BUSINESS-ETHICS pptx for senior high school

lessons

1. Lesson 9 The Corporate Social Responsibility

2. WHAT IS BUSINESS ETHICS? WHAT IS CORPORATE SOCIAL RESPONSIBILITY? DISTINGUISH BETWEEN CSR AND BUSINESS ETHICS?

3. WHAT IS BUSINESS ETHICS? Business ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination etc.  Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment.

4. WHAT IS CORPORATE SOCIAL RESPONSIBILITY? Refers to a corporation's responsibilities or obligation toward society. as defined by the World Business Council for Sustainable Development WBCSD. Social responsibility means that individuals and companies have a duty to act in the best interests of their environments and society as a whole. Social responsibility, as it applies to business, is known as CORPORATE SOCIAL RESPONSIBLITY.

5. DIFFERENCE OF BUSINESS ETHICS AND CSR Ethics speak to individual, occupational, organizational, or societal morals and values, while social responsibility is the practical application of ethical concerns for the benefit of society as a whole.

6. DIFFERENCE OF BUSINESS ETHICS AND CSR BUSINESS ETHICS CSR The whole encompassing behaviour of businesses CSR as an element business ethics Business ethics is the VERY broad field of study concerning good ethical decision making in commercial contexts. CSR is more narrowly about a company’s SOCIAL obligations.. That is, a company’s obligations to society in general. Business ethics is concerned with not just social obligations, but also obligations to employees, customers, suppliers, and competitors. CSR is about the extent to which companies owe something to society at large (i.e., those who do not have a direct involvement with the business). Business ethics is more about good or bad conduct according to moral standards. CSR integrating economic, social an environmental targets in one strategy.

7. VIEW OF FRIEDMAN IN CSR " The only responsibility of business is to increase its profits. ( make as much money as possible as long as it is ethical and legal). He argued that corporate executives work for the "owners" of the company, and today these "owners" are the company's shareholder.

8. FRIEDMAN ARGUES THAT THE EXERCISE OF SOCIAL RESPONSIBILITY BY CORPORATE EXECUTIVE IS: Unfair, because it constitutes taxation without representation. undemocratic, because it invest in government power in a person who has general mandate to govern. unwise, because there are check and balances in the broad range of government power thereby turned over to his discretion. A violation of trust. Because the executive is employed by the owners as the agent serving the interest of his principal. futile, both because the executive is unlikely to be able to anticipate the social consequences of his actions.

9. LESSON 10 HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY

10. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY Organizations are called to take responsibility for how their operations impact societies and the natural environment. A firm must focus on increasing both its bottom line and being a good corporate citizen (D'Amato et al., 2009).

11. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY Society and business Social issues management Public policy and business Stakeholder management Corporate Accountability

12. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY CORPORATE CITIZENSHIP CORPORATE SUSTAINABILITY NEW ALTERNATIVE CONCEPTS Evidence of these, is the proliferation of new corporate title such as chief sustainability officer or chief responsibility officer, and the rapidly spreading socially responsible investment.

13. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY S OCIALLY RESPONSIBLE INVESTMENT (SRI ) - A movement that aims at combining investors' financial objectives with their Concerns about social, environmental, and ethical issues.

14. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY In Europe, socially responsible actions has been around before the Industrial Revolution. CSR evolved over time depending on: - Historical - Cultural - Politicall - Socio-economic drivers - Particular conditions of countries & different points in time

15. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY • One important theory of CSR - Leaders can achieve favorable reputations with their stakeholders by building CSR activites and by CSR reporting to stakeholders. STAKEHOLDER APPROACH

16. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY

17. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY The issue had led to the creation of the United Nations Global Compact (UNGC) in 2000 to leverage in UN prestige and induce corporations to embrace 10 principles incorporating: - Values of environmental sustainability - Protection of human rights - Fair treatment of workers - Elimination of bribery and corruption

18. HISTORY AND PERSPECTIVES ON CORPORATE SOCIAL RESPONSIBILITY Critics said that UNGC has failed to provide concrete information as to what may be called progress. As a result, private entities and corporations have chosen to self-regulate and report independently on their CSR activities and practices. The view that CSR is a myth because of a lack of ethics in CSR and CSR-related activities, which stems from a conflict between ensuring profits and the need to do good and establish good community relations - CSR continue to grow.

19. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE There is a remarkable growth in the so-called "third sector" in socio-economic initiatives which belong neither to the traditional private for-profit sector nor to the public sector • These initiatives generally derive their impetus from voluntary organizations and operate under a wide variety of legal structures. • They represent the new or renewed expression of civil society against a background of economic crisis, the weakening of social bonds, and difficulties of the welfare state ( Borzaga and Defourny , 2004).

20. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE SOCIAL ENTERPRISE MOVEMENT A growing and gathering supporters across the globe as an innovative approach to business activity offering disadvantaged populations a path to human development and economic prosperity. • This term is used to refer either to an activity carried out or to particular organizations and institutions.

21. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE SOCIAL ENTERPRISE • It is thought to be something new and something distinct from classical business and traditional nonprofit activity. • Combination of social purpose, market orientation, and financial performance standards of business.

22. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE SOCIAL ENTERPRISES - Are organizations whose mission is to bridge social opportunity into sustainable reality innovatively, effectively and efficiently ( Borzaga and Defourny , 2004).

23. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE Defined as "development that meets the needs of the present without sacrificing the right of future generations to fulfill their needs". Sustainable development requires sustainability innovation, and entrepreneurs who can achieve environmental or social goals with superior products or processes that are successful in the marketplace of mainstream customers . SUSTAINABILITY

24. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE Sustainable entrepreneurs and sustainability managers are substantially shaping markets and society. Actors and companies making environmental progress with their core businesses can be called Sustainable Entrepreneurs, whereas the actions and behaviors of actors in commerce is called "Sustainable Entrepreneurship".

25. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE The normatives elements that should be found in a truly socially responsible business include: - Production of socially desirable products in a socially desirable manner - Advancement of the health and well-being of those it affects - All within a values-driven framework

26. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE " Firms that act in a socially irresponsible or illegal manner have decreasing shareholder wealth, implying that socially responsible and law abiding behavior pays off." - Van Beurden and Gossling, 2008

27. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE SOCIAL ENTERPRISE • It often provides a "business" source of revenue for socially oriented organizations and activities. • The revenue contributes to the self-sufficiency and long-term sustainability of organizations involved in charitable activities.

28. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE SOME CHALLENGES -the measurement and assessment of the degree of environmental or social responsibility orientation in the company - its environmental and social goals and policies - the organization of environmental and social management - the communication of environmental and social issues

29. THE "THIRD SECTOR" AND SOCIAL ENTERPRISE Certainly in developing countries the obstacles to success are far greater; in a special way, there are critical issues for social enterprise development in the so-called "bottom of the pyramid" (BOP) market.

30. LESSON 11

31. ` "Business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference" - Caritas In Veritate, n. 40

32. DEFINITION OF STAKEHOLDER "The stakeholder concept originated from the word stake (interest). It stems froma deliberate will to indicate that other parties have an interest in the enterprise. "Company managers should exert effort in incorporating social and environmental preoccupations into the management of the firm. These preoccupations may be linked to business activities or torelations with all internal actors. However, they may also be associated with any "actors" outside the scope of the company who may be affected by its operations. These actors (both inside and outside the organization) are called stakeholders.

33. " From the end of the 1970s and the beginning of the 1980s, the term stakeholders began to occupy a significant place in the literature. "Freeman defined stakeholders as "any group or individual who can influence or be affected by the organization as it achieves its goals.“ "The stakeholder concept really gained a foothold in management literature with the publication in 1984 of Freeman's work Strategic Management: A Stakeholder Approach, which marked a first stage in conceptual construction by being anchored strategically in the management of stakeholders. "The development of the term stakeholder began in the 1960s with the research carried out by Ansoff (1968), who considered that an enterprise is obliged to adjust its objectives to balance out the satisfaction of stakeholders.

