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Ethics and Corporate Social Responsibility Essay

Free Essay Example on Business Ethics and Social Responsibility 

Ethics analyzes the character, pattern of behavior of an individual or a group. Therefore, the accepted code of conduct or values within the society is referred as ethics. Ethics is a natural part of any business, which it must adhere to on daily basis. The issues revolving around ethics are diverse. They include the interaction of the business with the external world and come down to how the business deals with customers on a one on one basis (Werther, & Chandler, 2010). All businesses are interested in making money and increasing their profits. However, the way a business conducts itself in this process brings up the issue of ethical behavior.

Each business should therefore strive to have a good reputation. What factors are there to be considered that makes a business to be considered ethical or unethical. We must analyze ethical principals and moral problems associated with businesses. The business conduct must begin with the individuals in the organization and extend to the entire organization. Ethical issues thus should reflect the relations between profit maximization and non-economic issues. Therefore, as businesses strive to make maximum profits they should also look into some rules that govern society at large or ethical customs. Businesses should be responsible for business activities that go beyond profit making.

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Corporate Social Responsibility (CSR) is a self-regulating means that ensures the compliance of businesses with law and ethical standards (Prahalad, 2002). The aim of CSR is to encourage constructive actions through its activities on the environment, employees, consumers and communities. Organizations also involve themselves in activities, which eliminate activities that can cause harm to the public. The organization achieves this by deliberately including the public interest in their decision making process.

Multinational organizations began using the term CSR in the 1960s. Their aim was to influence everyone who their activities impact. These are the stakeholders and the public sphere. The issue of CRS has received both widespread support and criticism. Those who support it say that it enables organizations to make more profits because they operate with perspective. Critics on the other hand maintain that CRS eats into the profits of the organization thus distracting it from achieving its economic objectives (Mullins, 2004).

Law and ethical behavior

Ethics influences our lives in a big way. It comes in at work, at home, when we are playing and in nearly everything else. Every time we are interacting with other people, we have to do it in an ethical manner (Griffin, & Moorhead 2007). In short, ethics are a set of rules, which guide our every action. The rules are generally unwritten. Ethical behavior, which is accepted in the society, means that one is living according to these rules.  The society has a set of standard that it accepts as right. Since each individual have his or her own moral code, laws are necessary to protect us. Many laws have their basis on ethics, but a few are not. Laws therefore direct us to behave in an ethical manner. Since we fear the consequences illegal actions, we uphold ethical behavior (Kotler, 2004).

However, not all-ethical behaviors have become law. For illustration, we know that lying in the witness box is against the law. This offence is called Perjury. On the other hand, it is not unlawful to tell a friend a lie. This behavior is however unethical. You can cheat a friend if you were playing a game with him. This action is not unlawful bet unethical.  There are other behaviors which are both unethical and against the law. Cheating about your taxes is both unethical and against the law.

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People develop a sense of what is right or wrong as they grow up (Haynes, 2003). Our morals are based on the things around us. Take a child who grew up in an environment where both parents were lies. This person will probably be a liar when he becomes of age. He may know very well that it is not right to tell lies, but he probably will not think of lying as unethical. Such a person believes that lying is a lifestyle.

Illegal behavior and ethics

Some illegal behaviors are ethical, for illustration let us consider an action like stealing bread. We all know that people steal bread because they are hungry. Maybe a small percentage can steal bread to sell it, but majority of people who steal food do it when they are actually in the verge of collapsing because of hunger. Probably they have no jobs and cannot afford to buy food. In this case, though stealing is illegal, I can say that it is ethical. We can also think of a case like Euthanasia. A patient may literally beg a doctor to inject him or her with poison. Killing someone is illegal, but in such a case, I can say that it is ethical to end someone’s life. A doctor ending the life of a patient who is living in agony every single day and night and have very low probability of getting better is ethical. Other examples include a doctor who has prescribed Marijuana to his patient who has undergone chemotherapy. Doctors do this to assist patients to overcome nausea. Even though use of marijuana is illegal, I see this prescription as ethical.

Industry examples

Several companies direct their Corporate Social Responsibility activities towards preservation of environment. As you sow, (AYS) conducted a research on companies that recycle plastic and SocialFunds. Com emerged top. The research was based on two major areas namely, beverage container recovery and reduction of the packaging material. SocialFunds. Com is making polyester from plastic bottles as a way of giving back to the society.  The company is leading in container recycling followed by Coke and Pepsi. The CEO of friends of earth while commending the company said, “We join As You Sow and the Container Recycling Institute in calling for beverage companies to step up and improve their recycling efforts as well as to support public policies and programs to boost collection and recycling rates” (Kaliski, 2001). The company promotes effective community collection programs of plastic.

Gap Inc is using big chunks of its profit to combat HIV/AIDS.  Approximately 50% of its profit generated from red branded products to fund activities that reduce the AIDS pandemic (Lopez, & Martin 1999). They named the program as ‘’social marketing or cause-related marketing.” The company not only support AIDS prevention but also involves itself in economic development programs in the neighboring community. Gap Inc has expanded the program to economic issues because they realized that in Africa, the disease spreads mostly because of poverty. The logical thing to do was therefore to look into ways of empowering the communities affected economically.

Tusker Inc is also a company with great social responsibility programs. The company does many philanthropic activities such as donations to the poor and to churches. They are also actively involved in community development work. They address social and environmental issues. Since the company have a large consumer base, it supports consumer forums as part of its Corporate Social Responsibility. This strategy has worked for the company so well. Apart from increasing consumer awareness, it has gained wide acceptance from them.

Costs and benefits

The programs have proved to be highly effective in several ways. Socialfunds.com uses up to 2% of its profits on Social Responsibility programs (Iceland, 2001). The effect of this small percentage is so great that the company tops the list of companies that recycle plastic. Topping the list is not the main objective of the company. Their interest is actually on cleaning the environment. With more than twenty tones of plastic recycled every year, the company ensures that the environment is safe for habitation.

Gap Inc is also using approximately $ 30 million annually on social responsibility programs that combat HIV/AIDS. This huge amount of money has significantly reduced the rate of HIV infections in many parts of Africa. The HIV prevalence, number of new infections and deaths related to HIV are also reduced.

Finally Tusker Inc also supports its neighboring communities. The company is situated in eastern Africa and its social activities extend in all countries in this region. The amounts of money that they donate to the poor mitigate the widespread effects of poverty. They sponsor building of schools, hospitals and farming activities. Their strategy is directed towards lowering illiteracy, disease and hunger. These supports are important in African countries since the government can only manage to provide limited services.