CORPORATE SOCIAL

RESPONSIBILITY

ASSIGNMENT

Submitted To: Submitted By:

Dr. Urvashi Ghai Khosla Ananya Gaba
Faculty, DIAS 01012303916
MBA 4A
 CSR 2016
Q1. What is ethical decision making? Describe three different frameworks of ethical decision
making.
ANS. Ethics provides a set of standards for behaviour that helps us decide how we ought to act in a
range of situations. In a sense, we can say that ethics is all about making choices, and about
providing reasons why we should make these choices.

Ethical decision-making refers to the process of evaluating and choosing among alternatives in a
manner consistent with ethical principles. In making ethical decisions, it is necessary to perceive
and eliminate unethical options and select the best ethical alternative

1) Agent-centred Theories:

The Feminist Approach

In recent decades, the virtue approach to ethics has been supplemented and sometimes significantly
revised by thinkers in the feminist tradition, who often emphasize the importance of the experiences
of women and other marginalized groups to ethical deliberation. Among the most important
contributions of this approach is its foregrounding of the principle of care as a legitimately primary
ethical concern, often in opposition to the seemingly cold and impersonal justice approach. Like
virtue ethics, feminist ethics concerned with the totality of human life and how this life comes to
influence the way we make ethical decisions

The Virtue Approach

One long-standing ethical principle argues that ethical actions should be consistent with ideal
human virtues. Aristotle, for example, argued that ethics should be concerned with the whole of a
person’s life, not with the individual discrete actions a person may perform in any given situation. A
person of good character would be one who has attained certain virtues. Virtue ethics is concerned
with the entirety of a person’s life, it takes the process of education and training seriously, and
emphasizes the importance of role models to our understanding of how to engage in ethical
deliberation.

2) Consequentialist Theories:

The Common Good Approach

The most influential modern proponent of this approach was the French philosopher Jean-Jacques
Rousseau (1712-1778), who argued that the best society should be guided by the “general will” of
the people which would then produce what is best for the people as a whole. This approach to ethics
underscores the networked aspects of society and emphasizes respect and compassion for others,
especially those who are more vulnerable.

The Utilitarian Approach

Argues that the best life is one that produces the least pain and distress. The 18th Century British
philosopher Jeremy Bentham (1748-1832) applied a similar standard to individual actions, and
created a system in which actions could be described as good or bad depending upon the amount
and degree of pleasure and/or pain they would produce. Bentham’s student, John Stuart Mill (1806-
1873) modified this system by making its standard for the good the more subjective concept of
“happiness,” as opposed to the more materialist idea of “pleasure.”

Utilitarianism is one of the most common approaches to making ethical decisions, especially
decisions with consequences that concern large groups of people, in part because it instructs us to
weigh the different amounts of good and bad that will be produced by our action. This conforms to
our feeling that some good and some bad will necessarily be the result of our action and that the
best action will be that which provides the most good or does the least harm, or, to put it another
way, produces the greatest balance of good over harm. Ethical environmental action, then, is the
one that produces the greatest good and does the least harm for all who are affected—government,
corporations, the community, and the environment.

The Egoistic Approach

One variation of the utilitarian approach is known as ethical egoism, or the ethics of self- interest. In
this approach, an individual often uses utilitarian calculation to produce the greatest amount of good
for him or herself. Ancient Greek Sophists like Thrasymachus (c. 459-400 BCE), who famously
claimed that might makes right, and early modern thinkers like Thomas Hobbes (1588-1679) may
be considered forerunners of this approach. One of the most influential recent proponents of ethical
egoism was the Russian-American philosopher Ayn Rand (1905-1982), who, in the book The
Virtue of Selfishness (1964), argues that self-interest is a prerequisite to self-respect and to respect
for others. There are numerous parallels between ethical egoism and laissez-faire economic
theories, in which the pursuit of self-interest is seen as leading to the benefit of society, although the
benefit of society is seen only as the fortunate by-product of following individual self-interest, not
its goal.

3) Non-consequentialist Theories:

The Duty-Based Approach

The duty-based approach, sometimes called deontological ethics, is most commonly associated with
the philosopher Immanuel Kant (1724-1804), although it had important precursors in earlier non-
consquentialist, often explicitly religious, thinking of people like Saint Augustine of Hippo (354-
430), who emphasized the importance of the personal will and intention (and of the omnipotent God
who sees this interior mental state) to ethical decision making. Kant argued that doing what is right
is not about the consequences of our actions (something over which we ultimately have no control)
but about having the proper intention in performing the action. The ethical action is one taken from
duty, that is, it is done precisely because it is our obligation to perform the action. Ethical
obligations are the same for all rational creatures (they are universal), and knowledge of what these
obligations entail is arrived at by discovering rules of behavior that are not contradicted by reason.

Kant’s famous formula for discovering our ethical duty is known as the “categorical imperative.” It
has a number of different versions, but Kant believed they all amounted to the same imperative. The
most basic form of the imperative is: “Act only according to that maxim by which you can at the
same time will that it should become a universal law.” So, for example, lying is unethical because
we could not universalize a maxim that said “One should always lie.” Such a maxim would render
all speech meaningless. We can, however, universalize the maxim, “Always speak truthfully,”
without running into a logical contradiction. (Notice the duty-based approach says nothing about
how easy or difficult it would be to carry out these maxims, only that it is our duty as rational
creatures to do so.) In acting according to a law that we have discovered to be rational according to
our own universal reason, we are acting autonomously (in a self-regulating fashion), and thus are
bound by duty, a duty we have given ourselves as rational creatures. We thus freely choose
(we will) to bind ourselves to the moral law. For Kant, choosing to obey the universal moral law is
the very nature of acting ethically.

The Rights Approach

The Rights approach to ethics is another non-consequentialist approach which derives much of its
current force from Kantian duty-based ethics, although it also has a history that dates back at least
to the Stoics of Ancient Greece and Rome, and has another influential current which flows from
work of the British empiricist philosopher John Locke (1632-1704). This approach stipulates that
the best ethical action is that which protects the ethical rights of those who are affected by the
action. It emphasizes the belief that all humans have a right to dignity. This is based on a
formulation of Kant’s categorical imperative that says: “Act in such a way that you treat humanity,
whether in your own person or in the person of another, always at the same time as an end and
never simply as a means to an end.” The list of ethical rights is debated; many now argue that
animals and other non-humans such as robots also have rights.

The Fairness or Justice Approach

The Law Code of Hammurabi in Ancient Mesopotamia (c. 1750 BCE) held that all free men should
be treated alike, just as all slaves should be treated alike. When combined with the universality of
the rights approach, the justice approach can be applied to all human persons. The most influential
version of this approach today is found in the work of American philosopher John Rawls (1921-
2002), who argued, along Kantian lines, that just ethical principles are those that would be chosen
by free and rational people in an initial situation of equality. This hypothetical contract is
considered fair or just because it provides a procedure for what counts as a fair action, and does not
concern itself with the consequences of those actions. Fairness of starting point is the principle for
what is considered just.

The Divine Command Approach

As its name suggests, this approach sees what is right as the same as what God commands, and
ethical standards are the creation of God’s will. Following God’s will is seen as the very definition
what is ethical. Because God is seen as omnipotent and possessed of free will, God could change
what is now considered ethical, and God is not bound by any standard of right or wrong short of
logical contradiction. The Medieval Christian philosopher William of Ockham (1285-1349) was
one of the most influential thinkers in this tradition, and his writings served as a guide for Protestant
Reformers like Martin Luther (1483-1546) and Jean Calvin (1509-1564). The Danish philosopher
Søren Kierkegaard (1813-1855), in praising the biblical Patriarch Abraham’s willingness to kill his
son Isaac at God’s command, claimed that truly right action must ultimately go beyond everyday
morality to what he called the “teleological suspension of the ethical,” again demonstrating the
somewhat tenuous relationship between religion and ethics mentioned earlier.

Q2. What are the social responsibilities of an organization towards its various stakeholders?
Explain.

ANS. Social responsibility is the duty and obligation of a business to other stakeholders. Social
responsibility for one group can conflict with other groups, especially between shareholders and
stakeholders. Ethics refers to the moral rights and wrongs of any decision a business makes.

1. Employees:
No Enterprise can succeed without the whole-hearted cooperation of the employees. Responsibility
of business towards employees is in the form of training, promotion, proper selection, fair wages,
safety, health, worker’s education, comfortable working conditions, participation management etc.

The employees should be taken into confidence while taking decisions affecting their interests. The
workers should be offered incentives for raising their performance. Mental, physical, economic and
cultural satisfaction of employees should be taken care of. If business looks after the welfare of
employees then they will also work whole heartedly for the prosperity of business.

