MGT 422 SEU Ethical Issues and Dilemmas in An Organization Questions

Description‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Business Ethics and Organizational Social Responsibility
(MGT422)
Due Date: 03/06/2023 @ 23:59
Course Name: Business Ethics and
Organisational Social Responsibility
Course Code: MGT 422
Student’s Name:
Semester: Third
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Student’s ID Number:
Academic Year:2022-23-3rd
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Students’ Grade:
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Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
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for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
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• Avoid plagiarism, the work should be in your own words, copying from students or other
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pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.
Learning Outcomes:
No
Course Learning Outcomes (CLOs)
CLO-4
CLO-6
Illustrate the role of social responsibility in the functional areas and strategic
processes of business and a comprehensive framework for analyzing and resolving
ethical issues and dilemmas in an organization.
Write coherent project about a case study or actual research about ethics
The content is available for free download in knowledge resource from the SEU
homepage:
Read chapter 2: Author M. Palazzo (2019) “Emerging Trends in Business Ethics,
Corporate Social Responsibility, and Sustainability” Source Title: Linking Cultural
Dimensions and CSR Communication: Emerging Research and Opportunities
Copyright: © 2019 |Pages: 27
ISBN13: 9781522579465|ISBN10: 152257946X|EISBN13: 9781522579472|ISBN13 Softcover: 9781522586456
DOI: 10.4018/978-1-5225-7946-5
Assignment Question(s):
1. Examine how the author relates business ethics and the CSR. (Not less than 300
words-2 Marks)
2. Discuss in detail the four dimensions of CSR differentiated by the different levels of
priority. With appropriate examples. (Expecting detailed answer 10 Marks)
3. Critically evaluate the issues, controversies and the problems related to CSR approach
as defended by the author. (Not less than 400 words-3 Marks)
# Note: All answers should be supported with proper references.
Answers
1. Answer2. Answer3. Answer-
28
Chapter 2
Emerging Trends in
Business Ethics, Corporate
Social Responsibility,
and Sustainability
ABSTRACT
The second chapter explores the evolution of the concepts of business ethics,
corporate social responsibility (CSR), and corporate sustainability (CS). It
highlights the main advantages and limits of these approaches. The chapter
points out how changes in the field of business ethics and CSR lead to the
progressive affirmation of CS. This is considered a new business approach
in guiding the life of an organisation. CS is analysed with three components:
(1) people, (2) profit, and (3) planet. Finally, the work recommends areas for
further discussion and research.
INTRODUCTION
A wide debate on CSR developed during the 20th century (Glavas, 2016;
Jamali & Karam, 2018; Rupp & Mallory, 2015), beginning with Bowen’s
(1953) proposed facets related to the CSR theory. Since then, there has
been a continuous change in the field terminology. This topic became an
important area of study, enriched with related theories and approaches,
including business ethics, social issues management, cause-related marketing,
DOI: 10.4018/978-1-5225-7946-5.ch002
Copyright © 2019, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
corporate philanthropy, public policy, stakeholder management, and corporate
accountability (Buysse & Verbeke, 2003; Howlett, Ramesh & Perl, 2009;
Valor, 2005). Few topics describe the phenomena associated with corporate
responsibility (Hahn, Figge, Pinkse, & Preuss, 2018; Tran, 2018; Weber &
Wasieleski, 2018). More recently, the original concepts of corporate citizenship
and CS have been added to this field of study.
