Business Ethics and CSR

BUSINESS ETHICS AND CSR

Business Ethics and CSR
Contents
Introduction................................................................................................................ 2
TASK 1.1..................................................................................................................... 3
Corporate Social Responsibility..................................................................................3
Brief History................................................................................................................ 3
Michael Porter’s shared value theory/model..............................................................3
Linkage between CSR and Competitive Advantage....................................................5
Porter’s VCA model as lacking an ethical core...........................................................8
Conclusion................................................................................................................ 11
Bibliography............................................................................................................. 12
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Business Ethics and CSR
Introduction
The shared value model and Corporate Social Responsibility are interlinked and part of a
framework that creates new opportunities for business to improve profitability and social status
(Sheehan & Foss, n.d.). The report appraises Michael Porter’s shared value model and
critically evaluates some of the limitations related to the theory. The report revolves around the
reciprocal benefits for both, the businesses and the society, the resource allocation concerns, the
short and long-term interests of both the parties and even the drawbacks of the model. The report
has also tried to highlight the inability of the model to provide necessary and precise guidelines
for businesses as well as the society to be able to extract the maximum out of the idea of creating
shared values.
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Business Ethics and CSR
TASK 1.1
Corporate Social Responsibility
Corporate social responsibility consists not only what corporates perform with their revenue, but
also how extraordinary company is able to perform in achieving objectives. It is far beyond
philanthropy and compliance, and reflects the company’s management in managing their
economic, social, and environmental impacts, as well as their relationships in all key spheres of
influence: the workplace, the marketplace, the supply chain, the community and the public policy
realm (Rasche et al., 2017)
Brief History
The roots of Corporate Social Responsibility, track down in 1948 from Article 23. United
Nations Universal Declaration on Human Rights also describe as right to employment, equal pay
for equal work and right to join trade union. In 1970, first time Milton Friedman debate about
the exploitation of human resources by the companies for profits maximization. In 1990s,
awareness and activism among employees increased at high level. In addition, globalization
supports the flow of information at the global level in every sector. For example in the early
1990s, Nike faced tremendous consumer boycott. As the New York Times, reported about the
exploitation of labour by some Indonesian suppliers. In today’s world, corporate social
responsibility changing according to the wants of corporations and management. Through
Corporate Social Responsibility, modern business world is able to introduce the execution of
laws for benefiting the environment, organization and society as well (Žukauskas et al.,
2018).
Michael Porter’s shared value theory/model
According to ‘Michael E. Porter and Mark Kramer”- shared value is not social responsibility,
philanthropy, or sustainability, but encompasses a new process that reflect how company able to
achieve economic value creation (Porter & Kramer, 2011).
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