BUSINESS ETHIC AND VALUE : CORPORATE SOCIAL RESPONSIBILITY

OVERVIEW
CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY
MANIFESTATION OF CORPORATE SOCIAL RESPONSIBILITY
RELEVANCE OF CORPORATE SOCIAL RESPONSIBILITY
CONCEPT OF MORAL RESPONSIBILITY AND ITS APPLICATION TO CORPORATIONS

CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY
-The meaning of corporate social responsibility
-The beginning of corporate social responsibility
-Modern forms of corporate social responsibility
-The limits and balances of corporate social responsibility
-Corporate social responsibility vs. corporate social responsiveness

The Meaning of Corporate Social Responsibility
-Corporate social responsibility (CRS) is defined as the responsibilities of corporations to positively contribute to the socio-economic well being of the societies in which they operate.
-The Meaning of Corporate Social Responsibility
-Being responsible means that corporations are accountable to stakeholders and the environment
-Being socially responsible does not mean that businesses cannot fully utilize their economic resources toward getting profits and eventually gaining financial stability and prosperity
-Businesses are also expected to contribute to the welfare of the society by financially and morally involving themselves in social programs
-The Beginning of Corporate Social Responsibility
Corporate social responsibility began in the early twentieth century.
-The two principles adopted at the beginning of its history were the:
==>charity principle, and
==>stewardship principle.
-The charity principle is the notion that businessmen as individuals should assist the needy
-The stewardship principle furthers that businesses should consider the interests of everyone affected by their decisions, that is, the stakeholders.

The Beginning of Corporate Social Responsibility
-It began with the idea of individual philanthropy, where successful businessmen or individuals contributed to public welfare but then evolved into corporate philanthropy.
-An example of today's corporate philanthropy includes the initiatives of some corporations in helping the government solve social problems such as drug use and poverty.


Modern Forms of Corporate Social Responsibility
According to James E. Post, author of the book "Business and Society: Corporate Strategy, Public Policy, Ethics", there are three modern forms of CSR, which are:
-corporate philanthropy,
-corporate employee volunteerism, and
-corporate awards for social responsibility.

The Limits and Balances of Corporate Social Responsibility
Businesses must analyze the costs and benefits of social programs due to the time, budget, and workforce constraints they face.
The four limits of CSR are:
-legitimacy,
-cost,
-efficiency, and
-scope and complexity.

The Limits and Balances of Corporate Social Responsibility
The balances or arguments that justify CSR are:
-the need for businesses to fulfill social responsibilities,
-long-term viability and success,
-the need to respond to and fulfill stakeholders' demands and interests, and
-the need to provide remedies for social problems.

Corporate social responsibility vs. corporate social responsiveness
-Corporate social responsibility requires businesses to be more responsible to their stakeholders.
-On the other hand, corporate social responsiveness is the capacity and actions taken by organizations to respond to stakeholders' demands.

Corporate social responsibility vs. corporate social responsiveness
There are three principles of corporate social responsibility, which are that:
-the society grants legitimacy and power to businesses,
-businesses are responsible for outcomes related to their primary and secondary areas of involvement within the society, and
-managers are moral and economic agents that are obliged to exercise discretion in favor of the corporations vis a vis the stakeholders.

Corporate social responsibility vs. corporate social responsiveness
On the contrary, corporate social responsiveness consists of three mechanisms by which companies handle social obligations. The mechanisms are:
-environmental assessment, which is a scanning process that allows organizations to identify and respond to the business environment, and manage stakeholder issues,
community relation programs that focus on demographic information, lifestyles, and social values, and
-issues management, which includes identification, analyses, and response to current issues and trends in the social, technological, economic, and political segments.
Ways in which businesses respond to stakeholders' demands:
=rejection and adversary (inactive)
=resistance (reactive)
=compliance and accommodation (interactive)
=proactive

MANIFESTATION OF CORPORATE SOCIAL RESPONSIBILITY
The manifestations of corporate social responsibility can be seen through:
=awareness of stakeholders' expectations,
=obeying the law,
=corporate governance,
=admission of fault,
=credos and corporate values, and
=contributions to society.

MANIFESTATION OF CORPORATE SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
RELEVANCE OF CORPORATE SOCIAL RESPONSIBILITY
OVERVIEW
Corporate social responsibility in the workplace
Corporate social responsibility and consumers
Corporate social responsibility, the internet, and technology
Corporate social responsibility and the environment

CORPORATE SOCIAL RESPONSIBILITY IN THE WORKPLACE
The Nature and Meaning of Work
Sustained effort done to produce something of value for others
1850- Industrial Revolution- work is a drudgery
1920s- “scientific management” work is productivity and utility
1970s- work is self-fulfillment
1990s- work is related to inner needs beyond religious duty and material success

Basic Issues in the Workplace
Civil liberties in the workplace
Personnel policies and procedures: hiring; promotions; discipline and discharge; Wages