The committee that conducted ‘social audit’ of TISCO (Tata Iron and Steel Company) observes,
“not only should the company carry out its various obligations to the employees as well as the
larger community as a matter of principle, but this has also led to a higher degree of efficiency in
TISCO works and an unparalleled performance in industrial peace and considerable team spirit and
discipline which have all resulted in high productivity and utilisation of capacity.”Thus, by
discharging its responsibility to employees the business advances its own interests.

‘TATAS’ have been the first to enforce certain laws in favour of employees. Similarly Godrej &
Boyce, Shriram Industries and TVS groups are also good employers. Financial position of company
and economic conditions of nation should be taken into consideration while spending on labour
welfare during performance of responsibility towards employees.

2. Owners:
Business is accountable towards owners as well as managing business profitably, ensuring fair and
regular return on capital employed, consolidating financial position of business, guaranteeing
capital appreciation so as to enable the owners to withstand any business contingencies.

3. Consumers:
Responsibility of business towards consumer extends to:
(i) Product:
Quality goods should be produced and supplied. Distribution system should make goods easily
available to avoid artificial scarcities and after sales service should be prompt. Buying capacity and
consumer preferences should be taken into consideration while deciding the manufacturing policies.
The care must be exercised in supplying the goods of quality which has no adverse effect on the
health of consumers.

(ii) Marketing:
To avoid being misled by wrong claims about products through improper advertisements or
otherwise, the consumer should be provided full information about the products including their
adverse effects, risks and care to be taken while using the products.

Consumers all over the world are, by and large, dissatisfied because the performance of
businessman is far from satisfactory. Consumer is not the king in our country but a vehicle used by
businessmen for driving towards the goal of profit maximisation.

As a result of which the concept of ‘consumerism’ has come up to protect the rights of consumers.
Even the government is interfering in a big way to protect the interests of consumers.

4. Government:
A number of legislatives are formed from time to time by the government for proper regulation and
control of business. Businessmen should comply with all legal requirements, execute government
contracts, pay taxes honestly and in time, make services of executives available for government,
suggest measures and send proposals to enact new laws for the business.
A number of taxes are imposed on business for collecting revenue. Businessmen should pay various
taxes in time and help government in collecting funds. They should not resort to tax evasions rather
declare their incomes honestly and correctly.

But series of raids conducted on business houses clearly show that businessmen have failed to
discharge their responsibility towards government.

5. Shareholders:
Shareholders who are the owners of business should be provided with correct information about
company to enable them to give them true and fair position of the company to enable them to decide
about further investments.

Company should provide a fair return on the investment made by shareholders. If shareholders do
not get proper dividend then they will hesitate to invest additional funds in the concern.
Shareholders should be kept fully informed about the working of the company for healthy growth of
the business. The Companies Act 1956 also requires company to give full disclosure in the
published statements.

Company should strengthen the share prices by its growth, innovation and diversification. At the
same time shareholders shall also offer wholehearted support and co-operation to the company to
protect their own interests.

6. Community:
Responsibility of business towards community and society includes spending a part of profits
towards civic and educational facilities. Every industrial undertaking should take steps to dispose of
Industrial wastes in such a way that ecological balance is maintained and environmental pollution is
prevented.

Rehabilitating the population displaced by business units should also De part of responsibly of
business? Business houses should set up units at those places where sufficient space is available for
housing colonies of workers. The promotion of small scale industries will help not only nation but
will also help in building up a better society.

7. Environment:
Business should protect the environment which has acquired great importance all over the world.
Business can discharge the responsibility of protecting environment in following way:

(i) Preservation of Natural Resources:

Scarce natural resources should be used very carefully as these are depleting at a very fast rate. The
alternative sources can also be found out to save natural resources like to save forests alternative to
wood and pulp can be found, the use of coal can be reduced by alternative source of energy.

(ii) Pollution Control:

Appropriate steps should be taken to prevent environmental pollution and to preserve ecological
balance. The industrial waste should be disposed off carefully or if possible can be recycled to
minimise pollution. The toxic wastes, excessive noise, chemical pesticides, automobile exhaust etc.
need to be checked from time to time.

Q3. What are the dilemmas faced y modern business organizational. How these can be
combated by adopting spiritual values?
ANS. Dilemmas in the workplace are quite common, and they’re not always easy to answer. The
concepts are straightforward, but the challenge is in the execution. Even when organizations have
great policies and procedures and follow the laws and regulations, there’s still a high risk of
unethical behaviour.

For example, some employees may not know the resources exist to help in decision-making. They
may not know who to turn to with questions. Any time an organization is not fully supporting
people, they’re increasing the possibility of high risk behaviour.

Why do some organizations stumble when it comes to ethics? The answer is sometimes simple. In
many cases there are mixed messages, such as inconsistent application of policies or a tendency to
overlook borderline or even directly unethical behaviour. This is the “it’s not my job” mentality.

• There’s a wide range of important perspectives. Some people say that it’s simply
embodying their personal values of honesty, integrity, and good quality work. Others say
it’s treating their co-workers and employees in a responsible, caring way. For others, it’s
participating in spiritual study groups or using prayer, meditation, or intuitive guidance at
work. And for some, it’s making their business socially responsible in how it impacts the
environment, serves the community or helps create a better world.

• Some business people are comfortable using the word “spirituality” in the work
environment, as it’s more generic and inclusive than “religion.” Instead of emphasizing
belief as religion does, the word spirituality emphasizes how values are applied and
embodied. Other people aren’t comfortable with the word “spiritual” and prefer to talk
more about values and ethics when describing the same things that others would call
spiritual. But there are some businesspeople who talk about God as their business partner or
their CEO.

• There’s some fear about spiritual beliefs or practices being imposed by employers, but to
date this has been extremely rare. On the other hand, some observers warn about the
potential for superficiality and the distortion of spiritual practices to serve greed.

• Key spiritual values embraced in a business context include integrity, honesty,

accountability, quality, cooperation, service, intuition, trustworthiness, respect, justice, and
service. The Container Store chain nationwide tells workers they are “morally obligated to
help customers solve problems” – they’re not just to sell people products. The CEO of
Vermont Country Store, a popular national catalogue company, honoured--instead of fired--
an employee who told the truth in a widely circulated memo. This greatly increased morale
and built a sense of trust in his company.

Q4. What is ‘Ergonomics’? What ergonomics considerations must be kept in mind while designing
jobs and work schedule?

ANS. Ergonomics (from the Greek word ergon meaning work, and nomoi meaning natural laws), is
the science of refining the design of products to optimize them for human use. Human
characteristics, such as height, weight, and proportions are considered, as well as information about
human hearing, sight, temperature preferences, and so on. Ergonomics is sometimes known
as human factors engineering. Computers and related products, such as computer desks and chairs,
are frequently the focus of ergonomic design. A great number of people use these products for
extended periods of time -- such as the typical work day. If these products are poorly designed or
improperly adjusted for human use, the person using them may suffer unnecessary fatigue, stress,
and even injury.
Ergonomics (or human factors) is the scientific discipline concerned with the understanding of the
interactions among humans and other elements of a system, and the profession that applies
theoretical principles, data and methods to design in order to optimize human well-being and
overall system performance. Within this discipline or profession, physical ergonomics is regarded
as one of the domains of specialization, beside organizational ergonomics and cognitive
ergonomics.
The words system ergonomics implicate that a systematic approach is chosen for the design or
redesign of work situations. Step by step the next items are considered (after:) [2].
Orientation
• What is the starting point? What is the question in headlines? Who will be involved? Who is
the owner? What will be the project structure? Are there limiting conditions?
Analysis
• System analysis: what is the goal of the activities: what must be performed, both in
quantities and in quality?
• Task analysis: which tasks are required to achieve the goals? In this analysis an analysis of
bottlenecks is done as well.
Design
• Determine a program of requirements.
• Task allocation: which tasks can best be allocated to technology (machines, ICT), and which
to humans? Both have different capacities and limitations. Consider alternatives, and choose
the best solution.
• Design of tasks and jobs, including organisational aspects (e.g. level of education, training;
teamwork; work schedules; flexible solutions).
• Testing in a virtual environment using simulations (many kinds possible), mock ups,
models.
• Design of interfaces between humans and technology, and of communication.
• Adaptation of the designs
Two major stages can be distinguished: the global design, followed by the detailed design.
Realisation
• Realisation: building, implementation. If required training of staff.
Evaluation
• Evaluation: how well does the system do what it should? If necessary adaptations are
considered.

