CORPORATE SOCIAL

RESPONSIBILITY (CSR) AND

ETHICS

Chapter 15 Lecture 1
Definitions and Relationships
Corporate social responsibility (CSR) is the
process by which businesses negotiate their role in
society
In the business world, ethics is the study of
morally appropriate behaviors and decisions,
examining what "should be done
Although the two are linked in most firms, CSR
activities are no guarantee of ethical behavior
Recent Evidence of CSR Interest
An Internet search turns up 15,000 plus
response to corporate citizenship
Journals increasingly rate businesses (and
NGOs) on socially responsive criteria:
Best place to work
Most admired
Best (and worst) corporate reputation
Reasons for CSR Activities
CSR activities are important to and even
expected by the public
And they are easily monitored worldwide
CSR activities help organizations hire and
retain the people they want
CSR activities contribute to business
performance
 Corporate Social Responsibility Continuum
Do more than
required; e.g. Integrate social
engage in objectives and
philanthropic business goals
Fight social giving
responsibility
initiatives
Maximize firms Balance profits
profits to the and social
exclusion of all objectives
else

Do what it
takes to Lead the
make a Comply;
industry
profit; skirt do what
Articulate and other
the law; fly is legally
required social value businesses
below objectives with best
social radar practices
CSR are Grounded by Opposing Objectives
(Maximize Profits to Balance Profits with Social
Responsibility) and so Activities Range Widely

Do what it takes to make a profit; skirt the law; fly below

social radar
Fight CSR initiatives
Comply with legal requirements
Do more than legally required, e.g., philanthropy
Articulate social (CSR) objectives
Integrate social objectives and business goals
Lead the industry on social objectives
Businesses CSR Activities
Philanthropy
give money or time or in kind to charity
Integrative philanthropyselect beneficiaries aligned
with company interests
Philanthropy will not enhance corporate reputation
if a company
fails to live up to its philanthropic image or
if consumers perceive philanthropy to be manipulative
Integrate CSR Globally
Incorporate values to make it part of an
articulated belief system
Act worldwide on those values
Cause-related marketing
Cause-based cross sector partnerships
Engage with stakeholders
Primary stakeholders
Secondary stakeholders
Business Ethics Development
The cultural context influences
organizational ethics
Top managers also influence ethics
The combined influence of culture and top
management influence organizational ethics
and ethical behaviors
The Evolving Context for Ethics
From domestic where ethics are shared
To international where ethics are not shared
when companies:
Make assumptions that ethics are the same
Ethical absolutismthey adapt to us
Ethical relativismwe adapt to them
To global which requires an integrative
approach to ethics
Emergence of a Global
Business Ethic
Growing sense that responsibility for righting
social wrongs belongs to all organizations
Growing business need for integrative
mechanisms such as ethics
Ethics reduce operating uncertainties
Voluntary guidelines avoid government impositions
Ethical conduct is needed in an increasingly
interdependent worldeveryone in the same game
Companies wish to avoid problems and/or be good
public citizens
Ways Companies Integrate Ethics

Top management commitment in word and

deed
Company codes of ethics
Supply chain codes
Develop, monitor, enforce ethical behavior
Seek external assistance
External Assistance with Ethics

Industry or professional codes

Certification programs, e.g., ISO 9000
Adopt/follow global codes
Caux Round Table Principles
Reasons for Businesses to Engage in
Development of a Global Code of
Business Ethics
Create the same opportunity for all businesses if
there are common rules
Level the playing field
They are needed in an interconnected world
They reduce operating uncertainties
If businesses dont collaborate, they may not like
what others develop
Four Challenges to a Global Ethic
Global rules emerge from negotiations and will
reflect values of the strong
Global rules may be viewed as an end rather than
a beginning
Rules can depress innovation and creativity
Rules are static but globalization is dynamic