Business Ethics and Social Responsibility - 1
Business Ethics and Social Responsibility - 1
Business Ethics and Social Responsibility - 1
The study of business ethics refers to the ethical dimensions of productive organizations and
commercial activities, according to the Stanford Encyclopedia of Philosophy. It applies to the
production, distribution, marketing, sale and consumption of goods and services. It can include
potentially controversial issues like insider trading, bribery and discrimination.
From its roots in ancient Greece to modern topics like unequal gender pay, business ethics is a
large field of study. There are several journals devoted to business ethics, and it appears in
mainstream philosophy and social science journals as well. However, there is a difference
between business ethics and social responsibility (and corporate social responsibility).
Consumers interact with the brands and people in a business, and these exchanges affect the
success of the business. For example, small businesses depend on reputation and trust among
people in the community. By treating employees and customers well, businesses can gain the
community’s support.
Unethical business practices can have the opposite effect on customers. False or discriminatory
advertising, negative treatment of employees and ignoring safety concerns in products can
undermine consumer confidence. Legal action can also result.
Some companies have adopted the social entrepreneurship model of business that focuses on
applying practical, innovative and sustainable approaches to benefit society. The shoe retailer
TOMS is one of the most popular examples of the social entrepreneurship model. For every pair
of shoes sold, the company provides a new pair of shoes to children in developing countries.
Corporate social responsibility is similar to ideas of social responsibility for individuals and
businesses. Some sources provide similar definitions for the two terms, but corporate social
responsibility is a specific business approach that began in the 1950s and 1960s, with definitions
expanding in the ensuing decades.
Some organizations engage in corporate social responsibility activities for intrinsic reasons: to
help out and make societal contributions. Another motive is extrinsic, which relates to a
company expecting financial or other benefits for socially responsible behavior. Many studies
reflect positive organizational outcomes for corporate social responsibility activities, the Journal
of Business Ethics reports. Finally, a third motive for corporate social responsibility activities is
meeting societal expectations and stakeholder pressure.
Interaction
In this context, corporate social responsibility becomes synonymous with the duties and
relationship between the business and the environment that facilitates its existence. And thus, it
is not enough to cover certain ethical practices in businesses. For instance, corporate social
responsibility does not include the ethicality of how the organization pursues profits or
subscribes to political associations.
Corporate social responsibility is related to business ethics, but the former is a narrow topic
within the latter area. Businesses should use corporate social responsibility along with processes
like corporate governance, corporate outreach and politics, business process redesign and
corporate strategy to reconcile with the ethicality of doing business, according to Procedia
Economics and Finance.
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