Lec-12A

Lecture Overview

• Title: Business Ethics – Socially Responsible Business

• Instructor: Dr. Rana Muhammad Asad Khan

• Contact: masadkhan87@gmail.com, asad.khan@fcm3,paf-iast.edu.pk, 03314438163

• Reference Book: Entrepreneurship, Owning Your Future by Steve Mariotti

Corporate Social Responsibility (CSR)

• Definition: CSR indicates that the relationship between business and society should extend beyond economic interests.

• Ethical Sourcing:

  • Buying from suppliers that ensure safe working conditions and uphold workers' rights.

• Entrepreneurial Opportunity:

  • CSR provides opportunities at all levels for entrepreneurs.

• Integrated Operations:

  • CSR is integral to operations, not a separate consideration.

• Business Benefits:

  • Engaging in CSR can enhance profitability, exemplified by the phrase "doing well by doing good."

Responsibilities to Individuals

General Responsibilities

• Stakeholder Impact:

  • CSR affects all business stakeholders: employees, customers, investors, and creditors.

• Trust and Accountability:

  • Businesses must safeguard employees’ income.

  • Customers expect quality products/services.

  • Investors and creditors rely on sound financial decisions.

  • Ensuring thoughtful decision-making reflects commitment to responsibilities.

Legal and Practical Obligations

• Legal Responsibilities:

  • Entrepreneurs are legally obligated to provide safe workplaces and fair employment policies.

• Practical Needs:

  • Employees require tools and resources to perform effectively.

  • Example: A preschool director failing to provide necessary materials for teachers can lead to operational failures and safety risks.

Trust and Respect

• Building Trust:

  • Trust is crucial in employee relationships; it's easier with smaller teams.

  • The challenge lies in granting autonomy and responsibilities without constant oversight.

• Professional Development:

  • Some businesses support employee growth through practices like job rotation to bolster skills.

Consideration for Personal Circumstances

• Understanding Personal Needs:

  • Recognize an employee’s external responsibilities (e.g., family care, transportation issues).

  • Companies labeled as top workplaces contribute to employees' work-life balance.

Customer Relationships

• Attracting vs. Keeping Customers:

  • Retaining existing customers is generally less costly than acquiring new ones.

• Key Qualities in Customer Relations:

  • Honesty: Be transparent regarding product features.

  • Respect: Understand and meet customers' needs.

  • Accessibility: Maintain advertised business hours.

  • Attention: Focus on current customers during interactions.

Supplier Relationships

• Responsibility to Suppliers:

  • Misleading suppliers violates ethical bargaining principles.

  • Strive for efficiency in transactions and maintain clear expectations.

Investor Relationships

• Investors and Creditors:

  • They provide required capital and emotional support for businesses.

  • Businesses must ensure regular and timely updates to investors.

  • Seasoned investors may contribute valuable advice alongside financial support.