceptions about the ethics of business execs

    -honesty and ethics of business execs arent thought to be highly ranked

    -those lower are real estate agents, salespeople, stockbrokers

    -nurses are highly ranked

    -business execs ranks in the middle

    Are the Media Reporting Ethics More Vigorously

    -the media are reporting ethical issues more frequently

    -ethics questions among all institutions are subjects of growing and sustaining interest

    Is It Society that is Actually Changing

    -illegal corp activities can be traced to changes that have taken place in society, and to the unwillingness

    of many in business to adjust to these changes

    -what has changed are the contexts in which decisions are made, the demands that are being made, and

    the nature of whats considered proper corporate conduct

    Business Ethics: What Does it Really Mean?

    Ethics- deals with what is good and bad and with moral duty and obligation

    -is a set of moral principles or values

    -moral conduct refers to the principles of right and wrong in behaviour

    Business ethics- good and bad, or right and wrong practices within a business context

    -fairness, justice, equity

    Descriptive ethics- characterizes the morality of people, culture, society

    -compares moral codes, systems, beliefs, values, practices

    -focuses on what is the prevailing set of ethical standards

    -some people adopt the view that since everybody is doing it, its acceptable

    Normative ethics- justifying a coherent moral system of thinking and judging

    -justifies basic moral principles that are intended to guide behaviour

    -focuses on what should be

  • Conventional Approach to Business Ethics

    Defn- compares a decision with prevailing norms of acceptability

    -challenge is answering whose norms to use, and what norms are prevailing

    -legitimate norms emanate from family, friends, religious, local community, ones employer, law

    Ethics and the Law

    -both law and ethics have to do with whats appropriate, but law reflects societys codified ethics

    Making Ethical Judgments

    Three key elements compose this decision:

    1) Observe the decision, action or practice committed

    2) Compare the practice with prevailing norms of acceptability

    3) Recognize that value judgments are being made by someone as to what really happened, and what

    the acceptable norms are

    -aka 2 diff people could look at the same behaviour but interpret diff things

    Determinations of whats ethical require judgments to be made on:

    -what the true nature of the practice is

    -what societys prevailing norms are

    -what value judgments are being made by someone about the practice

    Ethical relativism- we pick and choose which source of norms we wish to use based on what will justify

    our actions

    Ethics, Economics, and Law: A Venn Model

    -in ethical decision making, the focus is on ethical expectations, economics and law

    -it must be balanced against each other to make wise decisions

    4 Important Ethics Questions

    -the questions are asked at five diff levels; individual, organization, industry or profession, societal,

    global or international level

    What Is?

    -what is actually going on in an ethical sense in business or in a specific decision

    -is a factual, scientific or descriptive question

    -helps us understand the reality of the ethical behaviour

    -what are your personal ethics; orgs; industrys; societys; global

    What Ought to Be?

    -rightness, fairness, or the justice of a decision

    -often viewed in terms of what management should do in an ethical sense in a given situation

    How Do We Get from What Is to What Ought To Be?

    -bridging the gap between where we are and where we should be

    -we may find that from a practical point of view, we cant achieve the goals

    -managerial decision making and strategy come into play

    -identify the problem, identify where we want to be, and then closing the gap

    What is Our Motivation?

    -sometimes it reveals some manipulative or self-centred move

  • Three Models of Management Ethics

    Immoral Management

    Defn- holds that managements motives are selfish and it cares only about its own, or the cos gains

    -managements goals are profitability and organizational success at any price

    -regards legal standards as barriers that management must avoid to accomplish what it wants

    Moral Management

    Defn- conforms to the highest standards of ethical behaviour

    -strive sot be ethical in terms of professional standards of conduct, motives, goals

    -aspires to succeed, but only within the confines of sound ethical precepts

    -fairness, justice, respect for rights

    -moral management pursues its objectives of profitability, legality, and ethics as required and desirable

    -the law is viewed as a minimal standard of ethical behaviour, because moral management strives to

    operate above the law

    Operating Strategy of Moral Management

    -live by sound ethical standards

    -will the action be fair to all stakeholders as well as to the organization

    Integrity Strategy- ethics as the driving force of an organization

    -provides a common frame to unify diff functions, lines of business, employee groups

    -helps define what an org is and what it stands for

    -moral leadership is also related to moral management

    -they have a passion to do right, be morally proactive, consider all stakeholders

    -strong ethical character

    -obsession with fairness

    -undertake decision making

    -not all orgs in moral management have done so all along though

    -the companies arrive at this position as lawsuits/gov regulations rise, consumers expect more

    Amoral Management

    -is not just the middle position between immoral and moral management;

    Intentional amoral management- managers do not factor ethical considerations into their decisions

    -neither moral nor immoral

    Unintentional amoral management- managers dont think about business activity in ethical terms

    -are inattentive that their decisions may have negative effects on others

    -managers are well intentioned but are too insensitive to consider the effects of their behaviour

    on others

    Operating Strategy of Amoral

    -permit free rein within the unspoken but understood tenets of the free enterprise system

    -key question is can we make money with this action

    Compliance strategy- focused on obedience to the law as its driving force

    -oriented toward compliance with regulatory and criminal law

    *Fig 6.7 for summary of moral, immoral, amoral

  • Two Hypotheses Regarding the Moral Management Models

    Population hypothesisdistribution of the three models might approximate a normal curve

    -amoral in the middle, other two on ends

    Individual hypothesisthe three models may operate at various times and under diff circumstances

    Eg. The avg manager may be amoral most of the time, but be moral/immoral for 1 circumstance

    Amoral Management as a Serious Organizational Problem

    -managers driven by the profitability ethos regards economic success as the exclusive barometer of

    organizational and personal achievement

    Making Moral Management Actionable

    -senior management should lead the transition from amoral to moral management by business ethics

    training, codes of conduct, mission and vision statements, ethics officers

    Developing Moral Judgment

    Kohlbergs levels of moral development- how we as individuals develop morally

    Levels of Moral Development

    Level 1: Preconventional Level

    -focus is mainly on self

    Reaction to punishment stageavoidance of pain, scolding is usually needed

    Seeking of rewards stagepraise or something tangible

    -they learn to behave according to the consequences

    Level 2: Conventional Level

    -there are others whose ideas are to be considered

    -the importance of conforming to the conventional norms of society

    Good boy/nice girl morality stagethere are some rewards for living up to what is expected

    Law and order morality stageindividual recognizes there are certain norms in society that are

    expected to function in an orderly fashion

    -individual sees they are part of a larger system

    Level 3: Postconventional, Autonomous, or Principled Level

    -indiv develops a notion of right & wrong that is more mature than the conventionally articulated notion

    -moral principles are self accepted, because they now perceive them as right

    Social contract orientationright action is thought of in terms of general individual rights and standards

    agreed by society

    Universal ethical principle orientationindiv uses conscience with self chosen ethical principles that are

    anticipated to be universal

    Feminist Views of Kohlbergs Research

    -Carol Gilligan argues that women see themselves to be part of a network of relationships with family

    and friends and thus are more focused on relationship maintenance when they confront moral issues

    -women move in and out of three moral levels:

  • -self is the sole object of concern

    -desire is to establish connectives and participate in social life

    -women recognize their own needs and the needs of others, those with whom they have r/n

    Sources of a Managers Values

    -values are the individuals concepts of the worth or importance of certain ideas

    -ones values shape ones ethics

    Religious Valuesethics is the big of religion that tells us how we should behave

    Philosophical valuesreason can provide us with principles/morals in the same way it gives us

    principles of other things like mathematics

    Cultural Valuessocietal norms from everyday living has had an impact on the managers thinking

