Chapter 1

Ultimate foundation of CSR:

Where Do We Base Our Etho-
logical Arguments?
Group 1
 WALL STREET SCAM
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. The 2001 case
of Enron and Andersen speaks for itself. From the motion picture Wall
Street, I quote the stirring speech of a wicked CEO named Gordon
Gekko, played by my favorite American actor Michael Douglas.
 "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 U.S.A." - Michael Douglas.
I don't care too much for money; money can't buy me love…
-The Beatles.
What happened then? From the reel to the real -- crime in the streets took
a backseat to white-collar crime on Wall Street during 1987, as
indictments exposed major scandals and brought both public and private
figures before the courts.
A web of illegal stock-trading schemes was unveiled in civil and criminal
charges lodge by the federal government against Wall Street executives
 This major case involved Dennis Levine, a former investment banker
who was sentenced to two years in federal prison and fined $362,000 in
February of that year on 4 felony counts of insider-trading practices.

Merrill Lynch & Company official, Nahum Vaskevitch, was also

charged by the Securities and Exchange Commission in March 1987 with
having provided insider information (insider trading) to David Sofer, an
Israeli investor.
Japan and Lockheed. Personalities involved were not small fish or dilis.
In 1974 Japanese Prime Minister Tanaka Kakuei was forced to resign
amid accusation of improprieties, and in 1976 he was arrested for taking
bribes from the Lockheed Aircraft Corporation, a U.S. firm.
In the United States, former Secretary of Defense Clark Clifford and
others were accused of aiding the bank in its illegal operations.
Cartoonists portrayed the Bank of Credit and Commerce International as
an evil octopus embracing the globe.
 The role of ethics and CSR is to remind businesses that it is not
sufficient to invoke the traditional principle of profit maximisation.
Besides material prosperity and high profit margin, there must be
some kind of.adherence to ethical standards so that business becomes
beneficial to all and not only to a few. And that business should be
fruitful to the whole person, and not only to its own pocket.
“You don’t need to choose between profit and ethics”
 Manager of the New
Millennium
- If you watch television and movies, and read the
daily papers, you may believe that most business
leaders lie and cheat, want to destroy the
environment , Make any compromise for
financial gain, and risk the lives and health of
their employees and the public to make money.
Of course, this is not true. Businessmen are not
always the bad guys
- Manuel V. Pangilinan, Jose and Raul Concepcion, Andres
Soriano III, Ramon del Rosario Jr, Elisio Santiago , Jose
L. Cuisia jr. Cesar Virata, Jaime Zobel de Ayala, Juan
Santos, Donald Dee, Cesar Buenaventura, Pedro Roxas,
Victoria P. Garchitorena are some examples of CEO’s,
industrialists, and business leaders that represent today’s
champion of corporate citizenship and high ethical
standards in the workplace.
 Balance between Classical
Model and CSR
- CSR awareness started with CEO’s of more established and giant
companies, and the corporate citizenship is in the mainstreams of big
companies but hardly in the minds of small and medium sized
entrepreneurs.
- Social responsibility of high ethical conduct is very
personal and is inherent in the organization's
objective strategy, simply to aid the well being of
the bigger society
- The idea is to drumbeat the power of CSR among students even
before they become entrepreneurs and business leaders.
Profit is the life blood of the
corporate machinery
- The organization has to harness its
limited resources in order to achieve
certain goals, which is financial viability
- Profit is also an important source of government
revenues needed to provide socio-educational
services.
Accordingly, Levi Strauss, Chairman and Chief Executive, Robert Haas
once said; “The organization needs to be an ethical creature – an
organism capable of both reaping profits and making the world a better
place to live.” When profit is maximized, Levi’s believes it can afford
the practice of ethical concerns and social responsibility.

Business can work harder for both increase in sales and promotion of
ethics.
 Business Ethics and CSR
From a working definition, by ethics I mean a specialized
study of what is right or wrong.

Business ethics is related to corporate social responsibility,

although the former is primarily personal and CSR is mainly
social. From the outset, it might be well to clarify this
relationship.
1.Business ethics first, then CSR. Business ethics knocks
on the individual conscience before one makes a decision,
while CSR nags the moral accountability of a group of
individuals.

2. A philosophy of management that can be both

personal and corporate. Whereas ethics is principally
personal. CSR is social and corporate.
 3.Goes beyond public relations and profitability. You
practice ethics because it’s your philosophy of
management; you benchmark CSR because it is the right
thing to do.

4.The big challenge is to actually implement and sustain

it. Both business ethics and CSR dedicate their energy to
mutual interests existing between business growth and
social development.
 5.Requires the involvement of everyone. Because it is
primarily social, CSR includes code of conduct, corporate
citizenship, employee volunteerism, resource sharing and
management, social investment and sustainable
development.

