Managing a Business/BUSINESS ETHICS
Dear Sir Please Answer the fallowing Questions
Q1) What is Ethical Analysis and discuss its Application: in Corporate Decision Making?
Q2) Define Corporate Ethical Leadership and discuss its nature and features?
Q3) What is Corporate Social Responsibility? Explain its characteristics?
Q4) Enumerate and explain the Ethical Implications of Technology?
Q5) Write short notes (any two)
a) Ethical Analysis and its Application in Personal Decision Making.
b) Corporate Culture
c) Reputation Management.
Q6) Explain the following concept (any two)
a) Social Reporting.
b) Ethics in Finance Accountancy.
c) Values in the Employment Relationship.
Q7) Define Ethics. Discuss the relation of Ethics and Human Resources Management?
Q8) What is the role of Ethics in Marketing?
HERE IS SOME SOME USEFUL MATERIAL.
SOME ANSWERS HELD BACK DUE TO SPACE CONSTRAINT.
PLEASE FORWARD THESE BALANCE QUESTIONS TO MY EMAIL ID
I will send the balance asap.
Q1) What is Ethical analysis and discuss its Application: in Corporate Decision making?
Ethics is unique among disciplines in that practitioners often cannot agree on a common definition of their topic. Ethics Scoreboard can't solve that problem, which is many centuries old. Here it attempts to put forth definitions that explain what words mean when they are used on this website.]
Values: Those qualities of behavior, thought, and character that society regards as being intrinsically good, having desirable results, and worthy of emulation by others.
Morals: Modes of conduct that are taught and accepted as embodying principles of right and good.
Morality: A system of determining right and wrong that is established by some authority, such as a church, an organization, a society, or a government.
Ethics: The process of determining right and wrong conduct.
Ethical System: A specific formula for distinguishing right from wrong.
Unethical: An action or conduct which violates the principles of one or more ethical systems, or which is counter to an accepted ethical value, such as honesty.
Non-ethical considerations: Powerful human motivations that are not based on right or wrong, but on considerations of survival and well-being, such as health, security, love, wealth, or self esteem.
Non-Ethical Considerations: Defined above, non-ethical considerations are important because they are often the powerful impediments to ethical conduct, and the cause of many conflicts of interest. Non-ethical considerations are many and diverse, and include:
• The need and desire for shelter, health, wealth, fame, security, self-esteem, reputation, power, professional advancement, comfort, love, sex, praise, credit, appreciation, affection, or satisfaction
• The desire for the health, comfort, safety, welfare and happiness for one's family, loved ones, friends, colleagues, an co-workers
• The pursuit of vengeance or retribution
• Hunger, lust, pain, ambition, prejudice, bias, hatred, laziness, fatigue, disgust, anger, fear
• …and many more
Ethical Dilemma: This is an ethical problem in which the ethical choice involves ignoring a powerful non-ethical consideration. Do the right thing, but lose your job, a friend, a lover, or an opportunity for advancement. A non-ethical consideration can be powerful and important enough to justify choosing it over the strict ethical action.
Ethical Conflict: When two ethical principles demand opposite results in the same situation, this is an ethical conflict. Solving ethical conflicts may require establishing a hierarchy or priority of ethical principles, or examining the situation through another ethical system.
Ethical Gray Area: Gray areas are situations and problems that don't fit neatly into any existing mode of ethical analysis. In some cases, there may even be a dispute regarding whether ethics is involved.
Reciprocity: The ethical system embodied by The Golden Rule, and given slightly different form in other religions and philosophies. It is a straight-forward way of judging conduct affecting others by putting oneself in the position of those affected. Reciprocity should always be available in any ethical analysis, but it is frequently too simple to be helpful in complex ethical situations with multiple competing interests.
Absolutism: Absolutist systems do not permit any exception to certain ethical principles. The champion of all absolutists, philosopher Emmanuel Kant, declared that the ethical act was one that the doer was willing to have stand as a universal principle.
One principle of absolutism is that human beings can never be harmed for any objective, no matter how otherwise worthwhile. Absolutism has the advantage of making tough ethical calls seem easy, and the disadvantage of making debate impossible. One sees absolutism reflected today in the controversies over war, torture, abortion, cloning, and capital punishment.
