ABE DIPLOMA IN HRM

HUMAN RESOURCE MANAGEMENT

UNIT 2: ETHICS & CORPORATE SOCIAL RESPONSIBILITY IN HRM

REVISION QUESTIONS & ANSWERS

SYLLABUS POINTS

2. Describe the wide range of competing and sometimes contradictory theories about ethics.
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2. Explain the importance of providing equal opportunity to all employees and potential employees in every aspect of HRM and that
2 equal opportunity means absence of discrimination on grounds of religion, ethnicity, gender, and disability. Distinguish between
anti-discrimination legislation and ethical employment.
2. Discuss diversity and the need to take account of difference in employing and developing people.
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2. Discuss examples of ethical dilemmas in managing people.
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2. Outline the range of arguments in the context of Corporate Social Responsibility.
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1. What is Ethics?
- Ethics is about morality – that is having the right and honourable conduct. Ethics varies from country to country.

2. What are the 2 levels at which Ethics operate?

- Organisational level.
- Individual manager/employee level.

3. Give examples of unethical behaviour by organisations.

- Polluting the environment.
- Taking advantage of the employees.

4. Give examples of unethical behaviour by an individual manager/employee.

- Leaking information to competitors.
- Harassment of colleagues.
- Dismissing a poor performer immediately.

5. Give some factors that encourage businesses to be ethical.

- Laws that prohibit employees from being exploited (eg: employment laws, consumer protection laws, etc.)
- Pressure groups/trade unions putting pressure on organisations to act ethically.
- Consumers boycotting products of an organisation that acts unethically.

6. To whom should the organisations be accountable and why?

- Shareholders: they are the owners of the company and must receive a return on their shares.
- Employees: they work for the organisation and there are statutory obligations to safeguard their interests and rights.
- Suppliers: they are the external sources of supply to the organisation and their well being is vital.
- Customers: due to increasing competition, and since they are main source of income, companies have to treat them
well.
- Society: organisations have a responsibility towards improving national economies, and society’s wellbeing.
- Local Communities: that is where products are grown, processed, distributed and sold so organisations need to give
them back.

7. What is consumerism? And what were the results of that?

- Consumerism is a movement, in modern societies, to guard and promote the interests of consumers against the
considerable power of the large firms who sell goods and services.
- Because of consumerism,
 Laws have been made to protect consumers.
 Consumer groups have formed to monitor the implementation of those laws.
 Regulators have been established and are publicly funded to promote fair-trading.

8. Who is a stakeholder? And what are the types of stakeholders?

- A stakeholder is a person or group of people who affect, or can be affected by, an organisation's activities.
- Types of stakeholders:
Internal stakeholders, eg: the employees and management.
Connected stakeholders, eg: the shareholders, bankers, customers and suppliers.
External stakeholders, eg: the government, competitors, local authorities, community,

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Human Resource Management, ABE Diploma in HRM, Unit 2, Revision Questions & Answers
© Ali Hashim, Clique College, Male, Maldives
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9. State the specific interest that each type of stakeholder has on the organisation.
- Employees: interested in continuity of employment, growth of the organisation, esteem arising from identification with
organisation’s, etc.
- Management: interested in continuity of employment, growth of the organisation, esteem arising from identification
with organisation’s, etc.
- Shareholders: interested in dividends, shares, decision making, legal compliance, etc.
- Bankers: interested in the financial performance of the organisations.
- Customers: interested in good quality goods & services at the right price.
- Suppliers: interested in ongoing and mutually beneficial ventures, payment on time, etc.
- Government: interested in legal compliance, jobs, taxes, business information, etc.
- Competitors: concerned about fair competition, business ethics, mutual respect, etc.
- Local authorities: interested in revenues through local taxation, impact of the business on the local environment, etc.
- Community: concerned about goods and services, whether or not they are produced in a safe environment, protecting
its workers and those living in the vicinity, etc.
- Schools/Colleges: interested in information on job opportunities, what the company actually does, its contribution to
society, etc.

10. What is stakeholder theory?

- It is a theory that states that a business has moral duties that extend well beyond serving the interests of its owners (or
stockholders), and these duties consists of more than simply obeying the law. They believe a business has moral
responsibilities to the stakeholders and it has to balance the responsibilities to various stakeholders.

11. What to do when stakeholders want different things?

- Organisations have to balance rewards to stakeholders with the contributions that stakeholders make to the firm.
Sometimes conflicts that arise have no obvious solution but have to be balanced carefully and diplomatically.

