Individuals and Societies

Social Science TEACHERS

On Business Ethics and CSR

Comment 0

In answering one of the CUEGIS concepts, it is helpful to read up on how businesses incorporate ethics and CSR into their operations. It is important to define and differentiate the concepts pertaining to the topics. You have to know how to apply these concepts in certain business situations.  An example question would be:

Discuss the importance of ethics and corporate social responsibility play in a business organization.


What is Corporate Social Responsibility?

Corporate Social Responsibility (CSR) is the responsibility of an organization for the impacts of its decisions and activities on society, the environment and its own prosperity, known as the “triple bottom line” of people, planet, and profit. Not only do responsible, sustainable and transparent approaches help build brand and reputation, they help strengthen the community and therefore the marketplace. A solid business plan, embedded into the business culture, reflecting organizational values and objectives through strategic CSR application, will help to build a sustainable and profitable future for all.

The obligation of an organization’s management towards the welfare and interests of the society in which it operates.

What is business ethics?

Business ethics 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.

Business ethics reflects the philosophy of business, one of whose aims is to determine the fundamental purposes of a company. If a company’s purpose is to maximize shareholder returns, then sacrificing profits to other concerns is a violation of its fiduciary responsibility. Corporate entities are legally considered as persons in USA and in most nations. The ‘corporate persons’ are legally entitled to the rights and liabilities due to citizens as persons.

Most students’ principles of right and wrong are well established prior to their attending high school. Thus, the presentation of business ethics does not involve the teaching of right and wrong. Instead, students need to learn how to apply their principles of right and wrong to business situations.

The principles of right and wrong that guide an individual in making decisions are called ethics. The use of personal ethics in making business decisions is called business ethics. In these Business Ethics Activities, you will have the opportunity to analyze the ethics of common business situations by using the following three-step checklist as a guide in collecting relevant information regarding an action.

1. Is the action illegal? Does the action violate any laws? Obeying the law is in your best interest and the best interest of your business.

2. Does the action violate company or professional standards? Public laws often set only minimum standards of behavior. Many businesses and professions set even higher standards of behavior. Thus, an action may be legal, yet still violate standards of the business or profession. Violating these standards may affect your job security or any professional certification you may hold.

3. Who is affected, and how, by the action? If an action is legal and complies with business and professional standards, you must rely on your principles of right and wrong to determine if the action is ethical. Determining how the action affects individuals and groups—including business employees and owners, customers, the local community, and society—will help you decide if an action is ethical.

Social responsibility a part of business ethics?

Social responsibility and business ethics are often regarding as the same concepts. However, the social responsibility movement is but one aspect of the overall discipline of business ethics. The social responsibility movement arose particularly during the 1960s with increased public consciousness about the role of business in helping to cultivate and maintain highly ethical practices in society and particularly in the natural environment. Many companies believe they have a responsibility to “give back” to society. This focus includes contributions of time and money, a duty to provide environmentally friendly products and services, and a desire to improve the lives of individuals here and around the globe. Such socially responsible companies see to it that this “consciousness” permeates everything they do.

The following 10 companies stand out as prime examples of how social responsibility can be productively coupled with sound strategies to advance goodwill, while building sustainable and impressive businesses. They provide the leadership to demonstrate how marketers can pursue both objectives simultaneously. As such, socially conscious companies have stepped up their efforts with increasing effectiveness and productivity. It is an impressive movement and one that invites society at large to do even more. Let’s use these as examples for “how to get it done” so that we can effectively expand our efforts to give back.

Burt’s Bees – The focus for Burt’s Bees has always been on well-being and “the greater good.” As part of the Natural Products Association, the company helped develop The Natural Standard for Personal Care Products, which created guidelines for what can be deemed natural. Burt’s Bees follows the highest possible standards for packaging sustainability, furthering its dedication to the cause as a member of the Sustainable Packaging Coalition. Since the brand’s start at a crafts fair selling $200 worth of honey, the company has since expanded to candles, lip balm and now more than 150 products. In 2009, revenue topped $250 million.

GE – To stay true to GE’s mission, Ecomagination offerings include products that significantly and measurably improve customers’ operating performance or value proposition and environmental performance. Ecomagination helped GE build its business by increasing awareness of how the company is using renewable energy and reducing carbon emissions. As proof of the effectiveness of GE’s program, the Ecomagination portfolio has grown from 17 products to more than 80 today, with revenues reaching $17 billion in 2008, an increase of 21% over 2007.

Method – As a cleaning product, Method hit the jackpot. While cleaning products historically contained hazardous chemicals, Method was able to make safe and effective home and personal cleaning products derived from natural ingredients such as soy, coconut and palm oils. The products also come in environmentally responsible, biodegradable packaging. As one of the fastest-growing companies in the world, and with $100 million in annual revenue, Method proves that socially responsible products can be wildly successful.

