1. Business ethics and Corporate Social Responsibility (CSR) compared.

BUSINESS ETHICS CORPORATE SOCIAL RESPONSIBILTY

Business Ethics is the VERY broad field of
study concerning good ethical decision-
making in commercial contexts.
business ethics is concerned with not just
social obligations, but also obligations to
employees, customers, suppliers and
competitors.
business ethics is more of a conscience.
There are good things in business that are not
good for society and this is where business
ethics comes in
CSR is more narrowly about a company’s SOCIAL
obligations…that is, a company’s obligations to
society in general.
CSR is about the extent to which companies owe
something to “society at large” (i.e., those who do
not have a direct involvement with the business).
Social responsibility is more of a policy or an
obligation to the community
There are good things for society that are not good
for business and this is where social responsibility
comes in.

Using it in business means the company must
follow the right behavior to benefit the good of
everybody, including the shareholders,
stakeholders, and even the community. Even
though making a profit is the most important
thing in business, if making money is the only
concern of a certain business, then it is
capitalism in its worst. Businesses should
have good business ethics to benefit the
entire community or society. This is the main
goal of business ethics. That the business
activities should not harm the people. Instead,
it should benefit them. Businesses that do not
have good business ethics are penalized by
the law, however, these sanctions are nothing
compared to the immoral things that other
businesses are capable of doing and have
actually done.
Comparing this scenario to business, businesses
must still perform its social obligations by
performing activities that are according to the
norms of society or community. Even if businesses
are more concerned on making profits for the
company, it should still have a social responsibility
towards its community. This is the main meaning of
social responsibility. It is more of an obligation or a
duty towards the people that the business affects.
One of the main examples for this is, reducing the
pollution in the company, especially if that certain
business is the one creating all the pollution.

Business ethics is the behaviour of any

business that it indulges in its dealings with
the community or society. For some, making
money is all they are interested in, and this is
capitalism in its dirtiest form. These people
are least concerned with the bad effects of
their business practices and the harm they
are doing to the society at large.
Business ethics is defined as the rules, CSR refers to the responsibility of enterprises for
standards, codes, or principles that provide their impacts on society; and the consequences for
guidance for morally appropriate behavior in the integration of social, environmental, ethical,
managerial decisions relating to the human rights, and as well consumer concerns into
operations of the corporation, and business business operations and core strategy, in close
relationship with the society collaboration with stakeholders
 It also refers to the voluntary activities or policies
that organizations engage in for the purpose of
causing positive social change and environmental
sustainability

More specifically, CSR refers to the selection of

institutional objectives and evaluation of results,
not only by the criteria of profitability and welfare
organization, but by the ethical standards or
judgments of social desirability. In this view, the
exercise of social responsibility must be consistent
with the corporate goal of earning satisfactory level
of benefits, but also implies a willingness to
relinquish some degree of benefit, in order to
achieve non-economic objective

2. Are the annual CSR activities a guarantee for ethical behavior of corporate executives?
Yes, but not 100 percent.
issues that make the linkage, of CSR, ethics with Sustainability are (a) Time and (b) context. With the
change in time and context, scope of CSR and ethics change.
Ethical at one point of time is not ethical at another point of time. Also ethics is not only a set of
normative principles. There are other principles of ethics which make ethical behavior itself
questionable. Similarly the scope of CSR is also getting widened, (for example companies are now
being asked to be responsible for the future consequences of present action, European commission).
So it becomes quite difficult to find out if one action is ethical at all times.
So I believe, CSR and ethics may indicate sustainability, but can not guarantee it.

No, maybe somehow but I believe CSR activities are voluntary activities and it is up to the corporate
executives

3. Why is there a need to balance profit with business ethics?

There is a need to balance profit with business ethics in order for the company or business to
have a guarantee that the customers they have will lasts as well as their fame in the market
because a company or business that conducts an operation with considering business ethics
can create a good public image that will surely lead to earning a profit.
Business ethics can improve attractiveness to customers.

