Business Ethics in Corporate Social Responsibility - Coursework Example

Business Ethics in Corporate Social Responsibility [Name] [Professor Name] [Course] [Date] Business Ethics in Corporate Social Responsibility Introduction Corporate social responsibility (CSR) demonstrates the manner in which companies get to manage their procedures in an effort to ascertain that their activities have positive effects on their stakeholders and also the society at large (Baker 2004). While business executives may desire to have a reason to evade responsibility that can result to cutting into the bottom-line, ethical theorists have come up with various reasons why companies need to get involved in CSR activities (CMI 2007). In order to give backing to the arguments, ethical theories are very significant. Business ethics has therefore intensely embedded CSR fundamentally in ethical theory. This particular paper argues that businesses have moral responsibility to the society rather than adding value to shareholders. Customarily, CSR has commonly been defined by the use of the philanthropic model. Public debate concerning the virtue of corporate social responsibility (CSR) is filled with rhetoric. On the basis of this view point, it has been recognized that the idea of CSR largely comprises of the capability to develop sustainable livelihoods. Durant (2007) asserts that organizations should have an objective of appearing more ethical than they seem appear. This perspective was initiated from his portrayal of CSR as a technique that permits companies to put emphasis on reduced profits and social welfare through “giving back to society.” It is vital to take note that Durant (2007) is of the view that organizations do not have entitlement to any behaviour that profits the organization and the society with equal amount. In case Durant’s (2007) standpoint is precise, then CSR can no longer be viewed as moral. In any case, these viewpoints can be further explained by the use of a correlation between business ethics and CSR. There are four types of corporate social responsibility, they include, legal, economic, ethical, philanthropic and economic. These four can be illustrated as a pyramid (see Figure 1). Figure 1: four kinds of responsibility, economic, legal, ethical, and philanthropic Business Ethics Business ethics can be described as principles that an organization adopts in its decision-making processes. Three key theories can be used to the assessment of ethics, this include; utilitarian, virtue ethics and Kantian. These principles or approaches are grounded on ethical necessities that describe or reinforce the relationship that exists between society and a business. Fundamentally, they are based on tenets that outline the right deeds or the duties that organizations should undertake in order to create a favourable society (Garriga and Mele 2004; Asgary and Mitschow 2002). Virtue ethics Virtue ethics is based on inspiring aspirational values of an organization (Durrant 2007). The theory aims at answering the question of what kind of organization a business should desire to be. Virtue ethics also has the objective of developing and categorizing what should be viewed as the moral character, in addition it also seeks to apply the moral character as the foundation for practices and decisions (Gowdy 2013). The overall notion that underlies virtue is grounded on the fact that an individual or an organization should develop inward character as opposed to relying exclusively on regulations, codes of ethics and external laws (Durrant 2007). On the grounds of this theory, in the event that the character of an entity is good, then the entity’s decisions and actions will definitely be good. In this context, the theory posits that organizations have ethical responsibilities to the society (Gowdy 2013). Organizations should therefore seek to follow the norms, values and expectations that replicate what the shareholders, employees, consumers, and the community perceive as fair, or that keep within the stakeholder’s depiction of being morally upright. Basically, the ethical responsibility of an organization is to act in a way that takes into consideration the probable effect it will build on the company’s corporate objectives or aspirations (Carrol, 2004). From these particular argument, CSR as a process has the objective of taking the responsibility of the organizations actions in order to inculcate a positive influence through the activities of the organization on the stakeholders, employees, consumers, environment, communities and members of the public sphere who may also be categorized under the stakeholder category (Branco and Rodrigues 2007). On the basis of this view point and in respect to business ethics, it can therefore be argued that CSR is a persistent obligation by a corporate entity to act morally while at the same time contributing to economic and social progress in line with the ethical ambitions, objectives and goals (Alzola 2008). The ambitions in this case are mainly grounded on enhancing the lifestyles of the employees, their families, the immediate community and the society at large (Durrant 2007). Utilitarianism The Utilitarian theory propagates that the propriety of actions is exclusively based on the level of good consequences they posses (Boatright, 2003). The crux of the tactic is that the “end justifies the means.” As argued by Durante (2007), there can be a conflict of interest between the utilitarian approach and the ordinary moral reasoning. A case in point is where, a business promises the community to give scholarship to the dwellers, it would be incorrect to provide the sponsorship to another community simply because by doing so would have more profound implications (Durrant 2007; Rega 2012). An ethical approach to corporate activities depicts the pursuit of long-term balance for a practice that creates and upholds stable relationship with the stakeholders (Pasternak 2007). Undeniably, this is a key aspect of CSR. The resolution to evolve the idea of CSR towards assimilating the corporate strategies and the problems of a society appears totally acceptable. Towards this end, CSR can be perceived from an ethical viewpoint where it is judged by the significance brings to the society. When CSR is viewed from the ethical standpoint, Cavalieri (2007) contends that it allows the society to overcome the enticement to interpret their CSR activities through the use of a charitable approach. Put differently, an