Chapter-5.pptx of business ethics of BBS

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1. Unit 5: The Social View of Governance: Corporate Social Responsibility (CRS) LH 8 5.1 Concept of corporate social responsibility 5.2 Moral principles of corporate social responsibility 5.3 Increasing relevancy of corporate social responsibility 5.4 Types and nature of social responsibilities 5.5 Carroll’s four-part model of corporate social responsibility 5.6 Social responsibility and ethics

2. Concept of Corporate S ocial R esponsibility Corporate Social Responsibility (CSR) refers to a business model in which companies integrate social and environmental concerns into their operations and interactions with stakeholders. CSR involves going beyond legal requirements to voluntarily improve the well-being of employees, communities, and the environment. Corporate Social Responsibility (CSR) is when companies voluntarily integrate social and environmental concerns into their business practices, benefiting society and enhancing their reputation. It encompasses various areas, such as: Environmental Sustainability : Reducing carbon footprints, waste management, and conservation efforts. Ethical Practices: Ensuring fair labor practices, human rights, and ethical sourcing. Philanthropy : Donating to charities, community programs, and other social initiatives. Economic Responsibility: Supporting economic growth and stability while considering social impacts . CSR aims to create a positive impact on society while enhancing a company's reputation and success.

3. 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 are aware of how they impact aspects of society, including economic, social, and environmental. Engaging in CSR means a company operates in ways that  enhance society and the environment  instead of contributing negatively to them. Corporate social responsibility is a business model by which companies make a concerted effort to operate in ways that enhance rather than degrade society and the environment. CSR can help improve society and promote a positive brand image for companies. CSR includes four categories: environmental impacts, ethical responsibility, philanthropic endeavors, and financial responsibilities.

4. Philip Kotler and Nancy Lee define CSR as “a. commitment to improve community well-being. through discretionnary business practices and. contributions of corporate resources ” WBCSD (World Business Council for Sustainable Development) “The continuing commitment by business to behave ethically and contribute to sustainable economic development while improving the quality of life of the workforce and their families as well as of the local community and society .” BSR (Business for Social Responsibility) “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment .” CSR stands for corporate social responsibility, an umbrella term for business practices that consider the effects a company has on society, its employees, and other stakeholders. It incorporates the idea that companies should play a positive role in the community and consider the environmental and social impacts of their business practices. So, Corporate social responsibility (CSR) is the idea that businesses should operate according to principles and policies that make a positive impact on society and the environment .

5. Moral Principles of Corporate Social Responsibility Accountability - Your business should look to be accountable for the impacts of its' activities on the wider society it operates in, as well as the environment. Taking into account any negative impact it should have on these factors, this could well effect future practices.  This principle emphasizes the importance of transparency and the need for companies to take responsibility for their actions. Transparency - The CSR policies, activities, and impacts your business undertakes may be considered need-to-know information. You should communicate this information with your stakeholders.  This principle highlights the importance of open communication and the need for companies to be honest and forthright about their CSR activities. The thought process being that if you're acting in an ethical manner, there should be nothing to hide regarding your day to day operations.

6. Ethical Behavior - Your business should conduct its business in an ethical and responsible manner, and should uphold high standards of integrity and honesty.  This principle emphasizes the importance of doing the right thing and treating others with respect and fairness. Respect for your stakeholder's interests - Your business should take into account the interests of its' stakeholders. This includes your employees, customers, suppliers, communities, and the environment, and should strive to create value for them.  This principle emphasizes the importance of building relationships with your stakeholders that will last and working collaboratively to achieve shared goals. Respect for the rule of law - Although this may be obvious, your business should comply with applicable laws and regulations, while respecting human rights and labor standards.  This principle emphasizes the importance of following the law and respecting basic human rights.

