Business Ethics & Corporate Social Responsibility (BECSR)

Chapter One
CHAPTER ONE: INTRODUCTION TO BUSINESS ETHICS /
UNDERSTANDING CORPORATE SOCIAL RESPONSIBILITY

1. Introduction to Business Ethics / Understanding Corporate Social Responsibility

1.1. Introduction to Ethics and CSR
1.2. Definition of CSR
1.3. Corporate Citizenship
1.4. Social responsiveness and performance
1.1. Introduction to Ethics and CSR

Ethics and Corporate Social Responsibility (CSR) are two fundamental concepts that play a crucial
role in the business world. In this document, we will explore the meaning and significance of
ethics and CSR, and how they impact organizations and society as a whole.

The term "ethics" is derived from the Greek word "ethos" which refers to character or customs
or accepted behavior’s. The Oxford Dictionary states ethics as "the moral principle that governs a
person's behavior or how an activity is conducted".

Ethics refers to the moral principles and values that guide individuals and organizations in their
Decision-making processes. It involves distinguishing between right and wrong, and acting in an
ethical manner by considering the impact of one's actions on others. In the business context, ethical
behavior is vital for maintaining trust, building strong relationships, and fostering a positive
reputation.
Ethics is a set of principles or standards of human conduct that govern the behavior of individuals
or organizations. Using these ethical standards, a person or a group of persons or an organization
regulate their behavior to distinguish between what is right and what is wrong as perceived by
others.
Business ethics is a form of applied ethics or professional ethics that examines ethical principles
and moral or ethical problems that can arise in a business environment. It is also known as
Corporate ethics. It applies to all aspects of business conduct and is relevant to the conduct of
individuals and entire organizations.
On the other hand, CSR is a concept that emphasizes a company's responsibility towards the
environment, society, and its stakeholders. It involves going beyond legal obligations and actively
contributing to the well-being of communities and the environment. CSR initiatives can include
activities such as philanthropy, environmental sustainability, employee volunteer programs, and
ethical sourcing.
The importance of ethics and CSR in business cannot be overstated. Ethical conduct helps
organizations build trust and credibility with customers, employees, and other stakeholders. It
enhances the reputation of a company and contributes to its long-term success. By engaging in
CSR activities, companies demonstrate their commitment to social and environmental concerns,

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which can attract socially conscious consumers and investors.
Moreover, ethics and CSR are not just beneficial for organizations but also for society as a whole.
Ethical business practices contribute to a fair and just society, where individuals and organizations
are held accountable for their actions. CSR initiatives address social and environmental challenges,
such as poverty, inequality, and climate change, and contribute to the overall well-being of
communities.
However, it is important to note that ethics and CSR are not just buzzwords or mere public
relations
tactics. They should be embedded in the core values and operations of a company. Organizations
should develop a robust ethical framework and integrate CSR initiatives into their business
strategies. This requires a commitment from top management, as well as the active participation
of employees at all levels.
Sources of Ethics
The various sources from where ethical values have been evolved. The main sources are
o Religion
o Genetic inheritance Culture
o Society
o Marketplace
o Legal System
o Nature
Scope of Business Ethics
Ethical problems and phenomena arise across all the functional areas of companies and at all levels
within the company.
1. Ethics in Compliance: Compliance is about obeying and adhering to rules and authority. A
compliance and ethics program can help ensure that an organization operates within the law
and stays true to its own ethical principles that are important to the company's business and
identity. The motivation for being compliant could be to do the right thing out of the fear of
being caught rather than a desire to be abiding by the law. An ethical climate in an organization
ensures that compliance with law is fueled by a desire to abide by the laws. Organizations that
value high ethics comply with the laws not only in letter but go beyond what is stipulated or
expected of them.
2. Ethics in Finance: Ethics in Finance talks about financial behavior or activities that are
ethically right or wrong. The ethics in finance incorporate truthfulness, integrity, honesty,
justice, and fairness in all sorts of financial activities. Financial ethics or business ethics are
actually subsets of general ethics. It is crucial for maintaining harmony and stability in
financial
services where people interact with one another and do any sort of financial or monetary
transactions. The ethical issues in finance that companies and employees are confronted with
include:
 In accounting – window dressing, misleading financial analysis.

