Business Ethics - Chapter 3.pdf

 Chapter 3 The social responsibility of business Figure 3.1 Dimensions of corporate responsibility  Economic responsibility A company must be financially sustainable. By being financially sustainable, a company can contribute in various ways to the well-being of society....

 Chapter 3 The social responsibility of business Figure 3.1 Dimensions of corporate responsibility  Economic responsibility A company must be financially sustainable. By being financially sustainable, a company can contribute in various ways to the well-being of society. By being financially sustainable, a company continues to create value for a wide range of stakeholders. It provides employment in the community, business to suppliers, and goods and services for customers.  Mandatory responsibilities A company must comply with formal obligations imposed by society so it does not engage in irresponsible behaviour that might harm the economy, employees, society or the environment. Mandatory responsibilities include legislation (e.g. anti-competition, labour and environmental laws) and standards set by professional and regulatory bodies.  Societal expectations These can either be formalised in voluntary best practice codes, or be unwritten norms or standard that communities expect companies to uphold. The three main reasons why companies need to respond to societal expectations: 1) To gain legitimacy 2) To enhance their strategic interests 3) To honour their ethical duties to society  Discretionary contributions These take the form of philanthropy or social investment. Reasons for discretionary contributions: 1) Sympathy for less fortunate members of society 2) Desire to give something back to the community 3) Benefit to a company’s reputation 4) Brand exposure 5) Corporate social investment  Corporate citizenship In the narrow sense, this refers specifically to the political responsibilities of corporations; in the broad sense, it refers to all the responsibilities of corporations in society. Corporations are often called upon to step into areas where government has failed to deliver or to protect its citizens; however, in doing this, they are often accused of abusing their power to gain and exercise undue influence in society.  Questions 1. Name the four broad areas corporations have responsibilities in? (The economy, the workplace, the social environment and the natural environment). 2. Name at least two national or international standards wherein corporation requirement to act responsibly is laid out? (UN Global Compact, the Global Reporting Initiative’s Sustainability Reporting Guidelines, the International Standards Organisation’s Guidance on Social Responsibility (ISO 26000), KingIV, and Companies Act 2008) 3. List at least three mandatory responsibilities corporations may face from society? (Legislation – e.g. Anti-competition, labour, or environmental laws; regulations, e.g. against insider trading; stock exchanges requirements; standard set by professional associations) 4. The approval that companies need from society in order to be accepted as legitimate is sometimes referred to as a company’s social capital or its __________ (licence to operate). 5. What is the increasingly preferred term used to capture that formerly demarcated by the concept ‘Corporate social responsibility (CSR)? (Corporate  Questions 1. Name the four broad areas corporations have responsibilities in? (The economy, the workplace, the social environment and the natural environment). 2. Name at least two national or international standards wherein corporation requirement to act responsibly is laid out? (UN Global Compact, the Global Reporting Initiative’s Sustainability Reporting Guidelines, the International Standards Organisation’s Guidance on Social Responsibility (ISO 26000), KingIV, and Companies Act 2008) 3. List at least three mandatory responsibilities corporations may face from society? (Legislation – e.g. Anti-competition, labour, or environmental laws; regulations, e.g. against insider trading; stock exchanges requirements; standard set by professional associations) 4. The approval that companies need from society in order to be accepted as legitimate is sometimes referred to as a company’s social capital or its __________ (licence to operate). 5. What is the increasingly preferred term used to capture that formerly demarcated by the concept ‘Corporate social responsibility (CSR)? (Corporate