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Chapter 2 Business Ethics and CSR Compared

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Rein Saleres

on 22 March 2015

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Transcript of Chapter 2 Business Ethics and CSR Compared

Are both business ethics and CSR beyond legal compliance?
CSR and ethical management coincide with the law and local regulation. Ethical standard has to be higher than legal compliance.
What are the similarities between CSR and business ethics?
• Both are beyond compliance with the law;
• Both are not tantamount to relativism;
• Both are born with universal values;
• Both are not utilitarian.
• Both are pragmatic and practical;
• Both are about firm conviction;
• Both are beyond public relations
• Both are centered on total human development
Are both business ethics and CSR similar to relativism?
• No, ethics and CSR are not similar to situation ethics or ethical relativism.

Relativism professes 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)

Business ethics is not relativism because the former accepts moral values that are objective, permanent, and universal.
(George, 1999)
Chapter 2 Business Ethics and
CSR Compared

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

(Herbert Simon, Administrative Behavior, 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.
Should a company become a corporate citizen without being ethical?
No. Business ethics seeks to determine whether a particular behaviour, decision, or action of an individual or organization is morally right or wrong.

(Peter Drucker 1993, The Practice of Management 1954)
among the firsts authors to explicitly address the “social responsibilities of business.”

(Griffin, 2000)
business ethics is the basis of the practice of CSR.
The wisest thing to do, it seems, is to practice business ethics first, and then engage in CSR activities.
Are both business ethics and CSR born with universal values?
• 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. Ethics and CSR deal with universal moral values.
• 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.
Are both business ethics and CSR 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 the government are duty-bound to solemnly respect human dignity and basic rights. Human dignity is the most central issue in ethical decision making.
Are both business ethics and CSR pragmatic and practical?
• Business ethics and CSR are concerned with
(correct policy) and
(best practice).
• Since they do not end in memorized codes and principles, business ethics and CSR are practical, pragmatic, and alive.
Are both business ethics and CSR about firm conviction?
, business ethics and CSR are about firm conviction. Corporate involvement is not about feelings, since ethical standards are not just emotional ore sentimental issues.
On the reverse, ethics is a fixed standard, objective, permanent, and grounded on the strongest convictions about what is right and wrong.
Do business ethics and CSR go 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, 2005)
Are both business ethics and CSR centered on total human development?
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 person.
How did business ethics and CSR evolve?

First phase
– company sees profit and only profit.

Second phase
– company complies with laws and regulations, which is the minimum requirement of being a corporate citizen.

Third phase
– company conforms to ethical requirements to build its image, as it reassess and safeguards its reputational value.

Ultimate phase
– company institutionalizes CSR and ethical management because it is the right thing to do.
Should there be a CSR department?
It is advantageous if a company has its CSR department that involves both the leadership and the rank-and-file. Because it is primarily social, CSR includes code of conduct, corporate citizenship, employee volunteerism, resource sharing and management, social investment and sustainable development.
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