    -music, movies, television

    Legal valueslegal system reps the codification of what the society considers right and wrong

    Professional valuesemanates from professional orgs that rep diff jobs and positions

    -articulates the ethical consensus of the leaders of those professions

    Sources Internal to the Organization

    -when an individual goes to work for an org, they learn that to survive, certain norms must be

    perpetuated and revered

    -respect for the authority structure

    -loyalty; conformity; performance; results

    Elements of Moral Judgments

    There are 6 major elements that are essential to making moral judgments

    Moral Imagination

    -ability to perceive that a web of competing economic relationships is at the same time a web of moral

    or ethical relationships

    -means not only becoming sensitive to ethical issues in business decision making but also developing the

    perspective of searching out subtle places where ppl are likely to be affected by decision making of mgrs

    Moral Identification and Ordering

    -ability to discern the relevance of moral factors introduced into a decision making situation

    -ability to see moral issues as issues that can be dealt with

    Moral Evaluation

    -practical phase of moral judgment entails essential skills like consistency and coherence

    -develop the ability to identify what the likely moral as well as economic outcomes of a decision will be

    -integrate the concern for others into orgl goals and purposes

    Tolerance of Moral Disagreement and Ambiguity

    -must be accepted because it is a natural part of ethics discussions

    -is an extension of a managerial talent present in all decision making situations

    Integrating of Managerial and Moral Competence

    -the scandals that major corps face occur as a result of many decisions made at diff points in time

    -managers are learning that there is a huge corporate price to pay for their amorality

  • A Sense of Moral Obligation

    -requires the intuitive or learned understanding that moral fibers are the integral components that hold

    systems together

    -moral manager has a sense of moral obligation and integrity that is the glue that holds together the

    decision making process

    Ch 7- Personal and Organizational Ethics

    Levels at Which Ethical Issues may be Addressed

    Personal Levelpersonal lives; outside the work context

    Organizational levelroles as managers or employees

    -these issues may bring consequences for the cos reputation and success in the community

    Industry levelstock brokerage, real estate, insurance, financial services, cars, telemarketing

    -any profession by which the individual is a member

    Societal and Intl levelsbecomes hard for the manager to have direct effect on business ethics here

    -managers acting in concert through their companies can bring high standards of change though

    -the managers greatest impact can be felt through what they do personally, or as a member of

    the management team

    Personal and Managerial Ethics

    -entails making decisions, confronting the individual with a conflict of interest situation

    -individual often has to choose between their interests, and the interest of somebody else

    -the question often asked in this situation is What shall I do in this situation

    -there is the conventional approach, principles approach, ethical tests approach

    Principles Approach to Ethics

    -based on the idea that managers make decisions based on a more solid foundation than conventional

    -managers can improve their ethical decision making if they factor into their proposed actions a

    consideration of certain principles or concepts of ethics

    Principle of Utilitarianism

    Utilitarianism- we should always act to produce the greatest ratio of good and evil to everyone

    -greatest good for the greatest number

    -forces us to think about the general welfare

    -proposes a standard outside of self interest

    -also makes us think in stakeholder terms; what would produce the greatest good in our decision,

    considering stakeholders

    Disadv- ignores actions that may be actually wrong

    -by focusing on the consequences of a decision, the decision itself may be ignored

    -may come into conflict with the idea of justice

    -some say the increase in total good isnt good because it ignores the distribution of the good

    -it is also hard to formulate satisfactory rules for decision making

    -doesnt handle the issue of rights very well

  • Principle of Rights

    -utilitarianism implies that certain actions are morally right, when they can actually violate somebody

    elses rights

    Moral rights- important claims or entitlements

    -there are also legal rights as well

    Principle of Rights- rights cannot be overridden by utility

    -it can only be overridden by another, more important right

    -principle of right expresses morality from the POV of the individual

    -utilitarianism expresses morality in terms of the group as a whole

    Principle of Justice

    Defn- the fair treatment of each person

    Distributive justice- distribution of benefits and burdens

    Compensatory justice- compensating someone for a past injustice

    Procedural justice- fair decision making procedures

    -John Rawls talks about a comprehensive principle of justice, based on the idea that what we need is a

    fair method by which we choose the principles through which conflicts will be resolved

    -he says each person has an equal right to the most extensive basic liberties

    -everybody is essentially to be treated equally

    -also that inequalities are arranged so they are to everyones adv and attached to positions open to all

    Principle of Caring

    -this principle is critical of the traditional views mentioned above

    -they embrace a masculine approach

    -traditional ethics focuses too much on the individual self

    -feminist theory views the person as essentially relational, not individualistic

    -emphasizes caring as opposed to justice or rights

    -focused entirely on people, and is essentially personal

    -caring people could lead to a caring org that offers new possibilities

    Virtue Ethics

    Defn- focuses on the individual becoming imbued with virtues

    -is centre dint he heart of the person; the manager

    -action oriented principles focus on doing; virtue ethics focuses on being

    -it emphasizes character development

    -we are lacking this today because we have failed to teach the young principles of good character

    -corporate well being will demand character, and bus leaders are necessary for teaching character back

    Golden Rule

    Defn- strong principle of ethical living and decision making

    -do unto others as you would have them do unto you

  • -if you want to be treated fairly, treat others fairly

    -we are not to make an exception of ourselves

    -however, there is no single principle that is recommended to be always used

    Reconciling Ethical Conflicts

    -three common concerns must be addressed in conflict situations:

    Obligationsverbal/written contract to which we have agreed

    Idealsgoal, principle, virtue

    Effectson stakeholders of our actions

    Shaw and Berry say that when two or more moral obligations conflict,

    -choose the stronger one

    -honour the more important one

    -when the effects are mixed, choose the action that produces the greater good/less harm

    Ethical Tests Approach

    -more practical in orientation and do not require the depth of moral thinking that principles do

    Test of Common Sensedoes the action about to take place really make sense

    -has limitations though; can conclude they would not actually get caught

    Test of ones best selfis the action compatible with your concept of yourself at your best

    -isnt helpful to those who dont hold themselves in high esteem

    Test of making something publichow would you feel if others knew you were doing this

    -has to do with whether your action can withstand public disclosure

    Test of ventilationexpose your proposed action to others and get their thoughts on it

    -seek others views first

    Test of the purified ideaare you taking the action just because somebody else with more authority or

    knowledge says it is right

    -just because somebody superior says its right doesnt mean it is

    Gag testa managers signal if an action is worthy or not is if they gag at the hearing of it

    Managing Organizational Ethics

    -to manage ethics, a manager must realize the orgs ethical climate is part of its overall corporate culture

    Factors Affecting the Orgs Moral Climate

    -to create an ethical climate, they must understand the factors that influence whether or not other

    employees behave ethically

    -there are factors in terms of their influence to unethical behaviour;

    -behaviour of superiors, ones peers, industry/profl ethical practices, personal financial need

    Pressures Exerted on Subordinates by Superiors

    -managers were asked to what extent they agreed with the phrase Managers today feel under pressure

    to compromise personal standards to achieve company goals

    -lower management felt it most

    -the lower a manager is, the more the manager feels pressure toward unethical conduct

    -employees frequently find themselves making compromises as a result of the need to conform to their

    superiors wishes and the expectation of loyalty

  • Other Behaviours of Superiors and/or Peers

    -amoral decision making; managers who fail to factor ethical considerations into their actions