7. Respect for international norms - Your business should respect international norms and standards, including those relating to human rights, labor, and the environment. The area you choose to operate within, be sure to respect the area & it's custom. This principle emphasizes the importance of being a responsible global citizen and following international best practices. Respect for human rights - Your business should respect human rights, and should not engage in business practices that violate any rights of individuals or groups. This principle emphasizes the importance of treating all individuals with dignity and respect, regardless of their background or circumstances.

8. Increasing R elevancy of Corporate Social Responsibility Corporate Social Responsibility (CSR) has become increasingly relevant for several reasons : Consumer Demand: Today's consumers, especially younger generations, are more socially conscious and make purchasing decisions based on a company's values and practices. Studies show a growing preference for brands that prioritize sustainability and social good [environmental, social, and governance (ESG) factors ]. Talent Acquisition & Retention: A strong CSR strategy can attract and retain top talent. Employees are drawn to companies that are purpose-driven and make a positive impact, leading to a more engaged and productive workforce . Brand Reputation: CSR initiatives can enhance a company's brand image and reputation. By demonstrating social responsibility, companies gain consumer trust and loyalty, differentiating themselves in a competitive market . Risk Management: Proactive CSR practices can mitigate risks associated with environmental damage, labor violations, or unethical sourcing.

9. Types and Nature of Social Responsibilities Environmental responsibility:  Corporate social responsibility is rooted in preserving the environment. A company can pursue environmental stewardship by reducing pollution and emissions in manufacturing, recycling materials, replenishing natural resources like trees, or creating product lines consistent with CSR. Ethical responsibility:  Corporate social responsibility includes acting fairly and ethically. Instances of ethical responsibility include fair treatment of all  customers  regardless of age, race, culture, or sexual orientation, favorable pay and benefits for employees,  vendor  use across demographics, full disclosures, and transparency for investors. Philanthropic responsibility:  CSR requires a company to contribute to society, whether a company donates profit to charities, enters into  transactions  only with suppliers or vendors that align with the company philanthropically, supports employee philanthropic endeavors, or sponsors fundraising events. Financial responsibility:  A company might make plans to be more environmentally, ethically, and philanthropically focused, however, it must back these plans through financial investments in programs, donations, or product research including  research and development  for products that encourage sustainability, creating a diverse workforce, or implementing DEI, social awareness, or environmental initiatives.

10. Carroll’s Four-part Model of Corporate Social Responsibility Carroll's CSR (Corporate Social Responsibility) Pyramid is a simple framework that explains how and why businesses should center CSR principles at the heart of their business. Developed by Archie Carroll in 1991, the pyramid is as relevant as ever. Often referred to and quoted by business leaders, politicians, and academics, the pyramid gives businesses the structure to meet economic, legal, and ethical demands . Carroll's CSR Pyramid is a model that illustrates the four key components of corporate social responsibility ( CSR ): economic, legal, ethical, and philanthropic responsibilities. Developed by Archie Carroll in  1991 , the pyramid emphasizes the importance of balancing these responsibilities to achieve a holistic approach to CSR . By adopting CSR practices, a company can achieve a balance of economic, social, and environmental considerations while addressing the expectations of stakeholders and shareholders. This approach not only helps companies meet their legal and ethical expectations but also enhances their reputation and long-term success.

11. Archie Carroll, the creator of Carroll's CSR Pyramid, adopted a four-part definition of CSR:  To be socially responsible, a business must meet economic, legal, ethical, and philanthropic expectations given by society at a given point in time. Carroll's Pyramid of CSR uses the shape of a pyramid to depict the importance of each of the CSR dimensions.  The base of the pyramid represents economic responsibilities, which are fundamental for business survival. Above this, legal responsibilities ensure businesses comply with laws and regulations. The ethical layer focuses on doing what is right, just, and fair, even beyond legal requirements. At the top, philanthropic responsibilities involve voluntary activities that promote human welfare and goodwill. This structured approach helps companies adapt their business practices to be not only profitable but also ethical, legally compliant, and socially responsible.

