Discuss about the Management for Business Ethics and Corporate Social Responsibility.
The article is written in Dec 2002 by Brenda E. Joyner, associate professor at Loyala university and Dinah Payne, professor at University of New Orleans. Importance of business ethics, corporate social responsibility in an organization are studied and discussed here. Articles talks about the social and personal benefits of the ethics for both employees and organization by taking us through various researches and literatures.
With the growing work pressure and competition among the companies, work place has become more pitiable. Work ethics have been emerged and evaluated as the necessity of the time. Organizations are putting more emphasis on social ethics and corporate social responsibility. Article discussed this evaluation while supporting the concept by business ethics statistics and literature reviews. It has shown that business has become more profitable and social because of this.
It states the reasons why business should engaged in business ethics. Business’s only responsibility should be to increase the profits then why it is engaging in social responsibility. Employees who are happy with their organization’s ethics are more committed towards their work. But then, what is right or wrong? Definitions of ethics are elaborated to emphasis their actual importance. Values, ethics and integrity are subjective terms and depend person to person. They can change with generations and organizations. Even dictionary meaning can’t be interpreted equally by all. (Payne, 2002)
Literature review clarifies the evaluation of business ethics and its impact on the organization and society. Evolving concepts includes the practices followed by the organization and the requirement of ethics felt by them. Authors collected the data through interview and secondary resources to connect the link values, ethics and corporate social responsibility. Based on the questions asked to persons, they categorised the responses in three categories and analysed it. They connected the three concepts. This study does not conclude the financial gains from ethics and values. Findings of the article communicates about the economic responsibility, ethical responsibility, legal and discretionary responsibilities of any organization towards society.
Customers want to associate themselves with the organization with good social practices. Many studies have shown that good ethics leads to good profits. Profitability measures include overall performance of the organization and its stakeholders which causes these results. Organization only want to increase this profit but it also includes employees and customers. Satisfied employees and happy customers can be a way for this. It is a truth that business and society can’t exist without each other. They are supporting pillar for each other. That’s why business must have to acknowledge the society’s demand of ethical practices. Employees are also part of society and organization also, so, they want to link their identity with ethically good both in organization and the society. Beer company represents this nicely. It sales beer along with the warning messages that it can harm the health of the consumer. Companies are bound to enforce corporate social responsibility norms legally otherwise customers as well as government will push them hard out of the business. (Agle, 2008)
To be consistent in the study; values, ethics and corporate social responsibilities are defined here. Values are the core set principles and beliefs desired by everyone. It forms a social culture by combining with behaviour, belief and attitude of individual or society. This culture is transmitted to generations with successions. Ethics are defined as the right or wrong doing of behaviour or practices. According to Velasquez (1999), normal judgement outlines right or wrong based on moral decisions. These judgements ascribe value to actions. Business ethics is the connection of ethics with the business. A business which operates with a moral evaluation of individual and organization is implementing this concept. There can be subjective or objective morality. Objective morality is the social laws whereas subjective morality is the one’s own beliefs to the correctness of any actions. Definitions of morality and ethics can be used interchangeably.
Corporate social responsibility (CSR) is defined as discretionary activities of business which are categorised as legally or ethical right and beneficial for the society. Organizational social performance model is developed by Archie Carrol (1979) to integrate all the dimensions of the social responsibilities into firm’s culture. These dimensions contains social responsibilities which are economic, legal, ethical and discretionary responsibilities. Another dimension represents the philosophy of social responsiveness. It directs the organization’s response towards social issues. These philosophies are: reactive, defensive and responsive. Reactive philosophy react to an application of external force like law or government. Defensive philosophy address issues to escape from it. Responsive philosophy address social issues voluntarily to resolve them. (Groves & LaRocca, 2011) Third dimension of the model is the social issues. These issues are not static and keep on changing as the society changes. Carroll’s model clears that firm’s stakeholders are important in ethical decision making process. These three dimensions are interdependent and interrelated. Ethics is derived from values which is also dependent on social responsibility of the organization. Spiral of culture values, beliefs, attitude and behaviour which affects the ethics of the business.
Economic Responsibilities: Responsibilities are categorised based on the data collection and analysis of the same. Economic responsibility of any organization is to make maximum profits by producing goods and providing services. Sometimes it is considered that a business is not a philanthropic service to make all people in the society happy. If it tries to do the same it will lose the business profit margins. Organizations who are focused on the profits felt that implementing Carroll’s model make them more profitable. They followed CSR not because of defensive philosophy but to increase their profit margins. They realized that CSR increases their economic gains by increasing customer loyalty and thus sales. (Kim & Kim, 2009)
Legal Responsibility: Carroll’s second most important element was to obey societal laws. Some laws are meant to be followed by the firms. Like drug company follows the law of providing safer work place for its employees. Testing of drugs is implemented here. Rather than waiting for employees to be injured, it followed proactive philosophy to address social issue of drug abuse at workplace.
Ethical Responsibilities: A firm’s ethical rules should meet the expectation of the societal norms. Firm should have a faith in the law and its importance. It is questionable whether company should do it only to avoid loss or because it is ethically correct. Organizations do not do only to avoid it losses, they do it boost employees’ faith and their ethical culture. This is a proactive philosophy to cultivate the reputation of the firm as fair and honest company.
Discretionary Responsibilities: Some companies are working for the society not because it is compulsory for them or they would be promoting their bad image. But they do social work because they like to do it for their own satisfaction. Some organizations get additional profits for doing this like an extra contract or any other reward. Initial motivation is always the correctness of the action which results in good outcomes. (Lindgreen, Swaen, & Maon, 2008)
This article identified the implementations and importance of values, ethics and corporate social responsibilities. Organization gain profit by following ethical practices. These gains may not be financial. But, self -satisfaction and reputation building help them to build long term relationships with both customer and the society. The results of the paper can’t be generalized for every industry or firm although these practices are followed in almost all industries. Organizations can hire consultants for implementing these strategies in their organizations. There might not be short term profits from them but in the longer run they are going to enhance the profits and the organizational culture.
Payne, B. E. (2002). evolution and Implementation: a study of values, business ethics and corporate social responsibility. business ethics, 297.
Agle, B. R. (2008). Business ethics quarterly: Stakeholder theory, ethics, corporate social responsibility & family enterprise. Business Ethics Quarterly, 18(01), 444–446. doi:10.1017/s1052150x00013130
Groves, K. S., & LaRocca, M. A. (2011). An empirical study of leader ethical values, Transformational and Transactional leadership, and follower attitudes toward corporate social responsibility. Journal of Business Ethics, 103(4), 511–528. doi:10.1007/s10551-011-0877-y
Kim, Y., & Kim, S.-Y. (2009). The influence of cultural values on perceptions of corporate social responsibility: Application of Hofstede’s dimensions to Korean public relations practitioners. Journal of Business Ethics, 91(4), 485–500. doi:10.1007/s10551-009-0095-z
Lindgreen, A., Swaen, V., & Maon, F. (2008). Introduction: Corporate social responsibility implementation. Journal of Business Ethics, 85(S2), 251–256. doi:10.1007/s10551-008-9732-1