Job design aims to specify the contents, methods and relationships of jobs to satisfy the
technological and organisational requirements as well as the personal needs of job holders. It meets
the needs of both employer and employees. Both individual human characteristics as group
characteristics are considered. Jobs need to be complete, in order to meet human’s needs. Key
elements are:
• Autonomy: the worker himself has influence on the way the tasks are performed;
• Feedback: the worker gets information about the individual performance and the system
performance, including aspects like client satisfaction;
• Significance of the task within the extend of the whole company or organisation;
 • Completeness: a position must consist of preparatory tasks, executive functions, and
supportive tasks;
- Variation in competencies and demands. A task can be best defined as a piece of assigned work
expected to be done within a certain time. It is important to strictly and thoroughly identify tasks
that need completion. Motivation describes forces within the individual that account for the level,
direction, and persistence of effort expended at work. The best jobs are those in which individuals
are compelled, excited, and passionate to do their work. Anyway, it is essential to design jobs that
motivate employees. Resource allocation occurs when organizations decide to appropriate or
allocate certain resources to specific jobs, tasks, or dilemmas facing the organization. Jobs need to
be constructed so that efficiency of the worker or department is maximized, while the health, safety
and well-being of staff are secured. Organizations need to use the resources and creativity of their
employees effectively and efficiently. In job design it is necessary to identify and structure jobs in a
way that the company’s resources are being efficiently used. Appropriate resource allocation allows
large organizations to foster and develop innovation in their workforce. Reward systems also play a
role in job design. Reward systems include compensation, bonuses, raises, job security, benefits,
and various other methods of reward for employees. An outline or description of reward packages
needs to be established while constructing jobs.
Five important job elements that motivate workers and stimulate performance are: skill variety, task
identity, task significance, autonomy, and job feedback. Three different psychological states
determine how an employee reacts to job characteristics: experienced meaningfulness, experienced
responsibility for outcomes, and knowledge of the actual results.
How to design jobs?
It starts with questions like:
• What are the task’s aims and objectives?
• How will the objective be achieved?
• Where will the task take place?
• When will the task be performed (continuously, night time, day time)?
• Who will perform the task (skills, training, and competence)?
• Why the task is required – overall context of the activity?
The ideal task design will identify key task requirements and allocate the task roles between man
and technology to optimise strengths and minimise weaknesses. See also the articles on physical
ergonomics and cognitive ergonomics.

Q5. What are the arguments for or against corporate social responsibilities? Bring out the
historical perspective of CSR?
ANS. Corporate social responsibility (CSR) can be defined as the "economic, legal, ethical, and
discretionary expectations that society has of organizations at a given point in time"
The concept of corporate social responsibility means that organizations have moral, ethical, and
philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors
and comply with the law. A traditional view of the corporation suggests that its primary, if not sole,
responsibility is to its owners, or stockholders. However, CSR requires organizations to adopt a
broader view of its responsibilities that includes not only stockholders, but many other
constituencies as well, including employees, suppliers, customers, the local community, local, state,
and federal governments, environmental groups, and other special interest groups. Corporate social
responsibility is related to, but not identical with, business ethics. While CSR encompasses the
economic, legal, ethical, and discretionary responsibilities of organizations, business ethics usually
focuses on the moral judgments and behavior of individuals and groups within organizations. Thus,
the study of business ethics may be regarded as a component of the larger study of corporate social
responsibility.
Some arguments for Corporate Social Responsibility are as follows-

• The rise of the modern corporation created and continues to create many social problems.
Therefore, the corporate world should assume responsibility for addressing these problems.
• In the long run, it is in corporations' best interest to assume social responsibilities. It will
increase the chances that they will have a future and reduce the chances of increased
governmental regulation.
• Large corporations have huge reserves of human and financial capital. They should devote
at least some of their resources to addressing social issues.
Some arguments for Corporate Social Responsibility are as follows-

• Taking on social and moral issues is not economically feasible. Corporations should focus
on earning a profit for their shareholders and leave social issues to others.
• Assuming social responsibilities places those corporations doing so at a competitive
disadvantage relative to those who do not.
• Those who are most capable should address social issues. Those in the corporate world are
not equipped to deal with social problems.
Benefits of corporate social responsibility
CSR and BRANDS
• Brands are basically the identification in which a company's product is identified by the
consumer. The sales and revenue of the company are widely dependent on the brand they
give to their product.
• Here are some CSR traits that positively / negatively affect the brand
• Positive Marketing/ Brand Building - Times of India (kalingatimes.com)
• Brand insurance - NIKE (Corporate Social Responsibility, 2003)
• Crisis management- Pepsi (wikipedia.org)
CSR and Globalization
• As companies expend through globalization, many challenges have waited for them from
Government regulations to the varying standards of what is deemed to be labor exploitation,
these challenges have the potential to cost companies millions of dollars. Some companies
are of the view that these policies are merely a cost hindrance, while other companies use
CSR tactics as a strategy to gain public support for the presence in the global market.
CSR and Human resources
• A CSR program can be an aid to hire and retain staff particularly within the competitive
graduate student market. Potential recruits often inquire about a firm's CSR policy, and
having a comprehensive policy can give an advantage. CSR can also add value in the
perception of a company among its staff, particularly when staff can become involved
through fundraising activities or community volunteering. Also CSR can be driven by
 employees' personal values, in addition to the more obvious economic and governmental
drivers.
CSR and Risk Management
• Managing risk is a central part of many corporate strategies. No matter how hard a company
tried their reputations which took decades to build up can be questioned in a matter of
minutes through incidents such as corruption or environmental accidents. These can also
draw unwanted attention from courts, governments and media. Building and promoting
great CSR policies can sometimes offset the risks.
CSR and Government Policies
• Government politics have tremendously shaped the regulation of businesses in several ways.
• First, government business policies insist that organizations operations shall bring no harm
to society or the environment. Businesses shall be friendly to society and vice versa, to
ensure that businesses follow these policies, the government enacts laws to monitor both the
conduct and operations of a business. In addition, to these laws violators also face
punishment if they are not followed.
The history of CSR dates back many years and in one instance can even be traced back 5000 years
in Ancient Mesopotamia around 1700 BC, King Hammurabi introduced a code in which builders,
innkeepers or farmers were put to death if their negligence caused the deaths of others, or major
inconvenience to local citizens. In Ancient Rome senators grumbled about the failure of businesses
to contribute sufficient taxes to fund their military campaigns, while in 1622 disgruntled
shareholders in the Dutch East India Company started issuing pamphlets complaining about
management secrecy and "self-enrichment". With industrialisation, the impacts of business on
society and the environment assumed an entirely new dimension. The "corporate paternalists" of the
late nineteenth and early twentieth centuries used some of their wealth to support philanthropic
ventures. By the 1920s discussions about the social responsibilities of business had evolved into
what we can recognise as the beginnings of the "modern" CSR movement. "The phrase Corporate
Social Responsibility was coined in 1953 with the publication of Bowen's Social Responsibility of
Businessmen" (Corporate watch report, 2006). The evolution of CSR is as old as trade and business
for any of corporation. Industrialization and impact of businesses on the society led to a complete
new vision. By 80's and 90's CSR was taken into discussion, the first company to implement CSR
was Shell in 1998. (Corporate watch report, 2006) With well informed and educated general people
it has become a threat to the corporate and CSR is the solution to it. In 1990 CSR was standard in
the industry with companies like Price Waterhouse Copper and KPMG. CSR evolved beyond code
of conduct and reporting, eventually it started taking initiative in NGO's, multi stake holder, ethical
trading. The concept of corporate social responsibility (CSR) has a long history associated with how
it impacts on organizations' behaviour. In order to understand CSR's impact on organization
behaviour, therefore, it is necessary to comprehend its progression. Subsequently, the purpose of
this paper is to trace the conceptual evolution of CSR.

Q6. “Ambiguity, concealed a fact, exaggeration and psychological appeal are the certain
methods by which organisations do unethical practices while advertising.” Explain.
ANS.- Ambiguity-
Strategic ambiguity is a tool frequently used in strategy and communication. Strategic ambiguity
reflects the intentional use of ambiguity or vagueness in strategic processes or discourses. Being
unclear or imprecise in concept and communication leading to diversity of interpretation can be
used to minimize uncertainty and achieving goals. For example, in international relations countries
may be ambiguous about the question of Taiwan. In organizational contexts, strategic ambiguity
can be applied to the strategy formation processes, mission statements, organizational change, and
stakeholder relationships.

Vagueness-

We tend to listen to, and take words at face value at a conscious level, but form meaning at an
unconscious level which will be specific just to us – and may change depending on the context (ask
a group of people to picture an elephant and describe their elephant and you find as many different
interpretations of the word ‘elephant’ as there are people in the group).Businesses have been using
non-specific language in advertising for a long time.

Contacting people without consent.