    -unethical acts; some managers are simply not ethical

    -acceptance of legality as a standard of behaviour; some think if they abide by the law, they are simply

    doing the most they ought to be

    -bottom line mentality and the expectations of loyalty and conformity; little value on doing what is right

    -absence of ethical leadership; management never assumes a leadership role

    -objectives/evaluation systems that overemphasize profits- setting unrealistic goals

    -insensitivity toward how subordinates perceive pressure to meet goals; management must be vigilant

    of the expectations theyre making on employees

    -inadequate formal ethics policies; lacking controls for monitoring/compliance/clear code of conduct

    Improving the Organizations Ethical Climate

    *Fig 7.5 for best practices for creating an ethical organization climate

    Top Management Leadership (Moral Management)

    -the moral tone of an org is set by top management

    -management has to set an example for all the others to follow

    -a managers reputation for ethical leadership is founded on two pillars;

    -perceptions of the manager as a moral person, and as a moral manager

    -being a moral person is composed of three things; trait, behaviours, decision making

    -moral managers recognize the importance of putting ethics at the forefront of their ethical agenda

    -they engage in role modeling, they communicate about ethics and values, and use rewards and also

    discipline effectively

    -they should create clear and concise policies

    -select for employment only those whose traits are in check with corporate standards

    -promote people on the basis of performance and ethical conduct and beliefs

    -company employees must feel the obligation to report irregularities in ethics

    Effective Communication

    -both written and verbal forms

    -candour requires a manager be sincere and honest in communication transactions

    -requires the manager to be fair and free from prejudice

    -fidelity means the communicator should be faithful to detail

    -confidentiality means the manager must exercise care in deciding what info they disclose to others

    Ethics Programs and Ethics Officers

    -ethics officers are in charge of implementing ethics initiatives of the organization

    -they have helped to reduce penalties

    -there are also codes of conduct, ethics hotlines, ethics training, audits

    Setting Realistic Objectives

    -a manager may innocently create a condition leading to unethical behaviour on a subordinates part

    -top mgmt must establish sales that are realistic, so they can be achieved with current bus practices

  • Ethical Decision Making Processes

    -process of stating the problem, analyzing it, identify possible courses of action, evaluating them, and

    then deciding on the best alternative and implementing it

    5 main points about the nature of ethics and decision making:

    -most ethical decisions have consequences; theyre followed by effects that impact both within

    and outside the organization

    -they have multiple alternatives

    -they have mixed outcomes

    -they have uncertain consequences

    -they have personal implications

    *Fig 7.6 for ethical decision making process

    -individual is asked to identify the action, to subject the course of action to the ethics screen

    -the ethics screen consists of several select standards against which the proposed course of

    action is to be compared

    -another approach is to ask and answer a series of simple questions

    Ethics Checkis it legal; is it balanced; how will it make me feel about myself

    Ethics Quick Testis a seven part test

    Codes of Conduct

    -top management has the responsibility for establishing standards of behaviour and communicating

    them to all managers and employees

    -code of ethics are used, aka codes of conduct

    -there are benefits that bus orgs receive as a result of a code of ethics;

    -legal protection, pride, consumer goodwill

    -improved loss prevention, product quality, productivity

    -common topics discussed in corporate codes:

    -conflicts of interest, discrimination, sexual harassment

    -receiving or giving gifts

    -employee theft, proper use of company assets

    -when codes are implemented strongly in the culture, reports of unethical employee behaviour is lower

    -study of corporate codes by Mark Schwartz revealed there are diff ways in which employees perceive

    codes of conduct, and he broke them down into 8:

    Rule Bookclarifies what is expected Smoke detectoremployees try to convince others

    Signpostleads employees to consult other individuals

    Mirror; Shield Fire alarmemployees contact the proper authority figures

    Magnifying glasssuggests a note of caution to be more careful

    Disciplining Violators of Ethics Standards

    -the moral manager consistently rewards ethical conduct and disciplines unethical conduct

    -management ahs to communicate to all that unethical behaviour will not be tolerated

  • Whistle-Blowing Mechanisms and Hotlines

    -people do not know how to react when they observe a questionable practice

    -employees may phone in their inquiries about the companys ethics code

    Disadv; it may do harm; many of the reported wrongdoings are false accusations many times

    Business Ethics Training

    -instruction in business ethics should be made a part of business school education, management

    training, executive development programs, and seminars

    -purposes are to increase the managers sensitivity to ethical problems

    -encourage critical evaluation

    -increase awareness of organizational realities, and societal realities

    -improve understanding of the importance of public image

    Ethics Audits and Self Assessments

    Ethics audits- approaches by which a company may assess its ethical climate or programs

    -intended to carefully review ethics programs, codes of conduct, hotlines, training programs

    -can include managements activity, communication efforts, incentive and reward systems

    -if management takes specific steps as suggested, many behaviours have a greater chance of being in

    line with leaderships ethical standards

    -thus ethics can be positively supervised

    Ch 2- Corporate Citizenship

    The Corporate Social Responsibility Concept

    -requires the individual to consider their acts in terms of a whole social system, holds themselves

    responsibly for the effects of their acts anywhere in the system

    -the commitment to social responsibility by businesses has led to increased corporate responsiveness to

    stakeholders and improved social performance

    Corporate Citizenship Concepts:

    CSRemphasizes obligation, accountability

    CSResponsivenessaction, activity

    CSPerformanceoutcomes, results

    Historical Perspective on CSR

    -Adam Smiths concept of invisible hand holds that a society could best determine its needs and wants

    through the marketplace

    Modification of the Economic Model

    -modification of the classical economic model was seen in philanthropy; contributions to charity

    Community obligations- are to improve, beautify and uplift


    Evolving Viewpoints of CSR

    it seriously considers the impact of the companys actions on society

    is the obligation of decision makers to take actions which protect the welfare of society as a whole

    along with their own interests

  • implies that a corporation doesnt just have economic and legal obligations, but also responsibilities

    to society that extends those obligations

    relates to achieving outcomes from organizational decisions concerning specific issues which have

    beneficial rather than adverse effects upon pertinent corporate stakeholders

    Carrolls Four-Part Definition of CSR

    -the social responsibility of business encompasses the economic, legal, ethical and discretionary

    expectations that society has of organizations at a point in time

    Economic Responsibilities- produces goods and services that society wants and to sell them at fair

    prices; attention to revenues, costs, strategic decision making

    Legal Responsibilities- the laws under which business is expected to operate

    Ethical Responsibilities- activities that are expected by societal members even though theyre not in law

    -full scope of norms and standards that reflect a belief of what consumers regard as fair/just

    Philanthropic Responsibilities- voluntary decisions of a business to engage in social activities

    -not required by law, and not generally expected of business

    -corporate giving, product and service donations, partnerships with local government

    -difference between ethical responsibilities and philanthropic responsibilities is that philanthropic arent

    expected in a moral or ethical sense

    Pyramid of CSR Fig 2.3

    -the socially responsible should strive to make a profit; obey the law; be ethical; and a good corp citizen

    Arguments Against and For CSR

    Arguments Against CSR

    -management has one responsibility only, to maximize the profits of owners/shareholders

    -social issues should be resolved by the workings of the free market system

    -if the free market cant solve the social problem, then the government should

    -business isnt equipped to handle social activities; managers are oriented toward finance & operations

