9 - Business ethics and social responsibility

Question 1

3 learning outcomes - Chapter 9

Answer 1

• understand the difference between principle-based ethics and situational-based ethics.
• consider how and why the growth of corporate social responsibility (CSR) has challenged organisations to search deep within themselves to protect and enhance their strategy and their business.
• understand and demonstrate how culture, governance, purpose and ethics can be aligned strategically to enhance organisational reputation; and the risks of getting this wrong.

Question 2

Principle ethics vs situational ethics - difference

Answer 2

Principle ethics - little room for choice

Situational ethics - response will be based upon particular circumstances of situation with which we are faced

Question 3

Define integrity

Answer 3

The quality of being honest and having strong principles

Question 4

Define objectivity

Answer 4

Not being influenced by personal feelings or opinions in considering and representing facts

Question 5

Define ethics

Answer 5

A code of behaviour considered correct, especially that of a particular group, profession or individual

Question 6

Define moral

Answer 6

Concerned with or relating to human behaviour, the distinction between right vs wrong

Question 7

Constance Bagley’s decision tree - whether a decision should be made - when should we decide to proceed with an action?

Answer 7

The proposed action is legal, maximises shareholder value, and is ethical.
or
The proposed action is legal, and it would be unethical not to take the action (even if not maximising shareholder value).

Question 8

5 different views of business ethics

Answer 8

Business is business - org is purely commercial and ethical dimensions are outweighed

Act consistently within the law - law should underpin ethical decision-making

Good ethics means good business - org sustainability is closely aligned with perception by stakeholders of good business ethics

Conventional morality - business will operate in line with prevailing moral codes of society within which they are based

Universal morality - people in business world should maintain standards of ethical behaviour in business as they would in private lives

Question 9

CGI are expected to adhere to CGI Code of Prof Ethics and Conduct, which comprises 4 principles:

Answer 9

• Integrity
• High standard of service/professional competence
• Transparency
• Professional behaviour (conforming with relevant laws and paying regard to all regulations)

Question 10

4 aspects of life of an org that CSR is aligned with

Answer 10

• Impact org has on the world and on people
• Ethical norms and behaviours that can and cannot be expected from any org
• Manner in which employees are treated
• Ethics and ethos that are expected throughout the org

Question 11

Recognition of CSR, in its fundamental form, is a commitment:

Answer 11

to contribute to economic development from within an ethical framework, while seeking to improve the quality of life for employees and families, local community and society at large

Question 12

What does CA 2006 require on CSR (indirectly)

Answer 12

• Directors have duty to ensure decision-making encompasses wider environment
• Director’s report requires companies to demonstrate to their members how they have fulfilled their duties

Question 13

Carrol’s pyramid of CSR - 4 levels

Answer 13

• Philanthropic responsibilities (desired by society)
• Ethical responsibilities (expected by society)
• Legal responsibilities (required)
• Economic responsibilities (required)

Question 14

4 ethical stances

Answer 14

Laissez-faire - focus on profits and shareholder value

Enlightened self-interest - commercial benefit of positive CSR stance recognised

Stakeholder interaction - org recognised benefit or working closely with wider stakeholder community, proactive in approach

Shaper of society - seen as visionaries with the ability to influence of social change

Question 15

3 different perspectives on (types of) sustainability

Answer 15

• Economic
• Social
• Environmental

Question 16

Differentiation between CSR (the R) and sustainability?

Answer 16

Responsibility = our accountability to and impact upon others

Sustainability = our accountability to and impact upon ourselves and others

Question 17

4 benefits to business of incorporating sustainability into overall strategic thinking

Answer 17

Business protection = reduction of risk of harm to org
Business operation = wider awareness of direct and indirect costs over longer time
Business growth = widening breadth of strategic consideration will lead to consideration of greater range of opportunities
Business reputation = being known for a sustainable CSR approach