Corporate Social Responsibility and Ethics in Global Business

This essay discusses the inter-relationship between corporate ethics, organisational citizen behaviour, employee commitment, and financial position of organisations in the context of CSR and ethics in global business operations. It also highlights the importance of CSR and ethics in current business operations and the challenges and opportunities in accepting different definitions of CSR. The essay draws on various peer-reviewed scholarly literature published between 2012 and 2018.

t dent ameS u N
T T T A A ATINS I U ION L FFILI ION(S)
BUSINESS

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Essay
Corporate Social Responsibility or CSR is one of the most discussed topics in present
literature and global business organisations. Almost every global company is engaged in
CSR’s to some extent and therefore 90% of global companies formally report on CSR that is
not limited to Australia or America only (Glavas, 2016). Although, corporate ethics have
increased significantly, mechanisms that relates corporate ethics with firm performance is
very little known for which most of the researchers and authors focusses on study related to
CSR and use of business ethics in global business environment. Earlier, studies related to
CSR and ethics in business operations gave more emphasis on firm’s reputation employed on
external perspectives and associations with external stakeholders only. Petite attention was
given to corporate ethics in firm’ internal practices even though it had great potential to
transform business practices into ethical move. But, things have changed dramatically in the
past few years where scholars and researchers are revealing inter-relationship between
corporate ethics, organisational citizen behaviour (OCB), employee’s commitment as well as
financial position of organisations ( Kim & Thapa, 2018).
According to Chin, Shin, Choi, & Kim (2013), “Of the three dimensions of corporate
ethics, internal ethics is most strongly related to employees’ collective organizational
commitment.” When employees recognise that the workplace in which they are working
adheres ethical and legal standards, they get more committed to their work as well as behaves
in a manner that aligns with organisational goals and objectives. Moreover, internal ethics not
only fosters internal environment of organisations but also provides with positive and ethical
relationship between employer and employees (Gökmen & Öztürk , 2012). Reflecting upon
present trend in literature and global business environment, the concept of CSR and business

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ethics have become primary factor that needs to be present in institutional and macro level
(Tellez, 2017). However, Glavas (2016) argues that due to various schools of thoughts, there
are various over lapping and confusing definitions of CSR among which words have been
used interchangeably like corporate citizenship (OCB), stakeholder theory, corporate social
performance and sustainable development. The author states that since every scholar made
different definition for CSR, challenges and opportunities in accepting them can be present
depending upon the situation. The challenge is difficulty in understanding CSR results due to
the lack of clarity in definition. This confusion has made many scholars implement the study
of CSR and ethics in their studies related to current global businesses. Yet, opportunity can
be realised since CSR is a broader subject for which there is a great potentiality in giving
variances about how organisations perceive CSR. For instance, set of employees may
perceive CSR like a moral obligation to the firm while others may feel that CSR shall be used
to improve relationships among organisations and its stakeholders only. However, these
differences in perceptions can further affect employees’ attitude and work behaviour
according to variation degrees (Chun, Shin, Choi, & Kim, 2013).
According to Pisan, Kourula, Kolk & Meijer (2017), CSR have spread extensively
among global societies on the part of researchers as well as practitioners. A new
infrastructure named CSR has emerged and is practiced in multitude of companies across
civil, public and corporate society playing role for development in each sector. In academics
and journals, scholars are also paying great attention in uses of ethics and CSR in which few
of them demonstrates their growing interest in both organisational perspective as well as
management angle (Pisan, Kourula, Kolk, & Meijer, 2017). The authors showed urgency in
making further investigation regarding CSR practices especially in developing nations as
persuasive institutional abysses weakens their settings. Therefore, over the previous year’s
scholars have focussed much upon reasons behind such abysses when assessing organisations

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operations, concerning specially to their CSR and ethical practices. In fact, recent reports
point out capability of CSR in linking institutional abyss with conflict-affected areas along
with giving specific logics practiced in developing country organisations (Turyakira, 2018).
According to Turyakira (2018), “Ethics refers to a system of moral principles or rules
of behaviour which involves doing the right thing in the right manner”. Contemporary
business organisations are facing increased pressure to perform their business operations
ethically along with following standards which prove to be economical, effective and
efficient to increase overall work performance. Due to intense competition in global business
environment, organisations find alternative ways to meet competition rather than following
traditional ways of lowering prices or offering quality products (Turyakira, 2018). It can be
noted here that current businesses employ individuals who poses diversified backgrounds in
relation to religion, nationality, race, area, and socio-economic status. These diversified
cultural backgrounds further create challenges for individuals and managers as realising
ethical stance becomes difficult due to diversified ideas and work principles. However,
according to current literature global business firms have understood that ethical delinquency
may cost high not only for the firm but also for the society in large. Furthermore, customers
nowadays have also become mindful in selecting those company’s products whom they feel
are trustworthy (Chun, Shin, Choi, & Kim, 2013). Therefore, many SME’s and traditional
firms faces breakdowns due to lack of strategic alliances and failure in implementing ethical
practices.
Many earlier definitions of CSR showed generalised perceptions like in 1960, CSR
was defined as “seriously considering the impact of the company’s actions on society.”
Another definition stated, “Social responsibility is the obligation of decision makers to take
actions which protect and improve the welfare of society along with their own interests”
(Carroll, 2016). Nevertheless, CSR had been undertaken in policies and practices in which