Have you ever thought about buying a list of email addresses so you can bulk up your company’s
subscriber list? You’re not the first one. Many businesses have used this tactic to contact people
who they otherwise wouldn’t have known. Remember our friends at the FTC? They also enforce a
law called the CAN-SPAM act, and under it, you’re legally allowed to email people without their
consent—but for one time only. Even that single contact can start irritating people, making your
uninvited communication do more harm than good for your brand image, so don’t push the limits
here. You’re better off building your contact lists organically.
Concealment of Facts-
This unethical marketing practice is rife in the natural remedies industry, where most manufacturers
deceive potential buyers that their products have no side effects because they are “made from
natural products”. But in reality, most of these products have been found to have side effects,
especially when used over a long period. In fact, there’s no product without side effects—it’s just
that the side effects might be unknown. It’s better to say, “There are no known side effects” than to
say “there are no side effects “.
Emotional exploitation.
One of the most effective ways to advertise a business is to call to people’s emotions. Making them
laugh or evoking a sense of nostalgia helps consumers forge a small bond with your brand.
However, when you intentionally evoke rage or sadness in a tasteless way, you could be seen as
exploiting emotions, rather than sympathizing with them. Rather than a single example here, I’m
going to reference a chain of advertisements that attempted to exploit the 9-11 terrorist attacks as a
way to earn customer sympathy. These ads often seem well-intentioned, showing respect for
surviving family members, firefighters, and New Yorkers, but the fact that these messages are being
used to hock products are what make them offensive and unethical.
Insensitive controversy.
Stirring up a bit of healthy controversy can be an effective way to get more attention; you can stand
out as a thought leader by presenting an unpopular opinion, and cultivate discussion among your
readers. However, when you venture into a world of controversy haphazardly, you’ll probably end
up making more enemies than new fans. Pepsi made this mistake recently when they tried to use an
ad to introduce their product into a Black Lives Matter protest—and while the ad tried to evoke a
positive tone, their intentional attempt to get political backfired in a big way.

Q7. Write short notes on

a) Social Audit
ANS. A social audit is a way of measuring, understanding, reporting and ultimately improving an
organization’s social and ethical performance. A social audit helps to narrow gaps between
vision/goal and reality, between efficiency and effectiveness.
A corporate social audit is an assessment of your company's performance on corporate social
responsibility objectives. It evaluates measurable goals intended to help your business meet the
expectations your stakeholder groups have regarding your social and environmental responsibilities.
Balancing social responsibility with business performance is imperative in the early 21st-century
business arena.
Objectives of Social Audit
Goyder defined the objectives of social audit in clear terms. He classified the objectives into two
broad categories namely,

1. Principal objectives, and

2. Secondary objectives.

Principal Objectives of Social Audit

The principal objectives according to Goyder are as follows.

• The extension, development and improvement of the company’s business and building up of
its financial independence.

• The payment of a fair and regular dividend to the shareholders.

• The payment of fair wages under the best possible conditions to the worker.

• The reduction of prices to the consumers.

Secondary Objectives of Social Audit

• Provision of a bonus to the workers.

• Assist in promoting the amenities of the locality.

• Assist in developing the industry in which the firm is a member.

• Promote education, research and development in the techniques of the industry.

From these objectives, we can infer that social audit is really an extension of the principle of public
disclosure to which corporations are subject

Advantages of social audit

• Trains the community on participatory local planning.

• Encourages local democracy.
• Encourages community participation.
• Benefits disadvantaged groups.
• Promotes collective decision making and sharing responsibilities.
• Develops human resources and social capital
b) ISO 26000
ANS. Business and organizations do not operate in a vacuum. Their relationship to the society and
environment in which they operate is a critical factor in their ability to continue to operate
effectively. It is also increasingly being used as a measure of their overall performance.
ISO 26000 provides guidance on how businesses and organizations can operate in a socially
responsible way. This means acting in an ethical and transparent way that contributes to the health
and welfare of society.
The ISO 26000 standard provides guidance on:
• The seven key underlying principles of social responsibility: accountability, transparency, ethical
behaviour, respect for stakeholder interests, respect for the rule of law, respect for international
norms of behaviour, and respect for human rights
• Recognizing social responsibility and engaging stakeholders
• The seven core subjects and issues pertaining to social responsibility: organizational governance,
human rights, labour practices, the environment, fair operating practices, consumer issues, and
community involvement and development
• Ways to integrate socially responsible behaviour into the organization
In addition to providing definitions and information to help organizations understand and address
social responsibility, the standard emphasizes the importance of results and improvements in
performance on social responsibility.
Who uses ISO 26000?
Organizations in the private, public, and non-profit sectors, whether large or small, and whether
operating in developed or developing countries, use ISO 26000. All of the core subjects are relevant
in some way to every organization.
Since the core subjects comprise a number of issues, organizations will benefit when they identify,
through examination of their own considerations and dialogue with stakeholders, which issues are
most relevant and significant for them to address.
ISO 26000 facts
• Intended as guidance, not for certification
• Presents a comprehensive documentation of social responsibilities including core subjects and
issues related to those subjects
• Published in 2010 by the International Organization for Standardization (ISO), a specialized
international agency for standardization composed of the national standards bodies of more than
160 countries
• Written by a unique multi-sectoral group representing governments; non-governmental
organizations (NGOs); industry; consumer groups; labour; and academic, consulting, and other
organizations around the world
• More than 400 experts and 200 observers from 99 countries and 42 international organizations
contributed to the development effort
• Last reviewed for possible revision in 2014; need for revision will be considered again in three
years.
 CSR 2015
Q1. “Corporate social responsibility is about giving back to society.” In view of the statement,
explain the concept of CSR and current CSR practices of firms in India.

ANS. Concept of CSR

The corporate sector has responsibility towards its own business entity, shareholders as well as
towards society. Thus every corporate unit must have a responsibility for the upliftment of society
which is broadly considered as Corporate Social Responsibility (CSR).

Social responsibility of business indicates norms and obligations of decision making authority to
take appropriate actions which can protect and improve the welfare of society as a whole along with
protecting the interest of business concern.

In present times, the concept is gradually more and more acceptable with changing situations. Thus
social responsibility broadly refers to the obligations and duties of business to the society as a
whole. According to K.K. Andrew, “Social responsibility may be taken to mean intelligent and
objective concern for the welfare of the society.”

Again, the United Nations Industrial Development Organisation (UNIDO) defines Corporate Social
Responsibility (CSR) as “a management concept whereby companies integrate social and
environmental concerns in their business operations and interactions with their stakeholders”.

Thus CSR is a way through which a company usually attains a balance between economic, social
and environmental activities. Thus, spending on CSR by a company is a simple process of giving
back to the society in which it is doing its business activity and making profits for its shareholders
sincerely.

Current CSR practices of firms in India

India is the first country in the world to make corporate social responsibility (CSR) mandatory,
following an amendment to The Company Act, 2013 in April 2014. Businesses can invest their
profits in areas such as education, poverty, gender equality, and hunger.

The amendment notified in the Schedule VII of the Companies Act advocates that those companies
with a net worth of US$73 million (Rs 4.96 billion) or more, or an annual turnover of US$146
million (Rs 9.92 billion) or more, or a net profit of US$732,654 (Rs 50 million) or more during a
financial year, shall earmark 2 percent of average net profits of three years towards CSR. In the
draft Companies Bill, 2009, the CSR clause was voluntary, though it was mandatory for companies
to disclose their CSR spending to shareholders. It is also mandatory that company boards should
have at least one female member.

CSR has been defined under the CSR rules, which includes but is not limited to:

• Projects related to activities specified in the Schedule; or

• Projects related to activities taken by the company board as recommended by the CSR
Committee, provided those activities cover items listed in the Schedule.

Corporate Social Responsibility Examples in India

• Tata Group

The Tata Group conglomerate in India carries out various CSR projects, most of which are
community improvement and poverty alleviation programs. Through self-help groups, it is engaged
in women empowerment activities, income generation, rural community development, and other
social welfare programs. In the field of education, the Tata Group provides scholarships and
endowments for numerous institutions.

The group also engages in healthcare projects such as facilitation of child education, immunization
and creation of awareness of AIDS. Other areas include economic empowerment through
agriculture programs, environment protection, providing sport scholarships, and infrastructure
development such as hospitals, research centers, educational institutions, sports academy, and
cultural centers.

• Ultratech Cement

Ultratech Cement, India’s biggest cement company is involved in social work across 407 villages in
the country aiming to create sustainability and self-reliance. Its CSR activities focus on healthcare
and family welfare programs, education, infrastructure, environment, social welfare, and sustainable
livelihood.

The company has organized medical camps, immunization programs, sanitization programs, school
enrollment, plantation drives, water conservation programs, industrial training, and organic farming
programs.

• Mahindra & Mahindra

Indian automobile manufacturer Mahindra & Mahindra (M&M) established the K. C. Mahindra
Education Trust in 1954, followed by Mahindra Foundation in 1969 with the purpose of promoting
education. The company primarily focuses on education programs to assist economically and
socially disadvantaged communities. CSR programs invest in scholarships and grants, livelihood
training, healthcare for remote areas, water conservation, and disaster relief programs. M&M runs
programs such as Nanhi Kali focusing on girl education, Mahindra Pride Schools for industrial
training, and Lifeline Express for healthcare services in remote areas.

