Contents
Corporate Social Responsibility (CSR) .............................................................................. 2
Reason of Implement of CSR in an Organization .............................................................. 2
Impact of CSR .................................................................................................................... 2
Reasons of Effects of CSR in an Organizations ................................................................. 2
Supply Chain CSR .............................................................................................................. 3
Impact of CSR on Supply Chain ........................................................................................ 3
Impact of CSR on Business Performance........................................................................... 4
Ethical Issues in Business ................................................................................................... 5
Types of Ethical Issues in Business .................................................................................... 5
Ethical Factors Affecting Business..................................................................................... 6
Steps to Improve Ethics at Your Company ........................................................................ 7
Changes to CSR policy to benefit different stakeholders. .................................................. 8
References ......................................................................................................................... 10
Corporate Social Responsibility (CSR)
CSR (corporate social responsibility) is a company strategy that promotes long-term growth by
providing economic, social, and environmental benefits to all stakeholders. CSR is a broad term with
several meanings and applications. (Pranas, et al., 2018)
Reason of Implement of CSR in an Organization
Many companies see CSR as an important component of their brand image, thinking that customers
will prefer to do business with firms they perceive to be ethical. In this way, CSR initiatives may be an
essential part of a company's public relations strategy. At the same time, some business owners are
driven to participate in CSR by personal convictions. (Investopedia, 2021)
Impact of CSR
The drive toward CSR has had an influence on several areas. Many businesses, for example, have taken
steps to enhance their operations' environmental sustainability by installing renewable energy sources
or acquiring carbon offsets. To manage supply chains, attempts have been made to eliminate the use of
unethical labor practices including child labor and slave labor. (Smallbusiness.chron, 2021)
On a local, national, and global level, companies are increasingly focusing on social responsibility,
whether it is promoting women's rights, preserving the environment, or striving to eradicate poverty.
From an aesthetics standpoint, socially responsible businesses present more appealing images to both
consumers and shareholders, which benefits their bottom line. (Varottil & Jean J. du Plessis, 2018)

Being a socially responsible business may help to improve a company's image and brand.

Employees with a sense of social responsibility can use the business resources at their disposal
to accomplish good.

Formal corporate social responsibility initiatives can improve employee morale and increase
workplace efficiency.
Reasons of Effects of CSR in an Organizations
There are number of reasons why organizations invest in socially responsible activities. Organizations
may engage in CSR activities because of altruistic intentions, positive effect on employee motivation,
retention and recruitment or customer-related motivations, etc. No matter for what reasons
organizations invest in CSR, all reasons lead to better corporate reputation. As consequence, businesses
should not view CSR just as a promotional tool.
While there appears to be consensus that businesses should operate in a socially responsible manner
since it has a significant impact on their reputation, there is little discussion about how businesses
should grow their CSR operations. According to a review of the literature, businesses should make a
long-term commitment to CSR initiatives, which should be backed up by top management. CSR efforts, on
the other hand, must be communicated effectively through advertising, annual reports, and stakeholder
interaction. (Dekoulou, et al., 2019)
Supply Chain CSR
Supply chain management CSR occurs when the firms that make up a supply chain interact to share,
understand, and address environmental and social issues that arise inside the supply chain.
While CSR focuses on considering stakeholder demands to increase competitiveness while also having
a good social and environmental effect, supply chain CSR entails applying this idea to the whole supply
chain. (Manners-Bell, 2017)
Impact of CSR on Supply Chain
A supply chain, in general, is made up of many firms participating in a process that runs from natural
resource acquisition through distribution. As a result, if one of the supply chain firms is condemned by
stakeholders for its actions, damages may be paid not just by that company, but also by other
companies in the same supply chain.
Businesses usually share information by conducting surveys and other methods to better understand the
state of both CSR operations that protect the company and CSR activities that develop the business
within the supply chain to mitigate this risk. On-site investigations and audits follow this sharing of
information. If an issue with CSR efforts that are meant to protect the firm is found. To comply with the
law and fulfil stakeholder expectations, the firm must address these concerns. CSR that benefits the
firm may, on the other hand, help the whole supply chain by improving competitiveness and
strengthening the chain. (Sojitz, 2021)
The social practices of CSR in the framework of stakeholder and sustainability theories, with a strategy
aimed at efficient supply chain management. The study found that CSR and CS are tightly linked, and
that the effective implementation of these business practices provides SMEs with several organizational
and financial benefits. The results indicate that:
(1) Social practices of in SMEs, CSR is focused on increasing innovation and strengthening
management.
(2) These variables, in addition to impacting SCM management in SMEs, have an impact on the supply
chain a major influence on innovation and a stronger corporate image.
(3) The SME's innovative activities satisfy the interested parties and result in the desired reputation,
image, and financial profitability improvements.
The study's findings have major implications that might assist SMEs improve their management.
(Toloue, 2013)
Impact of CSR on Business Performance
Corporate social responsibility helps to manage reputation by cultivating a positive image in the minds
of consumers, suppliers, and other stakeholders. Stakeholders will believe that if a firm is performing
its social obligation, how can it lead to unethical activity with them? As a result, their faith in the
company will grow. (Virtusinterpress, 2021)
Following are some impacts of CSR on business performance.

