business Ethics homework assessments

BBA 4751, Business Ethics 1

UNIT VII STUDY GUIDE

Corporate Social Responsibility

Course Learning Outcomes for Unit VII Upon completion of this unit, students should be able to:

1. Define corporate social responsibility. 2. Describe and evaluate the economic model of corporate social

responsibility. 3. Distinguish key components of the term responsibility. 4. Describe and evaluate the philanthropic model of corporate social

responsibility. 5. Describe and evaluate the social web model of corporate social

responsibility. 6. Describe and evaluate the integrative model of corporate social

responsibility. 7. Explain the role of reputation management as motivation behind CSR. 8. Evaluate the claims that CSR is “good” for business.

Unit Lesson This unit addresses the questions of whether businesses have any social responsibilities, and if so, how firms can meet and evidence their fulfillment of this responsibility. From an economic perspective, a business is an institution that exists to produce goods and services in a supply and demand arrangement. By engaging in this activity, the business creates jobs and wealth that benefits those beyond itself (i.e., society as a whole). The term corporate social responsibility (CSR) refers to the responsibilities that a business has to the surrounding society. Before exploring various approaches to CSR, it is valuable to understand the concept and relation between ethics and social responsibility. The concept of responsibility can pertain to a person that is reliable or trustworthy, or it can be attributed to something that is a cause for an event or action. Alternatively, the concept can be an effort to attribute liability or accountability for some event or action, which creates an obligation to restore the status quo. The relevance of these concepts to CSR is that they entail accountability for businesses. Specifically, they identify actions for which a business can be held accountable, as well as consideration of society’s interests (i.e., those that should restrict a business’ activities). Our textbook identifies three types of responsibilities and places them on a scale (ranked by importance of the expectation) in terms of society’s expectations for a firm’s activities.

Reading Assignment Chapter 5: Corporate Social Responsibility, pp. 211-236

Suggested Reading See information below.

BBA 4751, Business Ethics 2

1. the responsibility not to cause harm to others, 2. to prevent harm even in those cases where one is not the cause, and 3. to do good (i.e., volunteer and charitable work).

Assuming that it is true that businesses have responsibilities beyond making profits for shareholders, there are four primary theories of CSR: economic, philanthropic, social web, and integrative. According to the economic model of CSR, a business’ sole duty is to fulfill the economic functions businesses were designed to serve. Hence, the social responsibility of business managers is simply to pursue profit within the law. The philanthropic model of CSR holds that a business is free to contribute to social causes as a matter of philanthropy, but it has no strict obligation to contribute to those causes. However, it is maintained that businesses should be encouraged to contribute to society in ways that go beyond the narrow obligations of law and economics. The motivation for a business to adopt the philanthropic CSR model can be attributed to the prospective positive public relations it entails, for tax benefits, and/or for the goodwill it can build within the community. From the perspective of the philanthropic model, philanthropy done for financial reasons is not fully ethical and not truly an act of social responsibility. The social web model of CSR views a business as a citizen of the society in which it operates; therefore, the business is expected to conform to the normal ethical duties and obligations of all members of that group. Such ethical duties include respecting basic human rights and the obligation to cause no harm, even if it is at the cost of profits. Additional basic rights include an employee’s right to a safe and healthy workplace, the right to privacy, and the right to due process. Consumers’ basic rights include the right to safe products and truthful advertising. The integrative model of CSR states that organizations pursue social ends as the core of their mission, such as non-governmental organizations, professional organizations, schools, colleges, and many government agencies. However, this approach is not limited to non-profits. Some for- profit organizations have social goals as a central part of their strategic mission too. Sustainability in the context of CSR states that ethical goals should be at the heart of every corporate mission. However, sustainability is sometimes viewed as an extreme position in that it can be interpreted to mean that a firm’s financial goals must be balanced against, and perhaps even over- ridden by, environmental considerations. Each of the above-described CSR models includes the idea of a stakeholder. Stakeholder theory is the idea that every business decision affects a wide variety of people, benefiting some and imposing costs on others.

BBA 4751, Business Ethics 3

The economic model argues that the firm should be managed for the sole benefit of stockholders. However, stakeholder theory argues that this is an inadequate understanding of business. Instead, stakeholder theory maintains that the narrow economic model fails both as an accurate descriptive and as a reasonable normative account of business management. In terms of CSR and its value to business, there is some evidence that good ethics is good business. However, the impact is difficult to measure and some advise that business should be cautious about investing in CSR when consumers are not willing to pay higher prices to support that investment.

Reference Hartman, L. P., DesJardins, J., & MacDonald, C. (2014). Business ethics:

Decision making for personal integrity & social responsibility (3rd ed.). New York, NY: McGraw-Hill.

Suggested Reading Click here to access the PDF of the Chapter 5 Presentation. Kleine, A., & von Hauff, M. (2009, April). Sustainability-driven implementation of

corporate social responsibility: application of the integrative sustainability triangle. Journal of Business Ethics, Supplement, (85), 517-533.

Pava, M. L., & Krausz, J. (1997, February). Criteria for evaluating the

legitimacy of corporate social responsibility. Journal of Business Ethics, 16(3), 337-347.

Verbeke, A., & Tung, V. (2013, February). The future of stakeholder theory: a

temporal perspective. Journal of Business Ethics , 112(3), 529-543.