MBA 750: BUSINESS ETHICS
Nicos Rodosthenous PhD
Lecture 5
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Business and Visionary Ethics
• 1. Corporate Social Responsibility (CSR)
• Definition of the CSR is about how companies
manage the business processes to produce an
overall positive impact on society.
• The World Business Council for Sustainable
Development in its publication Making Good
Business Sense by Lord Holme and Richard
Watts, used the following definition:
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Business and Visionary Ethics
• Corporate Social Responsibility is the
continuing commitment by business to
behave ethically and contribute to economic
development while improving the quality of
life of the workforce and their families as well
as of the local community and society at large.
• Companies need to answer to the two aspects
of their operations.
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Business and Visionary Ethics
• 1. The quality of their management - both in
terms of people and processes (the inner
circle).
• 2. The nature of, and quantity of their impact
on society in the various areas of Marketplace,
Workplace, Community and Environment .
• Outside stakeholders are taking an increasing
interest in the activity of the company.
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Business and Visionary Ethics
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Business and Visionary Ethics
• Most look to the outer circle - what the
company has actually done, good or bad, in
terms of its products and services, in terms of
its impact on the environment and on local
communities, or in how it treats and develops
its workforce.
• Definitions as different as CSR is about
capacity building for sustainable livelihoods
and development.
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Business and Visionary Ethics
• It respects cultural differences and finds the
business opportunities in building the skills of
employees, the community.
• For example, the government from Ghana,
through business to CSR is giving back to the
society from the Philippines.
• Traditionally in the United States, CSR has
been defined much more in terms of a
philanthropic model.
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Business and Visionary Ethics
• Companies make profits, unhindered except
by fulfilling their duty to pay taxes. Then they
donate a certain share of the profits to
charitable causes.
• It is seen as tainting the act for the company
to receive any benefit from the giving.
• (the purpose justifies the means).
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Business and Visionary Ethics
• The European model is much more focused on
operating the core business in a socially
responsible way, complemented by investment in
communities for solid business case reasons.
• This model is more sustainable because:
• 1. Social responsibility becomes an integral part
of the wealth creation process - which if managed
properly should enhance the competitiveness of
business and maximize the value of wealth
creation to society.
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Business and Visionary Ethics
• 2. When times get hard, there is the incentive
to practice CSR more and better - if it is a
philanthropic exercise and peripheral to the
main business.
• The European Commission hedges its bets
with two definitions wrapped into one:
• 1) A concept whereby companies decide
voluntarily to contribute to a better society
and a cleaner environment.
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Business and Visionary Ethics
• 2) A concept whereby companies integrate social
and environmental concerns in their business
operations and in their interaction with their
stakeholders on a voluntary basis.
• The definition now focuses on the impact of how
you manage your core business.
• Today's shoppers aren't just looking for the best
price and quality — they expect the companies
they patronize to do good with their dollars and
make a positive impact on the world around
them.
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Business and Visionary Ethics
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Business and Visionary Ethics
• Corporate social responsibility (CSR) refers to
a business practice that involves participating
in initiatives that benefit society.
• As consumers' awareness about global social
issues continues to grow, so does the
importance these customers place on CSR
when choosing where to shop.
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Business and Visionary Ethics
• "Technology has brought global connectivity
and enabled advocacy and awareness for
social situations that were once obscure," said
Alexis Magnan-Callaway, whose fashion
company Pax Cult donates 10 percent of its
profits to an organization of the customer's
choice. http://paxcult.com/
• It's not just about having a recycling program
or sustainable products.
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Business and Visionary Ethics
• People want to feel good about what their
dollar is doing in the world." [Social
Responsibility Tips for Your Business]
• 2. Unique Examples of Corporate Social
Responsibility
• Socially responsible business is at the core of
Designed Good’s mission and we are closely
following the discussion revolving around its
steady growth.
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Business and Visionary Ethics
• We are especially interested in companies that
utilize their tools to do good and realize that such
actions are beneficial not only for society but, in
the long run, for themselves as well.
• 3. Google, Microsoft or Disney receive much
attention for their efforts and the Body Shop has
a long-standing reputation for social sensibility.