Utilitarianism: Utilitarianism accepts the existence of ethical conflicts and the legitimacy of some ethical dilemmas, and proposes ethical analysis based on the question, "Which act will result in the greatest good for the greatest number of people?' It entails the balancing of greater and lesser goods, and is useful for unraveling complex ethical problems. Its drawback, or trap, is that utilitarianism can slide into "The ends justify the means" without some application of absolutist and reciprocity principles.
The Gödel Incompleteness Principle: Czech-born mathematician Kurt Gödel proved that at the margins of any large logical system, such as arithmetic, or conceptual construct, such as Newtonian physics, problems would arise that could not be solved without going outside the system itself. If the system were enlarged to include these problems' solution, it would lose its integrity as a system. Hence all systems must be incomplete. In ethical terms, Gödel's liberating discovery means that no one ethical system will work for every problem, and that the fact that such a system does not solve a particular problem does not mean the system is invalid.
Cognitive Dissonance: Cognitive dissonance is a psychological phenomenon first identified by Leon Festinger. It occurs when there is a discrepancy between what a person believes, knows and values, and persuasive information that calls these into question. The discrepancy causes psychological discomfort, and the mind adjusts to reduce the discrepancy. In ethics, cognitive dissonance is important in its ability to alter values, such as when an admired celebrity embraces behavior that his or her admirers deplore. Their dissonance will often result in changing their attitudes toward the behavior. Dissonance also leads to rationalizations of unethical conduct, as when the appeal and potential benefits of a large amount of money makes unethical actions to acquire it seem less objectionable than if they were applied to smaller amounts.
THE PROCEDURE ITSELF
• Analyze the case.
a. What are the relevant facts?
b. Who are the stakeholders?
c. Isolate the ethical issues.
• Apply formal guidelines.
a. Consider common themes from corporate or professional codes of conduct.
personal integrity and claims of competence
personal responsibility for work
responsibility to employer or client
responsibility to the profession
confidentiality of information
conflicts of interest
the dignity or worth of people
public safety, health and welfare
participation in professional societies
increasing public knowledge about technology
b. Does the act violate or conform to the Golden Rule?
c. Who benefits from the action? Who is harmed by the action?
• Apply ethical theories.
a. Apply duty-based ethical theory.
Fidelity: Is there a promise that should be kept?
Reparation: Is their a wrong that should be righted?
Justice: Are there goods that should be distributed fairly?
Beneficence: Can the lot of others be improved?
Gratitude: Is an expression of gratitude appropriate?
Non-injury: Can others be protected from injury?
b. Apply rights-based ethical theory.
Is the right to know respected?
Is the right to privacy respected?
Is the right to property respected?
c. Apply consequence-based ethical theory.
d. Apply normative principles.
Apply the principle of nonmaleficence.
Apply the principle of informed consent.
• Apply relevant laws.
a. Consider laws passed to regulate the information industry.
b. Beware of the rare law that enforces unethical behavior.
• Apply informal guidelines.
a. Recalling your first impressions or reactions, what did your moral intuition say about the action or policy under consideration?
b. Apply the Mother test: Would you tell her? Would she be proud or ashamed?
c. Apply the TV test: Would you tell a nationwide audience of your actions?
d. Apply the Smell test: Do you feel "in your bones" that there is a problem?
e. Apply the Other Person's Shoe test: What if the roles were reversed?
f. Apply the Market test: Could you advertise the act to give you a marketing edge?
• Make a defensible choice.
This method is most useful when the DECISION-MAKER ...
o has a working knowledge of several ethical theories [step 3]
o has high initial sensitivity to relevant ethical "features" [step 1]
o has plenty of time for investigation and analysis
o is skilled in causal or consequential reasoning [step 3c]
o is skilled in the application of general ethical principles to specific cases [step 3]
This method is most useful in a SITUATION ...
o that will change little over time
o where the decision-maker is also a stakeholder
This method is most useful when STAKEHOLDERS ...
o share ethical codes or policies [step 2a]
o share ethical principles [step 4]
o share laws and legal precedents [step 4]
1. The Facts?
a. What facts make this an ethical situation? What are the significant features of the particular situation which make it an ethical situation? Is there some actual or potential harm involved for an individual or group? Does the situation relate to some basic human goods which are being created, distributed, denied or threatened? Does the situation affect human welfare in some significant way? Does it involve considerations of justice or rights?
