The Practice of Business Ethics and CSR: An Overview[/b]
Business organizations around the world are rising to demonstrate their contributions to the society and to behave responsibly. During the last three decades, management executives are finding solutions to handle challenges in positioning their firm’s social responsibility. Ethics can be normally referred to the system of rules that governs the ordering of values, or it distinguishes between right and wrong. In the context of business ethics distinguishes between appropriate and inappropriate behaviors while executing transactions. In simpler terms, Ethics refers to character, norms, and ideals of a group. Business ethics comprises of three key aspects namely the compliance to the rules of the industry to which the company belongs; the company’s contribution to the society and the consequences of the business in times of tragedy or adverse circumstances.
The emergence of globalization, open market economies, free trade, etc has led to the development of another area namely, Social Corporate Responsibility (CSR). CSR is evolving steadily and practiced by most of the business organizations because it provides a platform for business organizations to demonstrate their ethical behavior and development. Although providing maximum financial gains are considered the responsibility of a company it is becoming apparent the gains have to comply fully with the laws of the land. During 1960s social activist groups and environmentalists started to promote their notion of corporate responsibility in a much broader sense. The early 1970s saw the creation of many different bodies and standards such as Environmental Protection Agency (EPA), Equal Opportunity Employment Commission (EOEC), Occupational Safety and Health Administration (OSHA), Consumer Product Safety Commission (CPSC) and many others. Most of these organizations are governmental bodies established to promote corporate responsibility by complying with different procedures that ensure ethical business practices. These bodies are officially recognized as national public policy which recognizes the environment, employees and consumers as legitimate stakeholders in business. Since the time of 1970s, corporate executives had to overcome challenges on balancing their business goals and commitments with their firm’s owners and also with these broad groups of stakeholders who claim legal and ethical rights.
The question of behaving socially responsible is a big challenge for most corporations. Academic researchers and practitioners are striving to define this term to establish an agreed definition. In general, socially responsible refers to business decisions and actions taken at some levels which are beyond the firm’s direct economic and technical interest. Since business operations have an impact on the social scene, it is essential for companies to follow certain norms and ethical principles in conducting business operations. This needs to be addressed on the entire spectrum of obligations that firms have on society. The obligations also include the economic aspect. Currently the term corporate social performance (CSP) has emerged as a concept to include the perspectives of CSR, responsiveness, and the activities that benefit societies and businesses. The emphasis is more on concerns related to the accomplishments in the social sphere due to the corporate actions. This is the main focus of CSP. From the perspective of performance, it is evident that business companies have to formulate and implement-social goals and programs along with integrating ethical sensitivity in all decision making, policies and activities. Hence CSP explains the orientation to encompass all business performance to include quantity, quality effectiveness and efficiency.
CSR is an important area and internationally many companies either big or small are systematically addressing this issue. The concept of CSR is being adopted as one of the operational areas by business companies throughout the world. This is not a charitable act, but is supposed to act beyond the legal obligations to integrate social, ethical and environmental aspects into the business processes by a company. Due to globalization, businesses are quick to capitalize business opportunities by expanding their operations in many countries. Many companies in India are also reacting to these opportunities and have made forays into other economies and reaching out to consumers beyond the geographical boundaries of India. This has resulted in increased growth and adherence to international standards to exploit potential opportunities. In the current situation traditional approaches to business do not result in market opportunities. At the same time, civil society movements, government regulations and fulfilling statutory compliances are forcing the companies to act in a responsible manner to fulfill the economic, social and environmental obligations in a sustainable way.
Corporate Social Responsibility is one approach that factors’ the needs of community and the regions in which the businesses operate. For CSR to be successful, it should be defined in a framework of corporate philosophy. Taking this concept further, CSR includes the following main areas:
1. Corporate governance
2. Business Ethics
3. Labour and workplace relations
4. Good practices and affirmative actions
5. Supply chain
6. Customer satisfaction
7. Minimal or no damage to the environment
8. Community empowerment
Adopting these eight key processes in their corporate philosophy, business companies shall be able to sustain themselves in international markets, become more prominent to find their place in the Global Top 100 list. CSR ensures that companies do business responsibly by taking a leadership position in the community. Business companies have to deal with social issues that are relevant to its operations including the supply network and conduct operations in a transparent manner. The company needs to be responsible for its financial performance, and also to its social and environmental performance. Business ethics encompasses much more than compliance to laws and regulations. Every individual in the organization have to follow certain ethical principles to create a sound working environment. The leadership should take the lead in ensuring ethical practices are followed at all levels to make long term business sense. Organizations also have to train their staff on applying code of ethics, to become socially responsible and to minimize harm to the environment and at the same time demonstrate their social responsibility. The firm’s leadership should demonstrate highest ethical standards and communicate clearly to employees on the ethical practices followed in the organization to demonstrate ethical practices with the society at large.