The revolution associated with social responsibility has necessitated
that scholars and researchers compare these issues (i.e., citizenship, ethics,
sustainability) with traditional CSR to identify similarities and differences
(Logsdon & Wood, 2002; Matten, Crane, & Chapple, 2003; van Marrewijk,
2003). In reaching this goal, several academics found recent theories and
approaches joining existing topics. These theories were used to create a
new approach or apply the current terminology to different fields with other
peculiar meanings. For example, Votaw (1972) stated that:
Corporate social responsibility means something, but not always the same
thing to everybody. To some it conveys the idea of legal responsibility or
liability; to others, it means socially responsible behaviour in the ethical
sense; to still others, the meaning transmitted is that of ‘responsible for’ in a
causal mode; many simply equate it with a charitable contribution; some take
it to mean socially conscious; many of those who embrace it most fervently
see it as a mere synonym for legitimacy in the context of belonging or being
proper or valid; a few see a sort of fiduciary duty imposing higher standards
of behaviour on businessmen than on citizens at large. (p. 25)
This problem related to the meaning of CSR was taken into consideration
30 years ago. However, the matter still exists. For this reason, Carroll (1994)
highlighted that the situation of CSR is:
An eclectic field with loose boundaries, multiple memberships, and differing
training/perspectives; broadly rather than focused, multidisciplinary; wide
breadth; brings in a wider range of literature; and interdisciplinary. (p. 14)
After identifying this deficiency, Frederick (1998) tried to create a
classification of these subjects by considering their opposite poles. On one
hand, he set an ethical aspect of CSR. On the other hand, he set practical
features typical of social responsiveness. Between these two extremes,
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
Frederick (1998) placed other elements and approaches related to CSR,
including religion.
Conversely, Brummer (1991) classified CSR-related aspects into four
groups based on six criteria: (1) motive; (2) relation to profits; (3) group
influenced by strategies; (4) category of act; (5) effect; and (6) expressed or
ideal interest. The classification can be seen as a contribution to this field. It
does not help to analyse the nature of the relationship between an organisation
and society. Moreover, Carroll (1999) created a chronological progression
of the main advances in terms of corporate responsibilities.
Other categorisations of CSR have been developed, with many of them
based on social issues in management and corporate citizenship (Altman,
1998; Matten & Crane, 2005; Walsh, Weber, & Margolis, 2003; Wood,
1991). These topics are considered when highlighting the main changes in
the field of ethics.
Finally, Aguinis and Glavas (2012) proposed a multilevel and
multidisciplinary theoretical CSR model based on literature discussing
levels of analysis. The framework contains predictors of CSR programs
and outcomes, which are categorised based on how they affect internal or
external stakeholders.
The main aim of this chapter is to understand CSR, business ethics,
sustainability theories, and related approaches. This goal will be reached
by analysing each approach by exploring interactions between society and
business.
BACKGROUND
Business Ethics
The role of business ethics has gained value over the past years. Business
ethics is the study of business conditions, actions, and decisions addressing
issues related to “what is right” and “what is wrong” (Crane & Matten, 2016;
Matten & Crane, 2004). With the rise of globalisation, digital technologies,
and profit-based businesses, the demand for ethics has grown between
stakeholders. Ethics is no longer a managerial fad (Donaldson & Dunfee,
1999; Greenwood & Freeman, 2018; Post, Lawrence, Weber, & SJ, 2002).
In addition, academics and practitioners support the statement that ethics,
30
Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
values, integrity, and responsibility are no longer limited to the business
market (Stodder, 1998).
Business ethics is clearly characterised by the interaction between ethics
and business (De George, 1999; Ferrero, 2018). Therefore, it is part of the
wider area of ethics. This view, which is based on relations (ethics and
business), includes facets like moral assessments of an economic system
and moral evaluations related to employee/manager leadership behaviours
(Whetstone, 2001; White, 2001).
De George (1999) stated that moral evaluations must be of shared relevance
because these matters may produce severe results. Moral evaluations, when
analysed inside a company, are typical of individuals who embrace the
matter based on background. Other subjects (i.e., government, stakeholders,
international agencies) cannot create or impose virtues, opinions, or moral
judgments to a company if they are not shared by the individuals (employees/
managers).
This pushed De George (1999) to separate objective morality from subjective
morality. Objective morality is part of a wider area of existing legislation
and national or international principles/standards. Subjective morality is the
concept of culture and organisational culture. Subjective morality is embedded
in private and individual ideas of morality and ethics, as discussed in this
book’s first chapter. This kind of morality has several features in common with
the concept of personal conscience. Idealistically, managers and employees
would work together while following objectively and subjectively acceptable
principles (Hoffman, Frederick, & Schwartz, 2014). In a real context, related
to actions of companies, it may be necessary to choose between subjective
and objective moralities. In doing so, charismatic entrepreneurs may be prone
to select the subjective pole of ethics; others may prefer to follow objective
moral judgments (Beauchamp, Bowie, & Arnold, 2004).