Health coverage for workers involves deciding how to divide up the goods of the corporation which is not only an economic question of how to maximize the value of the firm but an ethical question of what is the best distribution, the most just distribution, or the distribution which fulfills each groups rightful claims on the value of the firm.
b. What facts are relevant to making an ethical decision? What facts should we know in order to decide how to act in this situation? Steps 1 and 2 are closely related. What facts are relevant will depend on what the ethical issues are and the ethical issues will be determined by the presence of certain facts. Thus the initial assessment of facts will have to be augmented once the ethical issues have been determined.
The facts in the Stern case would include: the cost to the company of the various coverage options, the short and long term economic prospects for the firm, worker demographics such as age, health status, level of economic sophistication, availability and cost of individual coverage, the effects of a change or lack of a change in coverage on the employees and the firm.
2. The Ethical Issues?
a. What level of ethical issues are we dealing with: systemic, corporate, or individual? Knowing the level of the problem will help us to decide who will be affected by the decision and will therefore qualify as stakeholders and who will be required to
make the decision--the society as a whole, decision makers within the corporation, or myself as an individual.
The Stern case involves corporate level issues, though reflecting on the high number of uninsured persons in the society and how that impacts on the corporation's cost of coverage may prompt the firm to get involved with the issue on an systemic level.
b. What specific ethical issues does this situation raise? Is it a question of how to maximize benefits and minimize harms. Is it a question of whether an action can be universalized? Of whether individuals are being treated as ends and not merely as means? Of whether all rational persons would agree that a particular action is right or good? Is it a question of a possible violation of rights or a conflict between rights? Is it a question of the fair distribution of benefits and burdens? Is it a question of how or whether to apply some specific ethical principle?
The ethical issues could be stated as follows:
(1) What level of health coverage do employees have a right to expect, given the history of the company?
(2) What level of coverage will maximize worker productivity while contributing the most to the profitability of the firm?
(3) Should the firm involve itself in the national debate on health care coverage?
c. What level of generality is required? The ethical issues need to be stated at a level of generality which will allow the issue to be discussed in as broad a terms as possible, so as to see all the possible ramifications, while yet being specific enough to lead to alternative actions in the case at hand.
The issue of health benefits for a corporation's employees should allow reference to the standards of the society as a whole but should refer to a decision to be made by this particular corporation.
3. The Alternatives?
Given the facts and the ethical issues, what alternative actions are possible in this situation? Initially we should state as many alternatives as possible without making judgments as to their plausibility. Having generated as many as possible, the most plausible should be chosen for further examination.
The corporation can provide no health benefits, co-pay with the employee, provide full benefits for the employee only, provide family benefits, open an HMO, and so on.
4. The Stakeholders?
a. Who will be affected by the alternatives and to what degree? We must determine who will be affected to a degree significant enough to include them among the primary stakeholders worthy of consideration. For systemic issues, which individuals, groups, institutions, and aspects of the physical, economic and social environment will be
affected. For corporate issues, who and what inside and outside the corporation will be affected: stockholders, government, society, the environment, suppliers, customers, local community, employees, managers and so on. For individual issues, who will be affected by the decision, both inside the company such as peers, superiors, other departments, and outside the company such as customers and suppliers.
In the health care example, the stakeholders include the corporation as a viable economic entity, the stockholders, the employees, their families and the local community.
b. How to rank stakeholder claims? Part of the decision making process will be to establish how much weight each stakeholder's claim deserves. This weighing of claims is often done intuitively. For purposes of justifying why the decision is the right one, however, the process for weighing the competing claims should be spelled out as much as possible.
c. The firm's claim on resources in order to continue as a viable economic unit would have be given the greatest weight, since without the firm none of the other stakeholders could receive any benefit. The competing claims of stockholders and workers would have to be given the next greatest weight since they contribute directly to the value of the firm and have legitimate claims on that value. Deciding on how much weight to give each group's claims would require and understanding of the capital structure of the firm (debt--equity balance, availability and relative cost of debt financing, and so on) and the history of the firm's relations with the employees (degree of worker contribution to finished product, loyalty and productivity of workers, average length of employment and rate of turnover, and so on). Families and the community would have less weight unless they have made equally important contributions to the firm.
