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FACILITATOR Prof. Dr. Mohammad Majid Mahmood Art of Leadership & Motivation HRM 760 Lecture - 27 Slide 2 Corporate Social Responsibility & Ethics-I Slide 3 CSR & Ethics In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done Slide 4 CSR & Ethics Corporate Social Responsibility (CSR) is the process by which businesses negotiate their role in society Slide 5 Corporate Social Responsibility Organizations have obligations to society beyond their economic obligations to owners or stockholders. Social responsibility relates to an organizations impact on society Slide 6 Recent Evidence of CSR Interest An Internet search turns up 100,000 plus responses to CSR Research Journals increasingly rate businesses (and NGOs) on socially responsive criteria: Best place to work Most admired Best (and worst) corporate reputation Slide 7 Reasons for CSR Activities CSR activities are important to and even expected by the public And they are easily monitored worldwide CSR activities help organizations hire and retain the people they want CSR activities contribute to business performance Slide 8 Businesses CSR Activities Philanthropy: give money or time or in kind to charity Integrative philanthropyselect beneficiaries aligned with company interests Philanthropy will not enhance corporate reputation if a company: fails to live up to its philanthropic image or if consumers perceive philanthropy to be manipulative Slide 9 Corporate Social Responsibility (CSR) CSR is the Sum of: Economic Responsibilities (Make a profit) Legal Responsibilities (Obey the law) Ethical Responsibilities (Be ethical) Discretional Responsibilities (Good corporate citizen) Slide 10 CSR- two viewpoints CSR is Inevitable Vs CSR is a Burden Slide 11 Arguments for CSR Not just profits! Power vs. Responsibility Stake holder relations Slide 12 Arguments against CSR From the shareholder point of view Hindrance in maximizing profits Slide 13 Choosing moderate strategy Businesses need to balance economic, legal, and social responsibilities in order to achieve long- run success. More generally, there is a relationship between good social and good financial performance. Slide 14 The word ethics is derived from the Greek word ethos meaning character and Latin word mores meaning customs Ethics defines what is good for the individual and for society and establishes the nature of duties that people owe to oneself and others in society The principle of conduct professional ethics A set of moral principles or values. ETHICS Slide 15 Why be ethical ? Expectation of stakeholders To prevent harm to general public It pays to organization A sense of trust among partners Personal reason Slide 16 Purpose of Ethics Ethics are the guiding principles. Ethics help make relationships mutually pleasant and productive. Ethics Create a sense of community and a sense of belongingness to society. Slide 17 Are Ethics Limited to Humans? Are ethics limited to humans only or do they extend to animals too? pure vegetarianism Likewise, issues of responsibility to the environment have also been raised. In other words, philosophy is not far from the religious view of total non-violence Slide 18 The Evolving Context for Ethics Ethical absolutism - they adapt to us Ethical relativism - we adapt to them Slide 19 Emergence of a Global Business Ethic Growing business need for integrative mechanisms such as: Ethics reduce operating uncertainties Voluntary guidelines avoid government impositions Ethical conduct is needed in an increasingly interdependent world everyone in the same game Companies wish to avoid problems and/or be good public citizens Slide 20 Reasons for Businesses to Engage in Development of a Global Code of Business Ethics Create the same opportunity for all businesses Level the playing field They are needed in an interconnected world Slide 21 Ways Companies Integrate Ethics Top management commitment in word and deed Company codes of ethics Develop, monitor, enforce ethical behavior Seek external assistance Slide 22 1-22 FACILITATOR Prof. Dr. Mohammad Majid Mahmood