Several scholars took into consideration the implementation of morality
and ethical principles. They added that business ethics could be considered
a specialised area of applied ethics to distinguish the right and wrong side
of morality (Michalos, 2017; Schwartz, 2017). Nevertheless, the conflicting
concept of business ethics is often seen as an oxymoron (Collins, 1994;
Duska, 2000; Nash, 2000). This is associated with the selected topic because
organisations are considered to be involved in unscrupulous or disreputable
practices. Therefore, it is impossible to talk about ethics when analysing
companies (Velasquez & Velazquez, 2002).
Following this perspective, organisations are viewed as aiming for
profits and sales. Many companies have been involved in outrages and other
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
negligent corporate performances, including environmental contaminations,
child labour, or the manipulation of human rights (e.g., Volkswagen’s diesel
emissions fraud, Apple’s violation of human rights in China, etc.). These push
stakeholders to respond to corporate initiatives with hostility, scepticism, and
criticism (Hotten, 2015; Siano, Vollero, Conte, & Amabile, 2017). On the
other hand, the same companies that carry on business malpractice are also
the organisations that promote basic ethical principles like trustworthiness,
transparency, and rectitude (Fisher & Lovell, 2009; Joyner & Payne, 2002).
These companies publicly embrace business ethics because they are aware
that this approach may receive attention from media, government, and other
stakeholders interested in sustaining responsible businesses (De George,
2011). However, even without a common definition of ethics, remarks can
be made concerning business’ adherence to conventional ethical standards
(Lewis, 1985). These remarks can help consumers and stakeholders identify
companies that are involved in being ethical vs. companies that approach
ethics for convenience (Creyer, 1997; Goodpaster, 1991).
Regrettably, a variety of studies note that the public sees a decline in business
ethics because moral or immoral behaviours are difficult to measure. Many
companies demonstrate a willingness to dispose of traditional ethical restraints
in the pursuit of economic success or more appealing goals (Beauchamp, Bowie,
& Arnold, 2004). In fact, while business ethics can affect the behaviour of
some organisations, particularly those seeking to prove to their stakeholders
that they performed well on an issue for which they have been disapproved
in the past, it is arguably less effective for many other organisations that do
not have the same need (Stark, 1993).
There are existing limitations in defining and measuring business ethics,
as well as problems linked with overcoming the conflicting nature of this
topic. Therefore, many related subjects propose guidelines for organisations
interested in practicing voluntary measures and self-regulation. In turn, these
organisations can refocus on regulating the social and environmental impacts
of their strategies and activities.
The concept of CSR shares many features with the issue of business
ethics. However, it is different in other peculiar characteristics (Giacalone
& Thompson, 2006).
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
CSR
During the last few decades, CSR set its basis in management literature
(Anderson & Frankle, 1980; Epstein, 1987; Holme & Watts, 1999; Jenni &
Lewis, 2008; Weber & Wasieleski, 2018). This topic, in fact, has been included
in managerial frameworks as it explores its facets and peculiarities in the
business perspective (Brueckner, Spencer, & Paull, 2018; Dias, Rodrigues,
Craig, & Neves, 2018; Frederick, 2018; Jamali & Karam, 2018). These
interpretative models have several features in common that contribute to
the development and evolution of the concept and its definition (Dorobantu,
Aguilera, Luo, & Milliken, 2018).
Despite the numerous CSR definitions proposed, the central attribute of
the behavioural dimension of the company is clear. Social responsibility, as
related to a company, means behaving as a good citizen, managing activities
to control social and environmental effects, and positively influencing lives
(Carroll, 1999; Hart, 1995).
Although the first theoretical studies on CSR were developed in the 1930s,
the first major contribution to social responsibility was in the 1950s (Berle
& Means, 1932; Clark, 1939; Kreps, 1940). Bowen (1953) linked CSR with
the social conscience expressed by businessmen. He (1953) was the first to
analyse responsibility. Bowen preferred this term to business ethics because
his research focused on the exploration of the morality of businessmen rather
than the corporate side of the selected topic.