6. Aspiration for excellence. The goal of business ethics is

personal excellence and that of CSR is corporate
excellence.
“When business does not attempt to see a rigorous respect for
the moral, cultural and spiritual requirements, based on the
dignity of the person and on the proper in identity of each
community… then all the rest (availability of goods,
abundance of technical resources applied to daily life, a
certain level of material well-being) will prove
unsatisfactory and in the end contemptible”

Pope John Paul II, 1987 papal encyclical On

social concerns, no. 33.
Mutual attributes of business ethics and CSR
Both business ethics and CSR deal with the human conduct, practices,
decisions, way of doing things, including both external observable
behaviors and internal unobservable intentions.

1 .Both business ethics and CSR are born with universal values. It
goes without saying, there are values that are universally valid, that they
are recognized by all and everywhere. In other words, there is only one
universal language for all business practitioners and professionals
everywhere—the true, the just, the fair, and the good.
MUTUAL ATTRIBUTES OF
BUSINESS ETHICS AND CSR

BY: APUNTAR, ALLYSSA LOU A.

 Business Ethics and CSR
● BOTH ARE PRACTICAL.
● Business Ethics and CSR
pragmatic and practical CSR
promotes fundamental
principles applied to concrete
situations of business life.
● Both are concerned with
orthodoxy (correct policy) and
orthopraxis (best practice).
● BOTH ARE ALL ABOUT
FIRM CONVICTION.
● Corporate involvement is not
about feelings, since ethical
standards are not just emotional
or sentimental issue.
● Ethics is a fixed standard,
objective, permanent and
grounded on the strongest
convictions about what is right
and wrong.
 UNION CARBIDE PESTICIDE
PLANT IN INDIA.
● The Bhopal disaster, also
referred to as the Bhopal gas
tragedy, was a gas leak
accident on the night of 2–3
December 1984 at the Union
Carbide India Limited
pesticide plant in Bhopal,
India.
MARLBORO AND PHILIP
MORRIS IN THE PHILIPPINES.
● In 1999, the world's biggest
tobacco company
acknowledged for the first time
that smoking is dangerous ,
dodgy , and addictive (even
more compulsive in effect than
cocaine).
Multiple Lawsuits. In the 1980s and 1990s cigarette manufacturers
came under increasing American public pressure for the health
problems associated with smoking.

In 1997 Liggett Group, itself a cigarette company supported the

policymakers’ accusations that tobacco companies had added nicotine to
their products.

By 1998 the tobacco industry had reached settlements with all American
50 states.
Onli in da Pilipins. Only in June 2003 was the Tobacco Regulation Act
signed into law. Only in june 2003 that a national law ever existed to
address the public hazard that is smoking.

The World Health Organization (WHO) has observed time and again
that anually there are more people dying of smoking-related illnes than
AIDS, tuberculosis, vehicular accidents, and even war—combined.
 “Among the actions and attitudes opposed to
the will of God, the good of neighbor and the
‘structures’ created by them, two are very
typical: on the hand, the all-consuming
desire for profit and, on the other, the thirst
for power, with the intention of imposing
one’s will upon others. In order to
characterize better each of these attitudes,
one can add the expression: ‘at any price’”
– Pope John Paul II, Sollicitudo rei socialis,
n. 37
 CSR and the law
The company’s code of conduct is not conceived and formulated by the
legal department.

The code of conduct usually springs from the company’s vision and
mission of service to clients and customers, employees, shareholders, to
the environment and to society as a whole.

Business ethics and corporate social responsibility cannot be reduced to

the simple obedience of the law.
Corporate Social Responsibility is more than
obeying the law.
At time though, CSR coincides with the law. Those instances forbidden
by law are also forbidden by certain code of conducts. The observance
of what is legal, we stress, is only the minimum requirement of CSR.

It means that something more is required in the business. Learning from

those sad experiences of humanity, such as the oil spill of Exxon Valdez
in Alaska, disaster in Marinduque, and the pesticide accident in Bhopal,
India
The 2003 Asian Forum on CSR ensured that the context for
corporate responsibility is fitting and pertinent, that is, CSR
took over the tradition, so antiquated and outmoded, and
now ensures that pro-profit organizations go:
•beyond profit
•beyond compliance
•beyond form
 DEVELOPMENT OF CSR
Aventis Pharma Inc. and Zuelling Foundation have started their medicine
donation programs. While HSBC’s and Citibank’s have education programs on
special children, Unilever Philippines has committed itself to diversity in
working environment, and many more business with projects for the people. All
these are certified Forms of social responsibility.