organization that is socially incorporated and which approaches CSR from an ethical perspective, does not confine itself to assimilating decisions in its corporate strategy that guarantee that the activities that make up its value chain do not endanger the society. Rather, it also aims to produce investment that has the ability to produce benefits for the society while at the same time cultivating its performance and competitive advantage (Burke and Logsdon 1996). Kantian Theory The Kantian theory is founded on justice and rights. Boatright (2003) explains that within this viewpoint, consequences are morally extraneous and inappropriate. The theory propagates that moral responsibility arises entirely from the moral law that binds all rational beings (Durrant 2007). Consequently, organizations operating within a society help to slow down and determine their social and economic advancement based on anticipations and the moral codes that are set by the society. It is thus logical to argue that just like any other entity, companies are liable to the society in which they function and belong (McWilliams and Siegel 2000). It should therefore be stated that by integrating codes of practice, corporate systems and codes of conduct, insolvencies, inefficiencies and a number of other imbalances that can materialise in an organization are aggravated. The penalties however do not only affect the survival of individual organizations. Rather, they prolong to the external environment by eradicating the equilibrium of the operating structure that the organization belongs to (Caliavari 2007). Subsequently, it escalates the duty of each unit in the system to the external environment. In addition, it is perceivable that people in the external environment recognize that the individuals operate their businesses in order to have a sense of responsibility of managing the important interests of the ever-growing number of individuals who continue to launch a bond with the organization and who believe in the corporate strategies (Yin and Zhang 2012). Organizations thus have moral responsibilities to develop generic rationale that places the interests of the stakeholder or society at the forefront. This notion consists of the circumstances favourable to the behaviours that produce benefits to the stakeholders as well as all parties that have a link with the organization (Burke and Logsdon 1996). Nuttaneeya (et al 2012) highlight that an organization should be perceived as a system that is visible to the environment and that is controlled by individuals who live in particular contexts and are the possessors, in their performance of the functions of; morality, corporate and cultures governance that exemplify them. This is since they are part of a society that encourages or suppresses these values. Based on Cavalieri’s (2007) standpoint, the ethics found in corporate organizations encompasses the same aspects as the ethics found within the economic and social context in which they operate. The major complexity of this theory however is that within the perspective of corporate social responsibility, it is hard to make out which guidelines the organizations should follow. Moreover, the theory fails to define the guidelines that should take preference over the other (Durante 2007). Conclusion From the discussion, it can be settled that business organizations should infer corporate social responsibility as extending beyond maximising returns on investment. CSR offers a proliferation of ethical theories and a compendium of approaches which are complex and imprecise controversial. Even as this may appear as true, a general agreement is that the theories try to argue that ethical CSR is good for the business and the society. Conversely, unethical CSR is bad for the organization as well as for the society. This implies that businesses have an duty towards the society. References Alzola. M 2008, 'When urgency matters On non-discretionary corporate social responsibility,' Human Systems Management, Vol. 27, pp.273–282 Asgary, N & Mitschow, M 2002, 'Toward a Model for International,’ Business Ethics Journal of Business Ethics, Vol. 36, pp239–246 Baker, M 2004, Corporate social responsibility - What does it mean?, Mallenbaker.net, viewed 26 August 2013, http://www.mallenbaker.net/csr/definition.php Boatright, J 2003, Ethics and the Conduct of Business, 4th Edition, Prentice Hall: London Branco, C & Rodrigues, L 2007, 'Positioning Stakeholder Theory within the Debate on Corporate Social Responsibility,' Electronic Journal of Business Ethics and Organization Studies, Vol 12 No. 1, pp.5-12 Burke, L & Logsdon, J 1996, ‘How Corporate Social Responsibility Pays Off ’, Long Range Planning Vol. 29 No. 4, pp495–503 Carrol, A 2004, 'Managing ethically with global stakeholders: A present and future challenge,' Academy of Management Executive, Vol. 18, No. 2, pp1144-119 Cavalieri, E 2007, "Ethics and Corporate Social Responsibility," SYMPHONYA Emerging Issues in Management, No. 2, viewed 25 August 2013, http://www.unimib.it/upload/gestioneFiles/Symphonya/lasteng/f20072/cavalierieng22007.pdf CMI 2007, "Corporate Social Responsibility Of Multinational Corporations, " CMI Brief, Vol 6 No. 2, viewed August 26 2013, http://www.cmi.no/publications/file/2575-corporate-social-responsibility-of-multinational.pdf Durrant, A 2007, Corporate Social Responsibility – Why bother?, viewed 25 August 2013, http://www.m4c-sustainability.co.uk/documents/essay-csrwhybother.pdf Garriga, E & Mele, D 2004, " Corporate Social Responsibility Theories: Mapping the Territory," Journal of Business Ethics, Vol. 53,pp.51–71 Gowdy, L 2013, Virtue Ethics, viewed 26 August 2013, http://www.ethicsmorals.com/ethicsvirtue.html Nuttaneeya, T, Wayne , O & Hecker, R 2012, “Capabilities, Proactive CSR and Financial Performance in SMEs: Empirical Evidence from an Australian Manufacturing Industry Sector.” Journal of Business Ethics, Vol.109 No.4, pp.483-500 Pasternak, S 2007, The role of ethical theories in ethical reasoning and behaviour within organizations, viewed 25 August 2013, http://www.ti-israel.org/_Uploads/dbsAttachedFiles/sigalitpasternak.pdf Rega, J 2012, Corporate Social Responsibility and Law, viewed 26 August 2013, http://www.academia.edu/1641503/Is_Ethics_relevant_to_CSR_and_the_Law Yin, J & Zhang, Y 2012, ‘Institutional Dynamics and Corporate Social Responsibility (CSR) in an Emerging Country Context: Evidence from China,’ Journal of Business Ethics, Vol.111 No 2, pp.301-316 Read More