In the 1960s and 1970s, social responsibility evolved through academic
contributions in literature and the emerging realities of responsible business
practice. This sets the basis for the affirmation of the expression “corporate
social responsibility,” which indicates moral and social obligations exerted
by company managers. In the same years, some concepts were introduced
that characterised the main aspects of CSR. In the definition of social
responsibility by Frederick (1960), the author highlighted the importance
of fulfilling the expectations of the company’s local community. Moreover,
McGuire (1963) introduced the concept of corporate citizenship, arguing that
companies must assume responsibility toward society beyond their economic
and legal obligations.
In that period, a critique of the concept of social responsibility was started
by Friedman (1962), who defined CSR as a doctrine to subvert the capitalist
system. According to Friedman (1962), the company’s social responsibility
scope is to use its resources to devote itself to activities aimed at increasing
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
profits. This profit-focused approach is typical of the neoclassical theory in
management, in which organisations must implement their social goals to
pursue institutional and economic purposes (Friedman, 1962).
The attention on corporate social responsibility doubled during the 1970s
as new cultural trends (i.e., environmentalism, ecology, consumerism, green
politic) focused on the protection of collective well-being. Some scholars,
including Sethi (1975) and Ackerman and Bauer (1976), extended the
conceptual scope of the term CSR by shifting the focus of this issue from
social responsibility to social sensitivity. This was indicated using the term
“corporate social responsiveness.” This new issue highlighted companies’
needs to anticipate social pressures generated by external environments.
Moreover, CSR broadened its boundaries with social, philanthropic, and
economic-legal aspects. The path of this evolution is explicitly indicated in
the pyramidal structure proposed by Carroll (1979, 1991). This structure
defined four dimensions of social responsibility characterised by different
levels of priority:
1.
2.
3.
4.
Economic (to make a profit)
Legal (to obey the law)
Ethical (to be ethical)
Philanthropic (to be a good corporate citizen)
This model sets comparative weightings for the issues of economic, legal,
ethical, and philanthropic functions. Each issue must be satisfied (following
the given order) before moving onto the next issue in the hierarchy.
The economic and legal functions are linked to the concept of the old
social contract. This makes them “required” expectations, while the ethical
and philanthropic features are part of the new social contract. Thus, ethics
is perceived as “expected,” while philanthropy is a “desired” responsibility
(Carroll, 1999). Carroll’s pyramid (1991) has been quoted by many CSR experts
(Visser, 2006). The pyramid has changed over the decades, which maintains
its significance (Schwartz & Carroll, 2008). Furthermore, the model proposes
the selected responsibilities in order of decreasing relevance. The essential
priority, in terms of responsibility, is economic. All other responsibilities
must be based on the economic priority. When this first step is reached, the
company is expected to put it into its “good business practice.”
Legal responsibilities entail that the organisation accepts that laws represent
society’s viewpoint of what is right and/or wrong. Companies must, therefore,
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
obey national and international laws. Ethical responsibilities refer to those
actions not formalised by law but requested by societies. The top of the pyramid
shows that philanthropic responsibility is an optional requirement. This final
responsibility entails that the company acts as a good citizen by donating
resources to improve the community’s well-being (Carroll, 2016). Overall,
the pyramid shows that socially responsible organisations can concurrently
accomplish these commitments by considering their decreasing obligation
(Carroll, 1999).
The philanthropic portion of the pyramid is applied when companies
give a direct contribution in terms of resources and/or employees to a cause.
Philanthropy, therefore, shares CSR’s goal to improve community well-being.
Philanthropy entails some form of cash grants, donation, and/or specific
services (Kotler & Lee, 2005). Although presented as a part of the new social
contract in the pyramid; philanthropy is a conventional way of implementing
CSR. It is a major support of society. Philanthropic responsibilities introduce
the concept of volunteerism as the main aspect of socially responsible activities
in the community, excluding any forms of external coercion (Walton, 1967).
The company’s decision to practice responsible actions beyond their
obligations is an optional tactic. If this decision is made, it can allow the
conquest of protected positions in competitive scenarios. This can help the
company reach goals through differentiation and positive relationships with
stakeholders based on social acceptance and legitimacy (Frederick, 1986;
Lee, 2008).
