Social Responsibility of Business

This document discusses the importance of managing business operations with ethical standards and social responsibility. It explores the concept of corporate scandals, the role of whistleblowing, and various ethical theories. The document provides insights into the impact of unethical practices on company reputation and the need for businesses to adopt ethical values.

Social Responsibility of Business
AS1 - Substitute Essay/Reflection

Table of Contents
Part 1 ...............................................................................................................................................3
Introduction ...........................................................................................................................3
Main Body..............................................................................................................................3
Conclusion ...........................................................................................................................5
Part 2 ...............................................................................................................................................6
Introduction ...........................................................................................................................6
Main Body .............................................................................................................................6
Conclusion .............................................................................................................................8
Reflective piece .....................................................................................................................9
REFERENCES .............................................................................................................................11

Part 1
Introduction
Corporate scandals and frauds affect the business environment negatively. There are
several researches conducted for analysing the cause among individuals for involving into
corporate scandals. It is very important to manage the corporate functioning with ethical
standards so that business can sustain in market for long period. There are different areas of
operations where companies get into some unethical ways of conducting business for earning
more money in less time (De George, 2011). Government takes care that all organisations are
working in ethical manner and they are following standards while operating business functions.
This is essential for all companies to manage the functioning of business processes in effective
manner and ethical way so that organisational goals can be achieved. It is necessary for all the
companies to adopt technological advancement and conduct business operations. It is essential
for the companies to analyse different factors related to business ethics and values for managing
the functioning in proper manner. This is concluded that organising business processes in ethical
manner is most important while involving within business processes. There must be ethical
norms and standards followed by organisations as it will lead to enhancement of proper business
functioning.
Main Body
It is considered that effective teaching system is needed for shaping the behaviour of
effective business ethics and operations. It is very important to manage the ethics education
within universities so that there are less corporate scandals. In various countries like Poland,
business ethics and corporate social responsibility issues have become popular in business
communities as well as academics. This provides help in increasing knowledge of people about
need of ethics while conducting business operations. Businessmen is considered as the person
who is involved in the corporate community for managing and handling respect of professionals.
As there are different corporate scandals which have occurred and the reason behind this is lack
of knowledge about CSR and business ethics. A study has revealed that study of business
education among students helps in increasing entrepreneurial attitude. Business ethics is involved
in management courses in order to make students know that there is great importance of
conducting the business operations in ethical manner. The field of corporate ethics is helpful in

examining the principles and values of conducting businesses in ethical manner. Students must
know the value and importance of conducting business operations in ethical manner. These will
help in supporting ethical professionals as well as corporate conduct. This includes following
legal regulations and rules while running business and managing the organisational goal of
attaining profits. There are various courses adopted by the universities of management studies in
order to increase knowledge of business ethics and CSR. The role of corporate ethics consists of
positions for creation, communication and enforcement of policies and code of conduct. The
courses of business ethics and CSR will help students to know that key role of management is to
provide benefit to human resource and business development. There is need of investigators and
compliance officers who can ensure that the companies as well as employees are operating
within code of conduct. There are other ways by which students can enrol themselves in business
ethics for managing the effective running of business. Today's education system is not able to
provide effective knowledge to students about business ethics and CSR. It is very essential for
any company to involve business ethics while conducting the operations and activities of
organisation. There are several challenges which companies have to face if they are not
conducting the business ethically. The students must be provided with knowledge of using CSR
and business ethics. This will be helpful in conducting good operations and providing quality
services and products to people. This subject will provide information to students about social as
well as moral values of business and how they affect principles of business. There are different
customers, government and shareholders who are involved in managing the business. This is a
framework involved in doing the business tasks and activities in proper manner. This is helpful
in changing business operations according to the need of market. The above discussion explains
statement given by Sumanthra Ghoshal regarding business ethics that lack of education system
has resulted in increased corporate scandals.
There are different codes of conduct for the corporations and this implies that corporate
managers must be aware about appropriate ethical behaviour as well as societal expectations.
Trust plays a very important role in business transactions and if there is ethical breach of trust
then scandals can occur. There was a US corporate scandal which started in the year 2000 in
Enron. This is a global company which is involved in business of trading and marketing of
natural gas and electric power. There were issues of disguised debts from failed projects through
questionable as well as loopholes reporting (Brown, et. al., 2014). The main aim of this scandal