The Body Shop – The Body Shop is regarded as a pioneer of modern corporate social responsibility as one of the first companies to publish a full report on its efforts and initiatives. Founder Anita Roddick led her company to stand up for its beliefs and champion causes such as self-esteem, environmental protection, animal rights, community trade and human rights. From sponsoring posters in 1985 for Greenpeace to presenting a petition against animal testing to the European Union with 4,000,000 signatures, The Body Shop has contributed significantly to the causes it supports, and exemplifies how other companies can do the same.

Starbuck’s Coffee – Since Starbucks Coffee started in 1971, the company has focused on acting responsibly and ethically. One of Starbucks’ main focuses is the sustainable production of green coffee. With this in mind, it created C.A.F.E. Practices, a set of guidelines to achieve product quality, economic accountability, social responsibility and environmental leadership. The company supports products such as Ethos Water, which brings clean water to the more than 1 billion people who do not have access. To date, Ethos Water has committed to grants totaling more than $6.2 million.

Ben & Jerry’s – Ben & Jerry ‘s founders Ben Cohen and Jerry Greenfield have infused the company with the notions of giving back in every way possible, as well as “linked prosperity” between the company, its employees and the community. They started the Ben & Jerry ‘s Foundation, were founding members of the Business for Social Responsibility organization and set an extraordinary rate of giving to charitable organizations in the corporate world, donating a full 7.5% of pretax profits. In their own words, they “strive to show a deep respect for human beings inside and outside our company and for the communities in which they live.” Unilever bought Ben & Jerry ‘s in 2000 and continues to support the foundation; it donated $2 million in 2009.

Kenneth Cole – Since 1985, Kenneth Cole has been openly involved in publicly supporting AIDS awareness and research. He uses fashion to promote awareness of, and help fight, various social issues. After 25 years of addressing meaningful social issues, Kenneth Cole established the awareness’ Fund, a not-for-profit initiative that uses partnerships, merchandise, events and its blog to celebrate, encourage and empower acts of service volunteerism and social change. A full 100% of net proceeds of the Awareness products go toward the fund. These efforts have helped fuel the success of the Kenneth Cole brand, a company with nearly $500 million in sales.

Pedigree – Pedigree dog food built its brand by focusing on the need for people to adopt homeless dogs. Funding the support and care of these animals and sponsoring a national adoption drive, Pedigree’s 2009 goal was to distribute $1.5 million in grants to 1,000 shelters and breed rescues. Pedigree donates one bowl of food to animal shelters every time it gets a Facebook fan, and it did the same when the company’s 2009 Super Bowl commercial was viewed online. Pedigree’s goal is to donate 4 million bowls of dog food, enough to feed every shelter dog in America for one day.

Tom’s Shoes – Blake Mycoskie started Toms Shoes on the premise that for every pair of shoes sold, one pair would be donated to a child in need. This innovative idea resulted from a trip to Argentina where Mycoskie saw an overwhelming number of children without shoes. Toms Shoes recognized that consumers want to feel good about what they buy, and thus directly tied the purchase with the donation. In just four years, Toms Shoes has donated more than 400,000 shoes, evidence that consumers have clearly embraced the cause.

Whole Foods – Whole Foods supports sustainable agriculture, promotes the reduction of waste and consumption of nonrenewable resources and encourages environmentally sound cleaning and store-maintenance programs. The company created the Local Producer Loan program, which provides up to $10 million in low-interest loans to small local producers to help grow their businesses. Whole Foods has also created Whole Planet Foundation, which fights poverty through micro lending in rural communities around the world. The foundation has raised $1.5 million to help 40,000 women lift themselves out of poverty by empowering micro entrepreneurs.

In the post-Enron era, the number of companies reporting their social and environmental impact on society has increased immeasurably. Indeed, to its many advocates, the emergence of corporate social responsibility (CSR) is not only a blueprint for the future, but a new highway to follow for conducting business in an uncertain world that has witnessed the evisceration of many long-accepted norms of conduct.

Broadly speaking, CSR — also known as sustainable development — involves the increased recognition by publicly held companies that they need to address and heed not only shareholders, but all the multiple stakeholders impacted by the company’s behavior. These include employees, customers, suppliers, governments, and nongovernmental organizations. In the new paradigm of social responsibility, stakeholders also could include socially responsible investor organizations, consisting of investors who make investment decisions using various social and ethical screens.

What follows are the major factors behind the emergence of CSR and an outline of key global and U.S. standards that have been put in place, as well as a review of current corporate and social audit reporting and support activities at numerous multinational companies. Several audit practitioners also offer their suggestions on best practices for evaluating, developing, supporting, and reporting on social and audit compliance standards.


Another good read would be this:

Annie Kelly. Ikea to go ‘forest positive’ – but serious challenges lie ahead. Fri 14 Dec 2012 15.42 GMTFirst published on Fri 14 Dec 2012 15.42 GMT.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>