12. Carroll's CSR Pyramid Levels Level 1 - The Foundation of Carroll's CSR Pyramid - Economic Responsibilities According to Carroll's CSR Pyramid, a business's profitability is the foundation upon which all other responsibilities rest. Carroll argued that businesses have an economic responsibility to society. By providing goods or services, they meet societal needs, and to continue doing so, they must be profitable. Various stakeholders rely on a company: shareholders expect returns on investment, employees depend on fair wages, and clients require reliable goods or services. Without profitability, a business cannot sustain itself and will cease operations. This is why, according to Carroll economic responsibility should be prioritized   over legal and ethical responsibilitie s. Level 2 of Carroll's CSR Pyramid - Legal Obligation The second level of Carroll's CSR Pyramid addresses the legal obligations of a company. Businesses must comply with the laws, regulations, and practices relevant to their operating regions, which can range from international to local levels. These legal requirements guide organizations on fair business conduct, covering aspects such as employment law, environmental regulations, health and safety standards, and anti-competitive practices. Essentially, it ensures businesses operate fairly and legally.

13. Level 3- of Carroll's CSR Pyramid - Ethical Responsibility Sometimes laws are not enough, and ethical principles are needed to ensure that a company does the right thing. The third level of Carroll's CSR Pyramid focuses on business ethics. While laws are often based on ethical principles, they can lag behind societal changes. For example, sustainability became a concern before legal systems began legislating it. Businesses must adopt ethical standards and practices even if they aren't yet codified in law. Level 4- of Carroll's CSR Pyramid - Corporate Philanthropy The fourth and final level of Carroll's CSR Pyramid is philanthropic responsibility. This level involves voluntary actions that exceed societal expectations, encouraging businesses to be good corporate citizens. Philanthropic responsibilities might seem like an extra effort, but today, people actively expect companies to give back to their communities.

14. Social Responsibility and Ethics Social responsibility is an ethical framework in which individuals or corporations are accountable for fulfilling their civic duty and taking actions that benefit society. If a company or person considers taking actions that could harm the environment or society, those actions are considered socially irresponsible. According to this concept, managers must make decisions that maximize profits and protect the interests of the community and society as a whole . Ethics refers to a set of moral principles that govern a company's or person's behavior. Companies should incorporate ethics into their daily actions, particularly those decisions that affect other people or the environment. A code of social responsibility and ethical conduct should be applied within an organization and during interactions with others outside the company. As long as a company upholds strong ethical standards and maintains social responsibility, the environment and employees are held as equals to the focus on profitability. However , government interference is often necessary if the company ignores its ethical standards and takes socially irresponsible actions, such as disregarding environmental regulations to increase profitability.

15. Ethics and social responsibility  are about an individual understanding the foundation of human values. Being ethical and socially responsible encourages individuals to make sound decisions by relying on their moral beliefs and upholding their civic duty. Each  individual has a responsibility, understanding that the actions they commit should ultimately benefit societal welfare . From a business perspective, the way we work (and live) influence principles and decisions within the organization , which in turn shapes the corporate culture .   Ethics and social responsibility  grant members of society a consistent expectation and boundary that is to be abided by. This also encourages the individual to understand the role they play is pivotal in maintaining harmony within society. The actions committed ultimately affects the balance and sustainability of the society at large . Social responsibility and business ethics are becoming increasingly important for many consumers and employees. Companies that implement social responsibilities and ethics see numerous benefits, such as extra advantages over competing businesses and increased customer bases.