• Below, are some other brands you may know that
are committed to doing good.
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Business and Visionary Ethics
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Business and Visionary Ethics
• 3.1 Costa Coffee
• Costa is a British coffeehouse chain that has
branched out to Europe, the Middle East and
Asia.
• Costa Coffee in India is taking big steps in their
approach to employees. Since 2008, the
company’s CSR program hires differently-able
employees, including the speech and hearing.
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Business and Visionary Ethics
• Costa’s CSR initiative is benefits both those
whose opportunities may have otherwise
been limited.
• This program has been so successful that
speech and hearing impaired employees
account for 15% of company’s overall
employee ratio, a number that the Costa plans
to increase over the coming year.
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Business and Visionary Ethics
• 3.2 LinkedIn
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Business and Visionary Ethics
• Innumerable people log onto LinkedIn every day
to search for employment opportunities and
career advice.
• LinkedIn as a company, however, is giving its own
employees a unique opportunity to give back and
invest in themselves.
• One Friday each month employees participate in
“InDay.” The purpose is to encourage the LinkedIn
community to explore volunteer opportunities
and allows different departments to unite for
common causes.
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Business and Visionary Ethics
• Often the company also invites guest speakers
discussing global issues, learning programs,
volunteer experiences, and other topics.
• "The next generation of employees is seeking out
employers that are focused on the triple bottomline: people, planet and revenue," Cooney told
Business News Daily. "Coming out of the
recession, corporate revenue has been getting
stronger. Companies are encouraged to put that
increased profit into programs that give back."
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Business and Visionary Ethics
• 4. Types of corporate social responsibility
• CSR can encompass a wide variety of tactics,
from giving nonprofit organizations a portion
of a company's profits, to giving away a
product or service to a worthy recipient for
every sale made.
• Here are just a few of the broad categories of
social responsibility businesses are practicing:
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• 4.1. Environment: One primary focus of
corporate social responsibility is
the environment. Businesses, both large and
small, have a large carbon footprint.
• Any steps to reduce them are considered
both good for the company and the society as
a whole.
• 4.2. Philanthropy: Businesses also practice
social responsibility by donating to national
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• and local charities. Whether it involves giving
money or time, businesses have a lot of resources
that can benefit charities and local community
programs.
• 4.3. Ethical labor practices: By treating
employees fairly and ethically, companies can
also demonstrate their corporate social
responsibility.
• This is especially true of businesses that operate
in international locations with different labor laws
than those in the United States.
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Business and Visionary Ethics
• Tom's Shoes, another notable example of a
company with CSR at its core, donates one pair of
shoes to a child in need for every pair a customer
purchases.
• Starbucks has created its C.A.F.E. Practices
guidelines, which are designed to ensure the
company sources sustainably grown and
processed coffee by evaluating the economic,
social and environmental aspects of coffee
production.
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Business and Visionary Ethics
• Creating Shared Value
• There is another approach that is gaining
increasing corporate responsibility interest. This
is called Creating Shared Value, or CSV.
• The shared value model is based on the idea that
corporate success and social welfare are
interdependent.
• A business needs a healthy, educated workforce,
sustainable resources and adept management to
compete effectively.
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Business and Visionary Ethics
• For society to thrive, profitable and competitive
businesses must be developed and supported to
create income, wealth, tax revenues, and
opportunities for philanthropy.
• CSV received global attention in the Harvard
Business Review article Strategy & Society: “The
Link between Competitive Advantage and
Corporate Social Responsibility”.
• The article provides insights and relevant
examples of companies that have
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Business and Visionary Ethics
• developed deep linkages between their business
strategies and corporate social responsibility.
• 5. Concluding remarks: Taking socially
responsible initiatives with your business is truly
a win-win situation.
• Not only will your company appeal to
increasingly socially conscious consumers and
employees, but you'll also make a real difference
in the world.
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Business and Visionary Ethics
• Keep in mind that in CSR, transparency and
honesty about what you're doing are
paramount to earning the public's trust.
• Corporate responsibility, corporate
governance and corporate citizenship.
• Case study: The tobacco industry
• Business Ethics and Values Book, Page 314.
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