The relationship between corporate social responsibility
and ethical decision making has always been a hot topic, especially given the
number of scandals which illustrate these two important business aspects do not
always align. When discussing the concept of CSR, ethics are always at the
forefront. Thus, in analysing this relationship, it is important to understand
that ethics are usually associated with morals, and this is what governs the
behaviour and decision-making process of corporations. Morals such those
related to honesty, respect, integrity, etc. However, isn’t ethics and morals
largely dependent on the individual or organisation, as well as based on the
situation at hand?
According to the online Journal of Business Ethics, Corporate
Social Responsibility is really ‘a commitment to improve community well-being
through discretionary business practices and contributions of corporate
resources’. It recognises the need for organisations to behave as good and
responsible corporate citizens. This usually involves them not only adhering to
laws, but operating their businesses in a manner which supports the environment.
Because being a law-abiding organisation does not necessarily equate to being an
ethical one, these CSR initiatives are sometimes done to promote the company’s
public image and brand.
Ethics also involve understanding and doing what is accepted
as being right or wrong. The concept of ethical decision-making usually has a
variety of meanings to different people. Moreover, it appears organisations are
becoming more socially aware, and have integrated CSR in their strategy
planning sessions. In a report by Kotler and Lee, a KPMG 2002 survey of the
Global Fortune Top 250 companies ‘indicated a continued increase in the number
of American companies reporting on corporate responsibility’ (2004).
Nonetheless, given past scandals and the notion that
businesses are profit hungry, organisations are increasingly focused on the
consequences of their actions. They are now actively seeking to ensure their
decision-making process is deemed ethical, and in the best interest of its employees,
shareholders, stakeholders and the wider business and local community. From
both an individual and organisational perspective, ethical underpinnings of CSR
usually has much to do with reputation. For individuals, this reputation is
related to how they are perceived by others. For an organization, its related
to its ‘good deeds’ and its relationship with its customers, vendors, employees
and the wider local and global community. Such displays of social responsibility
are tied to good decision making and ethical behaviour, which is also associated
with good businesses. Don’t employees, shareholders and the community want to
be associated with ‘good business’ organisations?
There are many widely accepted and well-respected
perspectives and frameworks regarding ethics. These are utilitarianism,
deontology, social justice and the virtue theory. Utilitarianism places an
emphasis on results, not rules, and on finding the best possible result. It is
based on the theory that ‘an action (or set of actions) is generally deemed
good or right if it maximizes happiness or pleasure throughout society’
According to Gunzenhauser, Immanuel Kant viewed deontology
as focusing on ‘having a moral intent and following the right rules is a better
path to ethical conduct than achieving the right results’. (2012). It operates
on the notion of ‘duty first’, and that we should all behave in a moral and
rational manner. Further, Gunzenhauser noted, the social justice and social
contract theory rests on the concept of ‘distributive justice’ and that
organisations have a duty ‘to give to unmet needs in society.’ The virtue
theory focuses on the value of having virtuous qualities rather than on formal
rules or right results. It has gained popularity in the business community and
is linked to the reason why, so many organisations have set objectives and
targets linked to CSR.
Ethical frameworks provide guidance for ethical decision
making. Further, isn’t making ethical decisions difficult and challenging for
individuals and organisations? This appears to primarily be because these
decisions are not always straightforward and again are usually dependent on the
situation at hand.
As an individual, whilst I do see some value in the other
well accepted frameworks and their strong points, I support the virtue theory.
I operate on a system of respect for myself and others, honesty, integrity,
respect, fairness, meritocracy, responsibility and accountability. I believe if
organisations truly applied similar frameworks, many of the scandals of the
past 20 years, could have been avoided. Scandals such as Enron which included
gross conflict of interests and displays of unethical behaviour by the Enron
executives, but even more so by the Arthur Andersen auditing company, which
assisted Enron in covering their loses and poor accounting practices.
In discussing the relationship between CSR and ethical
decision making, it is also important to note stakeholders play a critical role
in these CSR policies and strategies. As noted by Ferhan Syed in a Total
Quality Management online report, stakeholder groups form the basis of success
and failure of the business. They are the ‘individuals or groups that have
interests, rights, or ownership in an organization and its activities.’ (2009).
Therefore, it is in turn critical to understand and see how important it is
that stakeholder interests are taken into consideration in an organisation’s
CSR policy and strategies. In his report Sayed further noted stakeholders can
either benefit from well implemented CSR policies and strategies, or be gravely
affected by its mistakes.
The company I currently work for has very well implemented
CSR policies, which forms part of its business model, is listed as one of its
core values, and is included in its annual corporate targets and employee
objectives. These policies include environmental stewardship, volunteering in
the local community, assisting the elderly, issuing annual scholarships and
offering internships to local students to name but a few. Every employee must
commit to a minimum of 10 hours of volunteer work per year, which, whilst it
seems little, adds up to be significant. They seem to have implemented a
mixture of the deontology and virtue theory of ethical frameworks, and their good
deeds seem to be well received, and has garnered much support from employees,
and is appreciated by the local community.
In conclusion, it is clear, that corporate social
responsibility and ethical decision making are intertwined, although not always
working in tandem. This is primarily because organizations are viewed as
citizens of the countries in which they operate. It is also important that
corporations give something back to their communities, in the form of
charitable projects, and CSR has somewhat become the ‘bible for today’s good