Corporate Social Responsibility (csr) and Ethics

Corporate Social Responsibility (CSR) and Ethics

Definition of Ethics

The accepted definition of ethics is those accepted principles of right or wrong that govern the conduct or actions of a person or group of people. Business ethics refer to the accepted principles that govern businesspeople in organizations. Ethical business strategy is strategy that guides an organization's members in ways that do not violate these accepted principles. From a global perspective, ethical dilemmas stem from variations among political systems, laws, and cultures that define the accepted principles of right and wrong differently from nation to nation. The most common ethical issues in international business involve employment practices, human rights, environmental regulations, corruption, and the moral obligation of multinational corporations.

Terms and Concepts

Kantian Ethics: People should be treated as ends, and never purely as means to the ends of others.

Cultural Relativism: Ethics are cultural determined and companies should adopt the ethics of the cultures in which they operate.

Rights Theories: Human beings have fundamental rights and privileges that transcend national boundaries and cultures.

Justice Model: Ethics is the attainment of a just distribution of economic goods and services that is considered fair and equitable.

Moral Rights Model: The fundamental rights and privileges of the people, such as people's rights to freedom, life and safety, privacy, free speech, and freedom of conscience should be protected.

Utilitarian Model: Production of the greatest good for the greatest number of people. The moral worth of actions or practices is determined by their consequences.

The Universal Declaration of Human Rights is a United Nations document that lays down the basic principles of human rights that should be adhered to.

Article 1: All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

Article 23:

1. Everyone has the right to work, to free choice of employment, to just and favorable conditions of work, and to protection against unemployment.

2. Everyone, without any discrimination, has the right to equal pay for equal work.

3. Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worth of human dignity, and supplemented, if necessary, by other means of social protection.

4. Everyone has the right to form and to join trade unions for the protection of his interests.

In In a Different Voice, C. Gilligan (1982) defines ethical actions as a series of caring relationships that evolve over time, focused first on the self, then on dependent others, and finally, on establishing equality of needs between self and others so that dynamic relationships can replace dependent ones. This model of self, dependent other, dynamic equality can be used by multinationals in developing countries.

Assessing the Changing Paradigm

The product contract.

Some multinational corporations are recognizing that selling to a global market requires that they put themselves in the shoes of those to whom they wish to sell. For example, five years ago, the new CEO of Proctor and Gamble (P&G), A.G. Lafely, challenged product designers to design products for the poor in developing countries rather than just downsizing or downpricing products designed for consumers in the developed countries. P&G now designs low-income products, but only after researchers spent time in the homes of the targeted customers' homes studying everyday habits from tooth-brushing frequency in Venezuela to clothes washing in Russia. In China, for example, research into a prototype disposal diaper found that many Chinese believe that disposable diapers cause infertility or bow-leggedness. In Venezuela, they found women with minimal incomes who bought beauty products from Avon because Avon's catalogue was a wish book they could peruse every evening after the children were in bed. P&G now has its own wish book. (Ellison, 2005; Katz, 2005).

The CSR contract.

P&G's competitor, Unilever, has a CEO, Patrick Cescau, who has developed corporate social responsibility projects that are specific to the local needs.

The world is Unilever's laboratory. In Brazil, the company operates a free community laundry in a Sao Paulo slum, provides financing to help tomato growers convert to eco-friendly "drip" irrigation, and recycles 17 tons of waste annually at a toothpaste factory. Uniliver funds a floating hospital that offers free medical care in Bangladesh, a nation with just 20 doctors for every 10,000 people. In Ghana, it teaches palm oil producers to reuse plant waste while providing potable water to deprived communities. In India, Unilever staff help thousands of women in remote villages start micro-enterprises. And responding to green activists, the company discloses how much carbon dioxide and hazardous waste its factories spew out around the world. (Endgardio, 2007, p. 52)

As Cescau sees it, helping such nations wrestle with poverty, water scarcity, and the effects of climate change is vital to staying competitive in the coming decades. "Some 40% of the company's sales and most of its growth now take place in developing nations" (Engardio, 2007, p. 52).

In addition to designing products and choosing CSR projects specifically for the needs of people in specific developing nations, companies can bring their expertise in business and marketing to help Non-Governmental Organizations (NGOs), Not-for-Profits, and even governments implement programs. Marketing requires knowledge of the culture and needs of those who are being targeted. Even those organizations whose main purpose is to solve local problems need to know how to persuade people to change their habits. "Non-governmental organisations, accustomed to the role of good Samaritans, had to learn the art of marketing. . . . Now, says one mission-member, 'It is not a programme, it is a movement'" ("The eight commandments," 2007, p. 25).

The 1980s were declared the "sanitation decade" by the UN. In India, where contaminated water caused death from diarrhea, the government built toilets out of brick.