Business Ethics and Social Responsibility Unit

Business Ethics and Social Responsibility

• Business ethics are moral principles and values guiding individuals and organizations in the business world.
• The objectives of this unit are to describe business social responsibilities, discuss the role of businesses in promoting ethical labor practices (fair wages, employee loyalty, and reputation), identify key stakeholders impacted by business actions (employees, customers, community, environment, and shareholders), analyze the business role in poverty alleviation (3 approaches), and evaluate the role of businesses in contributing to a sustainable future.

Role of Business in Promoting Ethical Labor Practices

• Fair wages are crucial for ethical labor practices. Businesses should pay living wages and be transparent about salaries. Regular review is necessary.
• Fair wages foster a positive company reputation, attract talent, and contribute to a more just society.
• Employee loyalty is a result of ethical treatment. Treating employees ethically creates trust and loyalty, which benefits employers. Loyal employees gain more experience working with their employers.
• A strong business reputation results from ethical behavior and good treatment of employees. A positive reputation builds trust, attracts customers, and enables business success. Conversely, a negative reputation harms sales and success.

Business Responsibilities Towards Society

• Businesses have social responsibilities to support the weaker sections of society and create employment.
• They also have responsibilities in preserving and promoting social and cultural values and protecting the environment.

Key Stakeholders Impacted by Business Actions

• Shareholders are concerned with long-term financial performance and risks.
• Employees are affected by working conditions, wages, and opportunities.
• Customers are influenced by product ethics and sustainability.
• The community is impacted by local engagement and environmental impact.
• The environment is affected by business sustainability practices.

Poverty Alleviation

• Poverty is a condition where basic needs for food, clothing, and shelter are not being met. Causes of poverty, such as hunger and malnutrition weaken the primary business resources (people).
• Business approaches to poverty alleviation:
• Corporate Social Responsibility (CSR): Businesses voluntarily integrate social and environmental concerns into operations and stakeholder interactions.
• Bottom of the Pyramid (BOP) Business: Businesses focus on creating products and services for low-income consumers at the economic base pyramid.
• Business Simply Being Business: Companies prioritize maximizing profits whilst adhering to legal and ethical standards. Social responsibility is seen as a separate issue.

Sustainable Future

• Businesses play a critical role in creating a sustainable future. Their economic power, innovation capacity, and global reach enable them to reduce environmental impact, promote ethical and sustainable supply chains, develop eco-friendly products, invest in green technologies, and advocate for supportive policies. Embracing sustainability enhances long-term profitability and reputation.