    -if managers were to pursue CSR, it would dilute the businesss primary purpose

    -businesses have enough power; engaging in CSR would only give them more

    -encouraging them to assume social responsibilities would only place them in a position of international

    balance of payments

    Arguments for CSR

    -is in the LR self-interest of a business to be socially responsible

    -its the business fault that todays social issues exist anyways

    -if businesses are to exist in the future, then they need to take actions now to ensure their LT position

    -to ward off future gov intervention and regulation

    -it is more practical and less costly to behave this way than to react when issues have developed

    -because the public supports it

    Corporate Social Responsiveness

    -is the action oriented variant of CSR

    Ackerman and Bauers Point of View

    -criticized CSR; says that responding to social demands is more than deciding what to do

  • -they think social responsiveness is a more apt description of what is essential in the social arena

    -responsibility implies having assumed an obligation

    -responsiveness connotes an action-oriented condition

    Sethis Three-Stage Schema

    Social obligationcorporate behaviour in response to market forces/legal constraints

    Social responsibilitybringing corporate behaviour up to a level where it is congruent with the

    prevailing social norms

    Social responsivenesslong run role in a dynamic social system

    Fredericks CSR1, CSR2, CSR3

    -CSR is CSR1; social responsiveness CSR2

    -social responsiveness is the capacity of a corporation to respond to social pressures

    -CSR3 is corporate social rectitude

    -the moral correctness of actions taken and policies formulated

    Epsteins Process View

    -discusses corporate social responsiveness within the corporate social policy process

    -focuses on the individual and organizational processes for evaluating the firms capacity to anticipate,

    respond to, and manage issues

    Other Views of Responsiveness

    Ian Wilsonfour business strategies that include reaction, defence, accommodation, proaction

    Terry McAdamfour social responsibility philosophies

    - Fight all the Way -Do only what it required

    -Be progressive -Lead the industry

    Davis and Blomstromalternative responses to societal pressures that include withdrawal, public

    relations approach, legal approach, bargaining, problem solving

    James Postthree major social responsiveness categories; adaptive, proactive, interactive

    Corporate Social Performance (CSP)

    -intended to suggest that what really matters is what companies are able to accomplish

    -needs to identify a particular philosophy, pattern, mode of responsiveness, identify stakeholder issues

    -particular issues are of varying concern to businesses, depending on the industry in which they exist

    Carrolls CSP Model

    Social responsibility categorieseconomic, legal, ethical, discretionary

    Philosophy of social responsivenessreaction, defence, accommodation, proaction

    Social issues involvedconsumerism, environment, discrimination

    Usefulness of the CSP Model to Academics and Managers

    Academics; aid to perceiving the distinction among the concepts of CSR that have appeared in literature

    Managers; helps in understanding that social responsibility isnt separate from economic performance

    -integrates economic concerns into a social performance framework

    -places ethical and philanthropic expectations into a rational economic framework

    Wartick and Cochrans CSP Extensions

    -proposed that the dimension of social issues matured from an identification of the social issue

  • categories in which companies must take action known as social issues management

    -issues identification, issues analysis, response development

    -proposes that the three dimensions be thought of as depicting principles, processes, policies

    Woods Reformulated CSP Model

    -to think of social responsiveness as a set of processes rather than as a single process

    -think of Warticks policies as entailing outcomes of corporate and managerial actions

    -proposes that each 3 components (principles, processes, outcomes) are composed of specific elements

    Swansons Reorientation of CSP

    -links corporate social performance to the personally held values and ethics of executive managers

    -organizations can impact society through economizing (efficiently converting inputs into outputs) and

    ecologizing (forging community-minded collaborations)

    Corporate Citizenship

    -there isnt one distinct meaning

    -serves a variety of stakeholders well

    -shared moral and ethical principles

    -integrating individuals into the communities in which they work

    -balances all stakeholders claims

    -embraces the four faces of corporate citizenship; economic, legal, ethical, philanthropic

    -functions through which business intentionally interacts with NPO, citizen groups, other stakeholders

    -works to improve employee relations; customer relationships; bus performance; cos marketing efforts

    Social Performance and Financial Performance

    -whether or not there is a r/n b/n a firms social responsibility or financial performance

    -the appropriate performance criteria are subject to debate

    Perspective 1built on the belief that socially responsibly firms are more financially profitable

    Perspective 2a firms financial performance is a driver of its social performance

    -when cos are enjoying financial success, we see higher levels of social performance

    Perspective 3interactive r/n among social performance, financial performance, corp reputation

    -since they are so interrelated, it is hard to identify which factor is driving the process

    A Multiple Bottom Line Perspective

    -there is only one bottom line; a corporate bottom line that addresses the shareholders or owners

    investments in the firm

    -alternative view is that the firm has multiple bottom lines that benefit from CSP

    -CSP cant be fully comprehended unless we also consider that its impacts on stakeholders are noted,

    measured and considered

    Socially Conscious or Ethical Investing

    -this movement began in the 1970s

    -social investing had matured into a comprehensive investing approach with social and environmental

    screens, shareholder activism, and community investment

    -no clear evidence that returns from socially conscious funds will equal or exceed the returns from funds

    that arent so carefully screened

  • -socially conscious funds are valued most highly by the investors who really care about the special

    performance of companies

    3 main reasons why there is an increase in social/ethical investing:

    -more reliable research on CSP than in the past

    -investment firms using social criteria have established a solid track record

    -socially conscious generation in the 60s are now making investment decisions

    Ch 3- Stakeholder Approach to Business, Society, Ethics

    Origins of the Stakeholder Concept

    What is a Stake?

    Stake- interest of a share in an undertaking; it is also a claim

    -in between the two extremes is a right to do something

    Stakeholder- individual or group that has 1+ various kinds of stakes in a business

    -as stakeholders may be affected by the actions of the business, stakeholders may also affect

    the orgs actions, decisions

    -any individual or group who can affect or is affected by the actions of the org

    Who are Businesss Stakeholders?

    -shareholders, employees, customers

    -competitors, suppliers, the community, special interest groups, media, society

    -natural environment, nonhuman species, future generations

    ProductionManagerialStakeholder Views

    Production view- owners thought of stakeholders as individuals that supplied resources, or bought

    products or services

    Managerial view-separation of ownership from control, interaction with major constituent groups

    Stakeholder view- firm and its multilateral relationships with constituent or stakeholder group

    -management must perceive its stakeholders as those that management thinks have some stake in the

    firm but also the groups that themselves think they have a stake in the firm

    Primary and Secondary Stakeholders

    Primary social stakeholders:

    -shareholders, investors

    -employees, managers, customers

    -local communities, suppliers, business partners

    -direct stake in the org

    Secondary social stakeholders:

    -government and regulators, civic institutions

    -social pressure groups, media and academic commentators, trade bodies, competitors

    -can be extremely influential, but their stake is representational of the public and indirect

    Primary nonsocial stakeholders:

    -natural environment, future generations, nonhuman species

    Secondary nonsocial stakeholders:

  • -environmental pressure groups

    -animal welfare organizations

    Core, Strategic, Environmental Stakeholders

    Core stakeholders- specific subset of strategic stakeholders that are essential for the survival of the org

    Strategic- vital to the org and the set of threats/opportunities it faces

    Environmental- others in the orgs environment that arent core or strategic

    -whether stakeholders were core, strategic or environmental would depend on their characteristics, like

    legitimacy, power, or urgency

    Legitimacy, Power, Urgency: A Typology of Stakeholder Attributes

    Legitimacy- the perceived appropriateness of a stakeholders claim to a stake

    -owners, employees, customers have a high degree of legitimacy due to their direct

    relationships with a company

    Power- the ability to produce an effect; to get something done that otherwise wouldnt get done

