Corporate Social Responsibility, Employees and Business Ethics

This essay discusses the concept of Corporate Social Responsibility, employees and business ethics within the workplace. It covers the purpose of a corporation, stakeholder theory, factors that have led to the growing interest in CSR, and the need for CSR.

Running head: ETHICS AND SOCIAL RESPONSIBILITY 1
Ethics and Social Responsibility
Name:
Institution

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Introduction
All businesses exist for a sole purpose of maximizing the shareholders’ wealth. That is
making profits and more profits. This begs the question, what then happens to the other
stakeholders besides the shareholders? Accordingly, a business has responsibilities that go
beyond the shareholders to other stakeholders such as creditors, employees, customers, investors,
suppliers, and strategic partners. There are other non-market parties such as the media and the
society who also have important relationships with the organization. Many years now, the
Corporate Social Responsibility has been considered to be of importance to mankind.
However, over the last two decades, Corporate Social Responsibility has greatly become
of concern to the business world. As a result, this has led to an improved interaction between the
businesses, society, and the society as a whole. Before CSR became of concern to the business
world, ventures mainly concerned themselves with their decisions’ economic results. However,
at my personal level, I have learned that this is no longer the case. In the current environment,
organizations are entitled to take into consideration the moral, legal, ethical, as well as the social
consequences of the decisions that they make. The primary goal of this essay is to offer a
detailed reflection considering the Corporate Social Responsibility, employees and business
ethics within the workplace. The paper will discuss the Corporate Social Responsibility’s
concept. It will provide a detailed definition of this phrase and determine global factors that
make it essential for organizations to practice Corporate Social Responsibility.
The Purpose of a Corporation
For many years now, the question relating to the purpose of an organization has been
widely discussed. Some of the great theorists have expressed their different point of views,

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arguing that either the primary goal of a firm is to maximize its value or to become devoted in
their mission and to essentially satisfy their stakeholders’ needs (Attig, El Ghoul, Guedhami &
Suh, 2013). Generally, the two primary theories that exist when defining this is the shareholder
value theory and the stakeholder theory. The shareholder values theory explains that an
organization has got one specific objective which is to maximize its profits, including generating
shareholders’ value. At the other end is the ‘stakeholder’ theory that indicates that besides an
organization making profits and generating shareholders’ value, it is also entitled to pleasing its
stakeholders who consist the customers, suppliers, employees, and the society at large. Milton
Friedman is among the earliest precursors of the shareholders’ value theory (Pauly, Wickert,
Spence & Scherer, 2013). According to him, he once emphasized on if the corporate executives,
if they remained within the law, had other duties in their business activities besides making
money for their stakeholders. According to him, the answer was no.
However, I think that several people assume wrongly that the only reason that an
organization exists is only to make money. Despite that this is the important result that translates
to the existence of an organization, it is also essential that we go deeper and identify the real
reason as to why a business exists (Boulouta & Pitelis, 2014). By investigating this, I have
inevitably come to the conclusion that individuals come together and exist as an institution that
we label the name an ‘organization’. This is to make them capable of achieving a particular
objective collectively, which they could not be in a position to achieve separately, thus they
make a contribution to the society.
Stakeholder theory is almost similar to the Corporate Social Responsibility concept
which is regarded to have undeniably attracted a lot of attention over the past few years (Cheng,
Ioannou & Serafeim, 2014). Similar to the above theory, CSR’s primary goal is to understand all

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the stakeholders and strike a balance between the primary objectives of an organization and the
goals of each and every stakeholder. Both Friedman and Packard have got extreme opinions
which have encouraged mid-term approaches to form other scholars (Chernev & Blair, 2015).
For instance, Peter Drucker suggests that a socially responsible company is that whose profits at
least equals its cost of capital and does not waste the society’s resources.
Corporate Social Responsibility and Ethics
On my own view, Corporate Social Responsibility cannot be defined by the amount of
money that an organization contributes to a charity. Rather, Corporate Social Responsibility
should be defined as the overall involvement by a company in the activities that are essential in
the quality of the society’s life (Chin, Hambrick & Treviño, 2013). Corporate Social
Responsibility has emerged as an important matter that is associated with the multinational
business community and it has progressively become a mainstream activity. Within the private
sector, there is an increased recognition of the impacts that activities have got on the clientele,
competitors, investors, governments, workforce, the society, business associates, shareholders,
the environment, and other groups (Cho, Lee & Pfeiffer, 2013). Additionally, I have noted that it
has become progressively clear that a company is capable of contributing to its individual wealth
and the society’s wealth in general by considering how they affect the entire world when making
their decisions.
Multi-corporations’ ethics entails actions that are considered to be morally upright. It is
common knowledge that some of the activities carried out by corporations do not meet the
required ethical standards (Delmas, Etzion & Birch, 2013). The reason behind this is that most of
the firms are more focused on making a profit rather than including other things in their