5. The Ethics of the Alternatives?
a. Use ethical principles to decide on the best alternative. The ethics of each of the most plausible alternatives is assessed using ethical principles or rules. For each alternative, for example, we could ask the questions associated with the utilitarian, rights and justice principles to determine how the alternative is rated by each theory. When the alternatives have all been rated as right or wrong, good or bad, the object is to select the best alternative. In the ideal situation, all the ethical principles will point to the same alternative as the best one.
Utilitarian Principle: Given the relative importance of the firm, the stockholders and the employees,
which alternative would provide the greatest benefit to the greatest number? How would costs and benefits be measured in this case?
Rights Principle: What does each stakeholder have a right to expect with regard to health coverage? What alternatives would you not want imposed on you if you were in the position of any of the other stakeholders?
Justice Principle: Which alternative distributes the burdens and benefits most fairly among the stakeholders? Which stakeholders carry the greatest burden under each alternative?
b. How to decide when the theories point to different alternatives. There are situations in which different ethical principles will recommend different alternatives. In a case where the principles provide a mixed recommendation, we must choose which recommendation to follow and be prepared to justify that choice as best we can. Justification can be provided by showing why the theory(ies) indicates that alternative as the best and how this fits better into our conception of what the good life is than the alternatives suggested by the other theories. It may come down to the simple fact that, after inspecting all the alternatives with rationality and respect, I just do value one alternative, or one theoretical approach, or one point of view as highlighted by one theoretical approach, or one state of affairs provided by that alternative, or one value embodied by one alternative more than the others. I may not be able to say why I prefer that alternative except in terms of the way I choose to live my life and what my experience has shown me. Does the fact that I do not have another definite standard to appeal to, if two ethical theories should disagree mean that my decision is irrational or unjustified? The decision is rational in that I have made it on the basis of the careful consideration required by the seven step method and it is justified by showing why it is the best alternative according to at least one ethical theory. To say that I am willing to live by the decision is the only remaining justification.
6. The Practical Constraints?
a. Can the best alternative be put into effect?
Having decided on one alternative, we need to see whether there are any practical constraints which might prevent that alternative from being acted upon. When practical constraints rule out an alternative, we must return to Step 5 to select the next best alternative and subject it to the practical constraints test.
The best alternative may be to pay employees the maximum practicable wages and let them provide for their own health benefits. There may be a state or federal law mandating some level of company provided health coverage which would prevent our adopting this alternative.
b. Distinguish ethical from practical constraints. Ethical decision making involves ruling out alternatives on ethical grounds in Step 5 and on practical grounds in Step 6. In actual practice we often do not bother to distinguish the two different kinds of reasons for rejecting an alternative. It is be helpful to keep them distinct as far as possible in order to be clear as to what kind of reason we are giving. The difference between practical constraints and ethical considerations can best be illustrated by example.
In deciding on the level of health coverage from a rights perspective, we would weigh the competing rights of employees and the stockholders to the benefits of the company's operations. This ethical consideration would be different, however, from asking the
question of whether the stockholders or the workers would agree to accept a particular division of the benefits.
7. Actions to Take?
a. Implementing the best alternative. Having selected the best alternative which is not ruled out by practical constraints, we need to decide on the steps necessary to carry it out.
If a larger co-payment by employees is the best alternative, how will it be implemented?
a. A summary of the justification. We should also be prepared, at the close of this decision process, to provide a justification of why this course of action is the right or good one in this situation. Going through the seven steps justifies the decision in the fullest sense. We should be prepared, however, to respond in some briefer form to the legitimate requests of others--our superiors, our peers, the agents of society--for an explanation of why this alternative is the best approach to this situation. This summary based on the seven steps will also provide us with a briefer account to apply to similar situations in the future. The worst punishment would be to face the full seven step process for each and every ethical decision we make in our lives. We would have no time for living.
Q2) Define Corporate Ethical Leadership and discuss its nature and features?
Ethics is the heart of leadership,
Six Pillars of Character might easily be applied
to a business (or another) setting. These six pillars are:
• Trustworthiness - honesty, integrity, reliability, loyalty, keeping promises and not deceiving others
• Respect – using the Golden Rule or treating others as you wish to be treated, in
addition to being courteous, listening to others, and accepting individual differences
• Responsibility – accountability, self-control, the pursuit of excellence, and considering consequences of our actions prior to making them
• Fairness – playing by the rules, not taking advantage of others, making informed judgments without favoritism or prejudice, and not blaming others
• Caring - kindness, compassion, and altruism, acting to minimize hardship and to help others whenever possible.