• ITC Group

ITC Group, a conglomerate with business interests across hotels, FMCG, agriculture, IT, and
packaging sectors has been focusing on creating sustainable livelihood and environment protection
programs. The company has been able to generate sustainable livelihood opportunities for six
million people through its CSR activities. Their e-Choupal program, which aims to connect rural
farmers through the internet for procuring agriculture products, covers 40,000 villages and over four
million farmers. Its social and farm forestry program assists farmers in converting wasteland to
pulpwood plantations. Social empowerment programs through micro-enterprises or loans have
created sustainable livelihoods for over 40,000 rural women.

CSR Trends in India

FY 2015-16 witnessed a 28 percent growth in CSR spending in comparison to the previous year.
Listed companies in India spent US$1.23 billion (Rs 83.45 billion) in various programs ranging
from educational programs, skill development, social welfare, healthcare, and environment
conservation. The Prime Minister’s Relief Fund saw an increase of 418 percent to US$103 million
(Rs 7.01 billion) in comparison to US$24.5 million (Rs 1.68 billion) in 2014-15.

The education sector received the maximum funding of US$300 million (Rs 20.42 billion) followed
by healthcare at US$240.88 million (Rs 16.38 billion), while programs such as child mortality,
maternal health, gender equality, and social projects saw negligible spend. In terms of absolute
spending, Reliance Industries spent the most followed by the government-owned National Thermal
Power Corporation (NTPC) and Oil & Natural Gas (ONGC). Projects implemented through
foundations have gone up from 99 in FY15 to 153 in FY16 with an increasing number of companies
setting up their own foundations rather than working with existing non-profits to have more control
over their CSR spending. 2017 CSR spends are predicted to further rise with corporates aligning
their initiatives with government programs such as Swachh Bharat (Clean India) and Digital India
to foster inclusive growth.

Q2. Write short notes on

(a) Ethics in marketing

ANS. Most ethics discussions revolve around moral values of good and bad, right and wrong,
which can vary significantly depending on your spiritual, religious, and cultural backgrounds. To
reconcile these variations and find a definition of ethics which is most compatible with varying
morals, we’ll look at a perspective called utilitarian ethics.

Utilitarianism defines ethical practices as: “Those practices that result in the greatest good and/or
the greatest happiness for all.”

Thus, in marketing, our goal is to market in ways which create the greatest good, the greatest
happiness for all.

Ethics in Marketing

When we use our utilitarian definition of ethics, clear, concise definition, applying ethics in
marketing becomes straightforward.

First and foremost, does our product or service result in greater harm than good? If so, then we will
have an awfully hard time marketing it using ethical practices because its very existence is harmful.
In a situation where our product or service is inherently harmful, we should probably find work
elsewhere. This is something I struggled with for years when I was working in the student loan
industry. Ultimately, my solution was to try to get people to do everything possible not to use our
product, but then offer them the product as a last resort and educate them on the consequences of it.
In the end, however, I ended up leaving the field to work somewhere else.
Second, many marketing practices have little to no ethical impact. For example, much ado was
made of the fact that a notable social media influencer didn’t write all of their own social media
posts. Other social media practitioners decried that as inauthentic. Is the use of a ghostwriter
ethical? If the posts were helpful, if the posts provided value, then the practice was ethical in the
sense that it was doing the maximum good possible, even if the influencer wasn’t writing a single
one. All that was required was that the authors of his posts were creating the maximum amount of
good, as much or more than the influencer. If the influencer could only afford to write 2 posts a day
that benefitted his audience, but his ghostwriter could write 10 of the same quality, then by
definition he brought 5x more good to the world.

Third, some marketing practices are clearly unethical. For example, if we lie about what our product
does and the consumer ends up finding out the reality after purchase, we’re creating unhappiness.
We’re doing harm. If we tell the truth about our product or service and set realistic expectations, our
customers will be happier because we meet their expectations. Behaving in an ethical manner is the
cornerstone of long-term profitability! Create more happiness rather than less, do more good rather
than less, and it’s inevitable that people will want our product in their lives more.

Finally, remember that the definition and ideal to strive for is to do the greatest good possible,
which means minimizing or eliminating harm when and where possible. What if we’re confronted
with a situation where a small amount of harm is generated, or significant harm to a tiny number of
people, and a large amount of good results? Our goal is to explore ways to remove that harm, and to
find a better way to achieve the same result with less harm done.

If we set our goals to require that we create the maximum amount of good possible, there’s a strong
chance that we’ll create innovative new ways of doing the same old things. That eventually leads to
transformation of our products, services, practices, and company, one that we can be proud to work
at and proud to market as loudly as possible to the world. Do enough good, create enough
happiness, and the world will want us to win.

(b) Triple bottom line

ANS. Triple bottom line (TBL) is a concept which seeks to broaden the focus on the financial
bottom line by businesses to include social and environmental responsibilities. A triple bottom line
measures a company's degree of social responsibility, its economic value, and its environmental
impact.

The phrase was introduced in 1994 by John Elkington and later used in his 1997 book "Cannibals
with Forks: The Triple Bottom Line of 21st Century Business." A key challenge with the triple
bottom line, according to Elkington, is the difficulty of measuring the social and environmental
bottom lines, which necessitates the three separate accounts being evaluated on their own merits.

Normally, a company's bottom line on its income statement is its net income, i.e. its profits.
Elkington's triple bottom line (TBL) is intended to advance the goal of sustainability in business
practices, in which the focus of companies is extended beyond profits to include social and
environmental issues to measure the total cost of doing business. An investment manager,
individual investor, or CEO that wants to pursue the triple bottom line (TBL) must consciously
consider, in addition to the economic bottom line, the social and environmental areas in making
investing and business decisions. Deploying money and other resources, such as human labor, to a
project or an investment can either contribute to these three goals or focus on profit at the expense
of one or both of the other two. Some of the repercussions that have come about from ignoring the
TBL in the name of profits include destruction of the rainforest, exploitation of labor, and damage
to the ozone layer.

In effect, TBL is the idea that it is possible to run an organization in a way that not only earns
financial profits but also betters people’s lives and helps the planet.The elements of the triple
bottom line are referred to as "people, profits and planet."

People + Planet = Social + Environmental Responsibility

It can be challenging to maximize financial returns while also doing the greatest good for the people
and the environment. Consider a clothing manufacturer whose best way to maximize profits might
be to hire the least expensive labor possible and to dispose of manufacturing waste in the cheapest
way possible. The result might be the highest possible profits for the company but miserable
working and living conditions for laborers, and damage to the natural environment and the people
who live in that environment. In the past, such practices were more socially acceptable, but today,
many consumers are willing to pay more for clothing and other products if it means that workers are
paid a living wage and the environment is being respected in the production process. Many
consumers want companies to be transparent about their practices and to be considerate of all their
stakeholders, hence the popularity of the TBL concept that accounts for the full cost of doing
business.

Adding the "people" element of social responsibility to corporate bottom lines shifts the focus to the
fair treatment of employees and off-site labor, as well as enacting favorable practices in the
communities where companies conduct business. For example, Mars' Sustainable Cocoa Initiative
requires its cocoa farmers to be certified by fair trade organizations to ensure they follow a code of
conduct that includes fair treatment to those providing labor. In exchange for certification, Mars
provides productivity technology and buys cocoa at premium prices.

The bottom line referred to as the "planet" represents the implementation of sustainable practices
and the reduction of environmental impact. These measures range in scope from green initiatives
such as recycling programs within corporations to companies dedicated to manufacturing products
using only sustainable materials. For example, Axion Structural Innovations builds railroad ties and
pilings using recycled plastic bottles and industrial waste instead of using standard materials such as
wood, steel and cement.

Measuring the TBL

The triple bottom line can be difficult to measure because while the issue of profitability is black
and white, what constitutes social and environmental responsibility is somewhat subjective. How do
you put a dollar value on an oil spill — or on the prevention of one? Is it good enough to pay
workers in Bangladesh three times the average local wage if that wage still sounds horrifyingly low
to consumers in the United States? How do you measure the cost of child labor? Does it benefit
children and their families by allowing them to rise out of poverty, or does it perpetuate poverty by
denying children sufficient time to get educated and deprive them of a carefree childhood?

Q3. What are ethical dilemmas in modern business scenario? How ethical decision making
process can help to reduce dilemmas?

ANS. From factory working conditions at the turn of the 20th century, to today’s emphasis on
diversity training, the history of workplace ethics is the ongoing story of the relationship between
employees and employers. According to the National Business Ethics Survey of 2013, managers are
to blame for workplace misconduct the majority (60%) of the time, and senior managers are more
likely than those on a lower level to break the rules.

Here are some of the ethical issues that businesses face and real-world cases of how these ethical
issues have affected companies.

