Ethics and Social

Responsibility in
Business
GROUP 1
Berlian Tiara Maharani (042111233220)
Garudha Vahan B.K (042111233221)
Nisrina Nadhifa (042111233222)
WHAT IS BUSINESS ETHICS ?

Business ethics is the application of moral

standards to business situations
Ethical Issues
 Ethical issues often arise out of a business’s relationship with investors, customers, employees, creditors,
suppliers, or competitors.
 Businesspeople face ethical issues every day, and some of these issues can be difficult to assess. Although some
types of issues arise infrequently, others occur regularly.
 Examples of ethical problems that we often encounter:
a.Fairness and honesty
b.Organizational relationships
c.Conflict of interest
d.Communications
Factors Affecting Ethical Behaviour
The sets consist of individual factors, social factors, and opportunities.

Individual factors
Several individual factors influence the level of ethical behavior in an organization, including personal
knowledge, values, and goals.

Social factors
Many social factors can affect ethical behavior within a firm, including cultural norms, actions and decisions of
co-workers, values and attitudes of “significant others,” and the use of the Internet.

Opportunity
Opportunity refers to the amount of freedom an organization affords an employee to behave unethically if he or
she makes that choice.
Encouraging Ethical Behaviour

Government’s role : Trade association’s role :

The government can encourage ethical Trade associations can and often do
behavior in business by enacting more provide ethical guidelines for their
stringent regulations. members.

Most authorities
agree that there is
room for
improvement in
business ethics.
Social responsibility :
Individual companies role :
Social responsibility is the recognition
that business activities have an Codes of ethics are perhaps the most
impact on society and the effective way to encourage ethical
consideration of that impact in behavior.
business decision making.
Evolution of Business Social Responsibility
What is Social Responsibility?
Social responsibility is the recognition that business activities have an impact on society and the consideration of
that impact in business decision making The triple bottom line has three important elements of People (people),
Planet, and Profit (profits).

Historical Evolution of Business Social Responsibility

During the first quarter of the 20th century, businesses were free to operate as they chose. Government protection
for workers and consumers is minimal. As a result, people either accept what the business has to offer or not. The
average workweek in most industries exceeded 60 hours, no minimum-wage law existed, and employee benefits
were almost non existent.Work places were crowded andu nsafe,and industrial accidents were the rule rather than
the exception.
During the early 1900s, however, businesses—with the help of government—were able to use court orders, brute
force, and even the few existing antitrust laws to defeat union attempts to improve working conditions.
The Pros and Cons of Social Responsibility:
Some of the reasons why companies are pro
of social responsibility :
● Because business is part of our society, it
cannot ignore social issues.
● Businesses have the necessary technical,
financial and managerial resources to
handle today's complex social problems.
● By helping to solve social problems,
businesses can create a more stable
environment for long-term profitability.
● Socially responsible decision making by
firms can prevent increased government
intervention, which would force businesses
to do what they fail to do voluntarily.
This argument is based on the assumption that
businesses have responsibilities not only to its
shareholders but also to its customers,
employees, suppliers and the general public.
Some of the reasons companies are cons of
social responsibility :
● Business managers are primarily
responsible to shareholders, so
management should be concerned with
providing a return on the owner's
investment.
● Company time, money and talent should
be used to maximize profits, not solve
societal problems.
● Social problems affect society in general,
so individual businesses should not hope to
solve these problems.
● Social issues are the responsibility of
government officials who are elected for
that purpose and who are accountable to
voters for their decisions.
These arguments are clearly based on the
assumption that the main the purpose of
business is to make a profit and that
government and social institutions have to deal
with social problems..
Enviromental Concerns
According to a December 2016 report published by the U.S. Sentencing Commission, the most
common federal offenses committed by organizations are not fraud or money laundering but
environmental crimes.
70 percent of environmental crimes are water-related, 16.7 percent affect wildlife, 8.3 percent involve
hazardous materials, and 5 percent are air-related.
Another major environmental problem is pollution, the contamination of water, air, or soil through
the actions of people in industrialized societies.
Pollution damages water and air quality, threatens human and animal health, destroys habitats,
and contributes to climate change.

Effect of Environmental Legislation

As in other areas of concern to our society, laws and regulations play an important role in pollution
control.

Business Responses to Environmental Concerns

One of the most effective ways companies can reduce their impact on environmental issues is to
reduce waste from operations and other activities. Another way businesses seek to be more
environmentally conscious is through the use of "greener" forms of energy to counter the use of large
amounts of energy during operations and other activities.
Implementing a Program of Social Responsibility

The company's decision to be socially responsible is a step in the right direction but only the first step. The
company must then develop and implement a program to achieve this goal. In most cases, developing and
implementing such a program would require four steps: securing the commitment of top executives, planning,
appointing a director, and preparing a social audit.
THANK YOU
QUESTION?
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