• Citizenship – working to make one’s community better, protecting the environment, making our democratic institutions work, and operating within the
From a virtue or principle based ethical perspective, if leaders, executives, and managers adhered to the six pillars in day to day decision making, an ethical environment might likely be created, and in turn, employees might follow. Once an ethical
environment is created, employees and management develop trust in one another. Good
leaders garner trust. Trust can be developed in many ways but most fundamentally
through leading by example. Leaders must do ethical things on a consistent basis in plain
and full view for their constituents to see. Transparency is critical in creating an ethical environment.
Characteristics of Ethical Leaders
ten facets of ethical leaders offer a way to understand ethical leadership that is more complex and more useful than just a matter of “good character and values.”
1. Articulate and embody the purpose and values of the organization.
It is important for leaders to tell a compelling and morally rich story, but ethical leaders must also embody and live the story. This is a difficult task in today’s business environment where everyone lives in a fishbowl—on public display. So many political leaders fail to embody the high-minded stories they tell at election time, and more recently, business leaders have become the focus of similar criticism through the revelations of numerous scandals and bad behaviors. CEOs in today’s corporations are really ethical role models for all of society.
2. Focus on organizational success rather than on personal ego.
Ethical leaders understand their place within the larger network of constituents and stakeholders. It is not about the leader as an individual, it is about something bigger—the goals and dreams of the organization. Ethical leaders also recognize that value is in the success of people in the organization.
3. Find the best people and develop them.
This task is fairly standard in different models of leadership. Ethical leaders pay special attention to finding and developing the best people precisely because they see it as a moral imperative—helping them to lead better lives that create more value for themselves and for others. Finding the best people involves taking ethics and character into account in the selection process.
4. Create a living conversation about ethics, values and the creation of value for stakeholders.
Too often business executives think that having a laminated “values card” in their wallet or having a purely compliance approach to ethics has solved the “ethics problem.” Suffice it to say that Enron and other troubled companies had these systems in place. What they didn’t have was a conversation across all levels of the business where the basics of value creation, stakeholder principles and societal expectations were routinely discussed and debated. There is a fallacy that values and ethics are the “soft, squishy” part of management. Nothing could be further from the truth.
In organizations that have a live conversation about ethics and values, people hold each other responsible and accountable about whether they are really living the values. And, they expect the leaders of the organization to do the same. Bringing such a conversation to life means that people must have knowledge of alternatives, must choose every day to stay with the organization and its purpose because it is important and inspires them. Making a strong commitment to bringing this conversation to life is essential to do if one is to lead ethically.
5. Create mechanisms of dissent.
Many executives don’t realize how powerful they are simply by virtue of their positions. Psychologists such as Stanley Milgram have long ago demonstrated that most of the time people will obey what they perceive to be legitimate authority, even if there is no cost for disobedience. To avoid this “Authority Trap” it is critical to have an established and explicit way for employees to “push back” if someone thinks that a particular market, region, or internal process is out of line.
This needs to be made part of the organizational culture, not just a line item in a compliance program document. Some companies have used anonymous e-mail and telephone processes to give employees a way around the levels of management that inevitably spring up as barriers in large organizations. Many executives also have used “skip level” meetings where they go down multiple levels in the organization to get a more realistic view of what is actually going on.
6. Take a charitable understanding of others’ values.
Ethical leaders can understand why different people make different choices, but still have a strong grasp on what they would do and why. Following twenty-seven years in South African prisons, Nelson Mandela was still able to see the good in his jailers. After one particularly vicious jailer was being transferred away from Robbins Island because of Mandela’s protest and push back, the jailer turned to Mandela and stated “I just want to wish you people good luck.”5 Mandela interpreted this statement charitably as a sign that all people had some good within them, even those caught up in an evil system. Mandela felt that it was his responsibility to see this good in people and to try and bring it out.
7. Make tough calls while being imaginative.
Ethical leaders inevitably have to make a lot of difficult decisions, from reorienting the company’s strategy and basic value proposition to making individual personnel decisions such as working with employees exiting the organization. Ethical leaders do not attempt to avoid difficult decisions by using an excuse of “I’m doing this for the business.” The ethical leader consistently unites “doing the right thing” and “doing the right thing for the business.”