Unions
Policies and Procedures in the Workplace
policies, standards and decision regarding personnel matters must be directly job-related, based on transparent criteria and applied equally
incomplete or non-specific job description can injure job-applicants by denying them the information crucial for occupational decision making
aspects which are non-job related and thus should not enter personnel decisions: sex, age, race, national origin, religion, lifestyle, ill-considered educational requirements

During interviews: interviewers should focus on the humanity of the candidate and avoid allowing their personal biases to color their evaluations
in terms of promotions:management should promote on the basis of qualifications and personnel’s long term contributions to the company. Unfair treatment to other employees might result from promoting based on seniority, inbreeding and nepotism
Discipline and Discharge
Due process and just cause must operate if treatment is to be fair.
Due process- there should be procedures for workers to appeal discipline and discharge.
Employers should provide sufficient warning, severance pay and displacement counseling

Union Ideals
Protect workers from abuses of power at the hands of employers
existence of equal or mutual dependence between the employer and the employees- basis for collective bargaining- negotiations between the reps of organized workers and their employers over wages, hours, rules, work condition and participation in decisions affecting the workplace.
Union Tactics
direct strikes- must based on just cause (job-related matters); proper authorization; last resort
sympathetic strikes- involve the discontinuance of work in support of other workers with a grievance.
Primary boycotts- refusing to support companies being struck- seem morally comparable to direct strikes.
Secondary boycotts - refusing to support companies handling products of struck companies- are morally analogous to sympathetic strikes

Turbulence in the Workplace
Corporate downsizing- workforce restructuring
Wage inequality- (started from 1970s)- may due to competitive global labor markets, shift away from manufacturing, computerization of work, declining influence of the unions
Revised employment contract- rise of contingency or contract workers, temporary virtual teams etc.
Controversy in Today’s Workplace
Nature of privacy
the use of polygraph and personality tests, employee monitoring and drug testing
working conditions
job satisfaction and enhancement of quality of work life
Controversy in Today’s Workplace
A firm is legitimately interested in whatever significantly influences job performance, but there’s no precise definition of “significant influence”. Organizations may be invading privacy when they coerce employees to involve in civic activities, to participate in wellness programs or in so-called intensive group experiences
Information-gathering on employees can be highly personal and subject to abuse. Hence, there should be informed consent (deliberation and free choice) from the employees
deliberation requires that employees be provided all significant facts concerning the information-gathering procedure and understand their consequence
free choice means that the decision to participate must be voluntary and uncoerced
Controversy in Today’s Workplace
Polygraph tests, personality tests, drug tests, and the monitoring of employees on the job can intrude into employee privacy. The exact character of these devices, the rationale for using them to gather information in specific circumstances, and the moral costs of doing so must always be carefully evaluated
Health and safety is a moral concern in the workplace:
scope of occupational hazards, including shift work and stress
the number of employees harmed by work-related injuries and diseases
management style greatly affects the work environment. Managers who operate with rigid assumptions about human nature or who devote themselves to infighting and political maneuvering damage employees’ interests
Controversy in Today’s Workplace
Day-care services and reasonable parental-leave policies also affect working conditions.
The underlying moral issues :
-women have a right to compete on an equal terrain with men
-the development of the women’s potential capacity is a moral ideal
-Redesigning the work process can enhance job satisfaction; increase the quality of work life, the well-being of workers and even productivity

The Employees’ Obligations to the Firm Are to Avoid:
=conflicts of interests
=bribes and extortion
=theft
=trade secrets- concern non public information
=insider trading
=Conflicts of Interest

arises when
employees have a personal interest in a transaction substantial enough that it does, or might reasonably be expected to lead them to act against the interests of the organization
when employees have financial investments in suppliers, customers, or distributors with whom the organization does business
Bribe
payment in some form for an act that runs counter to the work contract or the nature of the work one has been hired to perform. The Foreign Corrupt Practices Act prohibits corporations from engaging in bribery overseas.
involves injury to individuals, competitors, or political institutions and damage to the free-market system
considerations in determining the moral acceptability of gift giving and receiving:
the value of gift
the purpose of gift
the circumstances under which it is given
the position and sensitivity to influence to influence of the person receiving the gift
accepted business practice
the company policy
the law
Abuse of Official Position
Insider trading- use of significant facts that have not yet been made public and will likely affect stock prices. It seems unfair and can injure other investors
Proprietary data- an organization’s classified or secret information. The proprietary-data issues pose a conflict between two legitimate rights: the right of employers to keep certain information secret and the right of individuals to work where they choose
The Firm’s Duties to Employees:
-Fair wages
-healthy and safe working conditions
-create working condition that can path to job satisfaction
-Employees’ Rights
-The right to privacy
freedom of conscience- the freedom to act when personal moral beliefs is violated
whistleblowing- disclose wrongdoings of the corporation/employers
the right to participate in management decision making which directly affect employees
the right to organize/unionize
Whistle blowing
Employee informing the public about the illegal or immoral behavior of an employer or organization
is morally justified if
-it is done from the appropriate moral motive
-the whistle blower has exhausted internal channels before going public
-the whistle blower has compelling evidence
-the whistle blower has carefully analyzed the dangers
-the whistle blowing has some chance of success

