BUSINESS ETHICS & CORPORATE

SOCIAL RESPONSIBILITIES

CHAPTER 1.
Business Ethics as Foundation of CSR
What is Ethics?
 Ethics is a subject of social science that is
related with moral principles and social
values.
 The discipline dealing with what is good and
bad and with moral duty and obligation
(merriam-webster)
 Ethics (or Moral Philosophy) is concerned
with questions of how people ought to act,
and the search for a definition of right
conduct(identified as the one causing the
greatest good) and the good life (in the sense
of a life worth living or a life that is satisfying
or happy).
 The word "ethics" is derived from the
Greek "ethos" (meaning "custom" or
"habit"). Ethics differs
from morals and morality in that ethics
denotes the theory of right action and
the greater good, while morals
indicate their practice.
 Socrates, as recorded in Plato's dialogues, is
customarily regarded as the father of Western
ethics. He asserted that people will naturally do
what is good provided that they know what
is right, and that evil or bad actions are purely the
result of ignorance: "There is only one good,
knowledge, and one evil, ignorance". He
equated knowledge and wisdomwith self-
awareness(meaning to be aware of every fact
relevant to a person's existence)
and virtue and happiness. So, in essence, he
considered self-knowledge and self-awareness to
be the essential good, because the truly wise
(i.e. self-aware) person will know what is right, do
what is good, and therefore be happy.
Responsibility is by definition, an ethical
value that is applied within a reasonable
judgment by a person while fulfilling with
dignity all his duties, whether it is students,
professors, workers, businessmen or
housekeepers.

pertains to the duties towards the society

and its ability to fulfill its mission on behalf of
any individual or organization. As a
consequence, you and me are socially
responsible when we accomplish our duties
with the society, it also means to be a good
citizen. Social Responsibility is not a
prerogative to enterprises and companies. It
is yours, mine, belongs to the family,
university (Social Responsibility of
Universities SRU), to the government and
so on.
Corporate Social
Responsibility is referred to
the specific attitude of social
responsibility in a corporate
and the moral obligation that
it has in order to execute its
responsibilities within a
society. In other words, the
company is viewed here as
a person and, the same as
each one of us, it is included
within the moral obligations
that it should implement.
 'Business Ethics' can be termed as a
study of proper business policies and
practices regarding potentially
controversial issues, such as
corporate governance, insider trading,
bribery, discrimination, corporate
social responsibility, and fiduciary
responsibilities.
 Businesses must abide by some basic
principles. It should provide quality
goods and services at reasonable prices
to their consumers. It must also avoid
adulteration, misleading advertisements,
and other unfair malpractices.
 A business must also perform other
duties such as distributing fair wages,
providing good working conditions, not
exploiting the workers, encouraging
competition, etc.
What is business ethics?
 According to Andrew Crane
(Professor), "Business ethics is the
study of business situations, activities,
and decisions where issues of right
and wrong are addressed.“
 Raymond Baumhart (sociologist)
defines, "The ethics of business is the
ethics of responsibility. The business
man must promise that he will not
harm knowingly.“
Business Ethics as Foundation of
CSR
1.) Why is ethical management important to
business?

Ethical management is practically

considered by all business leaders as
relevant to business survival and corporate
reputation.
Business Ethics as Foundation of
CSR
2.) Is the term “business ethics” an
oxymoron?

In the traditional sense, people get

into the business to maximize profit, while
ethics deals with anything other than profit.
Ethics, in the field of philosophy, is a
specialized study of what is right or wrong.
Business Ethics as Foundation of
CSR

However, there is the dilemma about

“doing the right thing.” It seems the one
who abides my moral principles is usually
poorer while the crook becomes richer. The
dilemma arises because ethical behavior is
not always rewarded and unethical behavior
is rarely punished.
Business Ethics as Foundation of
CSR
3.) What is business ethics?

