Lecture Art of Leadership and Motivation - Lecture 27

Art of Leadership & Motivation
HRM – 760
Lecture ­ 27

FACILITATOR
Prof. Dr. Mohammad Majid Mahmood


Corporate Social Responsibility 
& Ethics­I


CSR & Ethics

• In the business world, ethics is the study of
morally appropriate behaviors and decisions,
examining what "should be done”


CSR & Ethics
• Corporate Social Responsibility (CSR) is the
process by which businesses negotiate their role
in society


Corporate Social Responsibility
 Organizations have obligations to society beyond their 
economic obligations to owners or stockholders.
 Social responsibility relates to an organization’s 
impact on society

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


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


Businesses CSR Activities
• Philanthropy:
– give money or time or in kind to charity
– Integrative philanthropy—select 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


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)


 CSR­ two viewpoints
CSR is Inevitable
Vs
CSR is a Burden 


Arguments for CSR
Not just profits!
Power vs. Responsibility
Stake holder relations


Arguments against CSR

From the shareholder point of view
Hindrance in maximizing profits


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.


ETHICS
• 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.


Why be ethical ?
Expectation of stakeholders
To prevent harm to general public
It pays to organization
A sense of trust among partners
Personal reason

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.


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


The Evolving Context for Ethics
Ethical absolutism - they adapt to us
Ethical relativism - we adapt to them


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


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


Ways Companies Integrate Ethics
•
•
•
•

Top management commitment in word and deed
Company codes of ethics
Develop, monitor, enforce ethical behavior
Seek external assistance


FACILITATOR
Prof. Dr. Mohammad Majid Mahmood 

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