Business Ethics and Social Responsibility
What is Ethics….
Ethics means a code of moral principles (such as to give mental power, help others) and values that govern the behaviors of a person or a group with respect to what is right and wrong.
An ethical issue is present in the situation when the action of one person or organization may damage or benefit others.
For example, the manager has favoritisms due to that point some workers are discriminated.
A company’s ethical climate depends on the national culture as well as top managers.
Three Domains of Human action
- Domain of codified law – Legal standards. Behaviours that are covered by law. In this area the law makers set rules which people and organization must follow in the certain ways such as, obtaining a license for cars, paying corporate tax and so on.
- Domain of ethics – Social standards. Behaviours that are control by outside.
- Domain of free choice – Personal standards. In here refers to behave which the law has not said.Individuals or organizations enjoy complete freedom.
- Ethics can be clearly understand when you compared with behaviours over by law and free choice.
An ethical dilemma means results in a situation where there are conflicting between two parties. Such as individual Vs organization or organization Vs society.
Criteria for Ethical Decision Making
- Utilitarian Approach – This is one of the most common approach. Also, they take the decision which makes the greatest good for majority of people. For example alcohol and tobacco consumption during the working hour. Because such behaviours badly affect to the entire company.
- Individualism Approach – Select the decision which produce the best long-term interest for an individual.
- Moral-Rights Approach – Make decisions based on fundamental rights and liberties which can’t be taken away from them.
- Justice Approach – There should be an equity, fairness and impartiality. Ethical actions should be consistent with ideal human virtue.
- Practical Approach – in here take the interest of the stakeholders into account.
Shaping Ethical Behaviour within an Organization
- Written Code of Ethics – Formal guide off the company’s value concerning ethics and social issues. Such as , dress code
- Creating Ethical Structure – Various positions, programs and various system organization can help to implement ethical behaviour. For example ethical committee, ethics officer.
- Ethical Leadership – managers behave ethically both in their personal and professional life. Also, they are hones and fair.
- Creating an Environment for Whistle-blowing Through this method can reveal illegal and illegitimate practices within an organization.
Business Ethics in Practice
1. Customer communication – Advertising is a relatively common public communication method. But unethical communication may lead to consumers lead to loss of customer confidence and trust. Such practices might include.
- Exaggerated Claims – A marketer claiming the superior nature of a product that cannot be verified or substantiated.
- Bein unfair to competitors – comparing unfavourably product comparison
- False claims
It means the management’s obligation to prepare choices and take actions that will contribute to the welfare and interest of society as wells as the organization.
It gives an idea about the relationship between business and the larger society. Also, it promotes a vision of business accountability.
Company’s Social Responsiveness
- Discretionary Responsibilities – Be a good corporate citizen. Such as, Community in general, customer, employees. Business behaviour that are not necessary codified by into law. This is desired responsibility.
- Ethical Responsibility – Do what is right. Such as, Community in general, customer, employees. This is expected responsibility.
- Leal Responsibility – government. They expected tone within the framework of legal requirements imposed by the legislations, regulatory authorities and agencies. Moreover, this is required responsibility.
- Economic Responsibility – Customers, Shareholders. Business organisations primary responsibility is to produce goods and services and to maximise profit for their organization owners and shareholders.
Why Business Ethics and CSR important ?
- Customer interest increase – Through this can enhance customer satisfaction.
- Growing investor pressure relevant to ethical concern – Because of that investor’s confidence will increase.
- Employee interest increase to work in socially responsible organisations – They can attract high caliber employees.
- Help to increase corporate image – Because corporate image and the brand name is important to success of a business.
- Easily can get accessibility to local and international Market – When organization conduct their business ethically it facilitates the entry to both market easily. Because everyone prefer that kind of businesses.
CSR Management
- Plan
- Do
- Check
- Act
Tools of CSR
- Cause Promotions – organisations select causes which identify important to them.
- Cause- related Marketing – they donate a certain percentage to specific causes.
- Corporate social marketing- changing public behaviour.
- Community Volunteering- encourage their workers to support some causes.
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