The sessions. In a report by Kotler and

Topic: BusinessLeadership
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Last updated: June 1, 2019

The relationship between corporate social responsibilityand ethical decision making has always been a hot topic, especially given thenumber of scandals which illustrate these two important business aspects do notalways align.

When discussing the concept of CSR, ethics are always at theforefront. Thus, in analysing this relationship, it is important to understandthat ethics are usually associated with morals, and this is what governs thebehaviour and decision-making process of corporations. Morals such thoserelated to honesty, respect, integrity, etc. However, isn’t ethics and moralslargely dependent on the individual or organisation, as well as based on thesituation at hand? According to the online Journal of Business Ethics, CorporateSocial Responsibility is really ‘a commitment to improve community well-beingthrough discretionary business practices and contributions of corporateresources’.

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It recognises the need for organisations to behave as good andresponsible corporate citizens. This usually involves them not only adhering tolaws, but operating their businesses in a manner which supports the environment.Because being a law-abiding organisation does not necessarily equate to being anethical one, these CSR initiatives are sometimes done to promote the company’spublic image and brand.

Ethics also involve understanding and doing what is acceptedas being right or wrong. The concept of ethical decision-making usually has avariety of meanings to different people. Moreover, it appears organisations arebecoming more socially aware, and have integrated CSR in their strategyplanning sessions.

In a report by Kotler and Lee, a KPMG 2002 survey of theGlobal Fortune Top 250 companies ‘indicated a continued increase in the numberof American companies reporting on corporate responsibility’ (2004).Nonetheless, given past scandals and the notion thatbusinesses are profit hungry, organisations are increasingly focused on theconsequences of their actions. They are now actively seeking to ensure theirdecision-making process is deemed ethical, and in the best interest of its employees,shareholders, stakeholders and the wider business and local community. Fromboth an individual and organisational perspective, ethical underpinnings of CSRusually has much to do with reputation. For individuals, this reputation isrelated to how they are perceived by others. For an organization, its relatedto its ‘good deeds’ and its relationship with its customers, vendors, employeesand the wider local and global community.

Such displays of social responsibilityare tied to good decision making and ethical behaviour, which is also associatedwith good businesses. Don’t employees, shareholders and the community want tobe associated with ‘good business’ organisations? There are many widely accepted and well-respectedperspectives and frameworks regarding ethics. These are utilitarianism,deontology, social justice and the virtue theory. Utilitarianism places anemphasis on results, not rules, and on finding the best possible result.

It isbased on the theory that ‘an action (or set of actions) is generally deemedgood or right if it maximizes happiness or pleasure throughout society'(Gunzenhauser, 2012). According to Gunzenhauser, Immanuel Kant viewed deontologyas focusing on ‘having a moral intent and following the right rules is a betterpath to ethical conduct than achieving the right results’. (2012). It operateson the notion of ‘duty first’, and that we should all behave in a moral andrational manner.

Further, Gunzenhauser noted, the social justice and socialcontract theory rests on the concept of ‘distributive justice’ and thatorganisations have a duty ‘to give to unmet needs in society.’ The virtuetheory focuses on the value of having virtuous qualities rather than on formalrules or right results. It has gained popularity in the business community andis linked to the reason why, so many organisations have set objectives andtargets linked to CSR.Ethical frameworks provide guidance for ethical decisionmaking. Further, isn’t making ethical decisions difficult and challenging forindividuals and organisations? This appears to primarily be because thesedecisions are not always straightforward and again are usually dependent on thesituation at hand. As an individual, whilst I do see some value in the otherwell accepted frameworks and their strong points, I support the virtue theory.I operate on a system of respect for myself and others, honesty, integrity,respect, fairness, meritocracy, responsibility and accountability.

I believe iforganisations truly applied similar frameworks, many of the scandals of thepast 20 years, could have been avoided. Scandals such as Enron which includedgross conflict of interests and displays of unethical behaviour by the Enronexecutives, but even more so by the Arthur Andersen auditing company, whichassisted Enron in covering their loses and poor accounting practices. In discussing the relationship between CSR and ethicaldecision making, it is also important to note stakeholders play a critical rolein these CSR policies and strategies. As noted by Ferhan Syed in a TotalQuality Management online report, stakeholder groups form the basis of successand failure of the business.

They are the ‘individuals or groups that haveinterests, rights, or ownership in an organization and its activities.’ (2009).Therefore, it is in turn critical to understand and see how important it isthat stakeholder interests are taken into consideration in an organisation’sCSR policy and strategies. In his report Sayed further noted stakeholders caneither benefit from well implemented CSR policies and strategies, or be gravelyaffected by its mistakes. The company I currently work for has very well implementedCSR policies, which forms part of its business model, is listed as one of itscore values, and is included in its annual corporate targets and employeeobjectives. These policies include environmental stewardship, volunteering inthe local community, assisting the elderly, issuing annual scholarships andoffering internships to local students to name but a few. Every employee mustcommit to a minimum of 10 hours of volunteer work per year, which, whilst itseems little, adds up to be significant.

They seem to have implemented amixture of the deontology and virtue theory of ethical frameworks, and their gooddeeds seem to be well received, and has garnered much support from employees,and is appreciated by the local community. In conclusion, it is clear, that corporate socialresponsibility and ethical decision making are intertwined, although not alwaysworking in tandem. This is primarily because organizations are viewed ascitizens of the countries in which they operate. It is also important thatcorporations give something back to their communities, in the form ofcharitable projects, and CSR has somewhat become the ‘bible for today’s goodcorporate citizen.’ 

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