• Accounting
“Cooking the books” and otherwise conducting unethical accounting practices is a serious problem,
especially in publicly traded companies. One of the most infamous examples is the 2001 scandal
that enveloped American energy company Enron, which for years inaccurately reported its financial
statements and its auditor, accounting firm Arthur Andersen, signed off on the statements despite
them being incorrect. When the truth emerged, both companies went out of business, Enron’s
shareholders lost $25 billion, and although the former “Big Five” accounting firm had a small
portion of its employees working with Enron, the firm’s closure resulted in 85,000 jobs lost.

Although the Federal Government responded to the Enron case and other corporate scandals by
creating the Sarbanes-Oxley Act in 2002, which mandates new financial reporting requirements
meant to protect consumers, the “Occupy Wall Street” movement of 2011 and other issues indicate
that the public still distrusts corporate financial accountability.

• Social Media
The widespread nature of social media has made it a factor in employee conduct online and after
hours. Is it ethical for companies to fire or otherwise punish employees for what they post about?
Are social media posts counted as “free speech”? The line is complicated, but it is drawn when an
employee’s online activities are considered disloyal to the employer, meaning that a Facebook post
would go beyond complaining about work and instead do something to reduce business.

For example, a Yelp employee wrote an article on Medium, a popular blogging website, about what
she perceived as awful working conditions at the influential online review company. Yelp fired her,
and the author said she was let go because her post violated Yelp’s terms of conduct. Yelp’s CEO
denied her claim. Was her blog post libelous, or disloyal conduct, and therefore a legitimate cause
for termination? In order to avoid ambiguity, companies should create social media policies to
elucidate what constitutes an infringement, especially as more states are passing off-duty conduct
laws that prohibit an employer’s ability to punish an employee for online activities.

• Harassment and Discrimination

Racial discrimination, sexual harassment, wage inequality – these are all costly ethical issues that
employers and employees encounter on a daily basis across the country. According to a report from
the Equal Employment Opportunity Commission (EEOC), harassment and discrimination cost U.S.
companies $372.1 million in 2013. The EEOC states that there are several types of discrimination,
including age, disability, equal pay, genetic information, harassment, national origin, race, religion,
retaliation, pregnancy, sex and sexual harassment.

One type of discrimination, families responsibilities discrimination (FRD), has had an increase in
cases of 269% over the last decade, even as other forms of employee discrimination cases have
decreased. FRD is found in every industry and at every level within the company, according to a
2016 report by the Center for WorkLife Law at the UC Hastings College of Law. The report defines
FRD as “when an employee suffers an adverse employment action based on unexamined biases
about how workers with caregiving responsibilities will or should act, without regard to the
workers’ actual performance or preferences.” FRD includes many types of family responsibilities
and caregiving, including pregnancy and eldercare. For example, a father being fired for wanting to
stay home to care for his sick child, or a pregnant employee not being allowed to take a break even
though it was her doctor’s orders.

These cases are expected to continue to rise due to the growing number of family members who
have disabilities, the increase in people 65 and older who need care, the increase of men who are
becoming caregivers, and growing expectation for employees that they can work and provide family
care. Employers will need to adjust to these employee perspectives and restructure how work can be
accomplished to reduce FRD.

• Health and Safety

The International Labour Organization (ILO) states that 6,300 people die every day from
occupational accidents or work-related diseases. This results in more than 2.3 million deaths per
year. According to the Occupational Safety & Health Administration, the top 10 most frequently
cited violations of 2015 were:

- Fall Protection, e.g. unprotected sides and edges and leading edges
- Hazard Communication, e.g. classifying harmful chemicals
- Scaffolding, e.g. required resistance and maximum weight numbers
- Respiratory Protection, e.g. emergency procedures and respiratory/filter equipment standards
- Lockout/Tagout, e.g. controlling hazardous energy such as oil and gas
- Powered Industrial Trucks, e.g. safety requirements for fire trucks
- Ladders, e.g. standards for how much weight a ladder can sustain
- Electrical, Wiring Methods, i.e. procedures for how to circuit to reduce electromagnetic
interference
- Machine Guarding, e.g. clarifying that guillotine cutters, shears, power presses and other
machines require point of operation guarding
- Electrical, General Requirements; i.e. not placing conductors or equipment in damp or wet
locations
- Physical harm isn’t the only safety issue to be aware of, though. In 2016, an ILO report focused
on the impact of “psychosocial hazards” on workers’ health. These risks, which include factors
like job insecurity, high demands, effort-reward imbalance, and low autonomy, have been
associated with health-related behavioral risks, including a sedentary lifestyle, heavy alcohol
consumption, increased cigarette smoking, and eating disorders.

• Technology/Privacy
With developments in technological security capability, employers can now monitor their
employees’ activity on their computers and other company-provided electronic devices. Electronic
surveillance is supposed to ensure efficiency and productivity, but when does it cross the line and
become spying? Companies can legally monitor your company email and internet browser history;
in fact, 66% of companies monitor internet connections, according to 2014 data from the American
Management Association. 45% of employers track content, keystrokes and time spent on the
keyboard, and 43% store and review computer files as well as monitor email. Overall, companies
aren’t keeping this a secret: 84% told employees that they are reviewing computer activity.
Employees should review the privacy policy to see how they are being monitored and consider if it
can indicate a record of their job performance.

Companies also monitor employees through video cameras, which allows them to observe visually
and record employee behavior and keep their work environment safe. According to a 2015 data Pew
Research study, the majority of respondents (54%) found installing surveillance cameras that have
facial recognition technology acceptable, with one participant stating, “It would keep the workplace
safe and may also get the employees to perform their best.” Some employees were unsure and said
it depended on how the footage is used while others completely disagreed: “Monitoring work by
camera is insane,” and thought it would hinder rather than help work performance.

Many people are used to reading or hearing of the moral benefits of attention to business ethics.
However, there are other types of benefits, as well.

The following list describes various types of benefits from managing ethics in the workplace.

1. Attention to business ethics has substantially improved society.

A matter of decades ago, children in our country worked 16-hour days. Workers’ limbs were torn
off and disabled workers were condemned to poverty and often to starvation. Trusts controlled
some markets to the extent that prices were fixed and small businesses choked out. Price fixing
crippled normal market forces. Employees were terminated based on personalities. Influence was
applied through intimidation and harassment. Then society reacted and demanded that businesses
place high value on fairness and equal rights. Anti-trust laws were instituted. Government agencies
were established. Unions were organized. Laws and regulations were established.

2. Ethics programs help maintain a moral course in turbulent times.

Attention to business ethics is critical during times of fundamental change — times much like those
faced now by businesses, both nonprofit or for-profit. During times of change, there is often no
clear moral compass to guide leaders through complex conflicts about what is right or wrong.
Continuing attention to ethics in the workplace sensitizes leaders and staff to how they want to act
— consistently.

3. Ethics programs cultivate strong teamwork and productivity.

Ethics programs align employee behaviors with those top priority ethical values preferred by
leaders of the organization. Usually, an organization finds surprising disparity between its preferred
values and the values actually reflected by behaviors in the workplace. Ongoing attention and
dialogue regarding values in the workplace builds openness, integrity and community — critical
ingredients of strong teams in the workplace. Employees feel strong alignment between their values
and those of the organization. They react with strong motivation and performance.

4. Ethics programs support employee growth and meaning.

Attention to ethics in the workplace helps employees face reality, both good and bad — in the
organization and themselves. Employees feel full confidence they can admit and deal with whatever
comes their way. Bennett, in his article “Unethical Behavior, Stress Appear Linked”, explained that
a consulting company tested a range of executives and managers. Their most striking finding: the
more emotionally healthy executives, as measured on a battery of tests, the more likely they were to
score high on ethics tests.

5. Ethics programs are an insurance policy — they help ensure that policies are legal.

There is an increasing number of lawsuits in regard to personnel matters and to effects of an

organization’s services or products on stakeholders. As mentioned earlier in this document, ethical
principles are often state-of-the-art legal matters. These principles are often applied to current,
major ethical issues to become legislation. Attention to ethics ensures highly ethical policies and
procedures in the workplace. It’s far better to incur the cost of mechanisms to ensure ethical
practices now than to incur costs of litigation later. A major intent of well-designed personnel
policies is to ensure ethical treatment of employees, e.g., in matters of hiring, evaluating,
disciplining, firing, etc. Drake and Drake note that “an employer can be subject to suit for breach of
contract for failure to comply with any promise it made, so the gap between stated corporate culture
and actual practice has significant legal, as well as ethical implications.”

6. Ethics programs help avoid criminal acts “of omission” and can lower fines.

Ethics programs tend to detect ethical issues and violations early on so they can be reported or
addressed. In some cases, when an organization is aware of an actual or potential violation and does
not report it to the appropriate authorities, this can be considered a criminal act, e.g., in business
dealings with certain government agencies, such as the Defense Department. The recent Federal
Sentencing Guidelines specify major penalties for various types of major ethics violations.
However, the guidelines potentially lowers fines if an organization has clearly made an effort to
operate ethically.