16. Business ethics are the act of determining and making the right choices. Companies develop a set of rules and principles that guide their decisions and actions, creating positive influences on employees and consumers. Though every business forms a unique set of principles, they usually follow the same ethical standards . Social responsibility is a business's duty to make ethical decisions that positively impact society. Organizations need to consider how their actions affect communities to create long-lasting trusting relationships. In order to be socially responsible, companies must strictly follow their codes of ethics . Being socially responsible and following basic business ethics have the following benefits:

17. Gaining more customers:  Consumers are more likely to continually support businesses that care about the impact they make. Being positives influences on communities and maintaining ethical standards allows businesses to gain new customers and maintain existing ones. Existing customers are also more likely to promote the company by word of mouth. Recruiting from a wider candidate group:  Professionals are increasingly searching for careers with companies that are ethically and socially responsible. Promoting a strong code of ethics that includes social responsibility can help companies attract and retain more candidates. Getting an advantage over similar businesses:  Companies that promote social responsibility often acquire more customers than businesses in the same industry. Organizations can see advantages over their competition by considering their impact on the community. Creating a positive work culture:  When employees agree with a company's code of ethics and social responsibility, they are more likely to feel motivated and support the organization. Employers who encourage employees to take action in their community also gain more approval and commitment.

18. How businesses incorporate social responsibilities and ethics Organizations have countless options to implement strong business ethics and exemplify social responsibilities. Below are some of the ways businesses can incorporate these important elements : Develop a mission and objective: One of the first steps that businesses should complete is to craft a mission and objective that support ethics and social responsibility. A mission and objective serve as the foundation for all goals and actions that a business takes, so it's key to carefully consider these ideas. When writing the mission and objective, companies need to think about how they can support their communities, promote a positive business culture and better society as a whole . Create and maintain core values: Core values reinforce the company mission and show how the company intends to uphold its social standards. Both the business and employee need to follow these core values, so it's important to define a clear set that lasts long term. Core values that support social responsibility and ethics include: Integrity, Kindness, Openness, Humility, Community, Knowledge, Growth, Transparency. Employers can select four or five core values to focus on and grow their business around.

19. c. Focus on impact in the local community Society starts with the local community. Businesses that focus on the area they operate in can make a large impact on their residents. By promoting social awareness on a small scale, a company can spread its positive influence on a local group. This group is then inspired to advance that positive influence by helping others, which can increase awareness of the company's brand. Companies that operate in multiple locations should strive to make positive changes in each community. d. Support environmentally and socially conscious initiatives One of the main aspects of being socially responsible is supporting progressive societal efforts. Doing so shows that organizations are actively taking part in making their communities and society better places. Taking part in these efforts can also attract more customers and loyal employees . Companies should select initiatives that align with their core values and missions, which can help build their brand and culture. For example, a grocery store could support a nonprofit that provides food to underprivileged families. Making green efforts, such as implementing recycling programs and installing low-energy lights and appliances, are common initiatives that businesses can take.

20. e. Encourage communication Employees should feel comfortable expressing their ideas and opinions in order to foster strong business ethics. Managers should have open-door policies in which employees can approach them with feedback about the culture. Encouraging feedback helps employees feel comfortable being open, which improves morale and supports both employee and organizational growth. Employees who feel heard and respected are also more likely to stay loyal to the organization . f. Consider ethics during the hiring process Ethical companies need to hire ethical employees to build a positive culture. Employees also represent the companies they work for, so it's important to hire professionals who can positively influence society on their companies' behalf. During the hiring process, employers should seek employees who have similar core values and believe in the business's mission. Asking questions directly related to values and ideologies allows employers to find like-minded candidates.

21. e. Lead by example Employers should lead by example, abiding by the code of ethics they implement. When employees see leaders following their own business ethics, they are more likely to follow them, too. It also encourages accountability for both the employees and the company leaders. For example, if one of the employer's core values is open communication, they should regularly update employees on company events and changes . f. Express compassion Companies that support best business ethics should be generous and kind to consumers and employees. They should genuinely care about the livelihood of those who support them to develop trusting relationships. One way a company can demonstrate compassion is by making socially conscious decisions that positively affect the community or employees regardless of cost. Making compassionate decisions helps ethical companies gain the trust and support of team members and consumers.