Business Ethics and Corporate Social Responsibility
Corporate Social Responsibility refers specifically to relationships with external stakeholders such as representatives of the community and environment and often relates to businesses role in society.
Issues commonly associated with social responsibility
- Environmental pollution from production or consumption of products
- Standards of factory and product safety
- Non-discrimination in employment and marketing practices
- Avoidance of the use of non-renewable products
- Non-Production of socially undesirable goods
- Production of non-gradable packaging or products
- Taking bribes
- Unfair competitive moves
- Non-payment of taxes
Definitions
1. Taking more than just the immediate interest of the shareholders into account when making a business decision
2. Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
Difference between Business Ethics and Corporate Social Responsibility (CSR)
Business Ethics is concerned with issues of moral rightness and wrongness of decisions and actions. They have distinct meaning although the two are often used interchangeably. Business ethics comprises of principles and standards that govern behavior in the world of business. Actions can be judged to be right or wrong, ethical or unethical, individual inside or outside the organization. These judgments will influence society’s acceptance or rejection of the action taken.
Issue commonly associated with Ethics
- Honesty in advertising of jobs or products
- Fairness in setting pay and working conditions
- Non-Exploitation of countries or peoples
- Effects of customers of consuming products
- Dealing with oppressive governments
- Management of closures of redundancies
CSR however refers to a firm’s obligation to maximize its positive impacts upon stakeholders while the negative effects fulfilling the needs of all stakeholders. As such, ethics is just one dimension of social responsibility. The extent to which stakeholders judge that businesses meet, legal, ethical, economic and philanthropic responsibilities placed on them by their various stakeholders will determine the degree of corporate citizenship exhibited by the firm.
