Ethics and Corporate Social Responsibility: The Regulatory and Legal Framework

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Responsibilities of a Business FirmA narrow view of corporate responsibility, known as the 'shareholder primacy' theory has been enforced whereby a corporation's responsibility extends only to maximizing profits (Kercher, 2006). On the other hand, ethical responsibility theory advocates strong corporate self-restraint and duties and expansive public policy strengthening stakeholder rights. Economic responsibility theory advocates market wealth creation subject only to minimalist public policy and perhaps customary business ethics (Windsor, 2006).

It is universally agreed there is no single definition of Corporate Social Responsibility (CSR), but a great many companies and organizations worldwide promote its ever increasing use (McWilliams, Siegel, and Wright, 2006). According to some scholar, CSR are situations where the firm goes beyond compliance and engages in 'actions that appear to further some social good, beyond the interests of the firm and that which is required by law' (McWilliams, et. al, 2006). CSR is also defines as the open and transparent business practices that are based on ethical values and respect for the community, employees, the environment, shareholders and other stakeholders (Murthy, 2007), or the initiatives to improve the well-being of communities on local and global levels in such areas as health, race relations, the environment, or economic development (Bies, Bartunek, Fort, & Zald, 2007). On the other hand, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done" (Bies, et. al, 2007).

The language used in relation to CSR is often used interchangeably with other related topics, such as corporate sustainability, corporate social investment, triple bottom line, socially responsible investment and corporate governance (Kercher, 2006). In recent years, scholars and managers have placed greater attention to the strategic implications of CSR whereby over the past two decades, a growing number...
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