7. Ethics programs help manage values associated with quality management, strategic planning and
diversity management — this benefit needs far more attention.

Ethics programs identify preferred values and ensuring organizational behaviors are aligned with
those values. This effort includes recording the values, developing policies and procedures to align
behaviors with preferred values, and then training all personnel about the policies and procedures.
This overall effort is very useful for several other programs in the workplace that require behaviors
to be aligned with values, including quality management, strategic planning and diversity
management. Total Quality Management includes high priority on certain operating values, e.g.,
trust among stakeholders, performance, reliability, measurement, and feedback. Eastman and
Polaroid use ethics tools in their quality programs to ensure integrity in their relationships with
stakeholders. Ethics management techniques are highly useful for managing strategic values, e.g.,
expand marketshare, reduce costs, etc. McDonnell Douglas integrates their ethics programs into
their strategic planning process. Ethics management programs are also useful in managing diversity.
Diversity is much more than the color of people’s skin — it’s acknowledging different values and
perspectives. Diversity programs require recognizing and applying diverse values and perspectives
— these activities are the basis of a sound ethics management program.

8. Ethics programs promote a strong public image.

Attention to ethics is also strong public relations — admittedly, managing ethics should not be done
primarily for reasons of public relations. But, frankly, the fact that an organization regularly gives
attention to its ethics can portray a strong positive to the public. People see those organizations as
valuing people more than profit, as striving to operate with the utmost of integrity and honor.
Aligning behavior with values is critical to effective marketing and public relations programs.
Consider how Johnson and Johnson handled the Tylenol crisis versus how Exxon handled the oil
spill in Alaska. Bob Dunn, President and CEO of San Francisco-based Business for Social
Responsibility, puts it best: “Ethical values, consistently applied, are the cornerstones in building a
commercially successful and socially responsible business.”

9. Overall benefits of ethics programs:

Donaldson and Davis, explain that managing ethical values in the workplace legitimizes managerial
actions, strengthens the coherence and balance of the organization’s culture, improves trust in
relationships between individuals and groups, supports greater consistency in standards and
qualities of products, and cultivates greater sensitivity to the impact of the enterprise’s values and
messages.

10. Last – and most — formal attention to ethics in the workplace is the right thing to do.

Q4. “It is not leadership but spiritual leadership which helps in complete business
transformation.” Comment on this statement with relevant example.

ANS. Spiritual leadership involves intrinsically motivating and inspiring workers through
hope/faith in a vision of service to key stakeholders and a corporate culture based on the values of
altruistic love to produce a highly motivated, committed and productive workforce. The purpose of
spiritual leadership is to tap into the fundamental needs of both leaders and followers for spiritual
well-being through calling (life has meaning and makes a difference) and membership (belonging);
to create vision and value congruence across the individual, empowered team, and organization
levels; and, ultimately, to foster higher levels of employee well-being, organizational commitment,
financial performance, and social responsibility – the Triple Bottom Line.

A person’s spirit is the vital principle or animating force traditionally believed to be the intangible,
life-affirming force within all human beings. It is a state of intimate relationship with the inner self
of higher values and morality as well as recognition of the truth of the inner nature of others. Today
many individuals are struggling with what their spirituality means for their work since this is where
they spend vast majority of their waking hours. The office is now where more and more people eat,
exercise, date, drop their kids, and even nap. Many naturally look to their organizations as a
communal center because they lack the continuity and connection found in other settings.
Moreover, recent polls have found that American managers and leaders want a deeper sense of
meaning and fulfillment on the job – even more than they want money and time off.

Spiritual leadership is an emerging paradigm within the broader context of workplace spirituality
designed to create an intrinsically motivated, learning organization. Spiritual leadership comprises
the values, attitudes, and behaviors necessary to intrinsically motivate one’s self and satisfy
fundamental needs for spiritual well-being through calling and membership, which positively
influences employee well-being, sustainability and corporate social responsibility, and financial
performance – the Triple Bottom Line.

Essential to spiritual leadership is:

Creating a vision wherein leaders and followers experience a sense of calling so that their lives have
purpose, meaning and makes a difference, and
Establishing a organizational culture based on the values of altruistic love whereby leaders and
followers have a sense of membership, feel understood and appreciated, and have genuine care,
concern, and appreciation for BOTH self and others.
As shown in the figure below, the source of spiritual leadership is an inner life or spiritual practice,
such as spending time in nature, prayer, religious practice, meditation, reading, yoga, or writing in a
journal. An inner life practice positively influences spiritual leadership through the development of
hope and faith in a transcendent vision of service to key stakeholders that keeps followers looking
forward to the future. Hope/faith in a clear, compelling vision produces a sense of calling – that part
of spiritual well-being that gives one a sense of making a difference and, therefore, that one’s life
has meaning. Spiritual leadership also requires that the organization’s culture be based on the values
of altruistic love. Leaders must model these values through their attitudes and behavior, which
creates a sense of membership – that part of spiritual well-being that gives one a sense of being
understood and appreciated. The dimensions of spiritual leadership and the process of satisfying
spiritual needs then positively influence the key individual and organizational outcomes that
comprise the Triple Bottom Line.

Q5. Explain the concept of social audit? Why social audit is important in present scenario
especially for government organisation?

ANS. What are social audits?

Social audits refer to a legally mandated process where potential and existing beneficiaries evaluate
the implementation of a programme by comparing official records with ground realities. The public
hearings that social audits conclude with remain its soul. The proceedings cannot be scripted, and
the entire social audit is often a dramatic process of redistribution of power based on evidence and
fact. These audits were first made statutory in a 2005 Rural Employment Act.

Objectives of Social Audit

- Accurate identification of requirements.

- Prioritization of developmental activities as per requirements.
- Proper utilization of funds.
- Conformity of the developmental activity with the stated goals.
- Quality of service.

Benefits of Social Audit

- Involvement of people in developmental activities ensures that money is spent where is it

actually needed.
- Reduction of wastages.
- Reduction in corruption.
- Awareness among people.
- Promotes integrity and a sense of community among people.
- Improves the standard of governance.

Relevance of Social Audit

- At its simplest, Accountability refers to a process by which individuals or organisations are

answerable for their actions and consequences that follow from them. What remains unclear,
however, is the issue of who is entitled to hold these individuals or organisations to account and
mechanism that should be used in order to do so.
- The Traditional approach to Accountability refers to the conventional method of formal
authority over individual/organisation and right to hold them to account. But this approach to
accountability often fails to empower those who are most affected by an organisation’s
decisions. Meanwhile, the Stakeholder Approach to Accountability goes beyond the traditional
approach and domain of formal authority.
- This approach is more participative in nature and democratic in sprit.

Social auditing, which covers

(a) Verification of the information, and certification as to the correctness of the information; and

(b) Reporting the information to all the stakeholders and the public.
The scope of a social audit is not restricted to corporate decisions and actions that have a specific
‘social’ focus. Social audit is concerned with any action or decision initiated by the organisation
that has social consequences.
Social audit extends beyond the usual myopic preoccupation with corporate interests to the more
socially “responsible concerns, including the broader impact of corporate decisions and actions to
people and communities.
Of course, this is not for philanthropy, entirely; because any organisation will benefit from taking
into account the expectations of individuals, groups and other organisations that affect the success
of its operation.

Importance of Audit in Public Sector Organizations

Audit is an instrument, a tool of financial control, which is employed by the public or private sector
or an individual to safeguard itself against fraud, extravagance and more importantly to bring
credibility to the audited. According to International Organization of Supreme Audit Institutions
audit is defined as “Evaluation or examination of systems, operations and activities of a specific
entity, to ascertain they are executed or they function within the framework of certain budget,
objectives, rules and requirements.” This is a modern definition of audit in Public sector and does
not constrict itself with only cash audit, which was the case originally.

For sound and effective functioning of government and to ascertain that the benefit of public funds
being used, reach the lowest strata of society and to every individual, audit is an indispensable tool.
It helps secure accountability of the executive to the Parliament and towards the public in general.
The legislature can exercise control over the executives and verify that the public resources have
been utilized responsibly, for the purpose intended and funds raised through various sources like
taxes reach government fully.

There are a few International bodies which recommends agreed upon auditing practices, reports and
requirements. They are:

INTOSAI: International Organization of Supreme Audit Institutions

IFAC: International Federation of Accountants
IGAE: Intervencion General de la Administracion del Estado

In accordance with the target objective several kinds of audit can be defined in Public Sector.