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 Insider trading, securities fraud leading to manipulation of the financial markets.
 Executive compensation.
 Bribery, kickbacks, over billing of expenses, facilitation payments.
 Fake reimbursements
3. Ethics in Human Resources: Paying attention to business ethics is an important part of any
business owner or manager's job. The human resources function deals with a variety of ethical
challenges; being the department that deals directly with people employed by a company,
Human resource management (HRM) plays a decisive role in introducing and implementing
ethics. Ethics should be a pivotal issue for HR specialists. The ethics of human resource
management (HRM) covers those ethical issues arising around the employer-employee
relationship, such as the rights and duties owed between employer and employee. The issues
of ethics faced by HRM include:
Discrimination issues i.e. discrimination on the bases of age, gender, race, religion,
disabilities, weight etc.
 Sexual harassment.
 Affirmative Action.
Issues affecting the privacy of the employee: workplace surveillance, drug testing.

Issues affecting the privacy of the employer: whistle-blowing.

Issues relating to the fairness of the employment contract and the balance of power
between employer and employee.
Occupational safety and health. Companies tend to shift economic risks onto the
shoulders of their employees. The boom of performance-related pay systems and
flexible employment contracts are indicators of these newly established forms of
shifting risk.
4. Ethics in Marketing: Marketing ethics is the area of applied ethics which deals with the moral
principles behind the operation and regulation of marketing. The ethical issues confronted in
this area include:
Pricing: price fixing, price discrimination, price skimming.
Anti-competitive practices like manipulation of supply, exclusive dealing arrangements,
tying arrangements etc.
 Misleading advertisements
 Content of advertisements.
 Children and marketing.
Black markets, grey markets.

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5. Ethics of Production: Ethical marketing is a technique that highlights a company’s values—

honesty, transparency, responsibility, or adherence to fair trade principles—as a promotional
strategy. This area of business ethics deals with the duties of a company to ensure that products
and production processes do not cause harm. Some of the more acute dilemmas in this area
arise out of the fact that there is usually a degree of danger in any product or production
process
and it is difficult to define a degree of permissibility, or the degree of permissibility may
depend on the changing state of preventative technologies or changing social perceptions of
acceptable risk.
Defective, addictive and inherently dangerous products and
Ethical relations between the company and the environment include pollution,
environmental ethics, and carbon emissions trading.
Ethical problems arising out of new technologies for e.g. Genetically modified food
Product testing ethics.

Unethical Behaviors
Unethical behavior can be defined as actions that are against social norms or acts that are
considered unacceptable to the public. Ethical behavior is the complete opposite of unethical
behavior. Ethical behavior follows the majority of social norms and such actions are acceptable to
the public. Examples of ethical and unethical behavior:
Unethical: “A student used plagiarism on their final written assignment to get a higher grade”
This is unethical because it goes against social norms and the majority of the people would find
this act unacceptable.
Ethical: “A student worked hard on research for their final written assignment and used in text
citations and references to earn a higher grade” This is ethical because it does not go against social
norms and the majority of the people would find this act acceptable
Causes of Unethical Behaviors in Workplace
A. Misusing Company Time: One of the most regularly revealed “bad behaviors” in the
workplace is the misuse of company time. This category includes knowing that one of your
colleagues is directing personal business on company time, staff appearing late, extra breaks
or fake timesheets. These negative behavior patterns can rapidly spread to different workers.
It can also cultivate hatred amongst colleagues, severely influencing morale and efficiency.
B. Unethical Leadership: Having a personal issue with your boss or manager is a certain thing,
yet reporting to a person who is acting dishonestly is another. This may come in a clear form,
such as manipulating numbers in a report or sending company money on improper activities;
nonetheless, it can also happen more subtly, through bullying, accepting inadequate gifts from
suppliers, or requesting that you avoid a standard system just once. With studies demonstrating

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that managers are responsible for 60 percent of workplace wrongdoing, the abuse of leadership
authority is a disastrous reality.
C. Lying to Employees: The quickest way to lose the trust of your employees is to lie to them,
but managers do it constantly. One out of every five workers report that their supervisor or
manager has lied to them within the previous year.
D. Harassment and Discrimination: Laws require associations to be equivalent to business
opportunity employers. Organizations must select a various workplace, authorize policies and
training that help an equivalent open-door program, and encourage a situation that is respectful
of a wide range of people. When harassment and discrimination of employees based on
ethnicity, race, gender, handicap or age occur, has a moral line been crossed as well as a
legitimate one also. Most companies are attentive to maintain a strategic distance from the
costly legal and public implications of harassment and discrimination, so you may experience
this ethical problem in more delicate ways, from apparently “harmless” offensive jokes by a
manager to a more unavoidable “group think” mindset that can be a symptom of a toxic
culture.
E. Violating Company Internet Policy: A cyber-attack can be launched from anywhere by any
individual or group using one or more various attack strategies. People who carry out cyber-
attacks are generally regarded as cybercriminals. Often referred to as bad actors, threat actors
and hackers’ Cyber loafers and Cyber hackers are terms used to recognize people who surf the
web when they ought to work. It’s a huge, multi-billion-dollar issue for organizations. Every
day at least 64 percent of employers visit sites that have nothing to do with their work.
F. Pressure to Succeed: Employees may choose to act unethically based on unrealistic
expectations to succeed. For example, a salesperson may make false claims to secure a deal to
meet their quota.
1.2. Definition of CSR