Business organizations around the world are rising to demonstrate their contributions to the society and to behave responsibly. During the last three decades, management executives are finding solutions to handle challenges in positioning their firm’s social responsibility. Ethics can be normally referred to the system of rules that governs the ordering of values, or it distinguishes between right and wrong. In the context of business ethics distinguishes between appropriate and inappropriate behaviors while executing transactions. In simpler terms, Ethics refers to character, norms, and ideals of a group. Business ethics comprises of three key aspects namely the compliance to the rules of the industry to which the company belongs; the company’s contribution to the society and the consequences of the business in times of tragedy or adverse circumstances.
The emergence of globalization, open market economies, free trade, etc has led to the development of another area namely, Social Corporate Responsibility (CSR). CSR is evolving steadily and practiced by most of the business organizations because it provides a platform for business organizations to demonstrate their ethical behavior and development. Although providing maximum financial gains are considered the responsibility of a company it is becoming apparent the gains have to comply fully with the laws of the land. During 1960s social activist groups and environmentalists started to promote their notion of corporate responsibility in a much broader sense. The early 1970s saw the creation of many different bodies and standards such as Environmental Protection Agency (EPA), Equal Opportunity Employment Commission (EOEC), Occupational Safety and Health Administration (OSHA), Consumer Product Safety Commission (CPSC) and many others. Most of these organizations are governmental bodies established to promote corporate responsibility by complying with different procedures that ensure ethical business practices. These bodies are officially recognized as national public policy which recognizes the environment, employees and consumers as legitimate stakeholders in business. Since the time of 1970s, corporate executives had to overcome challenges on balancing their business goals and commitments with their firm’s owners and also with these broad groups of stakeholders who claim legal and ethical rights.
The question of behaving socially responsible is a big challenge for most corporations. Academic researchers and practitioners are striving to define this term to establish an agreed definition. In general, socially responsible refers to business decisions and actions taken at some levels which are beyond the firm’s direct economic and technical interest. Since business operations have an impact on the social scene, it is essential for companies to follow certain norms and ethical principles in conducting business operations. This needs to be addressed on the entire spectrum of obligations that firms have on society. The obligations also include the economic aspect. Currently the term corporate social performance (CSP) has emerged as a concept to include the perspectives of CSR, responsiveness, and the activities that benefit societies and businesses. The emphasis is more on concerns related to the accomplishments in the social sphere due to the corporate actions. This is the main focus of CSP. From the perspective of performance, it is evident that business companies have to formulate and implement-social goals and programs along with integrating ethical sensitivity in all decision making, policies and activities. Hence CSP explains the orientation to encompass all business performance to include quantity, quality effectiveness and efficiency.
CSR is an important area and internationally many companies either big or small are systematically addressing this issue. The concept of CSR is being adopted as one of the operational areas by business companies throughout the world. This is not a charitable act, but is supposed to act beyond the legal obligations to integrate social, ethical and environmental aspects into the business processes by a company. Due to globalization, businesses are quick to capitalize business opportunities by expanding their operations in many countries. Many companies in India are also reacting to these opportunities and have made forays into other economies and reaching out to consumers beyond the geographical boundaries of India. This has resulted in increased growth and adherence to international standards to exploit potential opportunities. In the current situation traditional approaches to business do not result in market opportunities. At the same time, civil society movements, government regulations and fulfilling statutory compliances are forcing the companies to act in a responsible manner to fulfill the economic, social and environmental obligations in a sustainable way.
Corporate Social Responsibility is one approach that factors’ the needs of community and the regions in which the businesses operate. For CSR to be successful, it should be defined in a framework of corporate philosophy. Taking this concept further, CSR includes the following main areas:
1. Corporate governance
2. Business Ethics
3. Labour and workplace relations
4. Good practices and affirmative actions
5. Supply chain
6. Customer satisfaction
7. Minimal or no damage to the environment
8. Community empowerment
Adopting these eight key processes in their corporate philosophy, business companies shall be able to sustain themselves in international markets, become more prominent to find their place in the Global Top 100 list. CSR ensures that companies do business responsibly by taking a leadership position in the community. Business companies have to deal with social issues that are relevant to its operations including the supply network and conduct operations in a transparent manner. The company needs to be responsible for its financial performance, and also to its social and environmental performance. Business ethics encompasses much more than compliance to laws and regulations. Every individual in the organization have to follow certain ethical principles to create a sound working environment. The leadership should take the lead in ensuring ethical practices are followed at all levels to make long term business sense. Organizations also have to train their staff on applying code of ethics, to become socially responsible and to minimize harm to the environment and at the same time demonstrate their social responsibility. The firm’s leadership should demonstrate highest ethical standards and communicate clearly to employees on the ethical practices followed in the organization to demonstrate ethical practices with the society at large.