ethics & csr

Ethics and CSR

"What does ethics mean to you?“

"What does ethics mean to you?“

• A few years ago, sociologist Raymond Baumhart asked business people. Major replies were-

• "Ethics has to do with what my feelings tell me is right or wrong.“

• "Ethics has to do with my religious beliefs.“• "Being ethical is doing what the law requires.“• "Ethics consists of the standards of behavior our

society accepts.“• "I don't know what the word means."

Three Domains of Human Action

Amount of

Explicit ControlHigh Low

Domain of Certified Law

(Legal Standard)

Domain of Ethics

(Social Standard)

Domain of Free Choice

(Personal Standard)

Ethical Dilemma

• A situation that arises when all alternative choices or behaviors have been deemed undesirable.

• Potentially negative ethical consequences, making it difficult to distinguish right from wrong.

Ethics

• The code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.

Criteria for Ethical Decision Making

• Most ethical dilemmas involve A conflict between needs of the part & whole. The individual versus the organization. The organization versus society as a whole. What will be your take for above???

Four Considerations inEthical Decision Making

Utilitarian Approach Individualism Approach Moral-Rights ApproachJustice Approach

Utilitarian Approach

Moral behavior produces the greatest good for the greatest number.

Computations can be very complex, simplifying them is considered appropriate.

Critics fear a “Big Brother” approach and ask if the common good is squeezing the life out of the individual.

Individualism Approach

Acts are moral when they promote the individual's best long-term interests.

Individual self-direction paramount.

Individualism is believed to lead to honesty & integrity since that works best in the long run.

Moral-Rights Approach

• Asserts human beings have fundamental rights and liberties.

• Moral decisions are those that best maintain the rights of those people affected by them.

• An ethical decision is one that avoids interfering with the fundamental rights of others.

“Moral Rights” Considerations

The right of free consentThe right of free consent

The right to privacyThe right to privacy

The right of freedom of conscienceThe right of freedom of conscience

The right of free speechThe right of free speech

The right to due processThe right to due process

The right to life & safetyThe right to life & safety

Justice Approach

• Moral Decisions must be based on standards of equity, fairness, and impartiality.

• Treatment of individuals should not be based on arbitrary characteristics.

• Organizations and individuals could draft code of conduct, make it known to all and implement equally on all

• Closet thinking to codified law.

Levels of Moral Development

SOURCES: Based on L. Kahlberg, “Moral Stages and Moralization: The Cognitive-Developmental Approach, in Moral Development and Behavior: Theory, Research, and Social Issues, ed. T. Lickona (New York: Holt, Rinehart, and Winston, 1976), 31-53; and Jill W. Graham, “Leadership, Moral Development and Citizenship Behavior,” Business Ethics Quarterly 5, no. 1 (January 1995), 43-54.

Social Responsibility

• Organization’s obligation to make choices and take actions that will contribute to the welfare and interests of society and organization.

• Distinguishing right from wrong.• Being a good corporate citizen.Many social responsibilities issues are ambiguous

with respect to right and wrong.

Shades of Corporate Green

Activist Approach

Actively conserve the environment

Stakeholder ApproachAddress multiple stakeholder concerns

Market ApproachRespond to customers

Legal ApproachSatisfy legal requirements regarding environmental

conservation

Total Corporate Social Responsibility

Corporate Responses toSocial Demands

Proactive

Take social initiatives.

Proactive

Take social initiatives.

Accommodation

Accept ethical responsibility.

Accommodation

Accept ethical responsibility.

Defense

Do only what is legally required.

Defense

Do only what is legally required.

Obstruction

Fight all the way.

Obstruction

Fight all the way.

High

Low

Degree of Social Responsibility

Three Pillars of an Ethical Organization

SOURCE: Adapted from Linda Klebe Trevino, Laura Pincus Hartman, and Michael Brown, “Moral Person and Moral Manager,” California Management Review 42, No. 4 (Summer 2000), 128-142.

Enlightened Companies

• Realize the importance of:– integrity– trust