Corporate Social Responsibility, Ethics, and Good Governance

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Corporate Social Responsibility (CSR)

a company's commitment to conduct business ethically while contributing to economic development and improving the quality of life of employees, communities, and society.

SR means companies should care about

People

Planet

Profit

Business Ethics

refers to the principles and standards that guide behavior in the workplace.

6 Ethical Values (1)

Honesty

Integrity

Respect

Responsibility

Fairness

Accountability

Honesty

6 Ethical Values (1)

Integrity

6 Ethical Values (2)

Good Governance

refers to the system by which organizations are directed and controlled. It ensures that decisions are made responsibly and
transparently.

Principles of Good Governance

Accountability

Transparency

Fairness

Responsibility

Integrity

importance of good governance

Prevents fraud

Builds investor confidence

Protects stakeholders

Improves organizational performance

Relationship among CSR, Ethics, and Good Governance

• Business Ethics Making the right decisions

• CSR Helping society and protecting the
  environment

• Good Governance Managing organizations
  responsibly

Why Do Businesses Need CSR

• Improves company reputation

• Builds customer loyalty

• Attracts investors

• Increases employee satisfaction

• Reduces environmental impact

• Supports sustainable development

Benefits of Corporate Social Responsibility

• Improves Company Reputation

• Builds Customer Loyalty

• Attracts Investors

• Increases Employee Satisfaction

• Reduces Environmental Impact

• Supports Sustainable Development

Definition of Ethics

The study of what is right and wrong. It provides a set of moral principles that guide people and organizations in making responsible decisions. In business, ethics helps managers and employees determine the right course of action even when facing difficult situations.

Morality

Personal Beliefs about what is right and wrong. Influenced by family, religion, culture, and personal values.

Values

Beliefs that guide a person's attitudes, decisions, and behavior. They influence how people interact with others and make decisions.

Core Values

• Honesty

• Respect

• Responsibility

• Integrity

• Compassion

• Fairness

• Loyalty

• Accountability

Ethical Principles

standards that help individuals determine whether their actions are right or wrong.

Major Ethical Principles

Honesty

Fairness

Integrity

Respect

Responsibility

Transparency

Ethical Leadership

means leading by example through honesty, fairness, accountability, and respect. it also inspires employees to act responsibly and make ethical decisions.

Characteristics of Ethical Leadership

• Honest

• Fair

• Trustworthy

• Responsible

• Respectful

• Accountable

• Compassionate

Organizational Ethics

refers to the ethical values, policies, and standards that guide the behavior of everyone in a company. It helps create a workplace where employees know what is expected of them.

Importance of Business Ethics

benefits both organizations and society.

why is it important? (business ethics)

Builds Trust

Improves Reputation

Prevents Legal Problems

Improves Employee Morale

Increase Customer Loyalty

Supports Long-term Success

Ethical Culture

Refers to the shared beliefs, attitudes, and behaviors that encourage ethical conduct within an organization. A strong ethical culture influences how employees make decisions.

Ethical Culture’s Characteristics

• Open communication

• Mutual respect

• Fair treatment

• Integrity

• Accountability

• Compliance with laws

Code of Ethics

A written document that outlines the standards of behavior expected from employees. It serves as a guide for making ethical decisions.

Ethical Theories

Frameworks that help individuals determine what is right and wrong when making decisions. Businesses use ethical theories because managers often face situations where there is no perfect answer. It provides guidance for making fair, responsible, and justifiable decisions.

Utilitarianism

states that the best decision is the one that produces the greatest benefit for the greatest number of people.

Founder of Utilitarianism

Jeremy Bentham and John Stuart Mill

Rights Theory

states that every person has fundamental rights that should always be respected regardless of the consequences.

Justice Theory

emphasizes fairness, equality, and impartial treatment. Everyone should receive equal opportunities and fair treatment.

Types of Justice

Distributive Justice

Procedural Justice

Interactional Justice

Distributive Justice

Fair distribution of rewards and resources

Procedural Justice

Fair decision-making process

Interactional Justice

Respectful treatment of people

Virtue Ethics

focuses on a person's character instead of the consequences of actions.

Important Virtues

• Honesty

• Courage

• Compassion

• Responsibility

• Integrity

• Respect

Common Good Approach

focuses on decisions that benefit the entire community rather than only individuals.

A systematic decision-making model

Step 1 identify the ethical issue

Step 2 gather all relevant facts

step 3 identify affected stakeholders

step 4 consider possible alternatives

step 5 evaluate each alternative using ethical theories

step 6 choose the best ethical decision

step 7 implement the decision

step 8 evaluate the results

Ethical Dilemma

occurs when a person must choose between two difficult options, both of which have ethical consequences

Tips for Resolving Ethical Dilemmas

1 Follow company policies

2 Consider all stakeholders

3 Respect Law

4 Apply ethical theories

5 Think about long-term consequence

6 Be honest and transparent

Corporate Social Responsibility

the idea that businesses should not only focus on making profits but also contribute positively to society and the environment.

Carroll’s Pyramid of CSR

Economic Responsibility

Legal Responsibility

Ethical Responsibility

Philanthropic Responsibility

Economic Responsibility

Be profitable

Legal Responsibility

Follow laws and regulations

Ethical Responsibility

Do what is right and fair

Philanthropic Responsibility

Give back to society and support communities

Economic Responsibility

This is the foundation of the pyramid. Businesses must generate profits, provide jobs, produce quality products and services, and remain financially sustainable. Without profitability, a company cannot survive or fulfill its other responsibilities.

Legal Responsibility

Businesses must comply with laws and regulations established by the government. Profit should be earned through legal and fair business practices.

Ethical Responsibility

beyond legal requirements, companies should act fairly, honestly, and ethically. Ethical responsibilities involve doing what is morally right even when the law does not require it.

Philanthropic Responsibility

This is the highest level of the pyramid. Businesses voluntarily contribute to society and improve community well-being through charitable activities and social programs.

Stakeholder Theory

states that a business should consider the interests of all people affected by its activities, not just its owners or shareholders.

Internal Stakeholder

People inside the organization who are directly involve in its operations

who are the Internal stakeholders

Employee, Managers, and Owners/Stakeholders

External Stakerholder

People or groups outside the organization who are affected by its activities

who are the external stakeholder

customers, suppliers, government, and community

stakeholder mapping

identify stakeholders and analyze their interest, concerns and influence. This will help companies make better decisions and avoid conflicts.

stakeholder engagement

process of communicating and working with stakeholders to understand and address their needs and concerns.

respecting stakeholders

business should respect the rights, needs, and interest of different stakeholders.