Companies that practice CSR reap additional benefits like as increased customer loyalty, which
boosts the firm's profit margin. Organizations get a high reputation in the eyes of stakeholders
increased good will, which helps them to outperform competitors.

The study concludes that identifying a company's CSR element will assist them in emphasizing
their conscientious events as well as their responsibilities. Other elements have been discovered
to influence the process of adding value to firms by building a good reputation. Greater Return
on Assets and Return on Equity will result from more innovation. (Core.ac, 2021)

Corporate social responsibility has a variety of effects on an organization's performance. It aids
in improving the company's financial performance so that it may grow quickly and earn the
most revenue possible in the market.

If a company follows to CSR and strives to satisfy its stakeholders, it will undoubtedly be able
to surpass its competition.
 A company's treatment of its community reveals a lot about how it treats its employees. People
who feel appreciated and supported at work are more likely to be productive and fulfilled.
Giving your workers the opportunity to volunteer, especially during working hours, fosters a
sense of belonging inside your company as well as a link to the community at large. Through
these personal-development chances, employees will acquire motivation and pride in their job.
(Andreas, et al., 2017)
Ethical Issues in Business
The term "ethics" is a broad one. Acting ethically in business, at its most basic level, is establishing a
company based on honesty and trust, as well as adhering to rules. However, many additional concerns,
such as empathy, its diversity and acceptance, and conducting business in line with the company's
principles, fit within the ethical issues in business definition. (D. Van Zandt, 2008)
Types of Ethical Issues in Business
If you want to operate an ethical business, you must first understand what kinds of problems you can
encounter and how to deal with them. Following are different types of ethical issues in business.

Discrimination
Discrimination is one of the most serious ethical concerns now affecting the corporate sector.
Many companies have been under criticism in recent months for not having a diverse staff,
which is sometimes due to discrimination. Discrimination, on the other hand, can occur in firms
of all sizes. It refers to any activity that leads an employee to be treated unfairly.
Discrimination is not only immoral; it is also unlawful in certain situations. Employees are
protected by laws that prohibit discrimination based on age, gender, ethnicity, religion,
handicap, and other factors. Nonetheless, salary disparities between men and women
demonstrate that discrimination persists. Discrimination can also take the form of dismissing
employees when they reach a specific age or granting fewer promotions to people of ethnic
minorities. (Myva360, 2021)

Harassment
Harassment, which is frequently linked to racism or sexism, is the second main ethical
challenge that businesses face. Verbal abuse, sexual abuse, taunting, racial insults, and bullying
are all examples of this. Harassment can happen from anybody in the organization, even
consumers. If a supervisor is aware of customer harassment and does nothing to stop it, it is an
ethical concern for the company.
Harassment, in addition to creating a hostile workplace, can force employees to quit the firm
early, which is a second reason why some companies lack diversity. Harassment has a long-term
effect on employees, both psychologically and financially, and it may even affect a person's
entire career path. (Thomas & Patricia, 1983)

