An Assignment

On
Business Ethics and CSR
Course Title: Business Ethics
Course code: BUS 332
Submitted BY
Md. Yasin Arafat
Id. 17100056
Submitted To:
Mohit Prodhan
Course Teacher & Assistant Professor
Department of Business Administration

Ranada Prasad Shaha University (RPSU)

Date of Submission: 20/05/2020
Introduction Of Business Ethics:
Business ethics, also called corporate ethics, is a form of applied ethics or
professional ethics that examines the ethical and moral principles
and problems that arise in a business environment.
Business ethics is the study of appropriate business policies and
practices regarding potentially controversial subjects including
corporate governance, insider trading, bribery, discrimination,
corporate social responsibility, and fiduciary responsibilities. The
law often guides business ethic, but at other times business ethics
provide a basic guideline that businesses can choose to follow to
gain public approval.Business ethics ensure that a certain basic
level of trust exists between consumers and various forms of
market participants with businesses. For example, a portfolio
manager must give the same consideration to the portfolios of
family members and small individual investors. These kinds of
practices ensure the public receives fair treatment.
The concept of business ethics began in the 1960s as
corporations became more aware of a rising consumer-based
society that showed concerns regarding the environment, social
causes, and corporate responsibility. The increased focus on so-
called social issues was a hallmark of the decade.

Since that time period, the concept of business ethics has

evolved. Business ethics goes beyond just a moral code of right
and wrong; it attempts to reconcile what companies must do
legally versus maintaining a competitive advantages over other
businesses. Firms display business ethics in several ways.
Examples of Business Ethics:

Here are a few examples of business ethics at work as

corporations attempt to balance marketing and social
responsibility. For example, Company XYZ sells cereals with all-
natural ingredients. The marketing department wants to use the
all-natural ingredients as a selling point, but it must temper
enthusiasm for the product versus the laws that govern labeling
practices.

Some competitors' advertisements tout high-fiber cereals that

have the potential to reduce the risk of some types of cancer. The
cereal company in question wants to gain more market share, but
the marketing department cannot make dubious health claims on
cereal boxes without the risk of litigation and fines. Even though
competitors with larger market shares of the cereal industry use
shady labeling practices, that doesn't mean every manufacturer
should engage in unethical behavior.
Good Ethics are Good for Business:
There has been over the last three decades a growing emphasis
on companies to conduct ethically sound behaviour and practice
behaviour governed by ethical code of conduct prescribed by the
corporate policy. The birth of industrialization did not bring the
need for ethics but the drastic consequences did, in the form of
child labour, dishonest trade, lack of systematic procedures and
inequity in various aspects in the businesses. Social awareness
from 1960s onwards forced companies to consider ethical
behaviour, which refines their actions morally and in turn
produces a positive image of the company in the eyes of the
existing or potential customers and the society as a whole in
which the company operates. But this is where the debate arises
(Crane, 2006). Ethics are good for business, as it has been
claimed by many business authors. However, ethical decision
making is by the most complex decision making situation that
companies face today. What is ethically right to one is wrong to
another. This so happens owing to the definition of ethics,
according to which it is the discipline that examines one’s moral
standards or moral standards of the society (Santa Clara
University, 2010). Every individual and society has its own set of
values, beliefs and morals and the resultant is a conflict among
different ethical decisions which pose a dilemma for managers of
companies which are fast expanding across the global and taking
into consideration a diverse customer base as well as a diverse
workforce belonging to different cultures and different moral
orientations. Following strong ethically behaviour and catering to
the rights of individuals and societies which are major
stakeholders in the companies, companies follow a socially
responsible behaviour which is quality of running a good business
(Blowfield, 2008). The need for companies to be socially
responsible and ethically sound is a complex issue for the
companies as they put forward cost complications as well. But
nonetheless, the argument that good ethics are good for
businesses is well supported and companies who are not
following ethically sound behaviour are facing tremendous
challenges in sustaining profitable performance of their
operations. It has been argued that commitment to socially
responsible behaviour and ethically sound practices is an
effective long term strategy and it may lead to short term losses
but its benefits are spread across the longer run, which
companies have to realize to adapt. The concept of sustainable
value emerges in the context of long term corporate social
responsibility which companies are increasingly benefiting from.

