Ethics: What Is Corporate Social Responsibility?

Ethics: What is Corporate Social Responsibility?

MGMT 351: Principled Leadership Instructor: Theran Muggleston Tusculum College

By: Deanna Branham

Abstract

Corporate social responsibility as defined by Ford (2013) is the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large. This paper discusses corporate responsibility, and how companies can rise above immoral acts. In addition to discussing corporate responsibility, this research looks at Pope Benedict XVIs paper "Caritas in Veritate". "Caritas in Veritate" discusses business ethics and scripture, and how it relates to ethics in businesses as well as how consumers affect a business' bottom line. The ethical example used in this paper is Toyota, and their decision to hire former federal investigators from the National Transportation Safety Board, who disregarded consumer safety by putting shareholder value above corporate responsibility

Ethics: What is Corporate Responsibility?

Our founding fathers developed our constitution using morals and ethics, which we could refer to as "principled leadership". Their moral compasses were guided by their religious beliefs. Although church and state operate separately, our civic leaders are free to use their religious beliefs to guide them when placed in ethically arduous situations. Do Biblical principles belong in the world of business? Many people disagree with Biblical principles being used to solve problematic situations in a professional setting. Ethically, in addition to providing a first-rate product to their consumers, business executives have an obligation to maximize stockholder wealth, while providing a reasonable salary and a safe working environment for their employees. Over the past decade, Corporate Social Responsibility (CSR) has risen to the forefront of the business community.

"Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large" (Ford, 2013, p.52). Theoretically, businesses give their organizations a cultural or ecofriendly façade known as "green washing" (Ford, 2013.) However, those with a genuine interest in CSR argue that companies should seek to do good as well as avoid harm. This can mean investing in renewable energy projects, rather than merely avoiding heavily polluting coal fired plants. It could mean providing training courses for workers that both help the company and help the individual, while also seeking to support local organizations that provide that training. It can also involve investment in water, power, and transport infrastructure that can benefit the company as well as the local community.

Business ethicists question how organizations can rise above corruption and succumb to a level of social responsibility worthy of everyone involved, from the stakeholders to the consumers as well as the community where the organization resides. What's the business plan?, an article written by Kirk O'Hanson (2009) explains how Pope Benedict XVI and the catholic church view economic ethics. O'Hanson states the Pope speaks to the leaders of global business. In the "Caritas in Veritate", The Pope grieves the rise of business executives in affluent countries as well poverty-stricken countries who consider their wealth a "right". "The Pope argues instead for the principle of gratuitousness or giftedness, whereby all who have wealth understand it as a gift from God that it must be put to use for the welfare of the people (O'Hanson, 2009, p.14)" O'Hanson points out, while the message is important, what constitutes ethical behavior for businesses is not discussed. The Pope also addresses the consumer in his reading. He warns consumers