Business Should Always Be Ethically and Socially Responsible

Topics: Business ethics, Corporate social responsibility, Social responsibility Pages: 6 (2233 words) Published: January 19, 2014
Business Should Always Be Ethically and Socially Responsible Introduction
Corporate scandals in business world have been more and more common, which damages the interest and profits of stakeholders, employers, community or society. The corporate scandals pull the public to focus on the ethic of managers and the firm itself. Comparing to the past, customers are focusing more and more on the reputation of the firms and they prefer to select the brands that are environmentally friendly and socially responsible when they buy products or service. This change pushes firms to maintain their reputations with more efforts. Corporate social responsibility has been a hot topic in business world today, which is an important part of building brand image while brand image is a value for firms. This essay holds the statement that business should always be ethically and socially responsible. Firstly, it gives the several definitions of business ethic and corporate social responsibility briefly. Subsequently, it outlines the pros and coins for addressing corporate social responsibility. Following this, it discusses the negative effects caused by corporate scandals with several real cases likeToyota, Bernard Madoff and Enron. Finally it discusses the benefits when business is ethically and socially responsible with the examples of Procter & Gamble and Li Ka-shing. Definitions of business ethics and Corporate Social Responsibility Ethics is the code of values and principles to govern people’s behaviours to verdict what is right or wrong. Business ethic is the application of personal moral in commercial enterprise. Comparing to the vague definition of business ethics, the definition of corporate social responsibility (CSR) is clearer. As stated by The World Business Council for Sustainable Development(2014), corporate social responsibility is the commitment of business to contribute to the economic development and the welfare of employees and the family, the community and the whole society. European Commission (2014) defines this concept as follow: the firms integrate concerns of social and environment with stakeholders in the economic decisions and actions voluntarily. The definitions of business ethics and corporate social responsibility state that business firms are acting ethically and socially responsible means in the economic operations they should consider the interests of stakeholders, environment and society and they should concern the welfare of employees and the family instead of concerning only the profits of firms and personal interest. The proponents of CSR include the moral obligation, license to operate, sustainability and reputation (Porter, 2004).According to Lahovnik (2008), there are three levels of corporate social responsibility. The first level is the obligation to meet the material for shareholders, employees, customers, creditorsand suppliers. The second level is the responsibility to benefit the human resource of community and avoid the damage to environment. The last one is the responsibility to the society. Even though there is not clear definition how far firms should address the social responsibility, there is indeed a fact that firms should take the social responsibility in their economic operations. Against and For Corporate Social Responsibility

There is a hot debating on whether firms should address their corporate social responsibility or not. For the objectors, business is just business that maximize profits is the economic responsibility of management instead of being the social role in society. The social problems should not be resolved by firms and firms are not designed to handle these issues. Corporate social responsibility could be an important tool wielded by firms. Stated by The Wall Street Journal, the addressing of CSR may be anillusion and a dangerous one because when there is a conflict between private profit and social interest; firms tend to select the former one (Karnani,2010). Even...
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