was to mislead the investors and provide promise to the company. There was increase in Enron
stock price by 311% and there was huge profit to the company. This company earned profit of
upto 6 times the book value and there was a whistle-blower by Enron's vice president naming
Sherron S. Watkins that corporate culture of this company is fraud. Due to this news, stock price
of this came down to $1 per share. After that, this company declared bankruptcy and ceased to
exit. This scandal proved that this company was not having audit and accounting partners. It
raised questions for Arthur Andersen as audit of Enron is done by this company. This revealed
failure of auditors of Aurther Andersen and this created dissolution of this company. Arther
Anderson was charged guilty for not justifying the records of Enron and destroying them after
investigation. Enron was dissolved as this company lost its reputation. The Bankruptcy of Enron
was one of the largest corporate bankruptcy case in history of US.
It is very important for all organisations to adopt ethical standards of conducting business
operations. It is very essential to manage the functioning of company as it leads to more
successful future of company in market. Business ethics is defined as carrying out business
operations according to the self acknowledged moral values and standards. These are applicable
for the company in a way that all the operations are conducted properly. The concept of business
ethics is related to the code of conduct within workplace (Dalton, and Radtke, 2013). There are
different organisations which present some factual representation and rules and regulations that
are used for managing ethical standards. There are different strategic decisions that are used for
providing people with the means of managing moral compliance.
The term “business ethics” is defined as system of moral values and principles that is
used within business. There are different standards and values which are followed in companies
for running the business successfully (Trevino, and Nelson, 2016). There are different code of
conducts which are reviewed on regular basis for suiting the changing environment and
circumstance. The concept of business ethics is known as knowledge of ethical matters within
business environment. Ethics must be present for everyone within company so that company's
success is enhanced.
There are some other corporate scandals too which occurred within market because of unethical
activities and tasks. Equifax is one of the three credit agencies present between Experian and
TransUnion. It is considered that in 2017, this organisation was involved in unethical practise of

business. There was major security breach. It affected more than 150 million users of this
company.
Corporate Scandal of Volkswagen
Volkswagen is one of the leading brand in car industry and known for its low priced cars
worldwide. The company has established its brand name and uses good quality materials with
latest technology. The company got involved in corporate scandal in year 2015 regarding 'diesel
dupe' that is Volkswagen cars had a defeat device or software in diesel engines The major diesel
car market is in US, which has lead to downfall in sales due to this defeat device.
In order to improve company's brand image and sales margin the investigation process has been
conducted by company and they found some irregularities in the tests. This device puts the
vehicle into a sort of safety mode in which the engine ran below the usual power and
performance. As per the results of internal inquiry company has removed the staff that is
responsible for this and have taken the corrective measures to solve the problem by
implementing new software.
Conclusion
From the above discussion, it is concluded that all organisations must use business ethics
while conducting the operations. This provides help in managing profits and conducting the
business activities. There are several policies and practices followed within company which
enhances the way for running business in ethical manner. These are implemented within business
for handling a proper guidance and converting work to public approval. There is fear of
retaliation which is reason for employees for not having a proper reporting and unethical
behaviour practice.
Part 2
Introduction
Whistleblowing is defined as the term used for an individual who passes on information
about any wrongdoing. This can include sexual harassment, corruption, etc. this includes making
a disclosure for the company's unethical activity. This type of person is closely related to the
organisation and he can be a supplier or customer of the product (Davis, 2013). There are people
who become whistle blowers and tell about company's unethical practices and policies in front of

