GOOD GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY

The Comparison of Business Ethics and Corporate Social Responsibility

MODULE 8
BA314

LESSON PROPER

The Comparison of Business Ethics and Corporate Social Responsibility

What do authors/experts say about business ethics and CSR?

· How did Business Ethics and CSR evolve?

· What are the similarities and differences between CSR and business ethics?

· What does it mean to be ethically accountable & socially responsible in a

globalizing society?

What do authors/experts say about business ethics and CSR?

· “Responsibilities toward the community is beyond the legal limits imposed

on them hence, CSR is beyond regulatory and legal compliance (Simon, H.,
1945)

Businesses have been affected by the growing public interest. Leaders are increasingly
becoming involved with “responsibilities toward the community beyond the legal limits
imposed on them” hence; CSR is beyond regulatory and legal compliance (Simon, H.,
1945). This implies that Business Ethics and CSR should be innate among its nature
and purpose. That this responsibility is not just for the company’s sake but for all the
stakeholders that it conforms to. (Maximiano, J., 2007)

▪ “Business ethics is the basis of the practice of CSR”. (Ducker, P. 1993)

This is a manifestation that the foundation of CSR is business ethics. What is ethically
correct within the organization, what is morally upright and what fair just, humane for
everybody became the context of both. Both addresses not only social, ethical, legal but
also considers environmental awareness towards this success (Maximiano, J., 2007)

▪ “A corporate ethics program is made up of values, polices, and activities

that impact the propriety of organizational behaviors.” (Brenner, 1992).
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The Comparison of Business Ethics and Corporate Social Responsibility

It is always our greatest concern that we work in an organization whose values is as the
same as our principles. It is much easier for the aim of a company to be economical if it
takes its policies and activities aligned with values.

▪ The moral reasoning in business ethics may be considered a foundation of

doing CSR. (Griffin, 2000)

Moral reasoning pertains to how we can determine what is right from wrong. If we
understand what is correct for the many, we can understand fully the benefits and
advantages of moral reasoning. If we know what is correct and just, fairness, equity and
equality will also be the basis of CSR.

How did Business Ethics and CSR evolve?

Business ethics and CSR evolve on the following phases:

• First phase- company sees profit and only profit. The foundation of the entire
business venture is its economic aim and purpose of gaining profit. An individual is
engaged to organizational activities to sustain stability in terms of finances and
economic living.

• Second Phase- Company complies with laws and regulations which is the
minimum requirement of being a corporate citizen. Corporate Citizenship implies that
"continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families as well
as of the local community and society at large. “ Thus, being a corporate citizen is not
just following the laws as a part of a minimum requirement but it allows the parties
(stakeholders) to be ethically accountable and socially responsible individuals.

• Third phase- company conforms to ethical requirements to build its image, as it

reassess and safeguards its reputational value. Corporate Images in stakeholders are
essential in building an ethical mantra to its existence. Ethical requirements connote
how a company follows what is expected to it by the local community, culture and the
norms. These expectations affect the actions made by the company. As a result of this
societal factor, companies tend to negate from unethical behaviors that leads to
conflicts among its stakeholders.

• Ultimate phase- Company institutionalizes CSR and ethical management because

it is the right thing to do. CSR and business ethics are two notions that became the
ultimate nature of these phases. Companies should follow the legal regulations for them
to operate; they should also be ethical, moral and act how the society perceives them to
be. In line with this, CSR concept and business ethics should be innate and embedded
to all existing and future business activities. It does not only make any activities prosper
but it covers a harmonious relationship among all the stakeholders.

The similarities and differences of CSR and business ethics

GOOD GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY
The Comparison of Business Ethics and Corporate Social Responsibility

Are both similar to relativism?

• No, ethics and CSR are not similar to situation ethics or ethical relativism.
Relativism profess that all beliefs are equally valid, and that the truth is relative-
depending on the situation level of modernization, environment and individual
reference.(Redfern & Crawford, 2004).