In today’s world filled with immense global crisis and endless

social and environmental issues that affect the business
environment, the managers, and shareholders are increasingly
concerned over the future well-being of their company. With the
corporate social responsibility taken as an expense, there is
growing concern over preventing overall reduction in the return to
the shareholders. Chris Laszlo through his book, Sustainable
Value “How the world’s leading companies are doing well by
doing good,” provides a rather comprehensive solution to this
problem: Sustainable Value, hence bringing forth social
responsibility as an opportunity not as an additional cost to be
borne. With a large number of companies operating to service
more or less the same pool of customers, there has been
heightened competition over gaining an edge in the market over
the years, which keeps on increasing. Large companies focus on
their competences to gauge success and minimize their costs to
provide value back to their shareholders. With the new era came
a new concept of corporate social responsibility, which brought
the notion that a business has a duty to the society, which it has
to fulfill. This only in turn brings a positive image for the company.
As much as can be argued about the additional cost it brings for
the company, according to Laszlo.
Introduction Of Corporate Social Responsibility(CSR):

Corporate social responsibility (CSR) is a self-regulating business

model that helps a company be socially accountable—to itself, its
stakeholders, and the public. By practicing corporate social
responsibility, also called corporate citizenship, companies can be
conscious of the kind of impact they are having on all aspects of
society, including economic, social, and environmental.

CSR And The Environment:

Environmental issues are increasingly central to CSR. Climate

change is likely to bring along several risks over the next years
like extreme weather events, water levels rise or climate refugees.
Therefore, companies betting on CSR practices understand how
important their help is to protect people, and In fact, more and
more companies are including environmental concerns in their
internal management systems to decrease resource consumption
better handle waste or use energy more efficiently. Some are
even using biomimicry principles to create new and durable
designs for their products. Furthermor have been specifically
created to help companies set up an environmental management
system in the framework of CSR.  Some examples of actions that
can be taken:
 The CSR Approach Of Companies Nowadays:

Today, the corporate world has started to truly institutionalize

CSR. CSR approaches and strategies refer to the various policies
put in place by companies that make them more resilient and at
the same time allow them to protect the environment, reduce
greenhouse gas emissions, improve the quality of products or
promote social inclusion and workforce equality.
Overall, a CSR approach has the potential to impact many
different areas within business internal structures and also in the
way the outer workforce and society are organized. Below are
some examples of CSR applied to different categories.

CSR And Social Issues:

At the same time, organizations betting on CSR strategies also

consider how they can help the development of society. This
includes both their employees and the people along the business
value-chain. Some examples are:

 Establishing an ethics charter against corruption and having

a good governance system
 Developing an ethical supply chain (fight against child labor
or unfair wages, for example)
 Increasing company employees’ compensation via
restaurant vouchers or other benefits like a company’s shares
 Establishing prevention/health and well-being programs at
work in the company
 Financially assisting and helping social associations or
NGOs
 Supporting museums, exhibitions or other cultural shows
from local groups
 Participating in social inclusion programs at a local level
 Participating in humanitarian programs (in terms of finance
or logistics)

Business Benefits of CSR:

The benefits of CSR are many. Companies establish good
reputations, attract positive attention, save money through
operational efficiency, minimize environmental impacts, attract top
talent and inspire innovation. Public companies often report on
their CSR performance in their annual reports.
It’s incredibly important that your company operates in a way that
demonstrates social responsibility. Although it’s not a legal
requirement, it’s seen as good practice for you to take into
account social and environmental issues.

 Improved public image. This is crucial, as consumers

assess your public image when deciding whether to buy
from you. Something simple, like staff members volunteering
an hour a week at a charity, shows that you’re a brand
committed to helping others. As a result, you’ll appear much
more favourable to consumers.
 Increased brand awareness and recognition. If you’re
committed to ethical practices, this news will spread. More
people will therefore hear about your brand, which creates
an increased brand awareness.
 Cost savings. Many simple changes in favour of
sustainability, such as using less packaging, will help to
decrease your production costs.
 An advantage over competitors. By embracing CSR, you
stand out from competitors in your industry. You establish
yourself as a company committed to going one step further
by considering social and environmental factors.
 Increased customer engagement. If you’re using
sustainable systems, you should shout it from the rooftops.
Post it on your social media channels and create a story out
of your efforts. Furthermore, you should show your efforts to
local media outlets in the hope they’ll give it some coverage.
Customers will follow this and engage with your brand and
operations.

 The ability to have positive impact in the

communityKeeping. social responsibility front of mind
encourages businesses to act ethically and to consider the
social and environmental impacts of their business. In doing
so, organisations can avoid or mitigate detrimental impacts
of their business on the community. In some cases,
organisations will find ways to make changes in their
services or value chain that actually delivers benefits for the
community, where they once didn’t.
 References:

https://courses.lumenlearning.com/boundless-
business/chapter/business-ethics/

https://www.investopedia.com/terms/c/corp-social-
responsibility.asp

https://cubegroup.com.au/top-5-benefits-of-corporate-social-
responsibility/