During the 1980s, the stakeholder theory became an undisputed approach
(Freeman, 1984). According to this theory, legitimacy in the social context
is achieved when a company focuses on responding to the many needs
and expectations of its stakeholders (Freeman, 2010). The management of
stakeholder relationships impacts business strategy (Clarkson, 1995; Donaldson
& Preston, 1995). Moreover, the stakeholder theory has significant implications
in the field of CSR (Clarkson, 1995; Jones, 1995). In the perspective set by
the stakeholder theory and other areas of study, it is difficult to divide social
and economic performances achieved by the company. The central aspect
that organisations must consider is the survival of the organisation achieved
through all kind of public approaches (Lee, 2008).
Reaching this essential goal depends on the company’s relationships with
shareholders and other stakeholders. In a strategic CSR perspective, acting in a
socially responsible manner does not mean solely implementing philanthropic
activities. It requires the development of strategic skills so the organisation
can generate a profit. It also requires the company to successfully manage
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
relations with various groups of stakeholders while positively achieving a
better competitive position (Porter & Kramer, 2002; Post, Preston, & Sachs,
2002).
In more recent years, there has been a growth of notions and perspectives
on corporate social responsibility. These include studies highlighting the
limits of traditional approaches to CSR (Ebner & Baumgartner, 2006). Issues
limiting the strength of the topic will be presented to explain the existing link
between sustainability and CSR.
MAIN FOCUS OF THE CHAPTER
Issues, Controversies, and Problems
Related to the CSR Approach
The main challenge faced by CSR is the fact that this approach is unable
to improve a company’s overall life. Moreover, it is difficult to assess or
measure the results of CSR. Besides, some organisations use CSR as a
“window-dressing” tactic to hide unethical activities. This increases the level
of criticism against the strategy (Aid, 2004; Frankental, 2001; Karnani, 2010).
Visser (2010) indicated three limitations characterising CSR:
1.
2.
36
Marginal Side of CSR (Peripheral CSR): CSR, which is applied by
many large companies, it is put into practice for the public relations
function. It is not integrated into the “life” of the entire organisation.
Furthermore, the number of companies that succeed in reaching a social
and/or environmental certification is very circumscribed. This situation
relegates CSR to a marginal position because it does not affect the
development of the entire society.
Incremental Side of CSR (Incremental CSR): To structure a strong
CSR strategy, this approach should be based on a managerial model aimed
at achieving social responsibility objectives as defined autonomously
by the organisation. This often requires that the socially responsible
scopes are reached through incremental improvements. The steps
should modify gradually. This approach is an inadequate response to
the urgency of various social or environmental problems which tend to
rapidly degenerate.
Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
3.
Uneconomical Side of CSR (Uneconomic CSR): This feature of CSR
considers the inclination of financial markets to reward companies that
achieve economic results in the short term. It puts less emphasis on
incentivising CSR-oriented companies. Many researchers have attempted
to study the influence of CSR activities on business performance.
However, it is difficult to demonstrate that CSR positively impacts
economic results (Margolis & Walsh, 2001; Vogel, 2005). For this
reason, companies prefer strategies with immediate results in terms of
profitability. In fact, it is clear that companies do not want to be engaged
in uneconomic and demanding CSR activities (Friedman, 1962).
More issues affect CSR, which illustrates that this concept is not free from
limitations. It is possible to state that:
1.
2.
3.
4.
Managers Do Not Have Skills to Develop CSR: One objection to CSR
is that organisations are not prepared to handle social activities. This
position highlights that managers are oriented toward economy and
finance. They do not have the knowledge to act in a socially oriented
manner (Davis, 1973).
CSR Dilutes Business Goals: Another opposition to CSR is that it
places less relevance on traditional corporate economic purposes.
Adopting CSR may put organisations into fields that are unconnected
to the company’s principal financial goal (Hayek, 1969).
CSR Gives More Power to Companies: A third limitation of CSR is that
organisations already have power in their fields and markets. Therefore,
there is no need to enlarge this power into other areas (Davis, 1973).
CSR Affects Corporate Competitiveness: A fourth argument is that
engaging with CSR causes organisations to become less internationally
competitive (Friedman, 1962).
