Ethics Chapter 2

business ethical responsibilities

Activities, standards, and practices that are expected or prohibited by society even though they are not codified into law.

corporate social responsiveness

An action-oriented variant of CSR.- an argument that csr needs to be action and not just motivational oriented.

understanding the four components of CSR

Economic responsibility - REQUIRED of business by society Be profitable. Maximize sales, minimize costs. Make sound strategic decisions. Be attentive to dividend policy. Provide investors with adequate and attractive returns on their investments. Legal responsibility- REQUIRED of business by society Obey all laws, adhere to all regulations. Environmental and consumer laws. Laws protecting employees. Fulfill all contractual obligations. Honor warranties and guarantees. Ethical responsibility- EXPECTED of business by society Avoid questionable practices. Respond to spirit as well as to letter of law. Assume law is a floor on behavior, operate above minimum required. Do what is right, fair, and just. Assert ethical leadership. Philanthropic responsibility- DESIRED/EXPECTED of business by society Be a good corporate citizen. Give back. Make corporate contributions. Provide programs supporting community—education, health or human services, culture and arts, and civic. Provide for community betterment. Engage in volunteerism.

social entrepreneurship firms (csr exemplar)

Firms that began their CSR initiatives at the very beginning of their founding and strategically carried them forward. A large part of their initial mission was to bring about social change or to reflect certain social values as a part of their organization's character. example: Ben and Jerry's

business economic responsibilities

Free enterprise social systems call for business to be an economic institution; as an institution it should have the objective to produce goods and services that society wants and to sell them at fair prices.

mainstream adopters firms (csr exemplar)

A group of CSR exemplar firms that include all other conventional businesses that have adopted, practiced, and achieved some degree of excellence or recognition for socially responsible policies and practices. example: Walmart

sustainability

A pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present but also for future generations.

sustainable development

A pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present but also for future generations.

paternalism

A protective approach. An example of paternalism was the company town. Although business's motives for creating company towns were mixed, business had to do a considerable amount of the work in governing them. Thus, some companies took on a kind of protective, paternalistic social responsibility.

philanthropy

Contributions to charity and other worthy causes.

corporate social responsiveness model

The performance focus suggests that what really matters is what companies are able to achieve—the results or outcomes of their acceptance of social responsibility and the adoption of a responsiveness viewpoint.

global corporate citizenship

The view that companies are expected to conduct themselves appropriately wherever they do business around the world.

arguments against csr

classical economics don't believe in it, business not to make social decisions, dilutes business purpose, too much power already, global competitiveness could be tarnished apparently these arguments do not hold much stake today.

6 reasons for engaging in CSR

innovation, cost savings, brand differentiation, long term thinking, customer engagement, employee enagement

variations of the classic economic model

philanthropy, community obligations, paternalism

political csr

when businesses turn into political actors by engaging in public deliberations, collective decisions, and the provision of public goods or the restriction of public bads in cases where public authorities are unable or unwilling to fulfil this role.

business case for csr

- CSR contributes to profitability because there is a market for corporate virtue --The market rewards responsible behavior --The market punishes a company's failures - CSR can be a source of competitive advantage

Three Perspectives on the Social-Financial-Reputation Relationship

1) csp drives the relationship 2)cfp drives the relationship 3)interactive relationships among all 3

the ages/stages of csr

1. Age of Greed(Defensive CSR) 2. Age of Philanthropy(Charitable CSR) 3. Age of Marketing(Promotional CSR) 4. Age of Management(Strategic CSR) 5. Age of Responsibility(Systematic CSR)

how firms respond to csr Pressure

1. Defensive : Doing very little with CSR and if something happens you deal with it 2. Cost/benefit : Is it more expensive to fix the problem or pay the fines with it 3. Strategic: Entire business model is based around CSR 4. Innovation : Using CSR to create new processes

creating shared value

A concept arguing that businesses should be generating economic value in a way that also produces value for society by addressing its challenges.

social intraneurship firms (csr exemplar)

Companies that did not have a specific social agenda as part of their initial formation but later developed a highly visible social agenda or program. example: Panera Bread

csr greenwashing

Intentionally seeking to convey the image of a socially responsible firm when the evidence of their practices does not support this conclusion.

business legal responsibilities

Reflect society's view of "codified ethics" in the sense that they articulate basic notions of fair practices as established by lawmakers.

csr exemplar firms

Socially responsible firms that have become models for other firms because they have tended to go well beyond the typical and established patterns for business firms in terms of their social responsibility excellence.

socially responsible, sustainable, and ethical investing

The SRI movement embraces social screening, shareholder advocacy, and community investing. Also referred to today as impact investing, or environmental, social, and governance (ESG) investing.

triple bottom line

The concept seeks to encapsulate for business the three key spheres of sustainability that it must attend to—economic, social, and environmental. corporate sustainability- the goal of this approach

stages of corporate citizenship

The essence of corporate citizenship is how companies deliver on their core values in a way that minimizes harm, maximizes benefits, is accountable and responsive to key stakeholders, and supports strong financial result

business philanthropic responsibilities

Though not responsibilities in the literal sense of the word, these are perceived as responsibilities because they reflect current expectations of business by the public.

conscious capitalism

To choose a business strategy that aids in the welfare of both individuals and the environment

community obligations

Voluntary efforts to improve, beautify, and uplift.

global business citizen

a business enterprise (including its managers) that responsibly exercises its rights and implements its duties to individuals, stakeholders, and societies within and across national and cultural borders.

Carrol's corporate social performance(CSP) model

a model that suggests that what really matters is what companies are able to achieve - the results or outcomes of their acceptance of social responsibility and the adoption of a responsive viewpoint

corporate social responsibility (csr)

encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time. Over the last half of the 20th century, the concept of CSR gained considerable acceptance and broadening of meaning. During this time, the emphasis moved from little more than a general awareness of social and moral concerns to a period in which specific issues, such as corporate governance, product safety, honesty in advertising, employee rights, affirmative action, environmental sustainability, ethical behavior, and global CSR took over center stage.

arguments in support of csr

enlightened self interest in order for long term sustainability in said field, warding off government regulations, businesses have resources available to solve problems so let them, pro-action is better than reaction, public supports it

social responsibility

the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests. The idea of social responsibility supposes that the corporation has not only economic and legal obligations, but also certain responsibilities to society which extend beyond these obligations.

corporate citizenship

views companies as citizens and all this implies (broad view) comprised of- 1)a reflection of shared moral and ethical principles, (2)a vehicle for integrating individuals into the communities in which they work, and (3) a form of enlightened self-interest that balances all stakeholders' claims and enhances a company's long-term value. the narrow view consists of one stakeholder group- the community