The idea that “ethical leadership” is just “being nice” is far from the truth. Often, exercising “moral imagination”6 is the most important task.
8. Know the limits of the values and ethical principles they live.
All values have limits, particular spheres in which they do not work as well as others. The limits for certain values, for instance, may be related to the context or the audience in which they are being used. Ethical leaders have an acute sense of the limits of the values they live and are prepared with solid reasons to defend their chosen course of action. Problems can arise when managers do not understand the limits of certain values.
As an example, one issue common to the recent business scandals was that managers and executives did not understand the limits of “putting shareholders first.” Attempts to artificially keep stock prices high—without creating any lasting value for customers and other stakeholders—can border on fanaticism rather than good judgment. Ethics is no different from any other part of our lives: there is no substitute for good judgment, sound advice, practical sense, and conversations with those affected by our actions.
9. Frame actions in ethical terms.
Ethical leaders see their leadership as a fully ethical task. This entails taking seriously the rights claims of others, considering the effects of one’s actions on others (stakeholders), and understanding how acting or leading in a certain way will have effects on one’s character and the character of others. There is nothing amoral about ethical leaders, and they recognize that their own values may sometimes turn out to be a poor guidepost.
The ethical leader takes responsibility for using sound moral judgment. But, there is a caution here. It is easy to frame actions in ethical terms and be perceived as “righteous.” Many have the view that ethics is about universal, inviolable principles that are carved into stone. We need to start with principles and values, and then work hard to figure out how they can be applied in today’s complex global business environment.
Principles, values, cultures, and individual differences often conflict. Ethical leadership requires an attitude of humility rather than righteousness: a commitment to one’s own principles, and at the same time, openness to learning and to having conversations with others who may have a different way of seeing the world. Ethics is best viewed as an open conversation about those values and issues that are most important to us and to our business. It is a continual discovery and reaffirmation of our own principles and values, and a realization that we can improve through encountering new ideas.
10. Connect the basic value proposition to stakeholder support and societal legitimacy.
The ethical leader must think in terms of enterprise strategy, not separating “the business” from “the ethics.” Linking the basic raison d’être of the enterprise with the way that value gets created and society’s expectations is a gargantuan task. But, the ethical leader never hides behind the excuse of “It’s just business.”
Becoming an EthicalLeader
We have been privileged to know many executives that we would classify as ethical leaders. What these executives have in common is a profound and deep sense of ethical principles, values, and character at the core of their leadership. They see their job as making others better, and enabling them to pursue their own hopes and dreams. They are able to get things done in complicated organizations and societies. But, it is their ethical core which pervades their relationships with followers, the skills and processes which they use in leading them, their analysis of the contexts, and their own sense of self.
Becoming an ethical leader is relatively simple. It requires a commitment to examining your own behavior and values, and the willingness and strength to accept responsibility for the effects of your actions on others,
Ethical leaders speak to us about our identity, what we are and what we can become, how we live and how we could live better.
as well as on yourself. A “responsibility principle” is a necessary ingredient for “managing for stakeholders” to be useful in today’s business world. Ethical leaders must consider and take responsibility for the effects of their actions on customers, suppliers, employees, communities and other stakeholders. If business were simply concerned with shareholder value, then this “responsibility principle” would be unnecessary, other than the responsibility to shareholders.
To become an ethical leader, commit to asking yourself the following types of questions:
(1) What are my most important values and principles?
(2) Does my calendar—how I spend my time and attention—reflect these values?
(3) What would my subordinates and peers say my values are?
(4) What mechanisms and processes have I designed to be sure that the people who work for me can push back against my authority?
(5) What could this organization do or ask me to do that would cause me to resign for ethical reasons?
(6) What do I want to accomplish with my leadership?
(7) What do I want people to say about my leadership when I am gone?
(8) Can I go home at the end of the day and tell my children (or a loved one) about my leadership, and use my day’s work to teach them to be ethical leaders?
The best way for organizations to develop ethical leaders is to engage in some of these questions. Viewing business simultaneously in economic and ethical terms helps to send the message that ethics isn’t just an important set of rules not to violate, but that it is an integral part of what it means to work at your organization.
There are some concrete steps about how best to develop ethical leaders within the framework that most global businesses find themselves. The first step is to bring life to a conversation about how the organization benefits its stakeholders and about understanding the organization’s values.