 Corporate social responsibility is essentially about compensating for its effect on the
environment and community.
 Companies that integrate CSR into their operations can expect good financial returns on their
investments.
 CSR can also improve attractiveness to investors
Conducting a business the right way is imperative for organizations to build a public image and stay in
the competition. By following ethics in business, organizations can make correct judgements and
decide what is right and wrong for them. By following the code of ethics in business, they can plan,
track, implement, and evaluate management acts. Being responsible towards clients, their course of
action, and the society can do a lot of benefits for businesses. Any deviation from these basics of
running a business will can prove a spoiler for the company’s image, and it will also result in losing
clients, stakeholders, and profit.
The guaranty or warranty offered by them to the customers should be kept, which will maintain their
fame in the market.
Certain organizations which strictly follows their own business ethics are at a lower risk of being fined
for having poor conduct and disobeying laws.

A company's ultimate goal is to increase profits, which lead some businesses to profit-motivation
conflicts. While many companies grow profits ethically, others maximize profits unethically via
deceptive marketing, slashing employee expenses, lowering product quality or impacting the
environment negatively. Unethical business practices can lead to smeared public relations and a loss
of trust and respect on the part of the consumer.

4. What do you mean by governance of profits based on legislative standards?

Governance of profits based on legislative standards means that earning of profits or the
management of their profits is based on law, policies or regulations set by the state or the
government and that legislative standards ensure that the governance of profits doesn’t came from a
doubtful sources or transactions.
Also, governance of profits based on legislative standards will impart transparency, accountability,
and integrity.

In the United States, the Sarbanes-Oxley Act, signed into law in July 2002, is the single most
important piece of legislation affecting corporate governance, financial disclosure, and the practice of
public accounting since the US securities laws of the early 1930s. By strengthening standards for
auditors and forcing companies to report on internal controls, the law has improved financial
statements. In other words, legislative standards are important to ensure the governance of profits.
Hand in hand with external regulatory and legislative standards, internal management attitude called
transparency is a must in business operations. Measures such as certification of business profit
reporting systems by signature, honest reporting, and embedding integrity in business information
systems are becoming imperatives, the objective of which is to ensure transparency, accountability,
and integrity.
These measures are easy enough to describe, but frequently difficult to practice. There have been
calls for the adoption of a set of generally accepted accounting principles (Global GAAP) as well as a
need to establish standards for measuring and reporting information that are specific to respective
industries, consistently applied, and in understandable form. In practice, these measures may be
difficult to implement.

5. What happens when profit maximization is accompanied by the driving force called greed?

If profit maximization is accompanied by the driving force called greed, they will disregard the moral
values and social responsibility in doing business and this will eventually lead to an undesirable
outcome of the business. It could affect their public image and customers loyalty and might suffer
from loss. Greed is not good and it only connotes insatiability, materialism, avarice, vices that are
definitely morally unacceptable.

The disregard of moral values and social responsibility in doing business usually leads to the
undesirable. The 2001 case of Enron and Andersen speaks for itself.

Taken from its ethico-theological context, greed connotes insatiability, materialism, avarice, vices that
are definitely morally unacceptable. From the motion picture Wall Street, I quote the stirring speech of
a wicked CEO named Gordon Gekko, played by Michael Douglas, about the corporate definition of
greed:

“Greed, for lack of a better word, is good. Greed is right because it works. Greed clarifies and
captures the essence of the evolutionary spirit. Greed will not only save our paper company, but will
also save another malfunctioning corporation called USA.”

It is a situation of a vice becoming a virtue, an evil turning nice, wicked attitude transforming into
acceptable behavior. What happens then? From the reel to the real—crime in the streets took a
backseat to white-collar crime on Wall Street, as indictments exposed major scandals and brought
both public and private figures before the courts. A web of illegal stock-trading schemes in civil and
criminal charges produces corporate scandals, which involve not just rank and file staff but top
executives.