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Introduction: Corporate Social


Responsibility (CSR); Business Ethics;
A business case for CSR

Dr. Eugene Hickland


Business Ethics and
CSR
MG6104

Learning Outcomes

To critically understand Corporate Social Responsibility (CSR)


To critically understand Business Ethics
To critically evaluate how CSR & Business Ethics is managed & implemented
To critically understand stakeholder theory and implications of for Managing
Business Ethics/Ethical Decision Making

To critically examine how CSR & Business Ethics can be integrated into the
corporate governance framework

To critically assess the relationship between employees, HRM, HRD & CSR and
Business Ethics

To have a critical understanding of the complex relationship between suppliers,


competitors, the Global Value Chain & CSR & Business Ethics

Learning Outcomes

To critically understand the role of the consumer & social marketing in the CSRBusiness Ethics relationship

To have a critical understanding of the complex relationship between suppliers,


competitors, the Global Value Chain & CSR & Business Ethics

To critically understand the role of the consumer & social marketing in the CSRBusiness Ethics relationship

To have a critical understanding of social accounting and socially responsible


investment and finance

To have a critical understanding of key regulatory institutions (e.g., the ILO, OECD)
& policy interventions such as the UN Millennium Development Goals, the UN Global

Compact & philanthropy.

To critically evaluate a posited CSR and organisational performance link: Is there a


business case for CSR & Business Ethics?
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Learning Outcomes

To critically understand the importance of social innovation


To critically understand the importance of environmental
management & sustainable development

To have a critical understanding of the future of CSR


The module bridges across many subject areas: accounting, crosscultural management, economics, finance, HRM, innovation
management & marketing.

Assessment

Team assignment 3,000 words, based on case studies contained in the


Crane & Matten, Business Ethics book. There are 4-5 questions at the

end of each of the selected case study that you need to answer.

The assignment brief (also in hard copy) and the cases are scanned and
on Blackboard. You will be assigned into your teams by the next
weekend

The assignment is due by 5pm on Friday, 20th November (Turnitin


& hard copy)

The assignment = 50% of your overall mark (5% of which is peer


assessment. The assessment forms will be posted on Blackboard).

The exam = 50%. 2 hours. Normally, this involves answering 2 (of 6)


questions with multiple parts.
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Key terms, CSR and the business case for CSR

Introduction of Key Terms


The debate: a business case for CSR?
The debate against current usage of CSR

What is business ethics

Business ethics is the study of business situations,


activities, and decisions where issues of right and wrong
are addressed- Ethics provide rationality for morals

Businesses are institutions

What level do ethics apply- macr0, micro or meso?


In practice ethics is often dilemmas
Modern Rights as theories developed in 3 stages political,
social and cultural (Campbell, 2006) a pre-occupation for
over 2,000 years (Herbert, 2002)

Defining business ethics in action

constitutive parts of business ethics:

Individual business ethics

Management ethics

Organisational ethics

Societal business ethics


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Ethics and the law

Culture
Context
grey
area

Laws
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Defining ethics, morality and laws

Morality: is concerned with the norms, values and


beliefs embedded in social processes which define right
and wrong for an individual or a community (often
linked to religion and the law).

Ethics: is concerned with the study of morality and the


application of reason to elucidate specific rules and
principles that determine right and wrong for any given
situation (do you abide by the moral code of
country/village in which you reside?).
These rules and principles are called ethical theories.

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Relationship ethics, morality and laws


to
produce
ethical
theory

Ethics
rationalise
morality

Morality

Ethics

that

can be
applied
to any
situation.
Ethical
theory

Potential
solutions to
ethical
problems,
incl CSR

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Why is business ethics important?


1.
2.
3.
4.
5.
6.
7.

Power and influence of business in society


Potential to provide major contribution to society
Potential to inflict harm

Increasing demands from stakeholders


Lack of business ethics education or training
Continued occurrence of ethical infractions
Evaluating different ways of managing business ethics

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What is CSR?

No consensus see discussion in


Blowfield & Murray, Ch 1 quite a lot of

customised interpretation to suit


individual companies.

Corporate Social Responsibility


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Six components of CSR (McGeough, 2015)

Stakeholder Responsibility
Discretionary Initiatives
Corporate Values
Ethical Conduct
Mutual Benefits
Effective Action
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CSR is voluntary

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What are we seeing more CSR?

Pressure from consumers & investors who expect organisations


to behave responsibly.

Consumer awareness especially your generation about


green issues; sustainability; ethical treatment of employees,
especially in the developing world.

Legislation national level; EU.


Institution pressure from organisations such as the UN; OECD & the
International Labour Organisation (ILO):

Media & Social Media Pressure

A rise in the business case for CSR.


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The case for CSR

Human Resources helps with recruitment & selection of


employees & staff morale

Risk Management investment in ethical brand equity


Brand Differentiation:
USP (Unique Selling Point)
Build brand loyalty
Reputation & brand attractiveness
In sum, CSR has the potential to add value to organisations;
enhance their performance & sustainability.
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Why not CSR

May take management focus away from core business activity a


distraction.

May appear cosmetic & tokenistic without genuine social benefit.


May make a business more vulnerable (appear more unethical) if
things go wrong eg in their global supply chain (example we just saw
in Bangladesh & Lidls).

Reduce profitability & shareholder value?

Restriction to free trade eg UK govts, under Thatcher, opposition


to trade sanction against South Africa during apartheid.
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Classic case against CSR

The Friedman doctrine (Milton Friedman, Nobel Prize, Economics,


1976): states that the only social responsibility of business is to increase
profits (especially shareholder value), provided that the company stays
within the rules of the law. Friedman stated that:

There is one and only one social responsibility of business to use its
resources to engage in activities designed to increase its profits so long
as it stays within the rules of the game which is to say that it engages
in open and free competition without deception or fraud (Friedman,
1970, cited in Beauchamp & Bowie (2001): p. 55).

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Summary

The study of business ethics is entwined with


culture, context and laws

CSR is a business strategy based on


sustainability or business advantage?

Examine the debates and business examples of

implementing an ethical agenda and developing


CSR programmes
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Further Readings

Blowfield & Murray, Chs 1, 2, 4


Crane & Matton, Chs 1 & 2
Friedman, M. (1970), The Social Responsibility
of Business is to Increase its Profits, New York
Times Magazine, 13 September

Burchell (Ed.), Section 3: pp. 84-89.


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