Business Ethics

in
Corporate Social Responsibility
Group 6 - Section B
Rahul Bhasuru
Vandana sheel Gautam
Rimpal Setty
Anmol Agarwl
Akhil Sai Kishore Bodduri
Contents:

• Introduction
• Ethics and Social Responsibility
• Models of Corporate Social Responsibility
• Social Entrepreneurship
• Case i. Volkswagen
• Case ii.
• Case iii.
• Case iv.
Introduction
Corporate Social Responsibility
refers to responsibilities that a business has to the society in which it operates

“The Social Responsibility of Business Is to Increase Its Profits”

- Adam Smith
(first to articulate a version of perspective)

Milton Friedman explains that a corporate executive has a

responsibility to conduct business in accordance with desires, which generally will be to
make as much money as possible while conforming to the basic rules of society, both those
embodied in law and those embodied in ethical custom (emphasis added)
Ethics and Social Responsibility
The words Responsible and Responsibility
• Responsible:
1. Being reliable or Trustworthy
2. Attributing something as a cause for an event/action
3. Attributing liability or Accountability
• Responsibility:
1. Actions that bind or compel or constrain us to act in a way

The three questions

• Is there a duty not to cause harm?
• Is there a responsibility to prevent harm?
• Is there a responsibility to do good?
Models of Corporate Social Responsibility
• Economic Model
Primary Responsibility: Produce Goods and
Services, Seek profit, Obey the law

• Philanthropic Model
Like individuals, business is free to contribute to
social causes

• Social Web Model

Business is embedded within a web of social
relationships of mutual rights and responsibilities

• Integrative Model
Part, or all, of the mission of the company is to
serve some important social goals
Social Entrepreneurship

Combining profitability with a social mission

is the insight of Social Entrepreneurship

It involves the standard entrepreneurial characteristics

of innovation, creativity and risk-taking, but marshals
these skills to address social needs

“Social entrepreneurs are not content

just to give a fish or teach how to fish.
They will not rest until they have
revolutionized the fishing industry”
An example - Muhammad Yunus,
- Bill Drayton
founder of Grameen Bank in Bangladesh
Case i. Volkswagen

Classic case of Failure of

Volkswagen in terms of Corporate
Social Responsibility (CSR)
Case i. Volkswagen
How Did the System Work?
The software sensed when
the car was being tested and
then activated equipment
that reduced emissions. But
the software turned the
equipment down during
regular driving, increasing
emissions far above legal
limits, most likely to save fuel
or to improve the car’s torque
and acceleration
Did the Company’s CSR
department knew?
Resignation of CEO, Audis
head of R & D and Porsche’s
engine chief – gives hints
that CSR department must
have known. Moreover
Volkswagen did all it could
to hide the fact that its
diesel engines were highly
contaminating.
Major problem with CSR
Companies are asked to
self regulate. Majority
of people see CSR as
superfluous, a luxury
that mustn’t get in the
way of making profits
CSR has failed
What has happened at
Volkswagen is so
important, so real, that it
should make companies to
think about their priorities
and just what the job of
their CSR department is.
Thank You