Importance of ethics and social responsibility in the business world
Introduction
Strategic ethics and social responsibility are two of the most important, yet perhaps most misunderstood concerns in the world of business today. By their very nature, these fields are controversial, and there is no universally accepted approach for solving their questions. On the other hand, government is encouraging organizational accountability for ethical conduct, and organisations are being asked to prevent and control misconduct by implementing ethics programs. By defining strategic ethics, we can link and compare it with the concept of social responsibility. In this way, we can examine applications in the business context, thus drawing conclusions about their roles in strategy.
Strategic ethics "comprises principles and standards that guide behaviour in the world of business" Ferrell and Fraedrich (2000:6). Social responsibility on the other hand is the obligation a business assumes toward society. Jennings (2003:6) defines these responsibilities as being economic, legal, ethical and philanthropic. A business ' economic responsibilities are to produce goods and services that society needs and wants at a price that can perpetrate the business and satisfy its obligation to investors. The legal responsibilities are the laws that they must obey. Ethical responsibilities are defined as behaviours or activities that are expected of business by society but are not codified in law. Philanthropic responsibilities are those behaviours and activities that society desires and business values dictate.
Social responsibility then can be viewed as a contract with society, whereas business ethics involves carefully thought out rules of business organizational conduct that guide decision making. Business ethics relates to rules and principles that guide individual and work group decisions, whereas social responsibility concerns the effect of organizational decisions on society.
The role of ethics and social responsibility in strategy
When a corporation 's
Strategic ethics and social responsibility are two of the most important, yet perhaps most misunderstood concerns in the world of business today. By their very nature, these fields are controversial, and there is no universally accepted approach for solving their questions. On the other hand, government is encouraging organizational accountability for ethical conduct, and organisations are being asked to prevent and control misconduct by implementing ethics programs. By defining strategic ethics, we can link and compare it with the concept of social responsibility. In this way, we can examine applications in the business context, thus drawing conclusions about their roles in strategy.
Strategic ethics "comprises principles and standards that guide behaviour in the world of business" Ferrell and Fraedrich (2000:6). Social responsibility on the other hand is the obligation a business assumes toward society. Jennings (2003:6) defines these responsibilities as being economic, legal, ethical and philanthropic. A business ' economic responsibilities are to produce goods and services that society needs and wants at a price that can perpetrate the business and satisfy its obligation to investors. The legal responsibilities are the laws that they must obey. Ethical responsibilities are defined as behaviours or activities that are expected of business by society but are not codified in law. Philanthropic responsibilities are those behaviours and activities that society desires and business values dictate.
Social responsibility then can be viewed as a contract with society, whereas business ethics involves carefully thought out rules of business organizational conduct that guide decision making. Business ethics relates to rules and principles that guide individual and work group decisions, whereas social responsibility concerns the effect of organizational decisions on society.
The role of ethics and social responsibility in strategy
When a corporation 's
References: Arrow, N, 2001, Social responsibility and economic efficiency. Public Policy, 21: 303-317 Epstein, E 1999. The corporate social policy process: Beyond business ethics, corporate social responsibility, and corporate social responsiveness. California Management Review, 29(3): 99-114 Ferrell, O & Fraedrich, J, 2000, Business Ethics, Ethical Decision Making and Cases. Boston: Houghton Mifflin Company Hill, C & Jones, G, 1998 Strategic Management: An Integrated Approach, 4th edn, Boston: Houghton Mifflin Company Jennings, M, 2003, Business Ethics, Case Studies and Selected Readings. Chicago: Thomson Learning Meznar, M, Chrisman, J & Carrol, A, 1997, Social responsibility and strategic management. Business & Professional Ethics Journal, 10: 47-66 Steidlmeier, P 1997, Corporate social responsibility and business ethics. In Sethi, S & Falbe, C, Business and society: Dimensions of conflict and cooperation, 101-121. New York: Lexington Books Swanson, D, 1999, Ethics and Business Strategy. Academy of Management Review, vol. 20, pp 43-60