Business ethics is a form of applied

ethics that examines ethical rules, theories,
and principles in business context. It
includes the correct understanding of any
moral duties or obligations that apply to
persons who are engaged in commerce.
 Business Ethics as Foundation of
CSR
Business ethics pushes the practitioner to study
and evaluate how he/she makes business decisions in
accordance with moral concept and judgements.
He/she ask questions: is it true? Or is it deceitful? Is it
fair? Is it the right thing to do? Ethical questions range
from practical, narrowly defined issues, such as
company’s obligation to be honest with its customers,
to broader social and philosophical questions such as a
company’s responsibility to preserve the environment
and protect employee rights.
Business Ethics as Foundation of
CSR
4.) What is the role of ethics in
management?

Business ethics covers a myriad of

both practical and moral problems that
arises out of specific areas of management.
4.) What is the role of ethics in
management?

Ethical management in the workplace

Ethical management is the foundation

of CSR in the workplace, which covers
those ethical issues arising from the
employer-employee relationship, such as the
rights and obligations justly owed between
them.
4.) What is the role of ethics in
management?

Ethical management regarding intellectual

property rights

This may take into account the issues

regarding bioprospecting(considered ethical)
and bio piracy (considered unethical)
copyright, patent, and trademark
infringement, business intelligence, employee
trading, and industrial espionages.
4.) What is the role of ethics in
management?

Ethical management in sales, advertising ,

and marketing

Business ethics and social

responsibility deal with the issues on pricing
and price fixing, moral dimension of anti-
trust or anti-cartel law, bait switch, viral
marketing, pyramid scandal,. Cases may
include Banetton.
4.) What is the role of ethics in
management?

Ethical management in production

This area of business ethics deals with

the duties of a company to ensure that
products and production process do not
cause harm. The stakeholders involved are
the consumers, the general public, and
almost always the environment.
4.) What is the role of ethics in
management?

Ethical management in finance, accounting, and

auditing

The best cases are Enron and Worldcom

where the issues comprise executive
compensation, (criminal) manipulation of the
financial markets, bribery, facilitation payments,
fraud, and false reporting. Its practical CSR
application is corporate governance,
accountability, and value-based management.
Business Ethics as Foundation of
CSR
5.) How is business ethics linked with CSR?

As a discipline, business ethics is one

branch of professional and applied ethics.
The growth of this discipline can be seen in
its inclusion in serious CSR discussions and
debate, and vice versa.
Business Ethics as Foundation of
CSR
6.) Can a company become a corporate
citizen without being ethical?

No. Business ethics seeks to

determine whether a particular behavior,
decision, or action of an individual or
organization is morally right or wrong.
Business Ethics as Foundation of
CSR
7.) How can business ethics become a
philosophy of management?

Indeed, business ethics can become a

philosophy of management-if the
practitioner chooses to do so. Whereas
ethics is principally personal, CSR is social
and corporate. In as much as it is practical
guidepost in one’s private and professional
life business ethics is personal.
Business Ethics as Foundation of
CSR
8.) Does ethical management go beyond public
relations and profitability?

It might happen, as a consequence of

social responsibility and ethical management,
that sales go up because the company projects
an angelic image. However, individuals do not
practice business ethics and corporation do
not benchmark CSR to do public relations and
increase saless.
Business Ethics as Foundation of
CSR
9.) What is the biggest challenge?

The biggest challenge is to

actually implement and sustain ethical
management. Both ethical management
and CSR are dedicated to mutual interest
existing between business growth and social
development.
Business Ethics as Foundation of
CSR
10.) Should there be a CSR department?

it is advantageous if a company has a CSR

department, which should not be headed by a
lawyer. Because ethical management is beyond
legal and regulatory compliance. It requires the
involvement of everyone. CSR includes code of
conduct, corporate citizenship, employee
volunteerism, resource and sharing
management, and sustainable management.
Business Ethics as Foundation of
CSR
Ethical management is a tool towards
corporate excellence.

While others are contented with the

minimal requirements of the moral norms
and code of conduct, the goal of both
business ethics and CSR is the moral
excellence of all players in the business.