Job Discrimination
definition
-the statistical and attitudinal evidence of discrimination
-the historical and legal context of affirmative action
-the moral arguments for and against affirmative action
-the doctrine of comparable worth and the controversy over it
-the problem of sexual harassment in employment

Discrimination in Employment:
=Involves adverse decisions against employees or job applicants based on their membership in a group that is viewed as inferior or deserving of unequal treatment.
Can be intentional or unintentional, institutional or individual
=Evidence of deep-seated attitudes and institutional practices and policies, point that most discrimination in the workplace are based on race and sex

Comparable Worth
-The doctrine of comparable worth holds that women and men should be paid on the same scale for doing different jobs of equal skills, effort and responsibility
EEOC Guidelines on Sexual Harassment (1980)
Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when:
--Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment,
--Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual, or
--Such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.

CORPORATE SOCIAL RESPONSIBILITY AND CONSUMERS
The Legal Liability of Manufacturers
Caveat emptor : “let the buyer beware” - consumers must be fully knowledgeable in the things they buy
due care : above and beyond any contract, producers need to exercise due care to prevent the consumers from being injured by defective products
strict product liability : manufacturers have legal responsibilities to compensate the consumers for the injuries suffered because of product’s defective condition
The Responsibilities of a Business
should give safety the priority warranted by the product
should abandon the misconception that accidents occur exclusively as a result of product misuse and that it is thereby absolved of all responsibility
must monitor the manufacturing process itself
when a product is ready to be marketed, companies should have their product-safety staff review their market strategy and advertising for potential safety problems
when a product reaches the marketplace, firms should make available to consumers written information about the product’s performance
companies should investigate consumer complaints
Other Areas of Business Responsibility Regarding Product
Product Quality- business assumes responsibilities to consumers via warranties, either implied or expressed
Prices- concealing a product true cost and price fixing (ex: agreement between manufacturer and retailer to fix prices of product) is a violation of the rules of the business in a market system
Labeling and packaging : producers are responsible to provide consumers with clear, usable information about the price, quality and quantity of a product so that intelligent choices and comparisons can be made
Deceptive Techniques in Advertising
Ambiguity
Concealed facts
Exaggeration
Psychological Appeals

Deceptive Techniques in Advertising
Advertising to children is big business, but children are particularly susceptible to the flattery of advertising.
Advertising
Defenders : ads’ imaginative, symbolic and artistic content answers human needs.
Critics: ads manipulate real human needs or even creates artificial ones.
Gailbraith: producers create both the goods and the demands for those goods. Ads encourages a preoccupation with material goods and leads to favor private consumption at the expense of public goods

CORPORATE SOCIAL RESPONSIBILITY, THE INTERNET, AND TECHNOLOGY
Corporate social responsibility should be practiced in the handling of the internet and technology, where corporations should promote responsible attitudes amongst employees with regard to the dissemination of information, the use of other people's products, and so on.
CSR and the Internet
Humans are responsible for the usage of computers; whether it is used for positive or negative purposes
Business via internet
security of internet transaction, delivery of goods etc.
change the relevance of geographical location, times etc.
The internet then lifts barriers of communication and creates an environment in which anyone can say or publish anything
We do not need new ethics in the age of the internet but we have to apply and possibly revise our ethical concepts and norms to fit the new environment
CSR and Technology
Technology is quickly transforming the ways in which work is organized, communication takes place, and business is done
The technological revolution has raised a number of moral issues in businesses such as the ethics of production and also sales and abuse of technological products
Involve the question of whether it is moral or ethical for agencies to use information technology (IT) to encroach into our private lives
In addressing issues revolving around the use of IT, moral compasses and ethical consciousness take priority over moral authority

CORPORATE SOCIAL RESPONSIBILITY AND THE ENVIRONMENT
As product and service providers and as the main economic contributor in a society, corporate social responsibility suggests that businesses should be responsible as to how they affect the environment.
Three concepts used in environmental crises, which are:
--ecocentric management,
--sustainable development, and
--crisis prevention and management.
--Crisis Prevention and Management

The free markets are responsible for environmental problems and they alone are sufficient as the problem solver
For example, when fines or legal penalties for pollution get too costly for a firm, developing pollution reducing technologies is the economically sensible strategy to adopt

Ecocentric Management
The modern corporations are the roots of environmental crises
Ecocentric is a belief that money and profits are more important than everything else
Sustainable Development
Corporations have significant environmental side effects
Advocates of this position believe on sustainable development concept, where corporations actively handle environmental problems by reforming and correcting production systems

Corporate Social Responsibility And The Environment
Pollution Control has a price, and trade-offs must be made. But weighing costs and benefits involves controversial factual assessments and value judgements. Any equitable solution to the problem of who should pay must recognize that all of us in some way contribute to the problem and benefit from correcting it.
Cost allocation requires a combination of regulations, incentives, charges and permits for polluting. Such an approach must not only consider what is effective but must also seek a fair assignment of costs