Global Trends and Ethics

This article discusses the importance of Corporate Social Responsibility (CSR) policies for companies to have positive impacts on society and environment. It covers the different domains of CSR, such as labor and human rights, health and safety, environmental impacts, ethical considerations, and management systems. The article also explains how CSR can be assessed using ethical theories.

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Global trends and ethics
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1GLOBAL TRENDS AND ETHICS
According to Tai and Chuang (2014), Corporate Social Responsibility of companies can
be defined as the initiatives of the company to evaluate and take responsibility of the effects of
the operations of the company on the society and environment. Companies must adopt CSR
policies to ensure that the operations of the companies have positive effect on the society and the
environment. The aim of the companies should be to promote the well-being of the people in a
society. CSR can also be defined as corporate citizenship. Implementing the principles of CSR
can require companies to incur costs, which may not be of financial benefit to the company in
short, term, however incurring such costs will help companies have positive impacts on the
society and environment and such positive impact will in turn be beneficial for the company in
the longer run (Poussenkova et al. 2016).
Corporate Social Responsibility can be defined as those voluntary activities which are
undertaken by companies to operate in a manner which is environmental, social and
economically sustainable (Vertigans and Idowu2017). CSR policies have been implemented in
every business environment and are no longer considered to be legal obligations to the
stakeholders of a company. Many organizations are even taking steps to give effect to the CSR
policies and bring such policies in their respected framework. CSR policies should not only be
implemented by large organizations, any business irrespective of its size and nature of operations
can take steps to positively affect the people and the environment (Cheng, Ioannou, and
Serafeim2014). It can be stated that every business organization must:
 Recognize the human rights, be respectful to them and take steps to safeguard the same
 Take responsibility of its actions and assess the impacts of the actions on the ecnomy,
society and the environment.
 Be transparent in its activities that have impacts on the society

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As opined by Saeidi et al.(2015), the code of Corporate Social Responsibility takes into
account many factors which have impacts on the society, environment and economy. Therefore,
the code of CSR covers many domains such as Labor and Human rights, Health and safety of
workers, Environmental impacts of the operations companies, Ethical considerations and
Management systems (Leipziger 2017).The best example of a company who has adopted the
code of CSR is Maxim Integrated. The other companies with the best CSR policies include
Google, Microsoft. Google had been selected the third time consecutively for having the best
CSR policy, Microsoft holds the second place (Forbes.com, 2018). The Walt Disney Company
held the third pace among the most socially responsible companies. The Walt Disney Company
had held that place since 2014.
The CSR pyramid or the four part model of CSR had originally been published in the
year 1979. The pyramid of CSR was introduced by Caroll. The purpose of the pyramid was to
illustrate the different building blocks of CSR. It is to be mentioned that the pyramid was
selected as it represents a geometric design which is built to stand strong over the years. The base
of the pyramid is the most important part of the structure as it holds the rest of the structure. This
is why economic responsibility was placed at the base as the foundation of the pyramid. Legal
responsibilities was upon the foundation of economic responsibilities as all business operational
must comply with legal regulations of the respective jurisdictions. Ethical responsibilities were
placed above legal responsibilities as it is important for businesses to maintain ethical standards
while performing its operations. Philanthropic responsibilities were placed at the top as it is
desired by societies and that the business acts as a good corporate citizen and contribute to the
development of the society (Carroll, 2018).

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The ethical responsibilities are represented in a separate block of the pyramid, ethical
responsibilities of business organizations can be expected to saturate and cut through the entire
model of the pyramid. If the CSR policy of Microsoft is analyzed by the CSR pyramid model, it
can be assessed that its CSR policy complies with all the responsibilities of all levels of the
pyramid. However Microsoft has been involved in an anti-trust case for a long time. The
Company allegedly had abused its position of monopoly in the European market.
Figure 1 CSR Pyramid
Source: (Carroll 2018)

4GLOBAL TRENDS AND ETHICS
According to the code of Corporate Social Responsibility workers must be paid the
minimum wages which are required by the applicable regulations and laws. Workers must be
also be compensated with remuneration for the work done in over time (Korschun, Bhattacharya
and Swain 2014). Wages must not be deducted as disciplinary measures.
Workers must not be made to work for more hours which is in excess of the maximum
work hours as set by the local laws It can be said that except in emergency circumstances a
workweek including overtime should not ideally be lengthier than 60 hours and workers of every
organizations must be given one day off in the week. Further no worker should be discriminated
on the basis race, age, color, ethnicity, sexual orientation, religion, political affiliation, marital
status and union membership.
According to Muller (2014), no child should be employed in the manufacturing process.
The term ‘child’ is defined as any person, who as not attained the age of fourteen or someone
who has not completed the compulsory education or someone who is under the minimum age for
being employed as provided by the law of any country. Further, it is to be said that any person
below the age of eighteen must not be employed in a hazardous environment.
The code of CSR prevents any worker from being subject to inhumane and harsh
treatment. Examples of such treatment include sexual harassment, coercion, verbal abuse and
corporal punishment. Workers must be free to move about in the workplace. Forced or bonded
labor must not be used in the workplace of any organization. All work done must be voluntary
and the workers should have the right to terminate their employment after giving and serving a
reasonable notice period. The workers or every organization must be given the right to interact
freely with others and form and join workers associations (Kelman et al. 2016). Engaging in

