The Relationship Between Ethics and Corporate Social Responsibility

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In recent years, the concept of ethics and social responsibility are essential in the business world as society is increasingly paying attention on the social responsibility of the companies and the ethics of their managers. According to Post et al (1996), ethics refers to standards of behaviour and moral judgement differentiating right from wrong. In addition, Bartol et al (2003) defined managerial ethics as “standards of conduct and moral judgement managers’ use conducting their business”. The objective of this essay is to analyze the relationship between ethics and corporate social responsibility (CSR). It will start with the principle concept of ethics, business ethics, and corporate social responsibility; the important of ethics in CSR that corporations should comply with; and comparing the two case studies of corporations that adopted CSR and managerial ethics.

Velasquez et al. (1987) found that the meaning of ethics can be identified as two things. Firstly, the ethics concept which distinguish actions are right or wrong, prescribes what people should do that promotes rightness, fairness, virtues, honesty, compassion and loyalty and also, that provides benefits to society. In contrary, there are penalties for people who commit an offence, which harm others and society. Secondly, ethics refers to the experience and development of people’s personal identity or a group’s standards such as feelings, social norms, moral beliefs and laws that they must ensure compliance to in reasonably judging the direction of decisions.

As mentioned earlier, that the concept of ethics is significant in the corporate world. This can be evidenced by the code of ethics and conduct that companies integrate in t business plans. Lawrences and Weber (2007) show that, any business that performs a good ethical behaviour is likely to succeed. Basically, there are many reasons for promoting business ethics. Firstly, it encourages consumers to interact more with the business as well as benefiting to the stockholders. A sense of trust is also a part of being ethical in order to enhance business performance among business partners. If the trust is broken, the unethical company would be neglected. In addition, a law or legal requirement is a neutral tool that companies use to ensure their employees or stakeholders react ethically. Furthermore, ethical principles help companies to prevent or minimize harm caused by unethical employees, such as corruption and unethical competitors. The concept of ethics also promotes personal morality of employees, which leads to an increased satisfaction and confidence when held accountable for their actions (Lawrence and Weber, 2007).

In addition, corporate social responsibility (CSR) refers to a company’s obligations to act to protect and improve societies’ welfare as well as its own interests (Bartol et al, 2003). However, there is a range of number of definitions of CSR:

Carroll (2001) defined corporate social responsibility as “economic, legal, ethical, and discretionary expectations that society has of organisation”.

Aaronson (2003,p.310) defined CSR as “the business decision making linked to ethical values, compliance with legal requirements, and respect for people, communities, and the environment around the world”.

European Commission (2001, p.5) defined CSR as “a concept whereby companies decide voluntarily to contribute to a better society and cleaner environment”.

The relationship between ethics and CSR can be seen in the similarity in their definitions, that they both are interdependent basis. CSR must go beyond ethics value; for example, corporations must comply with laws and regulations to serve appropriate benefits to communities, and must inform all stakeholders with honest and trustful information.

The advocate of CSR responds that since the businesses depend on the society that surrounds them, therefore, the company should have concern for social issues. According to the...
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