12. What to do when stakeholders want different things?

- Organisations have to balance rewards to stakeholders with the contributions that stakeholders make to the firm.
Sometimes conflicts that arise have no obvious solution but have to be balanced carefully and diplomatically.

13. Can the same stakeholder want opposite things? Give examples.
- Yes. An employee can be a shareholder if they are given bonuses on the profit they help to make to the organisation.
- In retail supermarkets, employees can be shareholders as well as customers.
- As employees, they want more bonuses, but as shareholders they may want more dividends or bonuses which will be
more if the labour costs are cut.
- As a customer the stakeholder want reduced utility bills and they do not want to pay high charges for electricity, but as
a shareholder of that same company, he or she may want more dividends and that can be achieved by charging the
high utility fees.

14. Name the basic beliefs upon which organisations’ decisions are mostly founded upon?
- Deontology: the organisation has a responsibility to act in ways that respect the fundamental rights of human beings.
- Utilitarianism: the business should serve the greatest good of the greatest number.
- Teleology: the end justifies the means, irrespective of the damage that is caused to people on the way to utopia.
- Egoism: that moral behaviour should be considered in terms of personal self-interest.

15. What is Corporate Social Responsibility (CSR)?

- CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis (The European Commission).
- CSR is concerned with the ways an organisation exceeds the minimum obligations to stakeholders specified through
regulation and corporate governance (Johnson, 2005).
- CSR is about how organisations conduct their business in an ethical way, ensuring that their activities do not harm the
economy, society and environment, and not violate human rights (CIPD, 2007).

16. What is the alternative view of CSR?

- The responsibility of a business is to its shareholders and only those activities that increase profitability and
shareholders’ dividends should be encouraged.
- If the main purpose of a business is to maximize the returns to its shareholders, then it could be unethical for a
company to consider the interests and rights of anyone else.
- This is echoed by Milton Friedman, 1970 - “Few trends could so thoroughly undermine the very foundations of our free society
as the acceptance by our corporate officials of a social responsibility other than to make as much money for their stakeholders as
possible”

17. What are the points in favour of CSR?

- Legal obligations cannot cover every eventuality.
- Common sense demands good corporate citizenship.
- Social obligations are relatively inexpensive.
- Governments, charities, etc. do not have sufficient resources to meet all community needs.
- Managers are well qualified to make decisions that help the community or society.
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Human Resource Management, ABE Diploma in HRM, Unit 2, Revision Questions & Answers
© Ali Hashim, Clique College, Male, Maldives
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 - Moral obligations can be enlightened self-interest.
- Public image is important.

18. What are the points against CSR?

- Laws already govern organisations.
- ‘Good corporate citizenship’ is hard to define.
- CSR may be wasting organisations’ scarce resources.
- Organisations do not exist to carry out ‘good works’ - there is conflict between social obligations and profit
maximisation.
- Hard to consult shareholders about CSR practicalities.

19. Give examples of CSR activities done by companies.

- Donating money to AIDS charities.
- Setting up education facilities for children and adults (eg: Shell Foundation).
- Pollution control and cleaning programmes.

20. State the ways in which CSR can be applied in HRM.

- Fair and open recruitment.
- Balancing the needs of employees and their families (e.g. pay and job security) with business survival and profitability
(e.g. offshoring).
- Fair pay structures and performance rewards.
- Provision of career development.
- Openness and partnership working with unions, other employee representative bodies and directly with employees.
- Health, safety and welfare provisions above the legal minimum.
- Grievance procedures and supporting culture.
- Acceptance of whistle-blowing.
- Fair treatment: equality and diversity (sex, race, disability, religion, sexual orientation, age) - prevention of less
favourable treatment, harassment and victimisation.
- Fairness in discipline and termination (especially redundancy and outplacement).

21. What is whistle blowing? Give examples?

- Whistle blowing is intervention by an employee to bring the wrongs (or perceived wrongs) of the employer to the
attention of the owners of the company, government or the public at large.
- Eg: an employee may bring to the notice of the authorities of sexual harassment of female staff by a male manager in
an organisation.
- Eg: a finance staff may bring to the notice of the shareholders of missing funds due to a manager’s wrongdoing.