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peaceful assembly is also permitted by this code. Workers must also be allowed to communicate
freely with the management regarding working conditions, any discrimination faced by them or
any safety concerns.
It is the responsibility of the organizations to take appropriate controls, comply with the
safety procedures, and take preventive and protective measures in order to mitigate risks relating
to health and safety of the workers in the workplace. Workers employed in hazardous
environment must be provided with personal safety equipment. Organizations must identify
emergency situations that may arise in the course of employment of workers and must take
necessary precautions. Organizations must have necessary scope to deal with emergency
situations which include having emergency reporting, appropriate fire detection, adequate exit
facilities and evacuation procedures. According to Samuelson and Anderson (2014), companies
must establish procedures to track, manage and report occupational injuries. Workers must be
encouraged to report any injury or illness sustained by them during the course of their
occupation. Further it can be mentioned that workers who are exposed to hazardous environment
must be provided hygiene and safety equipment whenever needed. Workers should be able to
access the general facilities such as dormitories and canteens. Such dormitories and canteens
must be clean and hygienic with proper ventilation and reasonable personable space. Further it
can be said that workers must be provided appropriate health and safety training in order to
mitigate any risk arising during the course of work.
It is to be mentioned that it is the duty of the companies and organizations to assess and
evaluate the impacts of its operations on the environment and necessary steps to reduce any harm
being caused to the environment due to the ongoing operations of business. It is to be said that
environmental permits as required by the law are needed to be obtained and maintained by

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companies. Suppliers of hazardous substances must comply with the regulations and laws which
prohibit or restrict such suppliers from supplying hazardous or toxic substances. Organizations
must comply with the laws and regulations regarding handling, moving, storing, recycling and
reusing such hazardous substances (Vaculchuk, Borodkina and Kobzar 2016). Further workers
who come into contact with such hazardous substances must be provided special training
regarding handling of such substances. Wastewater and solid waste generated from industrial and
sanitary processes have to monitored, refined and controlled before releasing the same into the
environment as required by the law. Every organization involved in industrial processes must
take necessary steps in order to eliminate all types of wastes.
According to this code every organization must strictly prohibit corruption,
embezzlement and extortion from being practiced within the organization (Moscato 2017). The
organization must indulge in taking or giving bribes for the purpose of obtaining undue
advantage in any situation. Information related to business activities of any organization,
financial status, performance of an organization must be disclosed to the public in accordance
with the laws and regulations. The operation of the business of every organization must be in
compliance with fair business standards in advertisements, sales and competition (Moscato
2017). It is to be mentioned that organizations must engage with the community and ensure that
the activities of the company aim to encourage the social and economic development of a
community. Intellectual property and confidential information must be protected at any cost.
A Corporate Social Responsibility statement has to be issued by an organization in order
to ensure that the company affirms its commitment to positively affect the society and the
environment. Companies must be aware and comply with the applicable laws and regulations.
Accurate information about the activities of the organizations must be communicated to the

7GLOBAL TRENDS AND ETHICS
suppliers, workers and the customers of the organization (ArAs 2016). Every company must
maintain documents and records in order to ensure regulatory compliance.
Companies must follow the code of CSR in order to ensure that best results are achieved
by the same in the future. Companies operating in socially, economically and environmentally
responsible manner following the code of CSR are likely to be successful in the future. However,
the functions of the company need to be transparent in order to ensure that clarity and fairness of
operations of a company are maintained. Further it is to be stated that managing and mitigating
the environmental and social risk factors have become very important for the success of any
company in abroad (Wang et al. 2016). There is an increasing awareness about responsible
business practices and incorporating such responsible business practices not only benefit the
communities and local economies but also the business of the companies. As opined by Vilalva
(2015), compliance programs which are effective tend to promote a culture that will encourage
social and ethically responsible conduct within an organization and will also promote a
commitment to abide by the law. Effective compliance programs also aim to protect the
reputation of the organization, its relationships with the investors and help in detection and
prevention of misconduct.
Business leaders are often boggled by whether their companies should adopt a code of
corporate social responsibility and what might be the benefits of adopting the code of Corporate
Social Responsibility. This question can be addressed affirmatively by saying that it is morally
obligatory to adopt a code of CSR and it is the right thing to do both ethically and financially
(Kapoor 2016). It can be said that CSR policies of a company affects the business of the same.
According to the instrumental approach of CSR, which focuses on the business case of the CSR,
one must engage in CSR practices if it is beneficial and profitable to the company. It can be said