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businesses employees and managers needs to ensure that all their strategies and operations
are made after considering and protecting society, environment and stakeholders (Chun, Shin,
Choi, & Kim, 2013). In some of the scholarly articles, definitions of CSR argued that actions
taken must be voluntary while considering socially responsible aptitude whereas others
argued that legal compliances is indulged in CSR strategies. Still, others believed that ethics
is also a part of CSR and thus, virtually every definition incorporated that organisations
providing corporate philanthropy followed their part of CSR. In 1990s Carroll’s four-part
pyramid defining CSR stated that legal, ethical, economic and discretionary expectations
create infrastructure or foundations that characterize business nature and responsibilities
towards society. At that time, this theory was universally accepted, however, with time and
changes in cultural as well as globalising of companies, issues were raised about applicability
of Carroll’s CSR pyramid. According to Nalband & Kelabi (2014), Carroll’s models was
considered best at that time but present studies demands more universal model that can be
accepted in every country including globalised corporate firms.
Present studies made by scholars, as identified in scholarly articles have found
positive relationship between citizenship behaviour and CSR. If organisations perform
beyond its principal mission like financial goals and contributes in greater wellness of society
like managing CSR, the employees will also go beyond their core duty while contributing
greater wellness in organisational success like OCB (Yerby, 2013). In addition, studies
suggest that ethics and CSR in business improves organisation’s reputation that in turn makes
employees feel proud of their company they work in. Social identity theory further suggests
that if treating others in good manner becomes a part of staff’s self-concept, then they would
also be identified and treated with dignity by others due to connectivity with the firm. Recent
literature also puts emphasis on developing leadership theories and human resource
management in regards to inter-relationship between ethical leadership, CSR and

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organisational performance. According to Kim & Thapa (2018), leadership theories that are
based on ethical grounds broadens idea about conventional leader-employee relationships to a
leader-stakeholder relationship. The authors considered inevitable need for bridging
leadership theories to CSR literature while calling an integration between different corporate
practices and leadership dimensions. Ethical leadership can further bring social oriented
changes in workplaces along with initiating organisations to consider ethical standards and
demonstrating integrity. Although ethical leadership is measured as key driver of firm’s
success and bringing employee efficiency, CSR enhances and initiates organisational
consequences (Gökmen & Öztürk , 2012).
In last 10 years many companies have voluntarily integrated environmental and social
issues in their operations and business models by adopting corporate related policies. Such
integrations have made many scholars arise further questions for the organisations: How do
policies made by companies following CSR differ from that of others and in what manner?
(Tellez, 2017) In fact, many scholars argued that ways in which global organisations
competes to pursue maximum profits, they give more importance on long-term sustainability
rather than gaining short-term revenues. Therefore, more and more organisations are
focussing on ethical grounds while giving lesser importance to shareholders as compared to
stakeholders (Glavas, 2016).
The above essay has been prepared after evaluating various peer reviewed scholarly
literature between 2012 and 2018 that supports CSR and ethics in global businesses. It can be
noted that in mainstreaming and promoting CSR and use of ethics in international companies,
peer reviewed scholarly literature plays a key role. In present global business environment,
journal editors may utilise special issues or sections highlighting unexplored topics and
research gaps after identifying contributions made in those issues. Similarly, many business
practitioners can also find these academic outlets and special editions helpful in exploring

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present use of ethics in global businesses along with identifying the significance of CSR in
current business operations.

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References
Carroll, A. B. (2016). Carroll’s pyramid of CSR: taking another look. International Journal
of Corporate Social Responsibility, 01(03), 1-8.
Chun, J., Shin, Y., Choi, J. N., & Kim, M. S. (2013). How Does Corporate Ethics Contribute
to Firm Financial Performance? : The Mediating Role of Collective Organizational
Commitment and Organizational Citizenship Behavior. Journal of Management,
39(04), 853-877.
Glavas, A. (2016). Corporate Social Responsibility and Organizational Psychology: An
Integrative Review. Multidisciplinary Psychology Journal, 07(144).
Gökmen, A., & Öztürk , A. T. (2012). Issues of Business Ethics in Domestic and
International Businesses: A Critical Study. International Journal of Business
Administration, 03(05), 82-88.
Kim , M. S., & Thapa, B. (2018). Relationship of Ethical Leadership, Corporate Social
Responsibility and Organizational Performance. Sustainability, 10(447), 1-16.
Nalband, N. A., & Kelabi , S. A. (2014). Redesigning Carroll’s CSR Pyramid Model.
Journal of Advanced Management Science, 02(03), 236-239.
Pisan, N., Kourula, A., Kolk, A., & Meijer, R. (2017). How global is international CSR
research? Insights and recommendations from a systematic review. Journal of World
Business, 52(05), 591-614.
Tellez, J. S. (2017). Marketing and Corporate Socia lResponsibility (CSR). Moving between
broadening the concept of marketing and social factors as a marketing strategy.
Spanish Journal of Marketing, 21(01), 04-25.

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Turyakira, P. K. (2018). Ethical practices of small and medium-sized enterprises in
developing countries: Literature analysis. South African Journal of Economic and
Management Sciences, 21(01).
Yerby, J. (2013). Legal and ethical issues of employee monitoring. Online Journal of Applied
Knowledge Management, 01(02), 44-55.