Ethical Responsibilities in Business: Case Studies and Analysis

This essay delves into the critical realm of ethical responsibilities within the business landscape, emphasizing the importance of actions beyond legal requirements. It examines Corporate Social Responsibility (CSR) and focuses specifically on ethical responsibilities, which are driven by a company's internal moral compass and societal expectations. The essay explores the complexities of ethical decision-making through case studies, including the controversial practice of animal testing in the cosmetics industry and the ethical implications of corporate practices, such as gender discrimination in the workplace. It also discusses the concept of frugal innovation, which emphasizes providing affordable products and services to underserved communities. The essay underscores the necessity for companies to establish ethical codes of conduct and policies to ensure fairness, transparency, and a commitment to social welfare, ultimately highlighting that ethical responsibilities are essential for building trust and maintaining a positive reputation within society.

Ethical Responsibility
Although legal and economic responsibilities consist of ethical norms, there are other
behaviors and activities that are not included in law but somehow are expected from business
by society’s members. According to an article1 by Archie B. Carroll, he explains that legal
and economic responsibilities are requested while ethical responsibilities are expected. In
other words, ethical responsibilities are something that society has expected from business
over and above legal requirements.
Corporate Social Responsibility is the effort of a corporation to make positive change
to the customers, employees and society as a whole. The following form of Corporate Social
Responsibility that would be discussed under this chapter is ethical responsibility. Ethical
responsibility is a responsibility that a company puts on itself believing that it is a right thing
to do and not because it is bound by law to do so. It is not activities and practice that are
coded by any written law but it is something the company thinks that it is right to do or
something considered to be forbidden by the society. Hence, ethical responsibilities are the
most difficult amongst other responsibilities for business to deal with.
Ethics are practices that come before the establishing of laws, people practice it for
years because they think that it is necessary and right to do so. Later, ethics become the
reason itself for creating laws and regulations. On the other hand, ethical responsibilities can
be considered as those responsibilities including the new values and norms that the society
expects it to be fulfilled by the enterprise, even if such values and norms can reflect higher
performance standards than those provided by law. The ethical component should be
considered in a dynamic interaction with legal responsibilities. In other words, the ethical
responsibility permanently makes the legal responsibility to extend and at the same time
imposes even higher expectations to businessmen in order to act at an even higher level than
the one imposed by the law2.
In recent years, the debate continues as to what is and is not ethical which shows that
ethical responsibilities in corporation have clearly been stressed. It is common that many
company have used animal testing method for the sake of cosmetic, soap and other toiletries.
1 Archie B Carroll, 'A three-dimensional conceptual model of corporate performance'
(1979) <http://iranakhlagh.nipc.ir/uploads/A_Three-
Dimensional_Conceptual_Model_11531.pdf> accessed 03 September 2017.
2 GEORGETA GRIGORE, 'ETHICAL AND PHILANTHROPIC RESPONSIBILITIES IN PRACTICE
'<http://upet.ro/annals/economics/pdf/2010/20100317.pdf> accessed 03 September
2017.

Animal testing is very cruel as in which a live animal would be forced to undergo something
that is likely to cause them pain and the animal is usually killed in the end of the experiment.
Throughout the experiment, animals will be injected with harmful substances, exposed to
radiation, forced to inhale toxic gases and so on. Animals in lab are routinely suffered
torment and frequently cut open without any painkiller3.
In 2004, the European Union has implemented a ban on animal testing of cosmetic
products and later introduced a ban on the import and sale of new cosmetics tested on animals
abroad in 2013. Unfortunately, other than EU countries, there are 80% of the world still allow
cosmetics to be tested on animals4. According to Humane Society International, China is the
country that most frequently used animal testing where there were 375,500 animals had been
used in 2015 to meet the test requirement in China5. To illustrate further, the company of
L’Oréal, have established a caveat stating that animal testing would only be avoided if the
law requires. Although animal testing is not illegal nor prohibited by law, company should
practice ethical responsibilities to avoid the use of animal testing and find out any other non-
animal tests to meet the test requirements. Today, there are over 600 companies certified with
the Leaping Bunny which indicates that the products are not animal tested. It is easier for
customer to find and buy products that are not animal tested. Cruelty Free International
Leaping Bunny-certified companies such as The Body Shop, COTE Hair care and Marble
Hill6, have pioneered this move towards cruelty free cosmetics and toiletries.
Furthermore, there is no any written law requires company to provide low cost
products or services to poor people in a rich country. Company itself should play its ethical
responsibilities in lifting the poor people out of poverty by serving and selling for the
“bottom of the pyramid” consumers. Company should think of poor areas as communities
and poor people as consumers. Company is under ethical responsibilities to understand the
need for “bottom of pyramid”7 strategies to meet the demands of poor by developing or
designing cheaper products and services for the specific needs of the poor. According to an
3 'The animal testing of cosmetics & toiletries' (2017)
<http://www.ethicalconsumer.org/ethicalreports/cosmeticstoiletriesspecialreport/
animaltesting.aspx> accessed 03 September 2017.
4 Ibid.
5 Ibid.
6 'Leaping Bunny product search' (2017)
<https://www.crueltyfreeinternational.org/LeapingBunny> accessed 03 September 2017.
7 VINCE BEISER, 'SAVE THE POOR BY SELLING THEM STUFF — CHEAP'
[2011]<https://psmag.com/economics/save-the-poor-by-selling-them-stuff-cheap-29860>
accessed 03 September 2017.

article8 by Loïc Plé, there are many companies follow frugal innovation which is an idea of
doing more and differently with less. Under this approach, companies have to provide cheap
products without any loss of core functionality or quality. The products must also be usable
which is to be easy to use and requires no special knowledge to understand how it works and
fits to local use conditions. The company will not treat the poor as recipients of charity under
this ethical responsibility but as a customer which means that the company needs to figure
out the needs of poor and treat them equally.
Lastly, company should set up a code of practice or company policy that regulates the
practice in the company itself. Company should implement policy against gender
discrimination in job assignments which means that every woman should be given same
opportunities for advancement. Women should be treated equally as man in workplace. There
is no any written law that requires the company to treat its workers without any gender
discrimination in the appointment of job position. Thus, company should play its ethical
responsibilities to come out a policy in order to ensure and to appoint women to any high
positions. In the largest gender discrimination lawsuit in United State, Dukes v. Walmart9,
1.5 million female employees take action against Walmart of discrimination in promotions,
pay and job assignments. In 2011, the Supreme Court ruled that “[e]ven if every single one of
these accounts is true, that would not demonstrate that the entire company operate[s] under a
general policy of discrimination.” Today, Walmart has policies to appoint women to
management positions.
The example presented above show that ethical responsibilities are important to
ensure the public welfare as it covers the area that is not coded by law. By practicing ethical
responsibilities, company is expected by the society to do more than what the law requires.
8 Loïc Plé, 'Serving poor people in rich countries: the bottom-of-the-pyramid business
model solution' [2015].
9 564 U.S. 338 (2011).