• In additional, Business ethics is not relativism because the former accepts moral
values that are objective, permanent and universal. (George 1999)

Are both business ethics and CSR a legal compliance?

• Legal compliance refers to the minimum requirement of the law for an organization
to operate. Business Ethics and CSR should go beyond this because ethical and moral
has to be higher than legal compliance. Thus, more than legal regulation, we have to
take note and maximize voluntary action of what is deemed ethical and moral. As a
result, everything else follows. (Maximiano, J., 2007)

Are both utilitarian?

• Utilitarianism focuses on the results of an action rather than the motive behind the
action. Ethics is not utilitarian. It may happen that, when the utilitarian principle is
applied, several basic rights and freedom of others are restricted or
disregarded. Business and government are duty-bound to solemnly respect human
dignity and basic rights. Human dignity is the most central issue in ethical decision
making. Business ethics is not relativism because the former accepts moral values that
are objective, permanent and universal. (George 1999)

Are both pragmatic and practical?

• Pragmatic and practical refers to realistic and sensible actions that deviate from
theoretical perceptions. Business ethics and CSR are concerned with orthodoxy (correct
policy) and orthopraxis (best practice).Since they do not end in memorized codes and
principles, business ethics and CSR are practical, pragmatic and alive. (Maximiano, J.,
2007)

Are both about firm conviction?

• Yes, both are about firm conviction. Corporate involvement is not about feelings,
since ethical standards are not just emotional or sentimental issues.

On the reverse, ethics is a fixed standard, objective, permanent and grounded on the
strongest convictions about what is right and wrong. (Maximiano, J., 2007)
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The Comparison of Business Ethics and Corporate Social Responsibility

Do both go beyond public relations and profitability?

• Public relations connotes for its image in relationship with the majority. As to the
question of going beyond public relations and profitability, it might happen, as a
consequence of practicing social responsibility and ethical management that sales
go up because the company projects an angelic image. You practice ethics because
it is your philosophy of management; you benchmark CSR because it is the right thing
to do. (Maximiano, 2007)

Are both centered on total human development?

• Business is for the betterment if everyone's well-being but it doesn't pertain to

physical and material welfare only.The total development of the human person
embraces the physical and the spiritual, material and immaterial, financial and moral.
Economic development itself is not an end. It is a means to an end, and the end is the
total welfare of man, that is, for the whole human persons. The social nature of man
shows interdependence between his personal betterment and the improvement of
society. (Maximiano, 2007)

Both business ethics and CSR are born w/ universal values

• Universal values - (philosophy) something that has the same value or worth for all,
or almost all, people. (Retrieved from: https://www.yourdictionary.com/universal-value)

• Both business ethics and CSR deal with the human conduct, practices, decisions,
way of doing things, including both external observable behaviors and internal
unobservable intentions, including universal values. It also deals with the problems that
exist in a specific situation in a reasonable and logical way instead of depending on
ideas and theories. In other words, there is only one universal language for all business
practitioners and professionals everywhere-the true, the just, the fair and the good.

Ethically accountable & socially responsible in a globalizing society

• Ethically Accountable- is the readiness to take responsibility for actions taken.

The usual codes of conduct cover four major business areas: basic human rights
employee practices and policies, consumer protection, and environmental stewardship.

• Socially Responsible- it is ethical framework and suggests that an individual has

an obligation to act for the benefit of society at large. Social responsibility is a duty every
individual has to perform so as to maintain balance between the economy and the
ecosystems. A notable evolution of global standard, providing a framework for the
independent verification of ethical practice. It involves auditing companies by
independent assessors on issues like child labor, health and safety, freedom of
association, the right to collective bargaining, discrimination, and compensation. It
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The Comparison of Business Ethics and Corporate Social Responsibility

is apparent that cultures around the world converge towards adopting some core
universal values like truthfulness, justice and fairness, freedom, interdependence,
solidarity, tolerance, social responsibility, human dignity, and respect for life. People of
goodwill having these universally shared values may lead to the establishment of some
sort of international principles for the welfare of all - led by private business as agent for
world benefit. (Maximiano, J., 2007)