Writing Assignment
Ethics and
Corporate Social Responsibility
Chapter 6
Doing Good while Doing Well
PA 315
Professor Sharon Pierce
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Ethics versus Morals
Comparison Chart
| ETHICS | MORALS | |
| What are they? | The rules of conduct recognized in respect to a particular class of human actions or a particular group or culture. | Principles or habits with respect to right or wrong conduct. While morals also prescribe dos and don'ts, morality is ultimately a personal compass of right and wrong. |
| Where do they come from? | Social system - External | Individual - Internal |
| Why we do it? | Because society says it is the right thing to do. | Because we believe in something being right or wrong. |
| The "Gray" | A person strictly following Ethical Principles may not have any Morals at all. Likewise, one could violate Ethical Principles within a given system of rules in order to maintain Moral integrity. | A moral Person although perhaps bound by a higher covenant, may choose to follow a code of ethics as it would apply to a system. "Make it fit” - such as a profession |
| Acceptability | Ethics are governed by professional and legal guidelines within a particular time and place | Morality surpasses cultural norms |
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General Social Expectations of Ethics
- Expectations business environment
- Guidelines of what is right and wrong, fair and unfair, and morally correct—when they make business decisions.
- The ethics of societies is quite stable, but does evolve over time - Would you agree?
- Slavery
- Voting rights for women
- General social expectations affect all members of society for ethical behavior.
- Honesty – builds trust and long-term relationships
- Fairness – equality of opportunities, mutual respect
- Legality – law abiding
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Specific Social Expectations of Ethics
- Specific expectations do vary by social role (industry, profession, social function, etc.)
- Example: judges versus CIA spies
- Example: soldiers versus nurses
So what are the social expectations of business ethics…?
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Business Ethics
The standards of conduct and moral values governing actions and decisions in the work environment.
- Social responsibility.
- Balance between what’s right and what’s profitable.
- Often no clear-cut choices.
- Often shaped by the organization’s ethical climate.
- This includes actions of their employees and associations
- Fall back on their own moral and religious backgrounds for guidance
- Can be affected by superiors – feel pressured
- Reflects the philosophy or the mission of the business
- Should include Corporate Social Responsibility – voluntary actions to be responsible citizens in their communities and globally
Most business people rely upon their own consciences in making business decisions, falling back upon their own moral and religious backgrounds for guidance. However, business people are also affected by their superiors and immediate colleagues when making business decisions and may feel pressurized to behave unethically when seeking to make profits. Over recent years many firms and industries have attempted to develop codes of conduct which can be used to guide managers when making decisions
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https://www.google.com/search?tbm=isch&sa=1&ei=arrEW_naKqLl_QaK5L-gCw&
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Encouraging Ethical Behavior
Ethical Reasoning Framework
Step one: Am I comfortable publicizing this decision broadly?
Step two: What if everyone makes this type of decision?
Step three: Identify stakeholders and their interests
Direct/indirect/remote stakeholders (or primary/secondary stakeholders)
Interest of each stakeholder involved
Step four: Identify critical issues and the competing values involved
Major issues
Right-and-wrong (ethical or moral lapses) vs. right-and-right (tough trade-offs of appropriate competing values)
Step five: Identify solutions and their potential impacts
Possible solutions
Moral level of each solution involved
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Most dilemmas are not right vs. wrong but right vs. right dilemmas.
- It is right to protect forests,
it is right to provide jobs for loggers
- It is right to uphold confidentiality,
it is right to protect the welfare of others
How Good People Make Tough Choices
Rushworth M. Kidder, 1995
Right versus Right by Rushworth Kidder
- Individual vs. community
- Individual – seeks own interest
- Community – needs of the majority outweigh the individual
- Short term vs. long term
- Short term – satisfaction of current needs
- Long term – concerned with future needs
- Justice vs. mercy
- Truth – stick to the principles
- Mercy – case by case
- Truth vs. loyalty
- Truth – conformity with facts and reality
- Loyalty – allegiance to a person, body of people, set of ideas
Question
- Erin embraces (and believes) that promotion is based on fairness, which in turn is based on technical merit. Now she must promote one of three individuals in the unit under her direction to the position of supervisor. Barbara is good and Erin’s friend. Janelle is very good but independent minded, and sometimes doesn’t agree with Erin. Erin picks Barbara as the supervisor. In this case, which best describes her situation in stricter terms?