This doesn’t need to be a formal program. It could be as elaborate as town hall meetings. Or, as one executive suggested to us, we simply could have an “ethics” or “stakeholders” moment at most meetings. Such moments, analogous to “safety moments” at companies like DuPont, set aside a brief time to raise concerns about the effects of the meeting on key stakeholders, or on a company’s values and ethics. Equally, the “ethics” moment could elaborate on how the conversations and decisions of the meeting were aligned with company values.
Many companies have leadership development programs. These programs need to be strengthened by adding the idea of “ethical leadership.” It is not necessary to use the specific principles we have developed, but companies can make themselves better by engaging participants in a conversation about what they see as “ethical leadership.” Executives can develop shared conversations and conceptions of how “ethical leadership” can be implemented in their particular company.
Executives need to figure out how to have “challenge meetings,” routine processes where anyone in the organization can raise a challenge to whether or not the company is living its values, or its enterprise strategy approach. Without the ability to challenge authority, there can be no such thing as true ethical leadership.
Many fear that anarchy would be the result of such a process. Our experience is just the opposite. Values, purposes, principles, an enterprise approach—all deliver a disciplined way to think about how to make the business better and more effective, and help to develop pride in the organization.
Q3) What is Corporate Social Responsibility? Explain its characteristics?
Approaching your business aims responsibly, with an awareness of your surrounding social and environmental needs, in order to fulfil stakeholder demands, achieve a profit and remain competitive.
There are several areas that companies should be addressing in order to become more socially responsible. Many of the issues that are being grouped under the heading of CSR are
already part of the daily work of professionals, but are not being recognised specifically as social obligations. These include Ethics, Human Rights, Community, Environment and Employee
The Business Case for CSR: What are the benefits?
The potential benefits of CSR for companies include enhanced reputation, competitive edge, better risk management and a more committed and efficient work force; all of which could
have a considerable effect on profits. Practising greater responsibility could also have a positive
impact on wider society and the environment.
Implementing CSR: How is it done?
All businesses can benefit from engaging in 'stakeholder dialogue', which means defining and talking
to the groups and individuals that affect, and are in turn affected by, your operations.
Other ways of approaching CSR depend on the size of the company but include building on existing business aims and policies that demonstrate social responsibility by producing
plans and value statements to show the ways in which you and your staff aim to progress.
The Business Case for CSR:
What are the benefits?
that implementing a CSR policy,
“...can bring real business benefits
-by reducing risk,
-by enhancing brand value,
-by opening doors and creating good will, and
-by improving staff efficiency and morale.
-It can also attract stable and
ethical investment and add competitive edge.”
-the reputation of businesses and the quality of their work is constantly under scrutiny from environmental pressure groups, the media and the public, as well as from potential clients and investors. Having a competitive edge is crucial to the survival of any
firm and the concept of CSR provides for individuals and companies to demonstrate industry leadership.
It is therefore crucial for ORGANIZATION professionals to realise that CSR does not provide a new set of business objectives to be met.
Rather, identifying CSR objectives for your business will provide you with a fresh approach to fulfil your existing targets and will illustrate to your stakeholders that corporate social responsibility has always been and will continue to be an integral part of your operations.
A more socially responsible perspective can also improve on staff shortages, has outlined the need for the industry to improve the recruitment and retention of a 'quality workforce'.
Demonstrating your social responsibility could place you higher up on a graduate's list of potential Employers.
This interest in issues of an environmental and ethical nature means that the ORGANIZATION
must emphasise its role in these areas in order to produce the enthusiastic, committed and loyal
workforce that it requires for the future. The social responsibilities of a business must begin at its
core; that is by adapting to values that its employees can relate to.
Finally, the possibility that CSR can lead to financial benefits should not be overlooked by the ORGANIZATION. Running your company in a socially responsible way should be seen as an
As a result of making social responsibility a fundamental driving force of business, ORGANIZATION professionals may notice better productivity and quicker completion on site due (for example) to changes in employee morale, better community relations (fewer complaints) and better dialogue with supply chain.
Employee volunteering has benefited ORGANIZATION.
The benefits of an Employee Volunteer Program are many, and building a strategic program that is integrated with core business objectives and core competencies creates a meaningful and sustainable program. Join this growing volunteer movement and your employees, shareholders, community, and company all benefit.