Free and Voluntary. Today business is looked upon as endowed with a heart,
soul and conscience. Its social duties as corporate citizen extend far beyond
making profits.
When it is no longer motivated by profit, business serves the
common good in the purest sense of service. When this
happens, business involvement in social development in
heroic.
 CSR in the Philippines

Dividendo Voluntario para la Communidad (DVC) a very first corporate

social responsibility organization founded in Venezuela in 1964.
Learning from DVC, Filipino industrialist and prominent business
leaders found an organization called Philippine Business Social Progress
or PBSP in 1970
 PBSP’s Contribution
In recognition of international leadership in corporate citizenship in 1991 United
Nations NGO Conference invited the PBSP Chair Andres Soriano III to address the
august assembly. The next year, the Prince of Wales Business Leaders Forum cited
PBSP’s exemplification of work in the promotion and praxis of CSR in this part of
the globe.

PBSP’s companies has grown to more than 160 companies that pledge to set aside
the 1% of their net income to bankroll and subsidize development programs. 20% of
this is managed by PBSP. To many observers PBSP runs like a “conspiracy in favor
of social development.” and it is as radically constructive to the Philippine society
 Companies and private foundation are sprouting like mushrooms top
share God’s blessing and help improve the quality of life the public.

An umbrella organization called The League of Corporate Foundation

are synergizing all foundations’ efforts.

To put the whole burden of social responsibility on the shoulders of the

government is wishing for the stars.
 Entrepreneurs realized that such social responsibility must come from
all sectors after Ninoy Aquino was martyred in 1983.

San Miguel Corporation’s big boss, Andres Soriano III has explained:. “
The practice of corporate social responsibility has evolved through the
years from company philanthropy to direct involvement. Today,
corporate social responsibility has ben institutionalized in many
business organizations as a distinct corporate function, which means that
it has become a significant part of the main line of their business.”
 CSR Initiatives Around The Globe
Year after year, the new millennium is witnessing Asia-Pacific and
other continental conferences on corporate social responsibility.

First Asian Forum on CSR in 2002, the one organized by the Asian
Institute of Management.

There’s the Second Asian Forum in CSR in Bangkok, Thailand in

September and in Taiwan in December of 2003.
 World Bank President James Wolfensohn has told the high-powered
assemblage of American and European CEOs in December 2002 to show
more social responsibility when expanding globally and doing
international business.
 CSR in Europe and the U.S. Business in the Community or BITC,
PBSP’s counterpart in England , was set up in 1982 to inspire, challenge,
engage and support business in continually improving in positive impact
on society.
In 1987, BITC has invited the Prince of Wales and International
Business Leaders’ Forum that has become the venue for businesses
around the world to work together in the practical exercise of CSR.
In 1995, the corporate community united in its resolution to collectively
respond to the challenge of destitution and unemployment and created
CSR Europe, with the signing of the European Declaration Against
Social Exclusion.

Founded in the United States in 1992, the Business for Social

Responsibility (BSR) is a global resource for companies on the lookout
for sustainability in their commercial successes in accordance with strong
CSR agenda.
 CSR’s relevance. The virus of social responsibility and corporate
citizenship are spreading fast, becoming germane and collectively
perceived as “very relevant to running a business.”

It looks as though values education and moral recovery programs are

now carefully thought about as pertinent not only for those in university
campus but also for professionals, public servants, government officials,
and entrepreneurs.
 BUSINESS, CSR, and total human
development
Business is for people, and all business activities (including
CSR) are only a means for the total and wholesome
development of the human person.

The total development of human person embraces the

physical and the spiritual, the material and immaterial, the
financial and the moral.
‘
THE HUMAN PERSON AS THE CENTRAL
ISSUE

Between business and total human advancement corporate interest and

professional links. These include links of an (1) anthropological order,
because the person who works for at manages business is not an abstract
being but is subject to socio- political moral and economic issues. The
social nature of man show there is interdependence between his personal
betterment and the improvement of society.
 They also include links in the (2) theologies philosophical order, since
once cannot dissociate the plan Creation and the plan Redemption from
the day-to-day business ventures CSR contemplates and discusses the
human person, not so much on his financial and material aspect, but
more specifically from the point of view of relationship with God with
himself, family and fellowmen (employees, customers, suppliers,
partners, etc.) and the environment.

Corporate citizenship advances its conviction that business should be at

the service of the human person, and not human person at the service of
business.
 THEOLOGICO-PHILOSOPHICAL BASIS
OF CSR
It's not just a value formation program imposed by certain leaders along the
Judeo-Christian tradition Corporate social responsibility is a collective
human experience of reading the signs of the times. Wise men and women
from all great spiritual traditions, such as Islam. Buddhism, and
Christianity, whave collectively proposed the basic underpinning of CSR.

