CSR is a much broader concept than business ethics.
Business ethics is the application of ethics and ethical theory to the decision of business. CSR claims that businesses are more than just profit-seeking entities and, therefore, also have any obligation to benefit society.
CSR is about business and other organizations going beyond the legal obligation to manage the impact they have on the environment and society. In particular, this could include how organizations interact with their employees, suppliers, customers and the community in which they operate, as well as the extent they attempt to protect the environment.
According to Carroll’s four-part model, corporate social responsibility encompasses the economic, legal, ethical, and philanthropic expectations [placed on organizations by society at a given point in time.
To be corporate social responsible, businesses must go beyond profit-making to be responsible for a variety of stakeholder groups other than focusing exclusively on investors. It is applicable to both large corporations and SMEs. The firm goes beyond compliance and engages in ‘actions that appear to further some social good, belongs to the interests of the firm and that which is required by law’.
The outcome of CSR includes financial performance, corporate reputation – brand & image, employee commitment, cost saving, customers, government, and competitiveness.
There are six stakeholder groups considered as the most important influence factors in terms of corporations’ social responsibility. They are shown as followings:
Customer responsibility practices
It demonstrates customer commitment by providing high quality service that includes complete information, responding to customer complaints, and adapting products and services to enhance customer satisfaction.
Employee responsibility practices