Erin is not ethical.
Erin is generally ethical but leaves room open for questioning her morality.
Erin is highly ethical and moral.
B – we go back to that gray area
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The Gray Area
- Ethics can be complicated and hard to define
- Right and wrong is not always clear
- Ethics depends on an individual’s idea of business
- Individual morality
- Moral—one complies with society’s system of beliefs
- Amoral—one does not always comply, acting in a fashion that is neither good or bad
- Immoral—one does not, acting in violation of proper behavior
Business Ethics and
Corporate Social Responsibility
Business Ethics
Corporate Social Responsibility
- Guidelines for the conduct of business based on notions of what is right, wrong, and fair.
- A business philosophy which stresses the need for firms to behave as good corporate citizens, not just obeying the law but conducting their production and marketing activities in a manner which avoids unnecessary environmental stressors.
- CSR – the idea that businesses should self regulate and provide a benefit to their communities
CSR is part of ethical business practices…
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Corporate Social Responsibility
QUESTION –
Is it important to you as a consumer? Why or why not?
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2017 Forbes – The World’s Top CSR Companies
- 170,000 company ratings from respondents in 15 countries
- Tracks social responsibility reputations by zeroing in on consumer’s perceptions of company governance, positive influence on society and treatment of employees
Question – Name your top 3 companies…
https://www.forbes.com/sites/karstenstrauss/2018/02/08/the-companies-with-the-best-csr-reputations-in-2017/#405824913873
The top 2017 CSR Company
- Reach every child in every country…
- Make a global difference on product safety and quality…
- Through UNICEF, strengthen child protection governance by implementing the Children’s Rights and Business Principles
- In collaboration with World Wildlife Fund, create solutions for reducing supply chain carbon emissions
- Search for sustainable alternatives to current oil-based raw materials and packaging
- Live up to the highest standards for business conduct with respect for international labor and human rights
- Employees are extremely important
- Reach local communities with family activities
Lego – Our Aspirations
Corporate Social Responsibility
- CSR is related to business ethics.
- Accounting scandals
- Enron – Jeffery Skilling and staff of executives hid billions in debt through unethical accounting practices. Chief Financial Officer Andrew Fastow mislead Enron’s Board of Directors. $591 million in losses/$628 million in debt- Sarbanes Oxley Act 2002 direct result of Enron.
- Mortgage and insurance scandals
- American International Group (AIG) an insurance company, bailed out for $85 billion – Recently removed from the US Financial Stability Oversight Council as no longer a risk.
- Scams of financial moguls
- Bernie Madoff – Former Chairman of the NASDAQ, stock exchange operated a Ponzi scheme (fraudulent investments). In 2009, pleaded quality to 11 felonies and admitted to defrauding thousands of investors of billions of dollars.
- BP oil spill
- The Deepwater Horizon oil spill – considered the largest offshore spill in the Gulf of Mexico that resulted from the April 20, 2010 Deepwater Horizon drilling rig explosion. Recent study came out that the dispersant they used harmed human health (Pittman, 2017)
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Corporate Social Responsibility
- At the organizational level
- A corporation is progressively more socially responsible to the degree that it:
- Meets basic economic needs through diligence and innovation
- Exceeds legal requirements by fulfilling the law
- Finds ways to enhance the community and planet with mutually beneficial actions
- Provides outright acts of charity
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Social Responsibility Arguments Increasingly Important
- Social responsibility is increasingly an interest and concern of public, investors, and employees
- Social responsibility can provide win-win scenarios, e.g., the environment can be protected (WIN) and costs can be cut(WIN)
- Poor social responsibility gets more attention from organizations providing bad press
- The moral argument is that all companies must abide by society’s minimum standards, and that wealth and success bring social obligations to be more responsible
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Thank you.