Ethics and Corporate Social Responsibility

Lesson 01

Lesson's ObjectivesIdentify the meaning of managementDefine organization and societyidentify the relationships among society

& organizationDefine CSR and Identifying the values and

expectations of stakeholdersSocial & Economic consideration and

values

Basic Approach for CSRManagement

◦The process of planning, organizing leading and controlling the work of organization members and of using all available organizational resources to reach stated organizational goals.

Organization◦A group of people working together in a structured

way to achieve a specific goal or set of goals.Who we areFor most of our lives, we are members of one

organization or another.

Basic Approach for CSRThe purpose of that an organization strive

to achieve ◦Organizations often have more than one goals◦Goals are fundamental elements of

organizations◦All organizations have some program for

achieving goal-plan

The management Process

Inputs Transformation system Outputs

Envi

ronm

ent Environm

ent

Environment

Monitoring and control

Cont…Firm takes resources from environment and

gives products/solutions to environmentSolutions must have a value than its inputtedProtect the value of stake holders

◦ “groups and individuals who can affect or are affected by, the achievements of an organization’s mission”

◦ Stakeholder is a party who are directly or indirectly affecting to the organization and being affected by organizational decisions.

◦ Primary/Secondary stakeholders

Expectation/ Value of Stakeholders

Stakeholders

Customers

Employees

Suppliers and business partners

CommunitiesGovernment

Investors

N.G.O

UnionsMedia

Corporate Social ResponsibilityCorporate social responsibility (CSR) also called

corporate conscience, corporate citizenship, social performance, or sustainable responsible business/Responsible Business

CSR it is totally based on holistic concern of the business and its output.

CSR is form of corporate self regulation integrated into a business model. CSR policy functions as a built in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.

Corporate Social ResponsibilityCSR is a process with the aim to embrace

responsibility for the company's actions and encourage a positive impact through its activities on the environment and its stakeholders.

CSR is founded upon the premise that businesses do have another responsibility apart from its economic responsibilities - a responsibility towards the society and its people - a 'social' responsibility.

Corporate Social Responsibility Keith Davis 1960, Corporate Social

Responsibility can be defined as businessmen's decisions and actions taken for reasons at least partially beyond the firms direct economic and or technical interests.

Jules Backman 1975, Corporate Social Responsibility "refers to the objectives or motives that should be given weight, by business in addition to those dealing with economic performances".

Corporate Social Responsibility"the obligation of decision make to take

actions which protect and improve the welfare of society as whole along with their own Internet".(Keith Daris and Robert L Blomstom 1975)

"the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of Life of the work Force and their families as well as of the local community and society at Large".(Lord Holms and Richard Watts)

Corporate Social ResponsibilityAccordingly at CSR an organization must

obligate with economic consideration, legal consideration, and also ethical consideration under the concepts of corporate social responsibility context.

ValueValues are standards to guide your action,

judgments, and attitudes.It is qualities, characteristics, or ideas

about which we feel strongly.A belief or feeling that someone or

something is worthwhile.◦Our values affect our decisions, goals and

behavior.◦Values define what is of worth, what is

beneficial, and what is harmful.

ValueValues give direction and consistency to

behavior.Values help you know what to and not to

make time for.Values set the direction for one’s life.Following are the major philosophical

views of value:◦Objective◦Subjective

ValueFollowing are the major philosophical views of value:

Objective - The objective value view holds that value is inherent in the object itself.

Subjective - The subjective value philosophical position holds that value is in the eyes of the beholder, not in the object itself.

ValueWe are acquiring values from everything

◦ Ages 1-7 --- parents◦ Ages 8-13 --- teachers, heroes (sports rock,

TV)◦ Ages 14-20 --- peers (values because of peers

or peers because of values?)◦ Ages 21+ --- Yours values are established,

but you may test your values from time to time.But 14-20 & 21+ groups may work with

organization with objective values than subjective.

