Article on Ethics, Business Ethics and Corporate Social Responsibility

Submitted To:
Dr. M A Mannan Professor Department of Management Studies University of Dhaka

Submitted By:
Name: Rafiqe Hasan MBA Serial No. 259 MBA 13th Batch Strategic & International Management Department of Management Studies University of Dhaka

Date of submission: 11 September, 2012

Ethics and Corporate Social Responsibility

Abstract: The concepts of Ethics, business ethics and corporate social responsibility in the old vis--vis the new economy. The effects of globalization and its impact on the transition from the industrial to the digital era are explored. Although the behaviour of business organizations has always had a profound worldwide impact, with the decline of the nation state economic power has, for the first time, eroded political power. Simultaneously, the undergoing revolution in contemporary information and communication technologies has significantly empowered the customer. Responding to enhanced customer awareness and sensitivity to business and social responsibility issues -coupled with consumers' increasing ability to react- companies in the digital age may be expected to develop even stronger cultures of corporate social responsibility, proactively seeking to increasingly honour their moral obligations to society in the 21st century.

Definition of ethics: General meaning of Ethics is moral principles that govern a persons or groups behavior. In other word ethics is the moral correctness of specified conduct. Ethics, also known as moral philosophy, is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong behavior. By Wikipedia What is Business Ethics? Business ethics are moral principles that guide the way a business behaves. The same principles that determine an individuals actions also apply to business. Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. By Wikipedia Acting in an ethical way involves distinguishing between right and wrong and then making the right choice. It is relatively easy to identify unethical business practices. For example,

companies should not use child labour. They should not unlawfully use copyrighted materials and processes. They should not engage in bribery. However, it is not always easy to create similar hard-and-fast definitions of good ethical practice. A company must make a competitive return for its shareholders and treat its employees fairly. A company also has wider responsibilities. It should minimize any harm to the environment and work in ways that do not damage the communities in which it operates. This is known as corporate social responsibility. Definition of Corporate social responsibility: In general corporate social responsibility (CSR) is the process by which businesses negotiate their role in society. In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what should be done. Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior. According to Wikipedia corporate social responsibility (CSR) is a companys obligation to be accountable to its entire stakeholder in all its operations and activities with the aim of achieving sustainable development not only economical but also social and environmental dimensions. An Authors named Joseph Blumberg, Vice-president, Group M. defined CSR Corporate social responsibility is just the way of the world. It is about a change in world-wide consciousness. The train is moving in some countries slowly maybe and in some countries faster but it is moving. And businesses can either get on board or get off. Approaches of CSR: 1. Continental European approach 2. Anglo Saxon Approach 3. Canadian (Montreal school of CSR) 4. Philanthropy approach 5. Fair Trade 6. Creating Shared Value

Reasons behind CSR: 1. CSR is now must with gaining profit. 2. CSR activities are important to and even expected by the public. 3. And they are easily monitored worldwide. 4. CSR activities help organizations hire and retain the people they want. 5. CSR activities contribute to business performance.

Business Ethics Activities: 1. Philanthropy give money or time or in kind to charity 2. Integrative philanthropyselect beneficiaries aligned with company interests 3. Philanthropy will not enhance corporate reputation if a company fails to live up to its philanthropic image or if consumers perceive philanthropy to be manipulative Ways Companies Integrate Ethics: Incorporate values to make it part of an articulated belief system Act worldwide on those values a) Cause-related marketing b) Cause-based cross sector partnerships Engage with stakeholders a) Primary stakeholders b) Secondary stakeholders Four Challenges to a Global Ethic: 1) Global rules emerge from negotiations and will reflect values of the strong 2) Global rules may be viewed as an end rather than a beginning 3) Rules can depress innovation and creativity 4) Rules are static but globalization is dynamic

Example of corporate social responsibility:

Corporate Social Responsibility of Pran Food Products LTD.: The idea of corporate social responsibility is being widely promoted all over and rightly so. Here is a corporate whose corporate mission embodies in itself corporate social responsibilities with the additional compulsion to make profits in order to thrive and grow which it must to fulfill its corporate social responsibilities in greater measure as time passes. PRAN has a bifocal objective of making profits through the fulfillment of corporate social responsibilities. PRAN-RFL is a concept: away to fight poverty & hunger in Bangladesh in the shortest possible time through employment generation. PRAN Signifies investment in agro processing: creating demands for farm produce which create jobs in rural areas also preventing urban migration. PRANs aim to add value to agricultural harvest. Bangladeshs comparative advantage lies in creating a competitive edge in value added agricultural products. This is what PRAN Stands for. The Groups major achievement has been to try to consolidate fragmented land holdings and to organize farmers into contract growers of specific crops for consumption in PRANs major processed products. With the elimination of the middlemen, farmers receive fair prices for their produce & due to technical assistance from the agro-processing industry; yields, quality and income have risen considerably. Poverty alleviation through profitable enterprises is now a reachable goal for many farmers. This resolution is perhaps PRANs greatest achievement. We know that the success of our business relies on a healthy environment. Were doing all we can to be good a steward of our planets resources. Our CSR effort revolves around the four premises i.e. Environment, Energy Preservation, Community & People to improve the quality of livelihood:

Promises to The Environment 1. Community forestation: In different locations around Bangladesh, we are planting trees to save our GREEN PLANET. 2. Effluent Treatment Plant (ETP): To ensure safe disposal of factory wastage we are got ETPs in all the establishments of our Group. 3. Heat Recovery Boiler: We recover the heat to save energy that we produce and utilize in our production facilities in all locations. Promises to The Energy Preservation We use: SKY-Light Roof to utilize daylight during factory operation CFL Bulbs at our Factories and offices to reduce Power Consumption Powered Trucks to reduce Air Pollution and usage fossil fuel for all vehicles. Promises To The People To Consumer: 1. We care for our consumers need and satisfaction. Through our communication activities, we let our consumer know about the benefits of our products and innovations. Our approach is to do responsible marketing and have four clearly defined principles that guide our communications: 2. We aim at building trust through clear communication. 3. We fully support consumers right to know what is in our products and we are transparent in terms of ingredients. We provide clear communication about our product ingredients, date of expire, nutrition values, etc. 4. We support our consumers by listening their suggestion, claims or feedback through use of a combination of channels which include websites and Care line phone numbers, etc to reduce any kind of misconception. 5. We provide clear price communication.

To Employee: 1. Equal opportunity are given to both male, female candidates irrespective of race, religions, culture etc. 2. Selection is done based on merits and qualifications. Everyone has got clear-cut job descriptions and got equal opportunity to contribute and share their ideas and thoughts to grow in the company. 3. Employees are rewarded with salary, commission and incentives as per standards. Workers and staffs are provided with free & subsidized food from the factory and office cafeterias. 4. Employees health and hygiene are taken out most care with full time adequate numbers of Doctors, nurses and other medical supports. 5. To develop the human skills, both on the and off the jobs trainings are constantly being provided to all the workers and staffs.

Promises to the Community: Dairy Development: To develop the dairy industry in Bangladesh, PRAN has started Dairy Hub operations in Bangladesh at its own cost were we are organizing farmers, counseling for raring of dairy & providing cattle feed, Artificial Insemination and other veterinary support to the farmers to increase the dairy yields.

Education Development: PRAN is promoting education and supporting several schools in their operations proving the salary of the teachers and staffs, providing books, arranging special coaching for the students.

Other Social Support: 1. Helping Mosque, Temple & Churches. 2. Working together with Red crescent. 3. Collecting and donating blood. 4. Working for the disabled. 5. Working with SAVE THE CHILDREN. 6. Helping the community in natural calamities. 7. We provide Airport Support for the Hajj Pilgrims every year from Bangladesh to KSA.

And finally We are a business entity. We care for the Environment, Natural resources, community and for the employee who works with us. We feel, we are doing well to the society while running our business profitably.

Conclusion: Corporate social responsibility should be viewed as a process and not as a destination. It emerged in response to public disillusionment with the traditional role of business and continues to be driven by a combination of forces involving consumers, shareholders, and citizens. Over the last five years, efforts have been made to strengthen the CSR movement through rigorous processes of standardizing, reporting, and auditing social and environmental performance. Yet, progress is limited by the reality that CSR remains a purely voluntary, self-regulated movement.

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