IBE - Business Ethics and CSR (Lesson 04) PDF

Introduction to Business Environments ( F N D 0 5 I B E ) Lesson 04 – Business Ethics and CSR Vithara Mannage Lecturer APIIT Business School Learning Outcomes Define business ethics and corporate social responsibility and e...

Introduction to Business Environments ( F N D 0 5 I B E ) Lesson 04 – Business Ethics and CSR Vithara Mannage Lecturer APIIT Business School Learning Outcomes Define business ethics and corporate social responsibility and explain the relationship between them. Explain the historical and theoretical origins of business ethics. Identify and assess the issues involved in corporate social responsibility between the firm and its numerous stakeholders. Identify and explain the various mechanisms used in organizations for ethical business and corporate social responsibility  The study of morals and Defining principles governing the “Ethics” rights and wrongs of human conduct.  Approaches to Ethics Transcendental ethics / Utilitarianism that argues that an ethical absolutism assumes that action is morally right if it produces the there are absolute concepts of right and greatest good for the greatest number of wrong, which apply across all societies. people. Ex; Supporters of the utilitarian Ex; Most world religions claim a position would argue that it is justifiable to universal moral code. lay off a proportion of the workforce to save the company from bankruptcy and protect the jobs of the other employees. Ethical relativism/ social ethics Tactical ethics assumes that people assumes that ethical standards will vary pursue ethical standards because it suits between societies, reflecting their histories them so to do. and influences. Ex; Drivers who slow down when they Ex; In some countries paying bribes see a speed camera, not out of any belief in or offering gifts to government officials is a the speed limit but to avoid getting caught necessary precursor to doing business in and paying a fine, are practising tactical that country, while in others it is illegal and ethics. potentially damaging to successful business Question Which of the above approaches to ethics is the most applicable to business and why? To what extent can businesses pursue a utilitarian approach?  Business Ethics Business ethics is concerned with moral issues such as: individual choices of right and wrong, and values of what is good and bad within the conduct of business affairs. The relationship of ethics to business is complex and incorporates all the approaches identified above. It has become much more complex with globalization Goals and Activities of an Ethical Business should comprise of.. Conducting business honestly Treating people who come into contact with the business (suppliers, customers, employers) fairly and in a socially responsible manner Being accountable, for example, corporations are accountable for their actions to the general public Looking after the environment, for example by reducing the use of plastics in food packaging. Question What are the ethical dilemmas facing managers who close down operations and make employees redundant to save the whole business from bankruptcy? Unethical Business Practices Unethical HRM practices; https://www.youtube.com/watch?v=CCrUZuyZHyk Unethical Advertising https://www.youtube.com/watch?v=DijFob8vxgI Unethical Accounting/Finance Practices https://www.youtube.com/watch?v=SMT5v5zT5KQ  Corporate Social Responsibility (CSR) A situation where the firm goes beyond compliance and engages in actions that appear to further some social good beyond the interests of the firm and that which is required by law. The Pyramid of Corporate Social Responsibility Philanthropic responsibility is deemed to be discretionary and involves contributing company resources to the community to improve the quality of life. This can include making donations to charities and educational causes, sponsoring the arts, and managers and employees engaging in charitable work in local communities. Ethical responsibility is that which goes beyond legal requirements and, according to Carroll, is expected. This involves achieving corporate goals by behaviour that is consistent with the ethical values of society. Legal responsibility through adherence to the laws of a particular country or, in the case of global firms, different countries is required Economic responsibility to such as shareholders for a return on their investment, to suppliers, customers and employees is also required. This involves being profitable, maximizing earnings per share, maintaining a strong competitive position and being efficient DreamVillage CSR Project By Hyundai India https://www.youtube.com/wat ch?v=xU3Yi7nMx7E  Why should businesses be ethical and socially 1. Increased customer loyalty responsible ? Customers are more likely to trust and be loyal to socially responsible businesses compared to companies that aren’t. Providing a great product and shopping experience, have their benefits. If you really want your customers to keep coming back, though, you need to let them know that their money is not just filling your pockets, but is rather used for the welfare of the society they are part of. 2. Employee satisfaction Employees will be proud to work for a reputable company which consistently helps societies improving their quality of life. Employees working in such a company will feel more motivated to work harder for the company’s success. Socially responsible companies will also be able to attract and retain the best talents more easily. 3. CSR boosts the brand image and reputation By being socially responsible, your firm is gaining support and positive recommendations. 4. Long-term partnerships Businesses can simultaneously improve their economic, social and environmental performance and find new market opportunities through strategic partnerships with NGOs. The knowledge, expertise and capabilities of NGOs and corporations are distinct and may be complementary; together, NGOs and companies can often accomplish more both for society and for the business. 5. Shareholders are satisfied What a shareholder cares about regarding the firm he has stocks in, is its good reputation, the solid dividend and people’s opinion. Because, after all, shareholders do not participate in the main working processes of the company!  Thank You [email protected] Next Session ; Business Strategy