Business Ethics and CSR

Topics: Business ethics, Corporate social responsibility, Social responsibility Pages: 8 (2238 words) Published: August 9, 2014


ASSIGNMENT TITLE:
RECENT CORPORATE SCANDALS PROVE THAT THE RESPONSIBILITY OF BUSINESS GOES BEYOND MAXIMISING PROFITS. DISCUSS NAME OF STUDENT: TANMUGAVALLI PILLAY VYTHELINGUM
PROGRAMME: BSC(HONS) MANAGEMENT (MINOR: FINANCE)
LEVEL: 4
NAME OF LECTURER: G. NAPAL
MODULE NAME: BUSINESS ETHICS AND GOOD GOVERNANCE
MODULE CODE: MGT 2067Y(3)
TABLE OF CONTENTS

INTRODUCTION Page 3

PROFIT MAXIMISATION Page 4

EVOLUTION FROM PROFIT MAXIMISATION TO VALUE Page 4 MAXIMISATION AND CORPORATE SOCIAL RESPONSIBILITY

IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY Page 6

CORPORATE SOCIAL RESPONSIBILITIES AND THE Page 6 STAKEHOLDERS

CORPORATE SOCIAL RESPONSIBILITIES AND ETHICS Page 8

CONCLUSION Page 9

LIST OF REFERENCES Page 10

RECENT CORPORATE SCANDALS PROVE THAT THE RESPONSIBILITY OF BUSINESS GOES BEYOND MAXIMISING PROFIT. DISCUSS. All organisations have an obligation towards the society and environment in which it operates. This obligation is often termed as Corporate Social Responsibility or Corporate Citizenship. In his book, A Planetary Bargain, Hopkins (2003) stated that Corporate Social Responsibility (CSR) “is concerned with treating the stakeholders of a company or institution ethically or in a responsible manner.” The fundamental role of any organisations is to protect all stakeholders; within or outside the company while keeping in mind the main reason for undertaking business activities; making profits. INTRODUCTION

In 1970, Friedman stated that Corporate Social Responsibility (CSR) “hypocritical window-dressing”. Friedman (1970) stated that “there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”. He believes that business aim is to maximise profits to remain competitive and its social responsibility is to maximise shareholders’ value. Any other aim will drive the business out of the market. Most companies want to make quick profit. Their hunger for profit forced them to cut corners by exploiting both resources and people. Sometimes, they are bound to meet their legal obligations in terms of minimum wages, environmental protection and health and safety at work. But, they would not go beyond this parameter. The presence of regulatory bodies compelled them to be legally right, however they remain ethically irresponsible. They offer some services to society for building brand image and reputation. These companies are not good corporate citizens but use CSR as a marketing strategy to change the perception of customers and the public at large. Some scandals which have created much media buzz are the Shell exploration in Artic region, Nike exploiting workers, Johnson & Johnson’s Tylenol issues, Medpoint Hospital, Enron and WorldCom.

PROFIT MAXIMISATION
Philanthropism is not the favoured term of businessmen as profit became an obsession. In fact the logical goal for undertaking business is to make profit. The aim of profit maximising companies is to create as much profit, as possible with the resources and market share currently at their disposal. The company will sometimes have to adjust influential factors such as cost of production, sales, and output to earn profit. Moreover, profit maximising is necessary for the survival and growth of the business. But in its strive to make more profit, Enron Corporation has gone bankrupt as it was engaged in unethical and fraudulent...

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SILVERSTEIN, K. (2014, July 18). Enron, Ethics And Today 's Corporate Values. Retrieved from http://www.forbes.com/sites/kensilverstein/2013/05/14/enron-ethics-and-todays-corporate-values/
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