general public. In context of Enron, the vice president of this company came as a whistle blower
and he told everybody that unethical practices are conducted in this company and audit is not
done in rightful manner.
Main Body
There are several theories related to the whistle blowing and ethical practices within an
organisation (Miethe, 2019). The concept of whistle blowing is involved in developing ethical
dilemmas. It is concluded that there is need of having moral obligations for revealing the
unethical practices. There is creation of problem while conducting this. There is problem for
company if there are any unethical practices followed in the company then reputation of
company falls down. There are different conflicting values and behaviour that have to be
managed properly. There are different ethical theories in context of whistle-blowing.
Caroll model of ethical practise
The CSR pyramid is defined as framework that describes the reason why organisations
must take social responsibility. There are basically four factors within this pyramid which
includes economic, legal, ethical and philanthropic. The main objective of this pyramid is
maintaining profits. There is need for all the organisations to manage philanthropic responsibility
for meeting the responsibilities. As per this model, it is necessary that CSR activities are
economically profitable and involves all legal regulations. They must know how to place the
pyramid foundation effectively within the organisation for increasing sustainability of business.
The economic responsibility of organisations is that companies must work in effective
manner so that they can provide quality products and services. There are different shareholders
of companies who have to expect and demand profitable return on the investment.
Legal responsibility in this pyramid model refers to the responsibility of organisations in
adopting all the legal regulations and rules while conducting business operations. These laws and
rules are important to follow for determining the way in which business can be operated
effectively.
Ethical responsibility of organisation is to manage the normative expectations i.e.
regulations and laws. It is important for various companies to manage and conduct business in
ethical manner. It is the responsibility of organisations to embrace standards, activities and
practices so that there are no problems in running business.

Philanthropic responsibility – This is related to the discretionary and voluntary activities
of conducting business. The concept of philanthropy suggests that society must participate in
controlling different business tasks and activities. Companies are provided guidance for
managing ethical sense of conducting business. It is responsibility of business to provide
different kind of philanthropy like donations, gifts, community development for making up
community. There are various companies which manage to adopt effective CSR strategies that
can be used for conducting the operations and tasks.
In context of this ethical theory, it is concluded that business organisations must adopt all
ethical regulations and values of conducting business operations. In case of whistle blowing, it is
concluded that this is involved in sharing concern about the manager working in the company.
Main objective of this element is to declare malpractice from whistle-blower which can damage
share price, revenues as well as personal reputation. Whistle blowing is a process by which there
is authority of providing information to public about any unethical practise. It is concerned about
an employee or worker who is passing on information about any wrongdoing within the
company. It is a good practise for employees to create and develop safe and transparent working
environment in which they can freely speak about their viewpoint and opinion. Employees and
staff members are people who may come across any type of wrong doing in the company. It is
important to manage such type of problem by informing seniors. Whistle blowing can be
included as positive or negative process within the organisation. It is essential for companies to
manage ethical manner of working and attaining organisational goals. This is important for the
companies to handle that they are working effectively by following business ethics. This will
help in avoiding any kind of negative incident. It is essential for the employees to manage the
whistle blowing process properly. This will help in developing good practices properly and
attaining organisational goals. There is need to manage the workers and employees and provide
them freedom for attaining goals in less time.
Ackerman's three phase model
Ackerman's model highlights the internal policy goals and its relation with the CSR
(corporate social responsibilities) activities. The model is explained in three phrases that are-
 First phase- The top management identifies the social problems that are taking place in
the organisation as its responsibility of top management to provide safe working