CSR also demonstrates several issues related to its practical/tactical
side. The implementation of CSR programs, in fact, has often manifested in
limits reducing effectiveness. CSR initiatives in business practice have had
negative reactions from different categories of stakeholders. Similarly, CSR
communication is used to publicly address and reassure audiences about
possible environmental or societal damages (Morsing & Schultz, 2006).
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
According to this perspective, CSR needs initiatives to impact media to
positively present the company to the public and relevant stakeholders.
Another limitation in CSR practice involves the multiplication of “contact
points.” This is considered as the main goal of any CSR program. On the one
hand, this perspective promotes interactions with stakeholders. However, it does
not develop public involvement. It seems, in fact, that mutual collaboration
between companies and stakeholders via symmetrical two-way communication
processes do not belong to CSR (Crane & Livesey, 2003; Morsing & Schultz,
2006). In fact, in many CSR programs, stakeholder involvement remains
limited (Browne & Nuttall, 2013; Porter & Kramer, 2011).
Implementing CSR programs without successfully engaging the public can
cause negative effects (Delmas & Burbano, 2011). Several scholars propose
conceptual frameworks aimed at managing relationships with stakeholders
to integrate them into CSR practices. Shared value (Porter & Kramer, 2011),
social contract (Davis, 2005), radical transactiveness (Hart & Sharma, 2004),
and stakeholder engagement (Andriof, Waddock, Husted, & Rahman, 2017;
Greenwood, 2007; Miles, Munilla, & Darroch, 2006) share the idea that
organisations must integrate the contribution of stakeholders in strategies
and practices related to social responsibility.
SOLUTIONS AND RECOMMENDATIONS
CS and CSR: Two Sides of the Same Coin
Many critics have raised disputes against the concept of CSR. These objections
reflect the reasonable perspective that there is, indeed, a negative side of the
argument with respect to almost any kind of theory. However, organisations
still feel the need to set economic and social goals.
Due to this increased need for ethics and morality, especially in the context
of digitalisation and globalisation, a new topic has emerged “to assess business
activities as well as social and industrial development more generally” (Matten
& Crane, 2004: 21). This is referred to as the concept of CS.
The World Commission on Environment and Development (WCED, 1987)
explained that “sustainable development is development that meets the needs
of the present without compromising the ability of future generations to
meet their own needs.” Sustainability involves environmental issues, as well
as social and economic features. Environmental scopes cannot be reached
38
Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
by ignoring social and economic matters (WCED, 1987). Sustainability
has three facets in the ability of a company to meet environmental, social,
and economic needs of stakeholders (Crane & Matten, 2016). These three
elements were defined by Elkington (1999) as part of the triple bottom line
(TBL) framework.
The First Pillar: Planet
The environmental aspect is the main feature of sustainability. Therefore,
each part of CS has the same importance as the three components contribute
equally to the relevance of the topic. The management and exploitation of
resources, as well as their conscientious safeguarding for future generations,
are essential concerns because these assets are characterised by limited access.
Many business strategies do not consider the natural environment as they
destroy basic resources and destabilise the future well-being of generations.
The environmental dimension of sustainability refers to the evaluation
of the impacts of processes, products, and services related to natural
resources. Therefore, continuing resource-intensive business behaviour is
not a conscientious and realistic option for a company. Accordingly, the
environmental perspective of CS pushes companies to:
1.
2.
3.
4.
5.
6.
Preserve the ecosystem by reinvesting profits and realising
environmentally friendly goods and services
Meet specific standards and certifications
Adhere to principles of environmental protection
Implement a rational use of natural resources
Support safeguarding the environment through voluntary programs and
activities to improve the environmental impact of a company’s activities
Prevent risks to the ecosystem and populations
The Second Pillar: People
The social aspect of CS involves analysing and preventing negative effects
of business practices on societies and communities (Scott, Park, & Cocklin,
2000). The social point of view concerns issues about the protection of health
and safety of employees and consumers, as well as the fulfilment of the
expectations of stakeholders. The “people” side of CS focuses on corporate
tools/practices, values and internal rules that guide socially responsible
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
behaviours and can be summarised in the ethical code of conduct (Somers,
2001).
The Third Pillar: Profit
The economic view on sustainability refers to indicators of profit. This
is linked to the business system’s ability to gain an adequate competitive
position. The profit dimension highlights strategies and tactics for long-term
economic commitment. This dimension is inevitably related to the fact that the
organisation aims to generate well-being and remuneration of shareholders.