    -power means the stakeholder could affect the business (PETA)

    Urgency- degree to which the stakeholder claim on the bus calls for the businesss immediate attention

    Strategic, Multifudiciary, Synthesis Views

    Kenneth Goodpaster distinguished among:

    Strategic approachviews stakeholders as factors to be taken into consideration and managed while

    the firm is pursuing profits for its shareholders

    -sees stakeholders as instruments that may facilitate/impede the firms pursuit of its strategic objectives

    Multifudiciary approachholds that management has a responsibility to stakeholders just as it has the

    responsibility to shareholders

    Stakeholder synthesis approachnew approach that Goodpaster recommends

    -business does have moral responsibilities to stakeholders, but is also expected to be implemented

    within a context of ethical responsibility

    3 Values to the Stakeholder Model

    Donaldson and Preston have articulated three values:

    Descriptiveprovides language and concepts to describe the corporation or organization

    Instrumentaluseful in establishing the connections between the practice of stakeholder management

    and achievement of corporate performance goals

    Normativestakeholders are identified by their interest in the organization whether or not the org has

    any interest in them

    -is often thought of as the moral/ethical view because it places a focus on how stakeholders

    should be regarded

    Questions in Stakeholder Management

    1) Who are our Stakeholders

    -must identify not only generic stakeholder groups, but also the subgroups

    -a generic group could be employees, shareholders, environmental groups, consumers

    -within those groups there may be subgroups as well

  • 2) What are our Stakeholders Stakes

    -different specific interests, concerns, perceptions of rights, expectations

    3) What opportunities and Challenges Do Our Stakeholders Present to the Firm?

    -the opportunities are to build good working relationships with the stakeholders

    -challenges present themselves in a way that the firm must handle the stakeholders well or be hurt in

    some way; either financially or by reputation in the community

    -emphasis is placed larger on challenges than it is on opportunities

    -the challenges normally arise because stakeholders think their needs arent being met

    -in terms of potential for threat, managers need to consider the stakeholders relative power and its

    relevance to a particular issue confronting the org

    -in terms of potential for cooperation, the firm needs to be sensitive to the possibility of joining forces

    with other stakeholders

    4) What Responsibilities Does the Firm Have to its Stakeholders?

    -what economic, legal, ethical, philanthropic responsibilities does mgmt have to each stakeholder

    -the most pressing threats present themselves as legal and ethical questions

    5) What Strategies or Actions Should Management Take?

    -do we deal directly or indirectly with stakeholders

    -do we take the offence or the defence in dealing with stakeholders

    -do we accommodate, negotiate, manipulate, or resist stakeholder overtures

    -do we employ a combo of the above or just a single action

    *Fig 3.8 for the diff stakeholder types*

    Stakeholder type 1supportive; high on potential for cooperation, low on potential for threat

    Stakeholder type 2marginal; low on both

    Stakeholder type 3nonsupportive; low on potential for cooperation, high on potential for threat

    Stakeholder type 4mixed blessing; high on both

    -managers should attempt to satisfy minimally the needs of marginal stakeholders

    -satisfy maximally the needs of supportive and mixed blessing stakeholders

    Effective Stakeholder Management

    -one major criticism is the complexity and time consuming nature of identifying, assessing, responding

    to stakeholder claims

    -some managers continue to think in shareholder terms because it is easier

    -but thinking in stakeholder term increases is most consistent, though it takes more time

    Stakeholder Management Capability

    -it resides at one of three levels of increasing sophistication

    Level 1: Rational Level

    -a low level of SMC; most orgs have at least identified who their stakeholders are, but not all have

    analyzed the nature of the stakes or the stakeholders power

  • Level 2: Process Level

    -orgs implement organizational processes to scan the env and receive relevant info about stakeholders

    -the info is then used for decision making purposes

    -issues management or crisis management approaches are also used here

    Level 3: Transactional Level

    -highest and most developed; managers engage in transactions

    -aka the communication level; interactiveness, genuineness, satisfaction, resource adequacy

    -Steven F. Walker and Jeff Marr argue that cos should compete on the basis of intangible assets

    Stakeholder Corporation

    -development of loyal relationships with customers, employees, shareholders willbecome one of the

    most important determinants of commercial viability and business success

    Stakeholder symbiosis- idea that recognizes all stakeholders depend on each other for their success and

    financial well being

    Stakeholder Power: Four Gates of Engagement

    -Walker and Marr assessed the commitment level of each stakeholder group

    -each successful stakeholder relationship passes through four stages

    Awareness gate 1; to know that something or someone exists

    -there are often hidden stakeholders who may not be aware of the firm though

    Knowledgeknowledge among stakeholders addresses not only p&s but also about corporate character

    -refers to the cos values, integrity, culture, practices

    Admirationstakeholders must come to trust the firm

    -loyalty and commitment

    Actioncompany can build partnerships that benefit both of you

    -getting referrals from customers, employees, investors

    -main implication of the four gates is the need to effectively manage communications with stakeholders

    of all types

    Principles of Stakeholder Management

    -to provide managers with guiding precepts regarding how stakeholders should be treated

    *Fig 3.9 for the principles*

    -focus is on acknowledge, monitor, listen, communicate, adopt, recognize, work, acknowledge conflicts

    Ch 15- Employee Stakeholders and Workplace Issues

    The New Social Contract

    -the work force of today is more mobile, less loyal, more diverse

    -fewer employees feel their employer is committed to them; trust is declining

    -many have lost faith in the system as a consequence of feeling mistreated and ignored

    -todays employees are seeking competitive pay and benefits coupled with opportunities for

    professional growth

    Social contract- set of reciprocal understandings regarding each partys role and responsibilities

    -pay based on longevity and status has been replaced with rewards based on performance

  • -three main forces drive the collapse of the old social contract:

    -global competition

    -advancements in technology

    -deregulation (of transportation, telecommunications)

    -the new social contract places on employees more responsibility for their own success

    -job security and compensation depend more on what the employee is contributing to the org

    -companies are expected to provide learning opportunities, and honest communication

    Employee Rights Movement

    Private property- holds that individuals and private orgs are free to use their property as they desire

    Meaning of Employee Rights

    Defn- legitimate privileges obtained by workers through group membership that protect them in

    specific ways from the prevailing system of governance

    -guarantees fair treatment in the workplace

    -serves to provide workers with either desired outcomes or protection from unwanted outcomes

    Statutory rights- rights provided by the law

    -includes protection from discrimination, pay equity, occupational health and safety

    Contractual rights- rights deriving from contracts based on oral or written statements

    Implied contract- employers promise of some kind of job security

    -employers should take the necessary precautions to reduce implied contract lawsuits:

    -train managers to conduct hiring procedures properly

    -insert clear statements in employment offers regarding employment/termination conditions

    -provide employee handbooks, employee applications, letters of employment

    -obtain written confirmation that employees have read all the documents

    The Right not to be Fired without Cause

    -in the US, the employment-at-will doctrine allowed an employer to terminate an employment

    relationship at any time for any reason without notice

    -in Canada, the employer must provide reasonable notice, as well as grounds for termination