Financial Audit: Intended to verify financial statements, accounts and balances as per generally
accepted accounting principles. Also, to verify money expended has been applied to the same
purpose and premise for which it was obtained and within the boundaries of acceptable vagaries.
Audit of Legality Concordance: Intended to verify all transactions, processes are in full accordance
with the law of the land and do not in any case harm or influence an organization or an individual
for its own means.
Audit of efficacy or of programs: Intends to verify the result obtained from a plan for which money
was employed is in conformance with the objective for which program was made.
Audit of Economy and efficiency: Intends to verify the way resources have been managed. Whether
resources have been acquired at minimum cost and employed for maximum benefit.
Audit of Systems and Procedures: It is important for every organization which follows rules and
laid down principles to verify its system and processes for improvement and quality conformance.
Financial and Audit of Legality concordance were originally grouped together to form Audit of
Regularity and rest other audits were termed as Operational Audit.
After audit is complete it is necessary to file a report which has adequate representation of facts and
figures, adequate content, adequate preparation, adequate opinion for the target audience to
understand it better and enough publicity for the report.

Audit must be treated as an instrument for exercising control over processes, systems, finances and
individuals to make governments and governing bodies more responsible towards the public and its
resources, but it cannot be considered as an end unto itself.

Q6. Briefly explain principles of environmental ethics.

ANS. The three classic ethical principles of justice, sufficiency and solidarity can be traced back to
many different sources: Greek philosophy, religious teachings, and reflection on human experience.
In the face of any decision involving environmental ethics, we should ask how each of these ethical
principles - also known as ethical norms - can be applied to the situation at hand. Ethical principles
are standards or benchmarks against which we can evaluate our actions. They are also signposts to
orient us toward the difference between right and wrong, especially in conditions where there are
multiple problems, and the interests of more than one party. Ethical principles are different from
scientific principles in that they are generally not as hard and fast. They are less likely to give us
one correct answer, but can be used to evaluate conflicting claims, a decision making process, or the
outcome of a decision.

• Justice and Sustainability

The classic formal principle of justice is that equals should be treated equally unless there is a
sufficient reason to treat anyone (or anything) unequally. It is clearly relevant in the field of ethics
called environmental justice, but this principle cuts across many issues. Environmental justice is
concerned with the inequitable access to environmental resources (clean food, air and water) and
the injustice of greater pollution that often characterize lower-income communities - not wealthy
suburbs. The notion of justice underlies concern about animal welfare. On the basis of what values
are other animals considered different from the human animal, and thus subject to consumption by
humans? Recent advances in biology have shown that the differences between humans and other
animals are much less than many of us might think. Does the equality of humans and animals as
living creatures require far more humane treatment of animals? Or even the total non-use of
animals? To apply justice to an environmental decision, we should ask:

Are all human beings involved in this situation being treated equally and, if not, why not?
Are all living creatures involved in this situation being treated equally and, if not, why not?
Sustainability extends justice into the future. Sustainability can be defined as meeting the needs of
the present generation without compromising the ability of future generation to meet their own
needs. We are consuming or degrading many resources (such as fossil fuel energy, topsoil and
water) today faster than they can be naturally replenished, which means they will not be available to
people in the future. The ethical principle of justice is at play because it underpins the need to
equitably balance the needs of those alive today (the rich and poor) with future generations. Thus,
environmental ethics takes the notion of fundamental fairness and stretches it to include those yet to
be born. To apply the principle of sustainability to an environmental decision, we should ask:

a. What are the immediate and long-term effects of the problem before us?
b. Who - humans and otherwise - is affected today by the problem before us and who will likely be
affected by this problem in the future?

• Sufficiency and Compassion

The principle of sufficiency mandates that all forms of life are entitled to enough goods to live on
and flourish. The principle also means no one should waste or hoard resources intended for the
sufficiency of all. Upholding the norm of sufficiency makes demands upon individuals - to share, to
live more simply, to think creatively - and on human communities: to ensure that everyone has
access to the goods that they need to live a life of dignity. The ethical norm of sufficiency is closely
tied to the notion of moral significance, which means that something is worthy of our ethical
concern. This means that we include the needs of others in our consideration of what is important,
or worthy of our concern. When we consider the needs of others, such as poor individuals in our
society or poor countries in the world, we are asserting the moral principle of sufficiency. This
principle helps us think about whom else we need to consider, to whom we have moral duties. It
underlies the practice of empathy. This principle can conflict, at least in some people's minds, with
the notion that the Earth does not have sufficient goods to meet everyone's needs. To apply the
principle of sufficiency to an environmental decision, we should ask:

a. Will the decision permit all those involved, especially the poor, to have enough resources on
which to live and flourish?
c. Is there any aspect of the decision that indicates the presence of waste or excess? Or a failure to
be creative?

Compassion extends the notion of sufficiency to the Earth. Environmental ethics asserts that other
animals, plants, and the elements (such as water, soil or air) are morally significant, and that
humans have responsibilities to act so that their needs are met too. Some environmental ethicists,
such as Deep Ecologists, assert that non-human forms of life have moral significance equivalent to
humans. Most people, however, believe that other forms of life have some moral worth, but that
humans are of greater moral significance. Even if you think animals are far more worthy of your
concern than plants or elements, recognize that all animals depend, either directly or indirectly on
plants for food, and that no creatures can live without sufficient clean water. To assert that any wild
animal is worthy of our moral concern begins the process of learning about the interdependence of
all creatures on the habitat and food resources provided by other creatures in an ecosystem. It is
simply impossible to consider the well-being of one other creature in isolation from their
environment. Ultimately, the future of humans is tied to the well-being of all other creatures. To
apply the principle of compassion to an environmental decision, we should ask:

a. What duties do we have to the other creatures likely to be affected by our actions?
d. What does sufficiency mean for other creatures, especially those threatened with extinction?
e. What would it mean to extend the principle of compassion to non-human creatures?

• Solidarity and Participation

The principle of solidarity invites us to consider how we relate to each other in community. It
assumes that we recognize that we are a part of at least one family - our biological family, our local
community, or our national community - but then challenges us to consider the full range of
relationships with others. In a globalizing economy, we participate in a vast, international economic
community, one in which goods and services are provided for us by those on the other side of the
world. Solidarity requires us to consider this kind of extended community, and to act in such a way
that reflects concern for the well-being of others. To apply the principle of solidarity to an
environmental decision, we should ask:

a. Who are all the human stakeholders involved in this situation?

f. Who are all the natural stakeholders?
g. Is there a community of life (ecosystem) involved?
h. Are there any stakeholders - human and non-human - who are especially vulnerable?
Participation extends the idea of solidarity to make it practical. The demands of solidarity point us
to the principle of participation, so that those affected by an environmental decision can shape how
it is made. Many, many environmental problems stem from decisions being made by private
individuals or companies that have wide-ranging implications. In some cases, in this country and
others, governments make environmental decisions without fully securing the consent of the public.
Often, those most affected are unaware of the decisions or the long-term effects on their health and
the well-being of their environment. The ethical principle of participation requires us to recognize
all of the parties - human and non-human - likely to be affected by a decision, and to recognize that
all parties should have a say in how the decision is made. Genuine participation requires
transparency, meaning that each individual has access to the same information that everyone else
has. To apply the principle of participation to an environmental decision, we should ask:

a. Do all stakeholders in this decision actually have a say in how the decision is going to be made?
i. Are there any stakeholders who cannot represent themselves? Or who have little power? How
will their interests be represented in the decision-making process?

Q7. Mr. Vir Sinha, M.D. Natural Beverages Ltd., was looking at the “AD Punchline” created
by his product manager Jatin Shah. He was taken aback by the claim that their new product
“NATU-RAS” energy drink is “The best fitness plan for your health real fruit and no sugar”.
Jatin Shah, the product manager , was little uneasy when asked by his M.D: as to how we can
claim “Best health plan drink” when they know that they are preservatives and permissive
food colour. Jatin defended by syaing that all shampoo hair oil advertisements also make
similar hyper claims as a mode of communicating superiority of their respective brands.

(a) Discuss, how in the case the question of ethics in advertising has been linked to persuasive
product communication for “NATU-RAS”.

ANS. In the case the name of the product “NATU-RAS" indicated that it is a natural health
drink. Audience of the advertisement would definitely assume the drink as a natural one, since
it is a fruit drink that is why there should not be any preservative or flavours in it. But in the
case- the beverage contains preservatives and permissive food colours, that’s why the drink
could not be sold as a natural health plan drink or named as NATU-RAS, it would not be
considered as ethical advertising.

(b) What ethical advice you will give to Mr. Vir Sinha to develop a persuasive advertisement,
without compromise on the ethical aspects of advertising.

ANS. Mr. Vir Sinha should use a different product name or tag line, which is persuasive for the ad
but should not deceive the audience about the product’s ingredients. He can also provide a nutrition
information chart on the product so that people can be aware of the contents of the drink and they
can consume according to health issues. He can reduce preservatives’ amount to reduce the
harmless and to increase the benefits of natural ingredients of the product. Then the tagline would
be ethically suitable for the product.