Business Horizons

Business Horizons / July-August 1991

By carefully considering the described stakeholder orientations under each of the three ethical types, a richer appreciation of the moral management approach should be possible. Our goal here is to gain a fuller understanding of what it means to engage in moral management and what this implies for interacting with stakeholders. To be sure, there are other stakeholder groups to which moral management should be directed, but again, space precludes their discussion here. This might include thinking of managers and nonmanagers as distinct categories of employees and would also embrace such groups as suppliers, competitors, special interest groups, government, and the media.

hough the concept of corporate social responsibility may from time to time be supplanted by various other focuses such as social responsiveness, social performance, public policy, ethics, or stakeholder management, an underlying challenge for all is to define the kinds of responsibilities management and businesses have to the constituency groups with which they transact and interact most frequently. The pyramid of corporate social responsibility gives us a framework for understanding the evolving nature of the firm’s economic, legal, ethical, and philanthropic performance. The implementation of these responsibilities may vary depending upon the firm’s size, management’s

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Figure 6 Three Moral Types and Orientation Toward Stakeholder Groups: Customers and Local Community Type ofManagement Immoral Management Orientation Toward Customer Stakeholders Customers are viewed as opportunities to be exploited for personal or organizational gain. Ethical standards in dealings do not prevail; indeed, an active Intent to cheat, deceive, and/or mislead is present. In all marketing decisions—advertising, pricing, packaging, distribution—customer is taken advantage of to the fullest extent. Management does not think through the ethical consequences of its decisions and actions. It simply makes decisions with profitability within the letter of the law as a guide. Management is not focused on what is fair from perspective of customer. Focus is on management’s rights. No consideration is given to ethical implications of interactions with customers. Customer is viewed as equal panner in transaction. Customer brings needs/ expectations to the exchange transaction and is treated fairly. Managerial focus is on giving customer fair value, full information, fair guarantee, and satisfaction. Consumer rights are liberally interpreted and honored. Orientation Toward Local Community Stakeholders Exploits community to fullest extent; pollutes the environment. Plant or business closings take fullest advantage of community. Actively disregards community needs. Takes fullest advantage of community resources without giving anything in return. Violates zoning and other ordinances whenever it can for its own advantage. Does not take community or its resources into account in management decision making. Community factors are assumed to be irrelevant to business decisions. Community, like employees, is a factor of production. Legal considerations are followed, but nothing more. Deals minimally with community, its people, community activity, local government. Sees vital community as a goal to be actively pursued. Seeks to be a leading citizen and to motivate others to do likewise. Gets actively involved and helps institutions that need help—schools, recreational groups, philanthropic groups. Leadership position in environment, education, culture/arts, volunteerism, and general community affairs. Firm engages in strategic philanthropy. Management sees community goals and company goals as mutually interdependent.

Amoral Management

Moral Management

Type of Management Immoral Management

Amoral Management

Moral Management

The Pyramid of Corporate Social Responsibility
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