    Just cause- grounds for terminating an individuals employment under this cause

    Some activities that constitute just cause include

    Serious misconducttheft, assault, dishonesty

    Habitual neglect of dutyfailure to improve over reasonable job requirements

    Conduct incompatible with the employees responsibilitiesactivities that compete with the

    employers business

    Willful disobedience

    -when employers terminate on the basis of just cause, it is their responsibility to prove the existence of

    it; it has to have already existed, not inferred

    Precautions to minimize risk of wrongful dismissal lawsuits

    Dont make promises of permanent employment

    Document disciplinary actions

    Conduct an investigationdone prior to any termination

  • Provide a termination letter and settlement offerindicate that employee is beign dismissed,

    state the effective date of dismissal, set out reasons for termination

    Conduct a termination meetinginform them of the termination, reasons

    -employee shouldnt sign a settlement offer during the meeting, but be given some time

    to review the offer and seek legal advice

    Constructive dismissal- when employer s terms of employment that adversely impacts the employee

    -employers restricting their operations may have to consider altering the terms of employment for

    certain employees

    Managements Response to Employees Job Claims

    Stay on the right side of the lawknow the law and obey it

    Investigate any complaints fullyemployee complaints about company activities should be checked out

    Deal in good faith with employeesemployees win court cases when its determined that the

    companies have acted in bad faith

    When firing someone, make sure it is for a good reason make sure the reason is supported by sound

    records and documentation as proof

    Reasonable Notice vs. Just Cause

    -just cause exists in restricted situations; when an employee has engaged in significant misconduct

    -the Labor Standards Code indicate the minimal notice periods and standards that must be provided

    -length of employment, performance record for eg must be taken into account

    -while some employers retain the employee during the notice period, more commonly, employers will

    pay a salary instead of giving the notice

    -this is due to the fact that office morale may be affected during the notice period; they may

    slack, not perform to the best of their ability, etc

    The Right to Due Process and Fair Treatment

    Due process- the right to receive an impartial review of ones complaints

    -the right of employees to have decisions that adversely affect them be reviewed by objective

    third parties

    -every employee has a right to a public hearing before being demoted, transferred, fired

    A Due Process System

    Employee constitutionalism- a set of clearly defined rights, and a means of protecting employees from

    discharge, demotion

    Main requirements of a due-process system:

    -must follow rules; must be effective

    -must be sufficiently visible that potential violators are aware of it

    -must be institutionalized, perceived as equitable, easy to use, apply to all employees

    Alternative Dispute Resolution (ADR)

    Common Approaches

    Open-door policy- senior level exec that leaves the door open for those who think theyve been treated

    unfairly to walk in and talk whenever they want

  • -assigning an HR department

    From an employees standpoint, issues with this are that the process is closed

    -one person is reviewing what happened

    -there is a tendency for one manager to support another managers decisions

    Hearing procedure- employees to be represented by a lawyer to decide the outcome based on evidence


    Defn- one who investigates reported complaints and helps to achieve equitable settlements

    -to ensure fair treatment of employees

    -the person reports directly to the president, who is the only one that can reverse the persons decisions

    -managers may feel threatened when employees go to the ombudsperson, who must be willing to anger

    execs in order to get the job don

    Peer Review Panel

    -employee is to talk first with the manager, and then HR manager, and then a higher exec

    -if employee is still not satisfied, they are entitled to request a peer review board

    -consists of two randomly chosen peers of the aggrieved employee, along with one disinterested exec

    from a different position

    -the success of this depends on having the clear support of top management for fair treatment, and

    being seen as a permanent fixture

    -ADR is growing more though; this is money saved by avoiding expensive litigation

    Freedom of Expression in the Workplace

    -employee may sometimes find themselves balancing obligations of loyalty to the employer with the

    right to free expression of opinions

    -individuals involved in a labour dispute may legally picket not only outside the employers premises, but

    at other locations as well (known as secondary picketing)

    -most whistle blowers stories lack happy endings though; are often negative outcomes

    -they may lose their jobs, endure more stress, encounter harassment


    Defn- one who exposes what they consider to be unconscionable practices of their own org

    -one who reports to an outside party some wrongdoing

    -the disclosure by org members of illegal, immoral, practices under the control of their employers

    4 key elements in the whistle-blowing process:

    -the whistle blower -the act/complaint

    -the party to whom the report is made -the org against which the complaint is made

    -the emerging view of employee responsibility holds that the employee has a duty not only to the

    employer, but also to the public

    Consequences of Whistle-Blowing

    -whistle-blowers are seldom rewarded; most often they encounter negative experiences

  • Eg. Criticism of work; less desirable work assignments

    -pressure to drop charges, heavier workloads, lost perks, exclusion from meetings

    Governments Protection of Whistle-Blower

    -Environmental Protection Act, Labour Code, Competition Law

    -some support for whistle-blower rights in the provincial section

    -no comprehensive protection plan for whistle blowers in Canada

    -Sarbanes Oxley permits an employee of a publicly traded company to sue the company if the employee

    suffers retaliation as a result of providing info regarding corporate violations

    -New Brunswick is the only province that offers protection of rights of whistle blowers in private sector

    Government efforts should:

    -allow whistle blowers to report anonymously

    -establish independent enforcement agencies to examine reports of whistle blowers

    -empower enforcement agencies to fully protect whistle blowers

    -permit the right to appeal any enforcement agencys decisions to court

    -reward whistle blowers accordingly

    There are some forms of speech that shouldnt be protected though:

    -employees shouldnt have the right to make personal accusations

    -they should not be entitled to make accusations that dont reflect a conviction that wrong is

    being done

    -shouldnt be entitled to object t6op discharge if management can demonstrate violation of a

    code of conduct was the reason for its actions

    Management Responsiveness to Potential Whistle-Blowing Situations

    company should assure employees the org wont interfere with their basic political freedoms

    orgs grievance procedures should be streamlined so employees can obtain direct hearings

    orgs concept of social responsibility should be reviewed

    org should communicate respect for the consciences of employees

    -whistle blowing can be averted if management listens and be responsive to employees concerns

    Companies should engage in the following to be responsive to employees:


    -delve into why the employee is pursuing the complaint

    -look for solutions that will addre4ss the interests of both objector and company

    -attempt to establish an equitable means of judging future actions

    Four key components of a model whistle-blower policy:

    Shout it from the rooftops: encourages employees to bring forward wrongdoing

    Face the fear: directing complaints to someone outside the wbs chain of command

    Get right on it: immediately investigate it

    Go public: show the public that complaints are taken seriously

    Ch 16- Employee Stakeholders: Privacy, Safety, and Health

    Right to Privacy in the Workplace

  • -the increase in workplace monitoring has led to new ethical considerations

    -privacy includes the right to be left alone, the right to autonomy

    -claim of individuals/groups to determine when, how and to what extent info about them can be

    communicated to others

    -info is stored in federal agencies, provincial agencies, local departments and businesses

    -Canadians are protected by 2 federal privacy laws;

    -Privacy Act and PIPEDA

    -Privacy Act places limits on the collection, use and disclosure of personal info

    -allows Canadians to correct personal info as needed

    -PIPEDA applied to the commercial activities and employment relationships

    Three main issues that are important of data collecting:

    Collection and Use of Employee Information by Employers

    -personal info includes any factual or subjective info

    -controlling a persons personal info means controlling the collection and use of that info

    -PIPEDA is aimed at controlling employers behaviour with regard to the collection of the data

    PIPEDA requires that companies must obtain consent for use of info, except for specific circumstances;

    -companies can use personal info only for the purpose that they gave consent to

    -companies must limit the collection/use of info to purposes that the person would deem

    appropriate for use

    -individuals have a right to access the personal info

    -businesses must conform to the law

    The individual must be aware of the fact that the company is using their personal info

    -the purpose behind data collection

    -the recipients of the personal info, and the nature of the privacy controls

    Steps in developing a system:

    Appoint a compliance teamdetermine who is responsible for ensuring compliance

    Assess existing privacy policiesensure policies are in compliance with PIPEDA

    Adopt a privacy code or privacyit will become the orgs public statement about its privacy standards

    Conduct a personal info practices auditwhat prsonal info is collected, how its used, how long its kept

    Assess purposes for use and disclosureensure the info is for reasonable use

    Assess existing info on fileindividuals have the right to access their personal info

    Identify when, where, what kinds of consents are requiredinstruments for obtaining consent must be

    designed, as well as the form of consent (express, opt-out, implied consent)

    Assess collateral collection and uses of personal inforequired to ensure uses are reasonable and

    necessary to achieve the purpose

    Implement organizational protocolspolicies to oversee approvals for all info collection

    Plan for regular compliance auditsassess how the org is conforming to policies

    -companies need to be careful not to misuse the information collected

    -the employer need to understand that the info collected isnt a commodity to be exchanged or sold

    -employees should know what info is being stored, and have the chance to correct any info

  • Testing of Employees

    Integrity Testing: aka honesty tests

    -done to stem employee theft, to avoid negligent hiring suits

    -to screen employees in a cost effective way, to replace polygraphs

    -the questions asked usually require simple yes or no answers

    -the tests are inexpensive, quick to administer, and easy to grade

    Drug Testing

    -businesses are reluctant to conduct drug tests due to invasion of moral issue/privacy

    -inaccuracy of these tests, negative impact on employee morale

    -tests only show the use of it, not abuse

    -is costly; management, employee and unions oppose this

    -the Canadian Human Rights Commission banned all drug testing on employees, though random alcohol

    testing is still allowed

    -employees that are substance abusers create higher financial burdens in compensation claims,

    accidents, negligence in their work

    Arguments for Drug Testingemployers have the right to protect their own employees

    -they are responsible to the general public in providing safe workplaces

    Arguments against Drug Testinginvasion of privacy, and the accuracy of the drug tests

    -do employers have a right to know if they employees use drugs

    Guidelines for Drug Testing

    -management shouldnt discipline someone for refusing to take a drug test

    -the tests should only be used when there is a legit suspicion of abuse

    -focus of the test should be placed on-the-job performance only

    -if an employees status is going to be affected by the outcome of a drug test, the confirmatory test

    should be conducted

    -privacy of the employee is to be respected

    Monitoring Employees on the Job

    Employee monitoring includes recording phone calls, voice mail, reading computer files, taping them

    -Internet is often looked at; e-mails

    -monitoring is an invasion of privacy, and also unfair treatment

    -can cause stress and tension, low morale, job insecurity

    -in response to alleged employee crimes, employers have placed cameras in pinholes in walls, LD

    cameras for overseas operations, and video evidence

    Policy Guidelines on the Issue of Privacy

    Steps that management may consider taking to be responsive to employee stakeholders:

    Prepare a privacy impact statementanalyze the implications to which all systems are subjected

    Construct a comprehensive privacy planensure privacy controls are integrated at the beginning

    Train employees who handle personal infoso theyre aware of the importance of protecting privacy

  • Make privacy a part of social responsibility programsmake employees aware of it

    Chief Privacy Officer (CPO)- responsible for monitoring, protecting the private info held by firms

    Workplace Health and Safety

    Occupational injury- any cut, fracture, sprain, amputation from a workplace incident

    -workers involvement in this can be direct or indirect

    Occupational illness- any condition caused by the work environment

    -varies from acute to chronic

    Role of the Government

    -enforce occupational health and safety legislation

    -conduct workplace inspections

    -disseminate health and safety info

    -promote training, education and research

    -resolve workpalce disputes regarding occupational health and safety

    -the CCOHS is a federal dpt corp that enhances workplace health and safety through supporting efforts

    to eliminate work related illnesses and injuries

    -it gives info and advice that promotes safe working environments

    -Bill C-45 imposes criminal liability on corps that fail to take reasonable measures to protect employee

    and public safety

    The org can be held criminally liable:

    -as a consequence of actions by senior officers who oversee day to day operations but who may

    not be directors

    -exec officers who intentionally commit crimes to benefit the org

    -those who are aware of offences but dont take action to stop them

    -those who show a lack of care that constitutes criminal negligence

    Role of the Employer

    -establish a joint health and safety committee

    -take appropriate precautions to ensure the workplace is safe

    -train employees, supply personal protective equipment

    -report all critical injuries to the proper gov department

    -appoint a supervisor to ensure safe working conditions

    -communicate to employees the health and safety requirements

    -maintain records, document and annual summary of work

    -employers must report to the Workers Compensation Board

    -employees injured at work can receive benefits in the form of a cash payout or wage loss payments

    Role and Rights of Employees

    -work in compliance with occupational health and safety acts and regulations

    -use personal protective equipment

    -report workpalce hazards and dangers

    -work in a manner as required by the employer

  • Occupational Health and Safety Act outlines 3 main rights of all employees to a safe workplace:

    -right to refuse unsafe or hazardous work

    -right to participate in the workplace health and safety activities

    -right to know, or the right to be informed about work place safety

    Workplace Hazardous Materials Information System (WHMIS) requires employers to:

    -label containers of hazardous materials

    -provide MSDSs with additional info

    -provide education so employees understand the hazards

    Workplace Violence

    -there has been increased gov legislation

    -employers are to write a report on the incident, describing what action and what change will occur

    Promoting Health and Safety in the Workplace

    -joint safety and health committees

    -lifestyle info; flexible working hours; employee involvement initiatives

    -active lifestyle programs; work-life balance initiatives; self directed work teams

    Safety Programs

    -maintain an employee-management safety committee with reps from management, each dpt,

    employee representatives to investigate accidents and helping publicize the importance of safety

    -leads to higher motivation to conform with the safety rules

    -is a good idea for management to encourage employees to participate

    -employees can involve by helping set safety standards, safety training

    -assist with design of programs, establish safety incentives, participate in investigations

    -employee handbooks should be given or placed somewhere everybody can access it

    Employee Assistance Programs

    -EAPS help with alcohol and drug abuse problems, as well as financial/emotional stress

    -aging, legal problems, emotional, social difficulties

    -aka broad brush EAP

    -they should be a part of a comprehensive company plan to promote wellness

    Family-Friendly Workplace

    -they look out for the mental and psychological health of their employees

    -there is an increase in corporate support for families in the workplace

    -these programs bring issues of resentment developing among childless couples, family feuds at work

    -due to these programs, it shows a change in the corporate culture

    Ch 17- Employee Discrimination and Employment Equity

    Challenges in the Labour Pool

    Designated groups- women, Aboriginals, visible minorities, people with disabilities


    -they have both lower status and lower pay

    -theyre underrepresented in semiprofessional occupations, management and board positions,

  • supervisors in crafts and sales and service personnel

    -stereotyping and preconceptions of womens roles and abilities

    -they hit the glass ceiling, and do not get accepted into the exec level culture

    -there are extreme barriers for them to career advancement

    Aboriginal or First Nations People

    -underrepresented in the work force

    -they face a huge educational challenge, big dropout rates

    -employment is limited due to the small number of opportunities near their reserves

    Individuals with Disabilities

    -higher unemployment rate compared to the national average

    -attitudinal barriers, physical demands, inadequate access to the technical and human support systems

    Visible Minorities

    -culturally biased aptitude tests, lack of recognition or foreign credentials, high language requirements

    -foreign born visible minorities experience the greatest difficulty finding desirable work