Corporate social responsibility (CSR) is used to describe initiatives or strategies organizations put
in place to make themselves more socially accountable. Corporate Social Responsibility (CSR)
refers to a business approach that seeks to integrate ethical, social, and environmental
considerations into its operations and interactions with stakeholders. It is a concept that goes
beyond profit-making and focuses on the broader impact that a company has on society and the
environment.
At its core, CSR involves taking responsibility for the company's actions and their consequences.
This means considering the well-being of employees, customers, suppliers, local communities, and
the environment. It recognizes that companies have a role to play in addressing social and
environmental challenges and seeks to promote sustainable and responsible business practices.
CSR encompasses a range of activities and initiatives that companies can undertake to fulfill their
social and environmental responsibilities.
These may include:

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1. Environmental sustainability: Companies can adopt eco-friendly practices, such as reducing
carbon emissions, conserving energy and water, and promoting recycling and waste management.
They may also invest in renewable energy sources and support conservation efforts.
2. Ethical business practices: CSR involves conducting business with integrity and adhering to
ethical standards. This includes fair treatment of employees, avoiding discrimination, ensuring
workplace safety, and respecting human rights throughout the supply chain.
3. Philanthropy and community engagement: Many companies engage in philanthropic
activities, such as donating to charitable causes, supporting education and healthcare initiatives,
and volunteering in the community. Such efforts contribute to the overall well-being of society.
4. Stakeholder engagement: CSR requires companies to engage and communicate with
stakeholders, including employees, customers, investors, and local communities. This helps in
understanding their concerns and expectations, and in building mutually beneficial relationships.
5. Transparency and accountability: Companies practicing CSR are transparent about their
social and environmental impacts. They disclose relevant information and are accountable for their
actions. This includes reporting on CSR initiatives and progress towards sustainability goals.
By adopting CSR, companies can not only contribute to the betterment of society and the
environment but also enhance their reputation and build stronger relationships with stakeholders.
It is increasingly seen as a vital aspect of business strategy, as consumers and investors are placing
greater importance on companies that demonstrate social and environmental responsibility.
Some of the benefits of corporate social responsibility
Positive brand awareness and public image: Consumers increasingly consider public image
when deciding whether to buy from you. Businesses committed to ethical practices, are recognized
for it. Companies found to engage is less that ethical practices are shunned. Word spreads rapidly.
Negative press spreads further still.
Greater employee engagement: It is difficult to imagine what type of employee wouldn’t prefer
to work for an organization that is recognized positively within its sector than negatively. A
henchman in a James Bond movie is the only example that springs to mind. Employee engagement
increases for those employees working for a company in which they are proud to be employed.
Managed correctly your workforce will become your biggest advocates.
Cost savings: It is a myth that ethical sourcing and manufacture incurs cost. It is not necessarily
the case. Changes to production methods, product packaging and service delivery can often result
in the double benefit of reducing cost spend while also improving sustainability. Combine internal
initiatives to increase sustainability and reduce cost, with an engaged and committed workforce,
and reap the dividends.
Standing out against the competition: In business we are often too modest. Overcoming praise
shyness is something usually reserved once a year for industry dinners.

If you do something good, particularly something ‘for good’, tell people about it and use it as
leverage to stand out against other businesses. Your clients and customers will prefer to be

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associated with a business that is recognized as behaving responsibly. Larger organizations and
public sector clients will avoid relationships with organizations that cannot positively
demonstrate their commitment to such initiatives. With this comes better performance, greater
productivity and higher staff retention.
Recruitment is easier with the better candidates choosing you as an employer of choice.
In conclusion, CSR is a business approach that goes beyond profit-making and embraces responsibilities towards
society and the environment. It involves integrating ethical, social, and environmental considerations into business
operations and interactions with stakeholders. By undertaking CSR initiatives, companies demonstrate their
commitment to sustainable and responsible business practices, benefiting not only themselves but also the broader
society.
1.3. Corporate Citizenship