Benefits to the Employees
• Improves performance
• Increases job satisfaction, attitude and morale
• Encourages teamwork
• Promotes leadership and skill development
• Improves communication between employees and their supervisors, and across departments
Benefits to the COMPANY
• Builds brand awareness and affinity
• Strengthens trust and loyalty among consumers
• Enhances corporate image and reputation
• Improves employee retention
• Increases employee productivity and loyalty
• Provides an effective vehicle to reach strategic goals
Benefits to the Community
• Provides skilled and talented volunteer pool, as employees devote personal and professional skills to community needs
• Offers direct cost savings for community service organizations in saved recruiting and labor costs
• Creates quantifiable social impact
• Helps bring community needs into focus
long-term strategic benefits of the CSR to an organization?
Strategy is the alignment of resources and capabilities to win in the market. The more encompassing, pervasive, and thorough the strategy is throughout an organization, the more effective it should be. Generally speaking, the harder you try to make something happen, the more likely it will happen. The same is true with an organization and its devotion to a particular cause. The more the organization tries to enact a given strategy, the more likely it is to happen.
Corporate Social Responsibility is a great example of a common category of effort that organizations pursue which has great potential for enabling the organization’s strategy, but often falls very short of realizing the full potential. Often times, companies will have a volunteer day, a cause that it endorses or a charitable organization it helps out.
The effects of corporate social responsibility are many fold. Usually this takes the form of putting in some volunteering hours for local clubs or community efforts. What ends up happening is that the employees help out in the community, some positive visibility to the organization comes through, possibly tax benefits are derived, and the organization’s employees feel that they are making a positive impact where they live, which boosts morale. These efforts are good, but not great. Quite easily, they could be great if channeled and reframed to maximize the potential.
How to do this will depend on what is most needed or wanted in an organization. What you want to do is find out where the sweet spot is with the kind of visibility, networking, impact and so forth you want to make, be known for, or receive. That sets the desired outcome and measures of success, which should align well with the overall strategy an organization is pursuing. Additionally, you would want to pair up the kind of output your employees want to do. That sets your current state and desired approach. The support and channeling is where the magic happens to make the link between the organizational strategy and what activities employees would like to do for their corporate social responsibility projects. In this linkage, look for ways of doing the following:
• Making a lasting impact
• Helping out in areas that will set up your organization for increased chances of success
• Finding areas where a small change can have large benefits to your organization and the organization that you are helping out
• Making the benefits repeatable and having a cumulative effect
• Finding areas to get the right kind of visibility
• Being very certain that the way your employees participate is in tune with their own beliefs/desires because their enthusiasm carries through for impact and quality of time spent
• Researching and understand where your involvement can make the biggest potential feedback
• Enabling connectivity to the community, brand recognition and relationship building
An example that comes to mind is an idea I proposed when working at a small consulting firm a few years back. The company wanted to grow and was constantly on the lookout for new business analysts and potential consultants. The firm, being personally and professionally invested in the community, was very much in tune with helping out the surrounding organizations and the city overall. What I suggested was that, as a CSR effort, the company partner with schools or professional organizations to put on case study competitions, business plan competitions, and the like while the small consulting firm would help out in a sponsor/volunteer capacity. What this would do is help out the community by finding ways to improve the quality of business plans, critical thinking and other abilities of those involved. The consulting firm employees would be able to directly impact and enhance the innovation and idea incubation through the competition structure while helping improve the individual’s efforts at the same time. Plus, the consulting firm would gain exposure to new ideas, potential candidates and gain insight into perspective client organizations (particularly through real case studies).
By taking a strategic approach, companies can determine what activities they have the resources to devote to being socially responsible and can choose that which will strengthen their competitive advantage. By planning out CSR as part of a company’s over all plan, organizations can ensure that profits and increasing shareholder value don’t overshadow the need to behave ethically to their stakeholders.
• Strategic CSR provides companies with solutions for:
• Balancing the creating of economic value with that of societal value
• How to manage their stakeholder relationships (especially those with competing values)
• Identifying and responding to threats and opportunities facing their stakeholders
• Developing sustainable business practices
• Deciding the organization’s capacity for philanthropic activities
The difference between ordinary CSR and CSR that brings strategic advantages to an organization is the method and approach behind the CSR. If CSR is approaches as a means to further enact an organization’s strategy, it has the potential for great benefit.