To fulfil its economic goals, the company must operate according to
current legislation on the protection of human rights and open competition.
The profit dimension is related to the practice of avoiding the establishment
of “cartels,” which prevent companies from competing without restraint. It
also aids in pricing strategy.
The pillar of profit strictly supports social causes or cause-related marketing
(Ballings, McCullough, & Bharadwaj, 2018). The economic dimension of
sustainability includes the ability to create relationships with customers,
suppliers, and other fundamental stakeholders.
FUTURE RESEARCH DIRECTIONS
This chapter presented the topics of business ethics, CSR, and CS. Focusing
on these approaches shows how they have shared features. They are also
characterised by different perspectives on similar social and environmental
issues. Analysing these subjects highlights that it is not always possible to
prefer one theory over another. However, their applicability can be affected
by radical changes modifying societies and organisations.
This chapter offered many definitions of business ethics, CSR, and CS. They
continually refer to different dimensions and pillars related to environment,
profit, and social issues. Although each definition places an emphasis on
different elements, the descriptions are congruent.
Business ethics, CSR, and CS definitions are used to depict social
phenomena. However, these approaches are limited in regard to stability
in managing complex challenges. Companies are tasked with defining the
dimensions, as well as understanding when to select one peculiar topic over
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Emerging Trends in Business Ethics, Corporate Social Responsibility, and Sustainability
another. What is important is that companies must put them at the core of
their organisation when considering business strategies.
CONCLUSION
According to this chapter, the sustainability revolution has obscured topics
like business ethics and CSR. The CS approach states that the survival and
development of macrosystems (i.e., the planet, economic systems, and society)
and microsystems (i.e., organisations and individuals) depends on reaching
a balance between three fundamental aspects: (1) environmental impacts;
(2) social implications; and (3) the preservation of individual well-being.
The reconciliation of these requirements allows companies to survive while
meeting the expectations of stakeholders. Therefore, the need to pursue
sustainable development is leading to profound changes in corporate policies
and practices.
It has been determined that CS, CSR, and business ethics share many
features and strengths. It is important to consider this fact during the decisionmaking process. This suggestion was proposed after studying the advantages,
limitations, and objections related to CS, CSR, and business ethics.
However, choosing from these three topics is not always possible.
For example, the theme of sustainability shares many features with other
perspectives too. These include ethical enterprise, harmonic company,
corporate environmental management, etc. These topics, in fact, allow
organisations to make decisions to improve society, involve stakeholders,
develop appropriate skills and processes, and create a proper orientation to
sustainability.
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KEY TERMS AND DEFINITIONS
Cause-Related Marketing: The process of creating and implementing
marketing tactics that are characterised by providing a certain amount of
money to a nonprofit cause. This, in turn, encourages consumers to engage
in revenue-providing exchanges.
Corporate Citizenship: Activities and processes implemented by an
organisation to meet its social responsibilities (i.e., legal, social, environmental,
ethical, and economic) according to stakeholder pressure. It aims to create
higher standards of living, improved quality of life for society, and profitability
for stakeholders. As the demand for corporate citizenship increases, investors,
consumers, and employees will use their collective power to influence
organisations that do not share their ethical principles.
Corporate Social Responsibility (CSR): This process foresees the needs
of stakeholders. An organisation can offer objective information, branding,
and business performance details through a CSR policy and managerial
communication tools. Stakeholders use this information to learn about the
business performance, social and environmental efforts, and relationships.
Corporate Social Responsiveness: This process identifies how
organisations and their stakeholders dynamically interact and care for the
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environment. Conversely, corporate social responsibility (CSR) refers to a
company’s moral obligation to society. Thus, responsiveness and responsibility
are linked. However, responsiveness can be created through public expectations
of corporate responsibilities.
People: This feature of the triple bottom line (TBL) indicates the concept
of human capital. It refers to people who work for the organisation, as well as
people who affect and are affected by the company’s performance. This aspect
is strictly linked with other relevant topics, including stakeholders, stakeholder
engagement, social responsibility, and corporate social responsibility (CSR)
communication.