Corporate citizenship refers to the responsibility that corporations have towards society and the
environment. It encompasses the ethical and social obligations that businesses have beyond their
financial performance. In today's globalized world, corporate citizenship has become an essential
aspect of corporate strategy, with companies recognizing the importance of contributing positively
to the communities in which they operate.
Corporate citizenship involves the social responsibility of businesses and the extent to which they
meet legal, ethical, and economic responsibilities, as established by shareholders. Corporate
citizenship refers to a company’s responsibilities toward society. Corporate citizenship is growing
increasingly important as both individual and institutional investors begin to seek out companies
that have socially responsible orientations such as their environmental, social, and governance
One key element of corporate citizenship is corporate social responsibility (CSR). CSR involves
integrating social and environmental concerns into business operations and interactions with
stakeholders. This means going beyond legal compliance and actively working towards making a
positive impact on society. CSR initiatives can take various forms, such as philanthropy, employee
volunteering programs, environmental sustainability efforts, and ethical sourcing practices.
Philanthropy is a common way for companies to demonstrate their corporate citizenship. Through
charitable donations and partnerships with nonprofit organizations, corporations can support
causes and projects that benefit communities. This can include funding education programs,
healthcare initiatives, disaster relief efforts, and environmental conservation projects. By engaging
in philanthropy, companies can contribute to the improvement of society and enhance their
reputation as responsible corporate citizens.
Employee volunteering programs are another important aspect of corporate citizenship. By
encouraging their employees to dedicate their time and skills to community service, companies
can make a direct and meaningful impact on local communities. Volunteering activities can range
from mentoring programs, environmental clean-ups, and skills-based volunteering, where
employees contribute their professional expertise to help nonprofit organizations address specific
challenges. Employee volunteering not only benefits the communities served but also fosters
employee engagement and a sense of purpose among the workforce.

Environmental sustainability is a critical component of corporate citizenship. Companies are

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increasingly expected to minimize their environmental footprint and adopt sustainable practices.
This includes reducing greenhouse gas emissions, conserving natural resources, and implementing
recycling and waste management initiatives. By prioritizing sustainability, companies can
contribute to the preservation of the environment and mitigate the negative effects of their
operations on climate change and ecosystems.
Ethical sourcing is another aspect of corporate citizenship that has gained significant attention in
recent years. This involves ensuring that the materials and products used by companies are sourced
ethically, considering factors such as labor conditions, human rights, and environmental impact.
By committing to ethical sourcing practices, companies can support fair trade, promote responsible
business practices throughout their supply chains, and contribute to the improvement of working
conditions globally.
In conclusion, corporate citizenship is a crucial concept that emphasizes the responsibility of corporations towards
society and the environment. By adopting corporate social responsibility initiatives, engaging in philanthropy,
encouraging employee volunteering, prioritizing environmental sustainability, and committing to ethical sourcing
practices, companies can demonstrate their commitment to being good corporate citizens. Through these efforts,
businesses can make a positive impact on communities, enhance their reputation, and contribute to a more
sustainable and equitable world.
1.4. Social responsiveness and performance

Social responsiveness and performance Social responsiveness is an important indicator of

employee performance. Companies should focus on developing programs that are designed to
support employees and create a positive work environment. This can include providing mental
health resources, offering flexible work schedules, and providing access to mentors or coaches.
Companies should also strive to create a culture of trust and respect that encourages employees to
openly express their feelings and needs. Additionally, companies should ensure that employees
are held accountable for their actions and are provided with the feedback necessary for
improvement.
Companies should also provide access to career growth and development programs to help
employees stay motivated and engaged in their work. Furthermore, companies should invest in
employee wellness initiatives, such as providing healthy snacks, offering ergonomic workspaces,
and providing access to on-site gyms. Companies should also offer flexible work schedules to
allow employees to better manage their personal commitments. Finally, companies should foster
an open and transparent communication culture to ensure that all employees feel supported and
connected.
Problems in owning responsibilities:
Responsibilities are effective only when the person/role can do something about a problem and
provide actionable oversight for the group or stakeholders where the problem occurs.
What are the different existing issues concerning owning up of responsibilities?

Why people are not owning up are having problems in taking responsibilities?

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Some reasons could be:
 Fear of failure
 Lacking interest in the areas of responsibilities

 Missing deadlines
Challenging tasks
Inability to take risks
Lack of trust with the team members and stakeholders
Unfair treatment by team leaders and members
Frequent excuses

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