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Unit-5th

Ethical Issues & Corporate Social Responsibility


Ethics and corporate social responsibility are differently interpretated, complex and controversial subjects in the context of organizations which are operating internationally in diverse social, economic, political, cultural and legal environments

Ethical issues and considerations arise in particular when the business practices in the host country differ markedly from those in the home country. Three types of ethical responses have been identified: ethical relativism (the ethical standards in the host country should be followed), ethical absolutism (the ethical standards of the home country should be followed), and ethical universalism (this presumes that there is a universal ethical standard of right and wrong which transcend cultural boundaries and that these must be followed by the organization (distinction between morally wrong and culturally different)

Corporate Social Responsibility is basically about an organization promoting non-economic objectives, i.e., instead of just focusing on maximizing value for shareholders, organization (specifically business corporations) attempt to play the role of good citizens. balancing the interests of shareholders with those of society at large

Corporate Social Responsibility can be a complex issue at the domestic level, but at the international level it takes on a much larger significance. Areas where organizations operating internationally can demonstrate their social responsibility include, for example, observance of basic human rights, adoption of adequate workplace working conditions and health and hygiene standards, payment of adequate wages and salaries, equal employment opportunities, avoidance of child labor, adequate education and training, allowing unionization and protection of the environment

Ethical issues and corporate social responsibility are closely related to the human resource function in organizations which are operating internationally and in diverse contexts:

Minimize the exposure of employees to corrupt conduct by assisting in the development, publication, and implementation of appropriate codes of conduct. Ensure training programmes cover areas which are of ethical concern (e.g. bribery, human rights, justice, and the common good) Align performance appraisal and compensation systems so that they support the ethical stance taken

Be conversant with the type of requests that may be made of staff operating internationally, and provide them the necessary training so that they have the requisite negotiating skills to handle possible problem situations Ensure that employees understand the difference between corrupt bribery payments, gifts and permissible facilitation payments