Planet: The environmental bottom line pillar indicates a company’s
sustainable environmental practices. This concept requires that a triple
bottom line (TBL) organisation cares for nature, does not create irreversible
problems, or reduces its environmental impact. A company that follows the
TBL approach minimises its ecological footprint (i.e., managing energy use,
minimising non-renewable resources, decreasing pollution, making its waste
less contaminated before disposing of it in a secure and legal mode).
Profit: The financial component of triple bottom line (TBL) is the main
aim considered by companies. Profit involves financial and “natural” capital.
Reputation: Corporate reputation is a collective mental representation.
It expresses a company’s relative status in the mind of employees and other
stakeholders. Corporate reputation refers to the collective judgment of the
public regarding an organisation. The judgement is based on financial,
environmental, and social impacts.
Sustainable Development: This concept was introduced in 1987 by
the World Commission on Environment and Development. It identifies a
development that can meet today’s needs for a safe environment, social justice,
and economic growth without impeding future generations. The preservation
of the three pillars of sustainability must be the main aim of all companies.
Triple Bottom Line (TBL): This concept, which was created in 1994 by
Elkington, refers to the fact that companies should focus on three bottom lines:
(1) habitual evaluation of corporate profit; (2) social responsibility; and (3)
environmental responsibility. This concept involves profit, people, and planet.
It aims to evaluate the financial, social, and environmental performance of
an organisation.
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APPENDIX
This chapter discusses how a sustainability revolution has taken place over the
last two decades (Edwards, 2005). A case study on Tata Steel is offered as an
example of the strength of this revolution (https://www.tatasteel.com/).Tata
Steel, the second largest steel producer in Europe, has plants in the United
Kingdom and Holland. It provides steel and other services to industries,
including construction and vehicle production.
Tata Steel’s five core values explain the ethical approach of the organisation:
(1) integrity; (2) understanding; (3) excellence; (4) unity; and (5) responsibility.
Moreover, the company has its own definition of sustainability (https://www.
tatasteel.com/#sustainabilty). It considers this strategy as “an enduring and
balanced approach to economic activity, environmental responsibility, and
societal benefit.”
Sustainability is, according to the company, strictly related to the main goal
of guaranteeing that future generations benefit from our current lifestyle.
This requires long-term goals based on economic, environmental, and social
facets of the business.
In addition, a commitment to ethics is revealed in the business’s corporate
social responsibility (CRS) policy (https://www.tatasteel.com/media/
newsroom/press-releases/india/2017/tata-steel-commissions-its-1st-3-mwsolar-power-plant-at-noamundi/). In fact, Tata Steel’s sustainability policy
shows that they “conduct our activities in relation to economic progress, social
responsibility and environmental concerns in an integrated way in order to
be more sustainable and to meet the expectations of our stakeholders.”
Tata Steel’s attention to sustainability is also expressed in the fact that
the company considers current laws on sustainable tactics. For example,
antipollution laws set limitations on carbon dioxide emissions. Tata Steel not
only follows the law, but in addition, it aims to exceed the law’s minimum
requests. This guarantees that Tata Steel can achieve sustainability and satisfy
key stakeholders.
These responsible actions also benefit Tata Steel’s reputation and image. The
company is considered, in fact, as an environmentally-committed organisation
and responsible business. Tata Steel offers products that improve long-term
sustainability. These products allow the company to reach an additional
margin and a primum price competition.
Tata Steel is working hard to reduce its emissions by employing new
technology for recycling. This improves its management of natural resources.
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For example, the company has developed a technology that reuses gas to
generate electricity. This has reduced its use of natural gas and emissions.
These examples demonstrate how sustainability tactics can be excellent options
for an organisation. By embracing this approach, the company enhances its
reputation and strengthens its corporate image. It is more efficient as it reduces
the use of raw materials and power. In addition, it is more efficient with its
recycling options. These issues positively impact profits and stakeholders’
confidence, trust, and loyalty.
Moreover, following the ethical approach reinforces the company’s competitive
position in the market. It fosters sustainable decision-making processes with
competitors. The benefits of sustainability influence human resources as
employees are engaged in their daily duties and they view their work as a
form of caring for people and the environment.
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