Corporate Social Responsibility, Employees and Business Ethics

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

ETHICS AND SOCIAL RESPONSIBILITY 2
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