    Legal Protection

    Canadian Charter of Rights and Freedoms

    -aim is to balance individual and collective rights

    Fundamental rights of all Canadians include

    -freedom of speech, press, assembly, association, religion

    -democratic rights

    -right to move freely from province to province for residence or employment

    -legal, equality, language rights

    Canadian Human Rights Act

    -ensures equality of opportunity and freedom from discrimination in the fed jurisdiction

    -includes race, colour, ethnic origin, religion, age

    -it protects the rights of Canadians but applies to a specific class or organizations; all fed gov dpts, Crown

    corporations, businesses and industries under fed jurisdiction, insurance and communications cos

    Canadian Human Rights Commission

    -prohibits employment discrimination in federally regulated businesses, like race, religion, sex, age,

    ethnic origin, marital status, handicap

    -examines allegations of discrimination to establish greater equality

    -it provides effective and timely mans for resolving complaints

    -promotes knowledge of human rights, and helps reduce barriers in equality

    -to file a complaint, the complainant must complete a written report first

    -the CHRC rep assesses the facts and determines whether the claim is legitimate

    -investigator gathers more facts and a report is submitted to the CHRC to recommend either

    substantiation or nonsubstantiation

    -if substantiated, the parties attempt to settle the matter, and if they cant a human rights

    tribunal may be appointed

    -the tribunal has the power to seek damages for the victim

  • Expanded Meanings of Discrimination

    Direct Discrimination or Disparate Treatment

    Disparate treatment- unequal treatment due to race, colour, sex

    Indirect Discrimination: Adverse Effect or Disparate Impact

    -all groups are to be treated equally, without regard for colour, sex or other traits

    -employers may be justified in discriminatory policies if based on a bona fide occupational qualification

    -any policy viewed as discriminatory must pass three criteria to support it is a bona fide occupl rqmt

    -it must be rationally related to the requirements of job performance

    -must be created in good faith

    -reasonable necessary in order to accomplish a valid purpose

    -BFOR is permissible if the employer can prove this discrimination is necessary for business operations

    Systemic Discrimination

    -occurs when problems of discrimination are embedded in institutional policies and practices

    -thought the practice may apply to everyone, they create a distinction between groups of individuals

    which disadvantage one group based on shared personal characteristics

    To assess whether organizational policies harbor systemic barriers:

    -is it job related -is it consistently applied

    -is it valid -does it have a disparate impact

    -is it a business requirement -does it conform to human rights

    Eg. Workplace environment that doesnt expressly discourage sexual harassment

    -job descriptions that undervalue the work of positions traditionally held by women

    -physical access that restricts those who are mobility impaired

    Issues in Workplace Discrimination

    Sex Discrimination

    Moving into Professional/Managerial Positions

    -male CEOs blamed glass ceiling on womens lack of experience and time

    -female execs disagreed, saying the exclusionary corporate culture is the reason why they dont advance

    Sexual Harassment

    Quid pro quo harassment- type of sexual harassment where something is given/received for sthg else

    Hostile work env harassment- employee perceives a hostile work env by uninvited sexually oriented

    behaviours being present in the workplace

    Corporate Responses to Sexual Harassment

    -letters from CEO, workshops, training as to what constitutes sexual harassment

    -worker orientation programs, films, role playing exercises, sexual harassment audits

    -they may choose to educate employees more, reissue written policy

    -make employees aware, update training programs, get input from women employees

    Age and Religious Discrimination

    -involves older workers being laid off to save money because younger workers can be paid less

    -many companies require workers to sign waivers of their right to sue in order to receive severance pkgs

  • Reasonable accommodation- adapting employment policies so that no individual is denied benefits,

    disadvantaged with respect to employment opportunities

    -includes reallocating tasks, redesigning job duties, revising work schedules

    -human rights tribunals across Canada require employers to demonstrate fleexibi.ity in accommodating

    the needs of employee

    Employment Equity

    Defn- treatment of employees in a fair and nonbiased manner

    -some objectives include eliminating employment barriers for the four designated groups

    -redressing past discrimination in employment opportunities

    -improve access for the designated groups

    -to foster a climate of equity, to implement positive policies

    Legal Basis of the Employment Equity Act

    -identify and removing systemic barriers that affect the four designated groups

    -Employment Equity Act achieves equality in the workplace

    -the act governs private sector employers under federal jurisdiction

    -it requires employers and Crown corps that have 100+ employees and are regulated under the Canada

    Labour Code to implement employment equity

    Employment Equity Planning in the Organization

    Step 1: Senior Management Commitment

    -the business leader can issue written policies to describe the orgs commitment to employment equity

    -explain what employment equity is, reason for the program, implications for current/future employees

    -info sessions, workpalce posters, departmental or group meetings, newsletters, employee handbooks

    Step 2: Data Collection and Analysis

    -assessment of employment practices and policies

    -permits employers to gather data on members of designated groups with the consent of employees

    Step 3: Employment Systems Review

    -personnel activities like recruitment, hiring, training, development, promotion, job classification,

    discipline, termination

    Step 4: Establishment of a Work Plan

    -concrete goals like numerical goals with time frames

    -programs aimed at achieving the estimated goals

    -planned changes in hiring, training, promotion

    -methods of monitoring and evaluating the program implementation

    Step 5: Implementation

    -success of plan implementation depends on the clear definitions of roles and responsibilities, training

    and effective communication

    -plan strategies may be altered or terminated when the results arent achieved

    Step 6: Evaluation, Monitoring, Revision

    -progress reports are provided to all members to communicate plan initiatives and outcomes

  • Advocates and Opponents of Employment Equity

    Preferential treatment- whenever an injustice is done, just compensation or reparation is owed to the

    injured party or parties

    -underlying rationale for this is compensatory justice

    Reverse discrimination- when any preference is given to minorities, women or other groups,

    discrimination may occur against those in the majority

    -employment equity has practical business value in customer relations, especially for makers of

    consumer goods and providers

    -the diversity programs constitute a competitive advantage or used as competitive weapons

    Pay Equity

    Defn- refers to two diff issues; the legislation and the principles behind it

    -objective of pay legislation is to eliminate the wage gap b/n men and women

    -pay equity refers to the equal pay for equal work;

    -and equal pay for work of equal value or comparable worth

    -workers doing the same job should receive the same pay

    -male and female workers must be paid the same wage rate for jobs of a similar nature even though

    they may have different titles (nurses aide and orderly)

    -workers should receive the same pay if those diff jobs have equal inherent worth

    -comparisons are based on the amount and type of skill, effort, responsibility needed

    Ch 16- Employee Stakeholders: Privacy, Safety, and Health

    Right to Privacy in the Workplace

    -the increase in workplace monitoring has led to new ethical considerations

    -privacy includes the right to be left alone, the right to autonomy

    -claim of individuals/groups to determine when, how and to what extent info about them can be

    communicated to others

    -info is stored in federal agencies, provincial agencies, local departments and businesses

    -Canadians are protected by 2 federal privacy laws;

    -Privacy Act and PIPEDA

    -Privacy Act places limits on the collection, use and disclosure of personal info

    -allows Canadians to correct personal info as needed

    -PIPEDA applied to the commercial activities and employment relationships

    Three main issues that are important of data collecting:

    Collection and Use of Employee Information by Employers

    -personal info includes any factual or subjective info

    -controlling a persons personal info means controlling the collection and use of that info

    -PIPEDA is aimed at controlling employers behaviour with regard to the collection of the data

    PIPEDA requires that companies must obtain consent for use of info, except for specific