Assignemnt

Submitted To:

Sir Kamran Shakir

Tahira Kainat (Msci232101010)

BBA_2A
Topic:

Principles Of Management

DEPARTMENT OF BUSINESS ADMINISTRATION

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Managing Ethical Lapses and Social Irresponsibility.
Even after public outrage over the Enron-era misdeeds, irresponsible and unethical practices
by managers in all kinds of organizations haven’t gone away, as you’ve observed with some
of the questionable behaviors that took place at financial services firms such as
GoldmanSachs and Lehman Brothers. But what’s more alarming is what’s going on “in the
trenches "in offices, warehouses, and stores. One survey reported that among 5,000
employees: 45 percent admitted falling asleep at work; 22 percent said they spread a rumor
about a coworker;18 percent said they snooped after hours; and 2 percent said they took
credit for someone else's work.71Unfortunately, it’s not just at work that we see such
behaviors. They’re prevalent throughout society. Studies conducted by the Center for
Academic Integrity showed that 26percent of college and university business majors admitted
to “serious cheating” on exams and 54 percent admitted to cheating on written assignments.
But business students weren't the worst cheaters—that distinction belonged to journalism
majors, of whom 27 percent said they had cheated.72 And a survey by Students in Free
Enterprise (SIFE) found that only19 percent of students would report a classmate who
cheated.73 But even more frightening is what today’s teenagers say is “acceptable.” In a
survey, 23 percent said they thought violence toward another person is acceptable on some
level.74 What do such statistics say about what managers may have to deal with in the
future? It’s not too far-fetched to say that organizations may have difficulty upholding high
ethical standards when their future employees so readily accept unethical behavior. What can
managers do? Two actions seem tube particularly important: ethical leadership and protecting
those who report wrongdoing.

ETHICAL LEADERSHIP.
Not long after Herb Baum took over as CEO of Dial Corporation, he got a call from Reuben
Mark, the CEO of competitor Colgate-Palmolive, who told him head a copy of Dial’s
strategic marketing plan that had come from a former Dial salesperson who recently had
joined Colgate-Palmolive. Mark told Baum that he had not looked at it, didn't intend to look
at, and was returning it. In addition, he himself was going to deal appropriately with the new
salesperson.75 As this example illustrates, managers must provide ethical leadership. As we
said earlier, what managers do has a strong influence on employees 'decisions whether to
behave ethically. When managers cheat, lie, steal, manipulate, take vantage of situations or
people, or treat others unfairly, what kind of signal are they sending to employees (or other
stakeholders)? Probably not the one they want to send. Exhibit 5-9gives some suggestions on
how managers can provide ethical leadership.
PROTECTION OF EMPLOYEES WHO RAISE ETHICAL ISSUES.
What would you do if you Saw other employees doing something illegal, immoral, or
unethical? Would you step forward? Many of us wouldn’t because of the perceived risks.
That’s why it’s important for managers to assure employees who raise ethical concerns or
issues that they will face no personal or career risks. These individuals, often called whistle-
blowers, can be a key art of any company’s ethics program. For example, Sharron Watkins,
who was a vice-president at Enron, clearly outlined her concerns about the company’s
accounting practices in a letter to chairman Ken Lay. Her statement that, “I am incredibly
nervous that we will implode in a wave of accounting scandals” couldn’t have been more
prophetic.76 However, surveys show that most observers of wrongdoing don’t report it and
that's the attitude managers have to address.77 How can they protect employees so they’re
willing to step up if they see unethical or illegal things occurring? One way is to set up toll-
free ethics hotlines. For instance, Dell has an ethics hotline that employees can call
anonymously to report infractions that the company will theninvestigate.78 In addition,
managers need to create a culture where bad news can be heard and acted on before it’s too
KhwajaFareedUniversityofEngineeringandInformationTechnologyRahimYarKhan
late. Michael Josephson, founder of the Josephson Institute of
Ethics[www.josephsoninstitute.org] said, “It is absolutely and unequivocally important to
establish culture where it is possible for employees to complain and protest and to get
heard.”79 Even if some whistle-blowers have a personal agenda they’re pursuing, it’s
important to take them seriously. Finally, the federal legislation Sarbanes-Oxley offers some
legal protection. Any manager who retaliates against an employee for reporting violations
faces a stiff penalty: a10-year jailsentence.80 Unfortunately, despite this protection, hundreds
of employees who have stepped forward and revealed wrongdoings at their companies have
been fired or let go from their jobs.81 So at the present time, it’s not a perfect solution, but is
a step in the right direction.