34. COMPANY STAKEHOLDERS The responsibility principle states that "Most people most of the time, want to and do accept responsibility for the effects of their actions on others." People engaged in value creation and trade are responsible precisely to "those groups and individuals who can affect or be affected by their actions;" that is, the stakeholders. Literature on stakeholders usually distinguishes between important and unimportant stakeholders .

35. COMPANY STAKEHOLDERS Sometimes, this ranking is refined further by distinguishing primary stakeholders (whose participation is required for the company's survival) and secondary stakeholders (whose relationship is not considered as vital for the company). Secondary stakeholders may have a potential influence (in the event of boycotts for example) and may emerge rapidly as players capable of influencing the company's performance. Other works also make a distinction between voluntary and involuntary stakeholders, which is based primarily on the notion of risk.

36. CHALLENGES IN CSR CSR is of pressing importance as it significantly influences the sort of lives we will lead in the future. Furthermore, the distinctive nature of entrepreneurial action leads to distinctive set of ethical problems and ethical obligations. When the ethics of corporations is not properly and sufficiently discussed, then sustainability could mean anything from"exploit as much as desired without infringing on future ability to exploit as much as desired" to "exploit as little as necessary to maintain a meaningful life." It is widely accepted today that true sustainability includes valuing ecosystem health, human needs, economic development, and social justice. (Dunham, 2007; Vucetich and Nelson, 2010; Racelis , 2012: Melé and Von Weltzien Hoivik , 2009).

37. Especially in the global market place, human rights have come to be a crucial issue in business. A concrete example of disrespect for the dignity and rights of persons is when an entrepreneur while having a magical way of building something out of nothing-engages in behaviors that negatively impact business. When entrepreneurs are underenormous pressure to produce "sales, two things generally happen: they develop tunnel vision and often become extremely forgetful about anything other than what they are focused on at the moment, and their type-A tendencies go into overdrive and they bulldoze their way through decisions, forgetting that actual human beings with thoughts and feelings are on the other end ( Iliff , 2014; Garriga & Melé , 2004).

38. WHAT IS STAKEHOLDER THEORY? Stakeholder theory is fundamentally about how business works at its best and how it could work. It is descriptive, prescriptive, and instrumental at the same time, and as Donaldson and Preston (1995) have argued, it is managerial. Stakeholder theory is about value creation, trade, and managing a business effectively. Effective can be seen as "create as much value as possible."

39. Stakeholder theory does not mean that representatives of thes e groups must sit on governing boards of the firm, nor does it mean that shareholders (we prefer financers as a more inclusive term) have no rights. It does imply that the interests of these groups are joint and that to create value, one must focus on how value gets created for each and every stakeholder. They have tried to use the 1dea to address issues such as "corporate social responsibility", "corporate legitimacy", "theory of the firm" and even macro- sociefal issues such as "building the good society(Freeman et al., 2010).

40. STAKEHOLDER APPROACH TO CORPORATE SOCIAL RESPONSIBILITY (CSR) Following the stakeholder theory, a socially responsible firm requires simultaneous attention to the legitimate interests of all appropriate stakeholders and has to balance such a multiplicity of interests and not only the interests of the firm's stockholders. A generic formulation of stakeholder theory is not sufficient. In order to point out how corporations have to be governed and how managers ought to act, a normative core of ethical principles is required.

41. In order to make stakeholder theory more aligned with the ideas of justice, fairness, and human freedom, Freeman and Philips (2002) proposed the Principle of Stakeholder Responsibility, which says that parties to an agreement must accept responsibility for the consequences of their action. Argandona (1998) suggested the common good notion which takes into consideration the common and thereby contributing to the creation of value. Later in 1997, Carroll and Nasi put forward a classification that opposed internal stakeholders (owners, directors, and employees) to external stakeholders (competitors, consumers, governments, pressure groups, media, and the natural environment) (El Abboubi and Cornet, 2012).