Unethical Accounting
Companies that are publicly listed may use dishonest accounting to make themselves look more
lucrative than they are. In other situations, an accountant or bookkeeper may alter records to
take advantage of the situation. (William & Vincent, 2015)

Health and Safety
Health and safety are another sort of ethical concern that is frequently covered by law.
Companies may choose to cut corners to save money or complete work more quickly. Failure to
consider workers' safety might result in psychological hazards (such as job instability or lack of
autonomy), which can contribute to work-related stress. (Gael, 2014)

Abuse of Leadership Authority
Harassment and discrimination are common manifestations of power abuse. Those in positions
of leadership, on the other hand, can use their power to urge employees to skip through some
elements of correct procedure to save time (perhaps placing the employee in danger), punish
employees who fail to reach excessive targets, or ask for inappropriate favors. (Peg, 2000)

Privacy
For one reason, companies may retaliate if employees complain about work conditions or the
firm on social media. Employees who make controversial remarks that go against the company's
principles may be fired. (E. & Palmer, 2010)
Ethical Factors Affecting Business
All activities and behaviors that impact management and employee conduct inside the firm and with the
outside environment are considered ethical issues affecting business. The idea of Corporate Social
Responsibility includes ethical issues in management, which include obligations, morals, integrity,
behavior, and what is good and bad for the firm, workers, and society. (Ceopedia, 2021)

Ethical Issues in Business
Prescriptive (normative) ethics, which establishes rules of conduct and recommends specific
behaviors, and descriptive ethics, which describes the moral attitudes and behaviors of
entrepreneurs, are both involved in business ethics. In theory, the objective of business ethics is
to resolve ethical issues in the workplace. (Zandt, 2008)

Ethical Factor in Area of Business communication
 Appropriate marketing techniques, telling the truth about products and services.
 Informing customers, employees, and partners about the company's mission statement
and goals.
 Respecting employees, customers, and partners' religious and social values.
 Negligence in informing shareholders about the company's situation, managerial ethics.
 Insider trading, the concealment of mergers, acquisitions, and investment information.
(Thomas, 2009)

Internal And External Regulations Concerning Business Behavior
 Regulations relevant to the industry (marketing code, broadcasting code).
 Regulations prohibiting discrimination in the employment and promotion of employees.
 The consequences of workplace harassment, whether physical and verbal. (Sebastian, et
al., 2016)

Ethical Factors Concerning Production Process
 Eliminating unsafe working circumstances.
 Avoiding procedures and technologies that endanger the environment's safety employees
and the public.
 Creating a product that is safe for customers.
 Utilization and recycling of waste products.
 Profiting from health-damaging items (drugs, cigarettes, and alcohol) and people
(gambling). (Žukauskas Pranas Žukauskas, 2018)

Ethical Factor in Motivation and Human Resource Management
 Performance takes priority above employee well-being.
 Encouraging customers to engage in unethical behavior (cheating, misinformation),
 Employees are encouraged to report superiors and colleagues about unethical behavior.
 Resulting in a lack of trust between them and management.
 Methods to detect and eradicate bribery, side deals, and preferential treatment.
 Ensuring that workers have a healthy working environment. (Toloue, 2013)
Steps to Improve Ethics at Your Company
The ability to act ethically is often hampered by a variety of barriers and inconsistencies. Following are some
different steps to improve ethics in a company.

Business Transformation Programs and Change Management Initiatives
Companies may distort their own ethical atmosphere by enforcing too much change from the
top, too soon and too often. Leaders in the research said they had to meet staffing goals, sell
large firms in important markets, and oversee mergers and acquisitions. Some of these activities
had inherent conflicts of interest, while others simply forced leaders to go against their
principles (loyalty, for example). Many leaders were ill-prepared for the situations they found
themselves and felt driven to make actions they subsequently regretted. (Hbr, 2021)

Incentives and Pressure to Inflate Achievement of Targets
People do what they are rewarded to do, and most leaders are compensated for meeting their
goals. As an example, consider Wells Fargo: Managers were compensated based on how many
accounts they opened and managed. As a result, many people appear to have felt compelled to
establish accounts that their clients had neither requested nor approved. Incentives may be an
issue in boardrooms as well: bonus payouts and executive share plans are frequently focused on
short-term company measures, which can be harmful to long-term performance. (David A.
Buchanan, 2019)