Social Entrepreneurship.
The world’s social problems are many and viable solutions are few. But numerous people and
organizations are trying to do something. For instance, Reed Paget, founder and CEO of
British bottled water company Belo, made his company the world's first to become carbon-
neutral. Its bottles are made from corn and can be composted into soil. Also, Belo's profits go
toward projects that bring clean water to parts of the world that lack access to it. Paget has
chosen to pursue a purpose as well as a profit.82 Heist an example of a social entrepreneur,
an individual or organization who seeks out opportunities to improve society by using
practical, innovative, and sustainableapproaches.83 “What business entrepreneurs are to
theeconomy,social entrepreneurs are to social change.”84Social entrepreneurs want to make
the world a better place and have a driving passion to make that happen. For example,
AgSquared aims to help small farmers, who make up 90 percent of the farms in the United
States, keep better track of critical information such as basic accounting of seeds, soil data
and weather mapping, and even best practices from the farm community.85 Also, social
entrepreneurs use creativity and ingenuity to solve problems. For instance, Seattle-based
PATH (Program for Appropriate Technology in Health) is an international nonprofit
organization that uses low-cost technology to provide needed health-care solutions for poor,
developing countries. By collaborating with public groups and for-profit businesses, PATH
has developed simple life-saving solutions, such as clean birthing kits, credit-card sized lab
test kits, and disposable vaccination syringes that can’t be reused. PATH has pioneered
innovative approaches to solving global medical problems.86What can we learn from these
social entrepreneurs? Although many organizations have committed to doing business
ethically and responsibly, perhaps there is more they can do, as these social entrepreneurs
show. Maybe, as in the case of PATH, it’s simply a matter of business organizations
collaborating with public groups or nonprofit organizations to address a social issue. Or
maybe, as in the case of AgSquared, it’s providing expertise where needed. Or it may involve
nurturing individuals who passionately and unwaveringly believe they have an idea that
could make the world a better place and simply need the organizational support to pursue it
Businesses Promoting Positive Social Change.
Since 1946, Target has contributed 5 percent of its annual income to support community
needs, an amount that adds up to more than $3 million a week. And it’s not alone in those
efforts. “Over the past two decades, a growing number of corporations, both within and
beyond the United States, have been engaging in activities that promote positive
socialchange.”87 Businesses can do this in a couple of ways: through corporate philanthropy
and through employee volunteering efforts.
CORPORATE PHILANTHROPY.
Corporate philanthropy can be an effective way for companies to address societal
problems.88For instance, the breast cancer “pink” campaign and the global AIDS Red
campaign (started by Bono) are ways that companies support social causes.89 Many
organizations also donate money to various causes that employees and customers care about.
KhwajaFareedUniversityofEngineeringandInformationTechnologyRahimYarKhan
In 2008 (latest numbers available), the three largest cashgivers—Walmart, Bank of America,
and ExxonMobil—donated more than $734 million.90Others have funded their own
foundations to support various social issues. For example,Google’sfoundation—
calledDotOrgbyitsemployees—hasabout$2billioninassetsthat it will use to support five areas:
developing systems to help predict and prevent disease pandemics, empowering the poor with
information about public services, creating jobs by investing in small and midsized businesses
in the developing world, accelerating the commercialization of plug-in cars, and making
renewable energy cheaper than coal.91
EMPLOYEE VOLUNTEERING EFFORTS.
Employee volunteering is another popular way for businesses to be involved in promoting
social change. For instance, Molson-Coors’ eleven member executive team spent a full day at
their annual team-building retreat building arouse in Las Vegas with Habitat for Humanity.
PricewaterhouseCoopers employees renovated an abandoned school in Newark, New Jersey.
Every Wachovia employee is given six paid days off from work each year to volunteer in his
or her community. Other businesses are encouraging their employees to volunteer in various
ways. The Committee to Encourage Corporate Philanthropy says that more than 90 percent of
its members had volunteer programs and almost half encouraged volunteerism by providing
paid time off or by creating volunteer events.92 Many businesses have found that such efforts
not only benefit communities, but enhance employees’ work efforts and motivation.

KhwajaFareedUniversityofEngineeringandInformationTechnologyRahimYarKhan