Bear in mind that csr principles are not culled solely from the Christian
tradition but also from other sources of spirituality such as the Islamic
teachings Other social and business sciences such as quantitative
management, statistics, and managerial accounting may be used as working
tools in reading the events of history and the complex realities of business.
Saint Jerome

Saint Jerome is best

known for his translation
of the Bible from Greek
and Hebrew into Latin.
Suffice to say that when you tackle a CSR issues and argues
for what is right, you just don't base your arguments on any
kind of fragile. flimsy, and feeble authority. It might be well
that your arguments and explanations are solidly grounded
on the supreme bedrock of theology, philosophy and
history.
 THE ULTIMATE SOURCES OF
BUSINESS ETHICS AND CSR
Sources (fons in Latin, meaning, “fountain”) are the founts from where CSR
draws its argument and teachings – not just any kind of fragile, flimsy and
feeble authority – and they are fourfold; (1) Sacred Scriptures, (2)Social
Doctrine of the Church, (3) Natural Law and (4) History.

These sources are references of supreme authority and the court of last appeal,
to say the least, and not simply quotes from poetry collection of Edgar Allan
Poe or from speeches of US President George W. Bush regarding global fight
against smuggling, white collar crime, and terrorism. There are no separation of
“Church and State” in CSR. CEOs and other executives need a strong
theologico-philosophical foundation to booster their arguments.
 1. Sacred Scriptures
CSR has a “theo” logical profile because its principles are established primarily on
the Living Word of God, which is a matter of Faith, beyond reason but not
unreasonable. Only in the “eyes of faith” that the principles sourced from the Bible
can become acceptable. You don’t chuckle when you read “God”, “conscience”
and “soul” in a business book, even atheistic witness swears by the Bible (highest
authority) at the legal court.

The World of God is applicable to a particular and concrete situation. The German
concept of Sitz im Leben in biblical studies (literally means “situated in life”
extends in socio-moral basis for Gospel Teaching. In other words, your CSR
policy, programs and systems, the nitty-gritty of company organizing , resources
sharing, and employee volunteerism ought to be based on a superior value, which
is following the footsteps of Jesus Christ.
 2. Social Doctrine of the Church: Gospel-
Based
When CSR invokes one of its basic principles, says, the corporate reverence for human
right to work, it means that doing work is a fundamental right to work, it means that
doing work is a fundamental vocation of man as recognized by the whole heritage of
the many sciences devoted to man: anthropology, history, sociology, psychology, and
so on (or what the Germans call Geisteswissenschaften)… But the source of this
conviction is above all the revealed word of God interpreted through social doctrine of
the Church.

We base this conviction on a teaching of Pope John Paul II in his encyclical Laborem
Exercents. In short, human labor is dignified because the Gospel says so. That is what
mean by saying the Bible and the Social doctrine of the Church are the ultimate
sources of CSR.
 3. Natural Law
Another source is the natural law, although in a lesser degree of authority.
Natural law is the moral norm knowable to human reason without the aid of
supernatural revelation, the one and the same law that is impressed in the very
nature of all human persons of all times and places. It is the only law that is
immutable and universal.

Natural Law admonishes us neither falsify, bribe nor extort; on the contrary, it
commands us to give what is due, to extend to the needy what is in our heart
(sympathy) and pocket (money), and to prefer “being” than “having.” Poles
apart from the civil law, which is legislated by Congress, natural law, although
unwritten, is patented in our human nature, which cannot be disobeyed by any
man or woman. It’s simply impossible to go against our nature.
 4. History
Human events can also be a values point departure when arguing in favor of
corporate citizenship. Business practitioners are obliged to listen for history has
something to say as in the case of the Enron and Andresen Seam. Union Carbide
incident in Bhopal, India, and the Marcopper disaster in Marinduque. The
catchphrase is to “scrutinize the signs of the times”

In summary, we have seen how CSR can tackle the ethical and Faith dimensions of
major business issues and problematics by examining the signs of the times
(History) , through the values of Gospel (Scriptures), the social teaching of the
church and the experience of the People of God (Natural Law).
CSR dilemma 1: To keep integrity while
working on your house

● Through your work you have good

contacts with the building firm which
your company often uses for local
properties.
CSR DILemma 2: To retail or not to retail
condom

● Our population is growing fast and becoming

unmanageable. The supply of food and other
necessities cannot cope with the increasing
number of people.
2 Quintessence of
csr:
Pope John Paul II whose real name is
Karol Jòsef Wojtyla, was born
Wadowice Poland in 1920. He has
governed the Roman Catholic Church
from a staunchly conservative
position since he became Pope in
1978.

Pope John paul ii

 Michael Jordan (1963-)

This American retired professional

basketball player, an official Nike endorser,
was considered by many to be the greatest
player in basketball history.