Cross-cultural differences
Most of the study's executives commented on how quickly their firms had globalized in the
previous ten years, and how ethical problems may be extremely tough to navigate when
working across cultures. They discussed how difficult it was to identify which cultural "rules"
were more important while making business decisions. They included cultural and ethical
examples such as shutting a sales office in Japan, violating a verbal pledge made during afterwork cocktails in China, and disregarding “sleeping” business partners in a Saudi Arabian
agreement. (Silverthorne, 2005)

Learn what really matters in your organization.
To be ready to question your organization's unwritten norms — and the mechanisms that
support them — you must first learn to listen for weak signals about the organization's true
beliefs. When it comes to doing the right thing, there will almost always be lip service, but what
happens in practice? For example, you may pay greater attention to:
 How people are paid.
 Who gets promoted and why?
 How employees feel about the company. (David A. Buchanan, 2019)
Changes to CSR policy to benefit different stakeholders.
Engagement will provide benefits if it is integrated into strategy and operations. CSR thinking restricts
corporate participation and should be replaced by a concept of a corporate social compact, in which
businesses are compelled to connect with the communities in which they operate.
1. Find Your Stakeholders
Your stakeholders include more than your board of directors, management, and consumers.
Legal interest organizations, communities, rival businesses, and your individual workers are all
examples of stakeholders. A stakeholder is someone or anything who has an interest in your
firm or is influenced by it in some manner. To be clear, this definition of stakeholder is rather
broad, and it would be difficult for a company to engage each one of them. As a result,
businesses must create methods for identifying key stakeholders and deciding when and where
to engage them. (9lenses, 2021)
2. Map Out the Process and Strategy
Every aspect of your company has an impact on your stakeholders. Use these areas of interest to
incorporate stakeholder participation and harness their knowledge. This SCR model differs from
the normal model in that your firm is not focused on developing activities that create a
responsible image. Instead, you are displaying accountability in your company. Stakeholders
buy-in and valuation are increased because of this level of openness, which helps to decrease
perceptions of propagandizing. (Kotler Philip Kotler, 2016)
3. Embed External Engagement in Your Culture
You must develop internal buy-in among your staff for any plan to succeed. You cannot be
open with individuals outside your firm until you are transparent with your own employees.
Keep in mind that workers and executives are also stakeholders. Internal transparency, in turn,
aids your comprehension of external engagement. The assumption that external engagement is a
propaganda exercise is a typical mistake in external engagement projects. We don't mean sales
presentations or glowing accounts of a company's good deeds in the community when we say
"engagement." Rather, the engagement process should be viewed as a negotiation with strong,
knowledgeable players. This goal may be achieved by incorporating involvement into your
company's culture. This means that every part of your business must be carefully considered in
terms of how it contributes to society. (Paetzold Kolja, 2010)
4. Establish Performance Measurements
You should create key performance indicators around these efforts once your firm has
established a plan and determined how to integrate it into every part of the business. This may
not be achievable until the efforts have been operating for some time, depending on the
engagement. All engagement programmers, however, should eventually have set metrics. These
figures are useful for two reasons. To begin with, they serve as standard performance indicators
that allow benchmarking and evaluation of the initiatives' efficacy. They also encourage
integration. By creating KPIs, your firm will create a de facto knowledge of expectations and
realities of engagement activities among important internal stakeholders. Engagement,
therefore, becomes a matter of personal investment to stakeholders. (Andreas, et al., 2017)
5. Continue Engagement and Interaction
Once that initial contact has been made or a project has been completed, the success might
inhibit further attempts to engage. When involvement is seen as a project, it is frequently
overlooked as a secondary problem. This scenario is dangerous to the country's long-term
stability. In fact, irregular involvement may be harmful for a firm since it gives the impression
that it is managing engagement when it is not. As a result, external involvement should be a
continual activity rather than a cyclical one. Commitment from all internal corporate
stakeholders is critical in this situation. (Polonsky, 2005)
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