Chapter 4

Corporate Social Responsibility

What an organization does to influence the society in which it exists, such as through

volunteer assistance program

Corporate Social Responsibility

What an organization does to influence the society in which it exists, such as through

volunteer assistance program

EthicsThe study of rights and of who is – or should be- benefited or harmed by an action.

Sample Practices of Corporate Social Responsibility and Ethics

Hires ex- convicts

Hires homeless people

Donates all profits of Newman's Own Food to charity

The Changing Concept of Social Responsibility

The muckcrakers exposes of corrupt business practices

Government‘s provision of some ground rules for managers

Different Views on Social Responsibility

1. Andrew Carnegie‘s The Gospel of Wealth

Charity Principle

Stewardship Principle

Doctrine of social responsibility requiring more fortunate individuals to assist less fortunate members of society.

Derived from bible which requires businesses and wealthy individuals to view themselves as stewards or caretakers of their property

2. Milton Friedman‘s Argument

There is only one social responsibility of business: to use its resources and energy in

activities designed to increase its profits so long as it stays within the rules of the game and

engages in open and free competition without deception and fraud.

Businesses should produce goods and services efficiently and leave the solution of social problems to concerned individuals and government

agencies.

Enlightened Self-interest

Organizations realization that it is in their best interest to act in ways that the community

considers socially responsible.

Corporate Social Responsiveness

A theory of social responsibility that focuses on how companies respond to issues, rather than

trying to determine their ultimate social responsibility.

Corporate Social Performance

A single theory of corporate social action encompassing social principles, processes and

policies.

Application of Social Performance on Decision Making Processes and Policies

The Shift to Ethics

Ethics- the study of how our decisions affect other people.

- It is also the study of people‘s rights and duties, the moral rules that

people apply in making decisions, and the nature of the

relationship among people.

4 Levels of Ethical Questions in Business

Tools of Ethics

The key terms of ethical language: VALUES, RIGHTS, DUTIES,RULES, and RELATIONSHIP

Values- relatively permanent desires that seem to be good in themselves. It is the answer to the WHY questions.

Right- claims that entitle a person. It is also known as the

person‘s SPHERE OF AUTONOMY

Duty- an obligation to take specific steps e.g. pay taxes,

obey the law…

Moral Rules- guide us through situations where

competing interests collide. They are the tie breakers – guidelines that can resolve disagreement.

Human relationship- every human being is connected to others in a web of relationship.

Common Morality

Morality of Care

Recent theories such as Gilligan and Nell Noddings have argues that common morality- the morality rules of justice- is only one perspective for reasoning about morality.

They have suggested an alternative model called THE ETHICS OF CARE.

Gilligan proposes that there are strands of moral theory: Justice and Care Perspectives

Institutionalizing Ethics

CEOs do not have to confront ethical problems in vacuum. Instead they can institutionalize the process.

Ways of INSTITUTIONALIZING ETHICS: corporate code of

conducts, ethics committees, ombudsman offices, judicial board, ethics training programs, and social

audit

Social Audit- report describing company activities in a given

area of social interest, such as environmental protection,

workplace safety, or community involvement.

Challenge of Relativism

There are any versions of moral relativism, but all of them

hold that we cannot decide matters of:

right and wrong, good and evil, in any rational way.

NAÏVE RELATIVISM- idea that all human beings are themselves the standard by which their action should be judged. Ethical decisions are personal.

CULTURAL RELATIVISM- the idea that morality is relative to a particular culture, society, or community.

It tells us to try to understand.