Value vs. PricePrice relates to the actual number of rupees a

commodity or service brings when it is sold. Price is therefore a fact.

Value relates to the worth of a commodity. This is more of a theoretical concept rather than an actual fact.

“Price is what you pay. Value is what you

get.”

Market Value “Market value” means: The most probable

price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus.

Values is identified with a two perspective as◦ western value◦ Eastern Value

Western Vs Eastern ValueWestern culture is a body of knowledge derived from

reason. This foundation of reason has made possible a vast accumulation of understanding related to reality or nature, including human nature.

This understanding is represented in several core

ideas and values, which include individualism, happiness, rights, capitalism, science and technology.

Western culture can also be referred to as advanced culture; this is because its ideas and values promote the development and sustainment of advanced civilization

Western Vs Eastern ValueNon-western culture is a body of ideas and values

derived fundamentally from mysticism/spiritualism or subjectivism, as opposed to reason. And it is characterized essentially by anti-individualism, self-sacrifice, tyranny-dominations, the view that humanity is depraved and/or helpless, and a hostility or indifference to economic progress, science and technology.

Nonwestern culture can also be referred to as uncivilized culture. This is because it’s essential ideas and values are fundamentally opposed to the ideas and values that lead to the development and sustainment of civilization.

Differences – East and WestEast

Internal self controlCommunalHierarchyModestyHarmony

Saving faceSilence oriented

Time is lifeRespect for status

Truth orientedNosy and curious

HypocriticalSharingAccept

Long term orientedIndirect

InterdependentBeing

WestExternal control

IndividualEquality

AchievementWinning

PrideNoise orientedTime is money

Respect for resultsFact orientedValue privacy

OpenSelfishControl

Short term orientedDirect

IndependentDoing

Owner/Entrepreneur – Cultural Differences

In Sri LankaFriends will ask the owner to hire their sons and nephews

In US Friends put up their money for the owner

In IndiaThe administrative system will put up

monumental red tape

In UKEveryone tries to

discourage the owner by explaining why it is likely

to fail and then scratch his car

In Hong KongWhen someone starts a

new business venture, the entire family works

around the clock to make it a success

Asian vs. Western Family Controlled Firm

Asian Family FirmTo hold the family together and family infighting exists

To give family members a jobThe family’s prestige and

honor

To honor the ancestral founders of the firm

Loyalty is valued over professional and bureaucratic

status

Western Family firmFamily loyalties are weak

Communications are bureaucratized

Outside directors or close associates of the controlling

family

Succession challenges

Unemotional - determined by impersonal and economic

criteria

Asian vs. Western - Values

Asian

GroupTrust

CompromiseFlexible

Western

IndividualisticStick to rules

ConfrontReasoning

Asian vs. Western - Action

Asian

Long termCollaborative

Customer focused

Western

Short termControl

“Show me the money”

Asian vs. Western – Management Style

Asian

RelationshipFlexible

AdaptiveUnderstanding

Western

RationalStructuredDirective

Doing

Asian vs. Western - Organization

Asian

Informal“Jack of All

Trades”Integrated

Co-operative

Western

Formal“Master of

None”FragmentedCompetitive

Cultural Stereotyping & Global Manager !!

The Humanity of the FRENCH

The Generosity of the DUTCH

The Candor of the JAPANEESE

The Charm of the GERMAN

The Punctuality of the SPANIARD

The Compassion of the ENGLISH

The team Spirit of ARAB

The Gentle Tact of the AUSTRALIAN

The Efficiency of the RUSSIAN

The Discipline of the ITALIAN

The Patience and Language Ability of the AMERICAN

Did you know The 19th Century belonged to Europe, the

20th to America and the 21st will be the Asian century”

Goldman Sach’s BRICS study predicts that by the year 2050, three of the four largest economies in the world will be Asian: China, USA, India and Japan (in that order) and no European economy will be among the top four.