22. Should whistle blowing be accepted? What are the points in favour of it?
- Moral duty of employee to society as a whole, not just immediate managers or the employer.
- Whistleblower might know only the ‘tip of the iceberg’.
- Unless challenged others will believe they can get away with it.
- Conscience is more important than job security.
- People who do not act ethically should expect others to act against them
- Sometimes whistle blowing is a statutory responsibility e.g. health and safety at work.

23. Should whistle blowing be discouraged? What are the points against whistle blowing?
- The actions of others are nothing to do with colleagues - this is for management.
- The situation may be misread by whistleblower.
- Whistleblowers can become obsessive about minor issues.
- Loyalty is an important value in staff.
- Revealing confidential information can be a breach of contract.

24. How can HR professionals promote a culture of responsible whistle blowing?

- HR professionals could incorporate whistle blowing into training programme (e.g. induction and management
development).
- HR professionals could initiate ethical guidelines, to include:
 Emphasis that employee has the right to be protected even if he is incorrect, so long as he is sincere. Protect
whistleblower from victimisation.
 Maintaining confidentiality where possible regarding the identity of the whistle blower and the concerns raised.
 Holding a meeting and investigation to obtain details of the concerns.
 Taking appropriate action to remedy the wrongdoing, or confirm that no irregularity has taken place.
 Whistle blowing can be done through a third party e.g. trade union representative or organisations such as Public
Concern at Work.
 HR to proof reward processes to minimise likelihood that staff maintaining silence because of the potential
detrimental effect upon their reward package.

25. What is discrimination?

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Human Resource Management, ABE Diploma in HRM, Unit 2, Revision Questions & Answers
© Ali Hashim, Clique College, Male, Maldives
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 - Discrimination refers to any instance of treating someone in a less favorable manner on the basis of that person's
characteristics.

26. What are the 2 forms/types of discrimination?

- Direct Discrimination: this occurs where one person is treated less favourably on the grounds of his or her racial or
ethnic origin, religion or belief, disability, age or sexual orientation. Eg: a shop owner who refuses to hire suitably
qualified people simply because they are of a certain race or ethnic origin, or an employer who specifies in a job advert
that only young people should apply even though the job in question could be done perfectly well by an older person.
- Indirect discrimination: this occurs when policies, procedures and practices that appear neutral have a disadvantage
for persons with particular characteristics, thus reducing the employment opportunities for those persons. Eg: requiring
security to be at least 1.8 m tall excludes almost all women as men from certain ethnic or racial groups.

27. What is Equal Employment Opportunity (EEO)?

- EEO is a concept that holds that individuals should have equal treatment in all employment-related actions/issues.

28. Name the areas where illegal discrimination occurs and discuss the misconceptions regarding these areas.
- Sex/gender: women should not work; they do not want much responsibility at work, etc.
- Race/ethnicity: they require time-off for religious holidays; they are not good in English, etc.
- Disability: disabilities will be an embarrassment to other workers; a visual handicap cannot be overcome, etc.
- Age: older people are less adaptable, slower than young staff; young workers are immature or lack skills, etc.
- Religion and belief: they will be dirty; they will have weird and uncivilised behaviours, etc.
- Sexual orientation: they are sick; they have socially unacceptable, unconventional behaviours, etc.

29. Discuss the behaviours outlawed by the UK legislation.

- Less advantageous treatment
 Eg: not giving a job to a woman because of her sex; dismissing a gay man because of his sexual orientation; not
promoting a middle aged worker because of her age.
 It can occur in areas like, recruitment and selection, opportunities for training and development, promotion and
career development, benefits, including pay, dismissal, etc.
- Harassment and bullying
 Eg: teasing a young person because of her age or a worker with a visual impairment because of his disability.
 They are also unwanted actions or comments viewed as demeaning and unacceptable to the recipient and
detrimental to the recipient’s dignity.
 Harassment can be a one-off act (shouting at someone in front of others) or low key but persistent (repeatedly
brushing up against a member of the opposite sex).
 Bullying can happen in a variety of ways like physical (shoving, pushing, tripping up); verbal (personal comments,
name-calling, put-downs); emotional (being left out, one's contributions ignored); gestures (gestures and pulling
faces to others indicating stupidity, body odour, boredom, disdain); written (graffiti, cyber-bullying, e-mails, texts).
- Victimisation
 Eg: treating someone less advantageously because they had previously complained or had supported someone
else who had complained).

END

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Human Resource Management, ABE Diploma in HRM, Unit 2, Revision Questions & Answers
© Ali Hashim, Clique College, Male, Maldives
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