Chapter 9 – Business ethics and social responsibility

Question 1

What are ethics?

Answer 1

Ethics - the rules and principles of behaviour which help us decide between right and wrong.

Question 2

What is business ethics?

Answer 2

Business ethics cover every aspect of business activity from macro issues, including pollution reduction, responsible use of raw materials and corporate reporting, as well as micro issues, including fair pay, management and individual behaviour.

Question 3

What are the five views of business ethics devised by Chryssides and Kaler? BAGCU

Answer 3

1. Business is business: the aims of an organisation are purely commercial and therefore the maximisation of the perceived expectations will outweigh any ethical dimension e.g. selling goods with a known fault or danger might be perceived as acceptable under this view
2. Act consistently with the law: this should underpin ethical decisions e.g. above example would be as unacceptable with this view
3. Good ethics mean good business ‘coincidence theory’: organisational sustainability is closely linked with the perception by stakeholders of good business ethics: e.g. while it might be acceptable to manufacture and sell a particular product, if that product were deemed to be damaging the reputation, it is likely that it would be withdrawn
4. Conventional morality: business will operate in line with the prevailing moral codes of the society which it is based – e.g. such codes will evolve with the passage of time, codes will differ significantly within different geographic locations (e.g. bribery accepted as a normal part of business in many parts of the world)
5. Universal morality: people in the business world should maintain the same standards of ethical behaviour in business as they would in their private lives.

Question 4

What is the purpose of a code of ethics?

Answer 4

A document or policy setting out the company’s ethical values and standards. Its purpose is to set out the standards of ethical behaviour that the company expects of its Board and workforce.

1. The structural requirements will ensure alignment or compliance with the underlying and professional levels of conduct that are associated with an organisation, sector or profession
2. The practical input will be a wide view of how the organisation, sector or profession expects people adhering to the code to behave
3. The personal section may well include specific examples illustrating how people are expected to behave, how they will be judged, and the potential organisation and personal consequences of non-compliance
4. The pressures at the bottom, the combination of societal values and legal requirements, will affect style, impact and veracity of the eventual fate and/or effectiveness of our code

Question 5

CSR should be part of strategy - outline PELE from Caroll’s Pyrarmid.

Answer 5

Philanthropic – ‘giving back’
Economic – be profitable – taxation
Legal – obey laws and regulations
Ethical – an organisation needs to act like a ‘good corporate citizen’

Question 6

According to Hamel, what is values based leadership?

Answer 6

Hamel (2012) discusses a values-based approach to leadership, recognising that managers only have a certain level of control and influence over individual employees. He suggests that obedience, diligence and expertise can be expected, controlled and even commanded. However,** initiative, creativity and passion can be inspired in staff by managers, but not commanded.**

Question 7

What are the four different types of CSR approach according to Johnson et al (2017)? LESS

Answer 7

1.** Laissez-faire** - profit - minimum govt interference - defensive
2. Enlightened self-interest - good business means good ethics - reactive
3.** Stakeholder interaction** - triple bottom-line perspective - proactive - partnership
4. **Shaper of society **- visionary - defining

Question 8

How would you audit CSR?

Answer 8

Triple bottom line reporting - PPP
- Profit - financial performance
- People - stakeholders
- Planet - environment, economy and society

Johnson et al suggests that the areas within CSR that need to be reviewed and audited are differentiated into internal and external aspects.
- internal - employees welfare, working conditions, intellectual property
- external - environment, products, marketing, community activity, human rights

Question 9

What is sustainability as part of strategy?

Answer 9

Sustainability refers to an organisation focusing on its long-term survival.