BUSINESS ETHICS &

CORPORATE SOCIAL
RESPONSIBILITIES

CHAPTER 1.
Business Ethics as Foundation of CSR

Business Ethics as Foundation of

CSR
1.) Why is ethical management
important to business?
Ethical management is
practically considered by all
business leaders as relevant to
business survival and corporate
reputation.

Business Ethics as Foundation of

CSR
2.) Is the term business ethics an
oxymoron?
In the traditional sense, people
get into the business to maximize
profit, while ethics deals with
anything other than profit.
Ethics, in the field of philosophy, is
a specialized study of what is right
or wrong.

Business Ethics as Foundation of

CSR
However, there is the dilemma
about doing the right thing. It
seems the one who abides my
moral principles is usually poorer
while the crook becomes richer.
The dilemma arises because
ethical behavior is not always
rewarded and unethical behavior is
rarely punished.

Business Ethics as Foundation of

CSR
3.) What is business ethics?
Business ethics is a form of
applied ethics that examines
ethical rules, theories, and
principles in business context. It
includes the correct understanding
of any moral duties or obligations
that apply to persons who are
engaged in commerce.

Business Ethics as Foundation of

CSR
Business ethics pushes the practitioner
to study and evaluate how he/she makes
business decisions in accordance with
moral concept and judgements. He/she ask
questions: is it true? Or is it deceitful? Is it
fair? Is it the right thing to do? Ethical
questions range from practical, narrowly
defined issues, such as companys
obligation to be honest with its customers,
to broader social and philosophical
questions such as a companys
responsibility to preserve the environment

Business Ethics as Foundation of

CSR
4.) What is the role of ethics in
management?
Business ethics covers a myriad
of both practical and moral
problems that arises out of specific
areas of management.

4.) What is the role of ethics in

management?
Ethical management in the
workplace
Ethical management is the
foundation of CSR in the workplace,
which covers those ethical issues
arising from the employeremployee relationship, such as the
rights and obligations justly owed
between them.

4.) What is the role of ethics in

management?
Ethical management regarding
intellectual property rights
This may take into account the issues
regarding bioprospecting(considered
ethical) and bio piracy (considered
unethical) copyright, patent, and
trademark infringement, business
intelligence, employee trading, and
industrial espionages.

4.) What is the role of ethics in

management?
Ethical management in sales,
advertising , and marketing
Business ethics and social
responsibility deal with the issues on
pricing and price fixing, moral
dimension of anti-trust or anti-cartel
law, bait switch, viral marketing,
pyramid scandal, and sex in advertising.
Cases may include Banetton.

4.) What is the role of ethics in

management?
Ethical management in production
This area of business ethics deals
with the duties of a company to
ensure that products and
production process do not cause
harm. The stakeholders involved
are the consumers, the general
public, and almost always the
environment.

4.) What is the role of ethics in

management?
Ethical management in finance,
accounting, and auditing
The best cases are Enron and Worldcom
where the issues comprise executive
compensation, (criminal) manipulation of
the financial markets, bribery, facilitation
payments, fraud, and false reporting. Its
practical CSR application is corporate
governance, accountability, and valuebased management.

Business Ethics as Foundation of

CSR
5.) How is business ethics linked
with CSR?
As a discipline, business ethics is
one branch of professional and
applied ethics. The growth of this
discipline can be seen in its
inclusion in serious CSR discussions
and debate, and vice versa.

Business Ethics as Foundation of

CSR
6.) Can a company become a
corporate citizen without being
ethical?
No. Business ethics seeks to
determine whether a particular
behavior, decision, or action of an
individual or organization is morally
right or wrong.

Business Ethics as Foundation of

CSR
7.) How can business ethics become a
philosophy of management?
Indeed, business ethics can become a
philosophy of management-if the
practitioner chooses to do so. Whereas
ethics is principally personal, CSR is social
and corporate. In as much as it is
practical guidepost in ones private and
professional life business ethics is
personal.

Business Ethics as Foundation of

CSR
8.) Does ethical management go beyond
public relations and profitability?
It might happen, as a consequence of
social responsibility and ethical
management, that sales go up because
the company projects an angelic image.
However, individuals do not practice
business ethics and corporation do not
benchmark CSR to do public relations and
increase saless.

Business Ethics as Foundation of

CSR
9.) What is the biggest challenge?
The biggest challenge is to
actually implement and sustain
ethical management. Both
ethical management and CSR are
dedicated to mutual interest
existing between business growth
and social development.

Business Ethics as Foundation of

CSR
10.) Should there be a CSR department?
it is advantageous if a company has a CSR
department, which should not be headed by
a lawyer. Because ethical management is
beyond legal and regulatory compliance. It
requires the involvement of everyone. CSR
includes code of conduct, corporate
citizenship, employee volunteerism,
resource and sharing management, and
sustainable management.

Business Ethics as Foundation of

CSR
Ethical management is a tool
towards corporate excellence.
While others are contented with
the minimal requirements of the
moral norms and code of conduct,
the goal of both business ethics
and CSR is the moral excellence of
all players in the business.

Case Analysis
A large American company participates in
a highly competitive industry. To meet the
competition and achieve profit goals, the
company has chosen the decentralized form
of organization. Each manager of a
decentralized center is measured on the
basis of profit contribution, market
penetration, and return on investment.
Failure to meet the objectives established by
corporate management for these measures
is not accepted and usually results in
demotion or dismissal of a center manager.

Case Analysis
An anonymous survey of managers in the
company revealed that they felt pressured to
compromise their personal ethical standards to
achieve the corporate objectives. For example,
certain plant locations felt the pressure to reduce
quality control to a level that could not ensure that
all unsafe products would be rejected. Also sales
personnel were encouraged to use questionable
sales tactics to obtain orders, including offering
gifts and other incentives to purchasing agents.
The chief executive officer is disturbed by the
survey findings. In his option, the company cannot
condone such behavior. He concludes that the