FCR_TINGCOY

Business Ethics and Corporate Social Responsibility IS THERE A DIVIDING LINE?

IETHICS.COM

JHILLIANNE TINGCOY

Case Details:

T

his is a case that discusses two key concepts in the business sector: Business Ethics and Corporate Social Responsibility (CSR). These are not just about doing what is right- not only because it is right to the company but also to the people, the community and the environment. As many companies nowadays engage in CSR through a donation to social or environmental problems, a very interesting question arises in the mind of the authors of this case study paper: Do these concepts of CSR and business ethics constitute a difference or an aspect of each other?

“According to the authors, Goel and Ramanathan, CSR is only a part of the larger concept, business ethics. They state that when businesses give back to the society or preserve the environment, it is good- but this does not necessarily imply that they are completely ethical. Business ethics entails that a company must always be honest, fair, and respectful not only during their CSR initiatives but also in whatever they undertake.“ “They employ a theory known as Stakeholder Theory and this implies that a company needs to consider not only the owners or investors but also the employees, the customers, the suppliers as well as the locals and even the environment. A business decision can impact others either negatively or positively and therefore companies need to take decisions that are just and do not offend anyone.”

SCIHTE SSENISUB HTIW DETARGETNI RSC

Benefits Apply a tactic that to be a PR strategy; quick to change brand perception/image; creates intel and brand loyalty; provides something for investors to look at that shows CSR in action.

Creates solid trust and reputation; serves stakeholder interests fairly; promotes long-term sustainability; lessens opportunity for ethical risks.

Downsides Risk of accusations of “greenwashing” or hypocrisy; fails to address systemic ethical questions; long-term trust will disintegrate.

May necessitate strategic overhaul of operations; upfront costs may be substantial; needs strong leadership.

NRUTER REDLOHERAHS DNA ECNAILPMOC NO YLNO SUCOF

Benefits Benefits Prioritizes immediate financial profits, resulting in decreased expenditures associated with Corporate Social Responsibility (CSR) initiatives.

Downsides

Creates solid trust and reputation; serves stakeholder interests fairly; promotes long-term sustainability; lessens forreputational ethical risks. harm, estranging key Can leadopportunity to significant stakeholders and increasing the likelihood of public protests, consumer boycotts, and heightened legal scrutiny.

Downsides

Ethical Theories Applied to the Case DEONTOLOGY A company has an obligation to be honest, fair, and responsible in their work – not just in their CSR initiatives. Even if it costs more money or takes more time, a company must do the right thing because it is a moral responsibility - for example, treating their employees in a humane way whenever they don't need recognition.

UTILITARIANISM Utilitarianism, judges the morality of an action based on its consequences, particularly in terms of whether it achieves the most good overall. In business, this means considering how a decision will affect all groups from the base of stakeholders and making a decision that results in the maximum overall good.

In the case study provided, incorporating CSR into an entire ethical framework embraces utilitarianism because it maximizes long-term benefit to the largest number of stakeholders: better working conditions for employees, responsibility to the environment and environmentally sustainable practices and increased trust and respect from customers. While CSR that is framed as PR can create a short term wave of public approval, it does not reach maximum good for a wider range of stakeholders in the long term.

REFERENCES: Goel, M., & Ramanathan, P. E. (2014). Business Ethics and Corporate Social Responsibility – Is there a Dividing Line? Procedia Economics and Finance, 11, 49–59. https://doi.org/10.1016/s2212-5671(14)00175-0