Aligning Business Ethics and Corporate Social Responsibility

History tells us that ethics generate trust. But before anything else, ethics create a reputation, which in turn develops the elements of trust between people. The thrust of intensive ethical attention in business is brought about by the growing power of consumers towards businesses. Gone are the days when they would just buy products based on what it offers because now they would likely care about the brand’s practices. Consider the impact of Nike’s marred reputation on its economic activities when unethical workplace environments and practices were made public. The company was quick to decide on what it should do to the situation, which is to gain public trust again through public showmanship of ethical efforts.

Although ethical choices are unavoidable and ethics is inescapable even in business, the intensity of such phenomenon has increased due to the growing concern on the collective impact of a business’ unethical action. The centrality of ethics in business has been the concern regarding the growing inquiry of why huge organizations fall. Advocates of business ethics claim the centrality of ethics in business life. The spotlight on business ethics is mainly directed on huge issues such as financial scandals, bribery, human rights violation and so on however, issues concerning ethics arise in even the tiniest business activities.

It is important to note that business ethics differ from corporate social responsibility. Business ethics concerns everyday ethics on the way the business is conducted concerning customers, employees, products, contracts, and so on. In other words, business ethics is exclusive to the internal dimension (employees, shareholders) and the intrinsically outward dimension (customers, suppliers) that the business touches. Corporate social responsibility differs but not apart from business ethics. It is an extension of business responsibility that does not, like business ethics, directly offer the same reciprocity of economic result. Hence, business ethics is imperative while corporate social responsibility is an option this is in a sense that corporate social responsibility is not within the legal responsibility of a business. For instance, some companies may not uphold corporate social responsibility but they do exercise a form of business ethics (i.e. small and medium-sized enterprises). Conclusively, business ethics is inescapable and mandatory but corporate social responsibility is today amidst the buzz on the term, still dependent on the choice of the company.

However, the attention given to corporate social responsibility has been extensive. Growing concerns on environmental degradation and human rights violations have led to numerous initiatives by non-profit organizations and governments. Initially, profit organizations were blamed for the messy situation. The media has been successful in marketing the need for corporate social responsibility, especially among the world’s biggest companies. With that, growing concerns on corporate social responsibility were instilled in people. Thus, pressure from the external environment definitely fueled corporate social responsibility to be placed at the forefront of business ethics.

Indeed, today’s social responsibility has meant a business means for-profit organizations. Before, it was nothing but a humdrum, as it was perceived apart from business objectives and agenda. Hence unlike business ethics, it is not imperative to business continuity. Decades ago, social responsibility was merely corporate goodwill that organizations can do without. Today, it is viewed as a source of competitive advantage. It has also been incorporated in business strategies as crucial in the development of new business ideas and markets.

In other words, nowadays companies are recognizing the greater need to furthering business ethics by extending it to the adoption and the associated publicity of corporate social responsibility. It is has become the newest fad that provides significant business benefits. The World Business Council defines corporate social responsibility as “business’ commitment to contribute to sustainable economic development working with employees, their families, local community, and society at large to improve their quality of life”. Companies do that through corporate social initiatives including but not limited to health care, product safety, employment, education, community development, and the environment. Corporate social initiatives come in different forms from funds to services. The gist of the phenomenon is of course economy-driven because the more socially responsible the company is, the more it garners favor from society. With that, there is less pressure from non-government organizations, the government, and even consumers themselves and society in general.

Nowadays there are many trends in corporate social responsibility. First is augmented giving to charities. Second is the increased reporting of corporate responsibility. In addition, an increasing number of corporate websites have also provided a specified section for corporate responsibility initiatives since the new millennium. In the web section, visitors are provided with enormous information about the company’s goodwill activities and ethical efforts. The third is the establishment of a corporate social norm that aims to institute good works as a key corporate principle. Company CEOs (i.e. Dell, American Express, Ford, HP, etc.) are key advocates of corporate social norms to do good. Thus, as leaders, CEOs effectively promote the change in corporate social norms directed towards making goodwill to all as a collective practice of companies. Finally, there is the trend of corporate perspective transition from giving as an obligation to giving as a strategy. This means using corporate social responsibility as an added tool for business development. Several companies (i.e. AT&T) initially perceived the business role of social responsibility through integrating corporate foundation (.i.e charity) to business models. Thus, as early as the 1990s, some companies have aligned social responsibility to business objectives.

Conclusively, in today’s corporate social responsibility, the conflict between ethics and economy seems to have been put to rest. Companies have found a way to be socially responsible without compromising the economy through aligning ethics with business objectives. With that, they make ethics useful in making a profit. Publicity and the increase of corporate social initiatives greatly contribute to a desirable reputation and a good reputation is like a magnetic force that attracts people. As a result, companies that adhere to corporate social responsibility at least if they do so publicly reaps the benefit of ethical efforts through the result of a variety of positive financial impact. In other words, corporate social responsibility is an investment, and return on investment is usually expected.

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