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activities. Due to the sheer number of individuals involved, employee and business ethics is an
upcoming issue. On a small scale, the action takes by few people may appear to be safe.
However, when figured on a large scale basis, these actions could be devastating. For instance,
when a company decides to fire some of its employees with the intention of keeping the
organization’s profits margin high, may be deemed unethical (Deng, Kang & Low, 2013). As a
result of the wake of the financial breakdown, several individuals such as the civil servants
mainly in the middle persons lost their jobs. Aimed at making sure that the organizations saved
money, most of the staffs were laid off. Hence, such as action is considered as being unethical.
The reason behind this is that despite that the firms are somehow at a loss, laying off of these
workers translates to the fact many individuals are likely to suffer.
Within the environment which businesses operate, they are an important aspect of the
society. As a potential future manager, I should ensure that I possess the required knowledge and
understanding that future prosperity is dependent on sustained good associations with several
individuals, groups, or even organizations (Di Giuli & Kostovetsky, 2014). For an organization
that is deemed to be intelligent, there is the understanding that the business cannot prosper if it
operates within a society that is unsuccessful. This is irrespective of whether the society is failing
as a result of environmental, social, or even governance challenges. Notwithstanding, the society
has got a lot of expectations from the private sector in regard to their responsible and ethical
behavior. The customers’ expectations are that the products and the services should be a
reflection of environmentally and socially accountable business ethics at prices that are
reasonable (Du, Swaen, Lindgreen & Sen, 2013). Additionally, the shareholders are also
demanding for financial performance that is improved and which interlink the environmental and
social element and the opportunities that the offer.

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Corporate social responsibility is multidimensional and it covers a wide range of issues.
They include corporate ethics, accountability and transparency in reporting corporate
responsibility to others. Also, eco-efficiency designing goods and services that have a reduced
impact on the environment, contributing to the social environment where the business operates
protecting the employees’ rights, availing a healthy working environment and having a positive
influence on stakeholders such as the society or government as a whole.
There are many debates surrounding corporate responsibility, among them; the primacy
of business that organizations cannot serve the society well before it make profits and so its main
aim should be profit making (Flammer, 2015). There is also a debate on whether businesses
should do well before doing well in society or doing well in society makes it possible for the
organization to do well financially. Another argument is the morality of profits, whereby
corporations are morally obligated to serve the society over making a profit. All these debates do
not hold a single answer. Therefore, it is always prudent that we look at corporate responsibility
‘through the lens of Biblical themes’.
Justice righteousness and truth are all important virtues that should be upheld in the
marketplace. Corporate social responsibility keeps in view all the policies that affect the
workplace positively such as teamwork, employees’ welfare, and the ethical decisions that affect
the entire organization (Hahn, 2013). Organizations that uphold the Biblical themes are held in
high-esteem at the marketplace for they are serving a cause that is greater than profits. Some of
the governments have made it a requirement for organizations to report their social corporate
responsibilities in their financial records. This move is geared to encourage the act of ‘giving
back to the society’.

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Factors that have translated to the Growing Interest in CSR
Through my course, it has caught my attention that the increasing interest in Corporate
Social Responsibility has been due to a wide array of factors. Among these factors include the
changing concerns and expectation among the citizens, customers, industrial change, not
forgetting the public authorities’ globalization (Hoi, Wu & Zhang, 2013). Also, the growing
concern has been due to the increased social criteria’s influence on the individuals and
institutions’ investment decisions. Nonetheless, there is an enhanced concern regarding the
degradation of the environment. Particularly, this is an essential area of concern due to the fact
that conserving the environment has become a crucial aspect for every person in the society
(Homburg, Stierl & Bornemann, 2013). With the multi-corporations gaining millions of profits,
it is prudent that they give back to the society. However, it is shocking to observe the wanton
disregard in conserving the environment among some few organizations in regard to handling
their industrial waste, sheer indifference or even the use of recyclable paper. As mentioned
earlier, Corporate Social Responsibility is made up of activities that give back to the society or
ensuring that there is fairness in the carrying out of activities.
Protecting the environment has become one of the primary focus among most
humanitarian organizations. According to most of these humanitarian firms, they argue that
environmental conservation should be at the heart of every organization and it should be
considered as an essential aspect (Ioannou & Serafeim, 2015). This is due to the fact that the
environment can be termed as the only invaluable natural resource that the human being has been
given. The issues associated with managing industrial waste among several companies has been
of great concern among most environmental organizations. This is due to the one accord of
irresponsible handling of waste in some of the firms. For instance, I can attest that the scenario of

