CSR AND BUSINESS ETHICS

Prepared By: EDDYLENE FRANCIS SALAC 2004-01-08858 Submitted To: DR. VIRGILO SALENTES

DEFINITIONS AND RELATIONSHIPS Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society. In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done . Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior.

Corporate Social Responsibility

 It is the implied, enforced, or felt obligations of managers, acting in their official capacity, to serve or protect the interests of groups other than themselves.  Remember that Wal-Mart is encouraging its manufacturers to: produce recyclable products or packaging; make products or packaging from recycled materials; produce concentrated products that reduce package volume and waste; manufacture in a way that is safe for our land, air, and water; and produce products that are safe for the environment.

 A corporations approach to social responsibility is usually determined by its top executives. More frequently than ever, corporate executives appear to be making decisions that closely parallel the expectations of society.  One study indicates that senior executives have begun to increase their emphasis on corporate social responsibility. The same seems to be true of boards of directors, in that rubber-stamp boards appear to be on the wane.  Reports have unearthed a number of examples of directors correcting irresponsible decisions, firing inept and unethical CEOs, and, in general, behaving in a socially responsible manner.

 Although there is no commonly agreed definition of the term social responsibility, it could mean the moral and ethical content of managerial and corporate decision that is the values used in business decisions over and above the pragmatic requirement imposed by legal principles and market economy.  An organization has social responsibility if it recognizes through its managers, that it has an obligation to perform to societys demand and act to ensure that its action help meet the needs of society.

Business Ethics
is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. is the application of ethical principles to business relationships and activities. Reading newspaper or watching the evening news provides ample illustration of illegal or unethical practices of individuals in large corporations. Even big establishment like Meralco and leading Oil company has experienced some negative press coverage. Deciding what is ethical is often difficult.

Following are examples of business activities that are usually considered unethical:
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Falsifying information on an application blank Trading stocks on the basis of inside information Padding expense accounts and otherwise seeking reimbursement for questionable or nonexistent business expenses Divulging confidential information or trend secrets to competitors Taking company property or materials for personal use Giving and receiving gifts in return for orders Quitting a job without giving adequate notice Firing someone without giving adequate notice Stealing (over pricing of goods) Soliciting or offering kickbacks

ETHICAL CONSIDERATION IN BUSINESS



Question of ethics in business have been prominent in the recent years. Illegal campaign contribution, bribery, and other scandals have created a perception that business leaders used illegal means to gain competitive advantage, increase profits or improve their personal position. Shareholders tend to ignore fraudulent financial reporting, believing it is routine, as long as profit and market share dont suffer. Neither young managers nor consumers believe top executive are doing a good job of establishing high standard. Some even joke that business ethics has become a contradiction in terms.

Most business leaders believe they uphold ethical standards in business practices. But many managers in their organization deal frequently with ethical dilemmas and the issues are becoming increasingly complex. In organization, it is an ongoing challenge to maintain consistent ethical behavior by all employees. There are some danger signs that an organization maybe allowing or even encouraging un-ethical behavior among its employees? Many factors create a climate conducive to un-ethical behaviors, such as: 1. excessive emphasis on short term revenues over longer term consideration 2. failure to establish a written code of ethics

3. a desire for a simple quick-fix solution to an ethical problems 4. unwillingness to impose mitigation measures on pollution abatement that may impose financial cost, 5. consideration of ethics solely as a legal issue or public relation tools 6. lack of clear procedure of handling ethical problems 7. response to the demands of shareholders at the expense of the others constituencies.

Sources of ethical guidance

Lead to

Our belief s about what is right or wrong

Determine

Our actions

Type I Ethics

Type I Ethics

A Model of Ethics

The following six-step process can help improve business ethics:

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Top-management must adopt and unconditionally support an explicit corporate code of conduct. Employees must understand that expectations for ethical behavior begin at the top and that senior management expects all employees to act accordingly. Managers and others must be trained to consider the ethical conditions of all business decisions. An ethics office must be set up. Phone lines to the office should be established o that employees who dont necessarily want to be seen with an ethics officer can inquire about ethical matters anonymously.

Features of Compliance-based Ethics Codes Ideal: Conform to outside standards (laws and regulations)

Features of Integrity-based Ethics Codes Ideal: Conform to outside standards (laws) and regulations) and chosen internal standards

Objective: Leaders: Methods:

Avoid criminal misconduct Lawyers Education, reduced employee discretion, controls, penalties

Objective Enable responsible : employee conduct Leaders: Managers with aid of lawyers and others

Methods: Education, leadership, or: countability, decision processes, controls, and penalties

REFERENCES: 1. http://en.wikipedia.org/wiki/Business_ethics 2. www.uk.sagepub.com/parker/CHAPTER%2015/Chapter%2015% 3. www-rohan.sdsu.edu/faculty/dunnweb/rprnts.pyramidofcsr.pdf

THANK YOU.