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that there are several ways in which a connection can be formed between adopting a code of
CSR and acquiring profits from compliance with such code. Following CSR practices will help
the company form a positive reputation in the market which will in turn attract more customers.
Customers are likely to buy products from companies which have good reputation in the market.
Therefore according to the instrumental perspective CSR projects of a company are assessed on
the basis of the propensity of such projects to make the customers perceive the company in good
light. Thus CSR can be sophisticated and strategic marketing tactic in the tool box of the
company. However, it is to be mentioned that this approach does not imply that companies not
operate in compliance with local and international laws, it implies that companies must try to go
beyond what has been written down in the legislative statutes in order to do good to the society.
If CSR is to be judged from the ethical approach, it can be stated that even though CSR
might not be profitable and beneficial to the business in every instance it will have positive effect
on the company (Lucas, Van Wee, and Maat, 2016). It can be said that in times of conflict during
choosing between what is profitable to the company and what is morally and ethically correct to
do, it can be said that choosing the latter at times can help the company portray a positive image
to the public. According to the ethical approach it can be said that companies at times accept the
loss of profit for moral reasons to ensure that ethical demands such as the interest of other parties
are given more priority.
As defined by Crane and Matten (2010), corporate Social Responsibility of companies
can be assessed by applying principles of ethical theories. An ethical theory is defined as
sophisticated, well thought of, cogent and self-consistent theory which provides answers to a
wide range of questions about what should be done when faced with an ethical dilemma and
what is the morally correct thing to do in such circumstances (Newton 2017). The ethical

9GLOBAL TRENDS AND ETHICS
theories that can be applied assess the concept of corporate social responsibility are
Utilitarianism, Ethics of Rights and Contractualism.
The theory of utilitarianism states the simple idea that it is morally correct to do
something or take action which produces the greatest good for the most number of people. As
stated by Springer, who is a contemporary utilitarian, companies should aim to maximize the
sum total well-being of the society. It can be stated that the theory of Utilitarianism prevents
companies commit any kind social evil including discrimination in the work place, indulge in
taking or giving bribes, using forced labor as these action do not constitute the well-being of the
society in general. According to this approach it can be stated that companies should give as
much of priority to the interests of the faraway strangers as the interest of its stakeholders.
Proponents of Utilitarianism state that companies should act in ways to promote the well-being
of most number of people therefore companies should give more priority to promote the welfare
of the poorest sections of the society instead of focusing on providing benefits to the closest
stakeholders of the company. The operations of the company that has the best CSR policy such
as Microsoft can be assessed by the Utilitarian Perspective. The CSR policy of Microsoft aims to
create the greatest good for its stakeholders. The operations of Microsoft increase the well being
of the society by contributing significantly to the mass. Its operations also have positive impacts
on the society and the environment (Microsoft.com 2018)
According to this theory that rights of human beings are the most important elements and
such rights must be realized at any cost. A right can be defined as the claim against other claims
of other individuals. In general the theory, Ethics of Rights proposes that morality is constituted
by more than just promotion of the good of most number of people. This theory falls in the
branch of deontological theories of ethics (Spence 2016). This theory is opposed to the theory of

10GLOBAL TRENDS AND ETHICS
Utilitarianism as it focuses more on realization of the right of individuals instead of just
promoting the good for the most number of people. Therefore, it can be stated according to this
theory that the actions of the companies should not compromise the right of any individual for
achieving the objectives of the company. It can be said that the CSR policy of a company which
is based on the principles of Ethics of Rights will ensure that the rights of the individuals
associated and the ones affected by the operations of the company are realized. It will also ensure
that moral dignity of all the agents of the company is maintained. The operations of the company
Microsoft can also analyzed by the theory of Ethics of Rights. The CSR policy of Microsoft in
addition to creating the greatest good for the society also ensures that the rights of its agents are
safeguarded and their moral dignity is maintained (Microsoft.com 2018)
This theory of Ethics is the alternative to the theories of Utilitarianism and Ethics of
Rights. However, it can be said that this theory has affinities for the theory of Ethics of Rights
(Chaffee 2017). The main important principle of this theory is that normative propositions,
which are relevant, are defined as the result of the contracts or agreements entered into by the
agents. Therefore, it can be said that a normative proposition is justified as long as the agents
agree to it. According to the proponents of this theory it can be stated that the clause
reasonability is a condition which is necessary for an agent to enter into the contract or the
agreement. Thus it can be said that a policy of Corporate social responsibility which is based on
the principles of this theory will focus on the important issues of mutual acceptability and
reciprocity alongside the notion of reasonability. The theory of contractualism can be applied to
analyze the CSR policy of Microsoft. The company has taken the decision to incur the cost of
upgrading the means of production to ensure that the operations of the company do not have
detrimental effects on the environment and the society.

11GLOBAL TRENDS AND ETHICS
Thus in conclusion it can be said that companies must comply with the code of corporate
social responsibility in order to be successful in the long run. Companies must ensure that the
operations undertaken by them must not have adverse effects on the society and aim to promote
the well-being of the society. The code of corporate social responsibility focuses on promotion of
human rights of the workers, health and safety of workers, environmental impacts of operations
of the companies and workplace ethics. The best example of a company which has adopted the
code of the corporate social responsibility includes Google, Microsoft, The Walt Disney
Company and Maxim integrated. Ethical theories of Utilitarianism, Ethics of Rights and
Contractualism can be applied to principles of Corporate Social responsibility in order to ensure
that the actions of the companies have no negative effects on the workers or the environment.

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