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the great pacific garbage patch is in existence to express how most of the organizations are
failing to handle the dumping of their waste responsibly (Jizi, Salama, Dixon & Stratling, 2014).
This great pacific garbage patch is an accumulation of human waste that was improperly
dumped, thus finding its way into the ocean. This patch has resulted in several problems which
include the loss of aquatic life as well as water contamination not forgetting to mention the
introduction of several pollutants to the water bodies.
By analyzing the Corporate Social Responsibility, I have noticed that it is clearly and
certainly unethical for organizations to be reaping huge profits at the expense of the environment
and other aspects of human life (Khan, Muttakin & Siddiqui, 2013). Corporate Social
Responsibility clearly states that firms should devise better mechanisms of handling their waste
disposal. Regardless that it is currently unclear of the best means of handling some of the wastes
that include hot water and others, responsibility entails ensuring that before any waste is
disposed of, it has passed through some prerequisite tests (Korschun, Bhattacharya & Swain,
2014). These tests are meant to make sure that the wastes being disposed of are safe for disposal,
considering that they are not likely to pose harm to the human beings in any way, inclusive of
other lives. Thus, CSR is considered to be a control mechanism for ensuring that the multi-
corporations remain ethical in every action that they undertake.
Earlier, I thought that Corporate Social Responsibility is not a responsibility for all the
organizations. However, my thinking has been greatly changed as I conducted research on CSR
and ethics (Mason & Simmons, 2014). I have understood that Corporate Social Responsibility
makes sure that corporation across the globe engages themselves in several other activities that
are viewed as giving back to the society. Some of these activities that are considered to be of
help include engaging in activities that are aimed at assisting the disadvantaged individuals in the

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society, engaging in activities that are aimed at involving the society such as fundraising for the
needy, and other related activities (Michelon, Boesso & Kumar, 2013). In the financial and
corporate world, CSR has a positive effect on performance.
Factors Indicating the Need for Corporate Social Responsibility
There are many factors that indicate why Corporate Social Responsibility is needed. The
population is the first factor. The high population growth in developing countries will result in
the creation of bigger markets that are dominated by youthful individuals who will have
questionable access to the standards of living such as those in the developed nations (Morgeson,
Aguinis, Waldman & Siegel, 2013). According to statistics, it is evident that by 2025, eighty-five
percent of the global population will be living in the developing nations. Hence, this presents
problems to organizations that seek to engage themselves in Corporate Social Responsibility
because there is a clear evidence that these populations will be requiring a lot of financial aid.
The other factor that shows why Corporate Social Responsibility is needed in wealth.
Regardless of the increase in the global wealth, there has been an increased income gap thus
threatening the society. It is thus the mandate of every organization to strive in attempting to
make sure that there is a balance in wealth distribution. My analysis has shown that almost
eighty percent of the world population can be classified as being poor, eleven percent in the
middle, and a low eleven percent are described as rich (Saeidi, Sofian, Saeidi, Saeidi & Saaeidi,
2015). This means that corporation should work hand-in-hand in making sure that the trend
whereby the poor continues becoming poorer and the rich becoming richer is eliminated because
it appears unethical for some few individuals to have so much while others have got nothing at
all. Also, nutrition indicates the reason why there is a need for Corporate Social Responsibility.

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Presently, there are millions of people who are malnourished, with so many lacking foods. Every
year, there are thousands of people who die out of hunger, while the corporations are observed to
spend millions of money on fancy holidays for their staffs. It is important that every organization
takes responsibility and spare some time to reflect on the money that it uses for its executives’
benefits, compared to the finances that the organization spends on assisting the needy in the
community. While these benefits are important in motivating the employees, they should not be
overemphasized at the expense of the suffering citizens.
The third factor that should be taken into consideration when designing the Corporate
Social Responsibility programs is education. There is a widespread basic education. However,
many individuals lack the opportunity to learn. Approximately, there are over one million
children who are not in school. The highest percentage of children who lack education is mainly
in the developing nations (Servaes & Tamayo, 2013). Globally, one among every five adults is
illiterate. These are staggering figures considering the current increased learning opportunities.
Organizations are faced with the problem of promoting learning by developing schools,
constructing technical training institutes, or by funding educational development programs.
Additionally, the corporations can encourage education by taking in trainees as well as interns
and providing them with the opportunity to develop their skills in jobs, thus enabling them to
fairly compete in the corporate world.
Conclusion
This self-reflection on Corporate Social Responsibility has shown that CSR is an
essential aspect for every business entity. My research has helped me gain a clear picture of the
several areas in which an organization may select to focus its Corporate Social Responsibility. In

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Corporate Social Responsibility, the first area that an organization may decide to focus on is the
environment. In the development of the Corporate Social Responsibility programs, I have been
exposed to several other areas that should be considered during the development of the Corporate
Social Responsibility programs. These areas consist of employment, health, education, as well as
nutrition. Investing in Corporate Social Responsibility is important because it combines the
stakeholders’ financial goals, with their dedication and the obligation of the factors that are
concerned with the society’ well-being. These factors include practices that are environmentally
friendly, justice in the society, or even economic growth. Apart from being Corporate Social
Responsibility’s aspects, these elements are also used to display an organization’s ethical
standards. It is considered unethical for some individuals to own a lot while other individuals
own totally nothing, at the expense of the suffering members of the community. Nonetheless, it
is also considered unethical for organizations to earn a lot of profits at the expense of the
environment, by engaging in practices that degrade the environment thus resulting in illnesses
and the loss of life. Through this reflection, it can be concluded that Corporate Social
Responsibility as well as maintaining high ethical standards is not an option for an organization
but an obligation for all the businesses.

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