environment to the employees working within the organisation. This practice create an
open and transparent environment where workers feel free to speak up on their problems.
 Second phase- It's not possible for top level management to look into all the social
problems of the employees. Its very important for every organisation weather be small or
large to provide safe working environment to its employees. Therefore, companies
appoints staff specialists from the current employees to look into the issues of the other
staff members. Staff specialist is responsible to find out the measures to tackle the
problems and issues of the other members.
 Third phase- In this phase the tricks and strategies formulated by the specialists are
consider by the top level management and after their approval it is implemented in the
organisation to provide the comfortable working environment to the employees. Its the
responsibility of the management to provide work safety with satisfaction within the
organisation.
Conclusion
It is concluded from the above discussion that whistle blowing is an act that enables
individuals to have right to inform people about any kind of unethical practise taking place
within the company. This is important that when every employee working in the company are
having knowledge about whistle blowing and they are managing their work in effective manner.
I have analysed that there are various benefits of whistle blowing such as Discover misconduct
and act against it sooner – The concept of whistle-blowing is unique and it provides each and
every individual an opportunity for reporting any concern or complaint. If there are any cases of
unethical practices then any person who wants to file a complaint can come forward, Take care
of things internally – If the whistle blower is stronger then protection laws have to be more
strong (Brown et. al., 2014). Media has the authority to expose any kind of scandal within
business. Media is allowed to take help of employees working in the company. Reduce losses
when misconduct occurs – An organisation is benefited by whistle blowing as there are
significant loss savings. There is a proper system which is used for managing the suffered losses.
Part 3

Reflective piece
I attended lectures about CSR and business ethics within university. While studying this
subject, I get to know about the value and importance of ethics and ways in which it should be
applied in the organisation. While taking lectures of business ethics, I studied number of cases
about organisations that prove ethical conduct of operations is really low. I have attended
lectures that increased my knowledge about managing the business activities in ethical manner. I
have learnt about different theories involved in learning different activities and tasks of
companies. While attending the sessions, I got to learn about different ways of managing
business values and ethics within the company. I have learnt about various theories of whistle
blowing such as Ackerman, Caroll's theory, etc. It is seen that after attending these lectures, I
have evaluated that there is need to manage the efficiency of work within organisations
otherwise there are negative consequences such as bankruptcy, diminished profits, bad brand
image, etc. It is evaluated that all the business activities are done in ethical manner so that goals
can be attained. I have evaluated that all the businesses which have lost their image in market are
the ones who were involved in some unethical conduct at workplace. This is important for me to
understand the advantages and disadvantages of whistle blowing. I learnt that Whistleblowing is
helpful for managing the building of trust among the brand. It is concluded that whistle blowing
is important for identifying and analysing the act of misconduct. There is an openness to
misconduct which provides explanation or demonstrating commitment for ethical standards
within the company. I have analysed that it is very important that anti corruption and whistle
blower protection acts are present for managing the legal requirements of company. There are
some regulations and policies followed within an organisation for managing the business
activities ethically.

REFERENCES
Books and Journals
Brown, A.J. et. al., 2014. International handbook on whistleblowing research. Edward Elgar
Publishing.
Dalton, D. and Radtke, R.R., 2013. The joint effects of Machiavellianism and ethical
environment on whistle-blowing. Journal of business ethics, .117(1). pp.153-172.
Davis, M., 2013. Whistleblowing. International Encyclopedia of Ethics, pp.1-6.
De George, R.T., 2011. Business ethics. Pearson Education India.
Dungan, J., Waytz, A. and Young, L., 2015. The psychology of whistleblowing. Current Opinion
in Psychology, 6, pp.129-133.
Ferrell, O.C. et. al., 2019. Business ethics, corporate social responsibility, and brand attitudes: An
exploratory study. Journal of Business Research, 95, pp.491-501.
Miethe, T., 2019. Whistleblowing at work: Tough choices in exposing fraud, waste, and abuse on
the job. Routledge.
Su, H.Y., 2014. Business ethics and the development of intellectual capital. Journal of Business
Ethics, .119(1). pp.87-98.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Tsalikis, J. and Fritzsche, D.J., 2013. Business ethics: A literature review with a focus on
marketing ethics. In Citation Classics from the Journal of Business Ethics .(pp. 337-404).
Springer, Dordrecht.