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The study of business ethics is involved in the ethical dimensions of productive organizations. Besides ethical dimensions, the study includes commercial activities, according to the Stanford Encyclopedia of Philosophy. The study is relevant to the production, marketing, sale, distribution, and consumption of goods and services.
It can comprise potentially divisive issues like insider trading, bribery and discrimination. Ever since its inception, in ancient Greece, the study of business ethics discusses modern topics like unequal gender pay, business ethics is a large field of study.
Business ethics is included in several journals. Mainstream philosophy and social science journals discuss business ethics. However, there is a striking difference between business ethics and social responsibility (and commercial social responsibility).
THE DAILY IMPACT OF BUSINESS DECISIONS
The daily lives of professionals and consumers are impacted by business decisions. Organizations employ many people to manage sale or provision of goods and services. Codes of conduct protect professionals like lawyers and accountants from professional societies.
And, other professionals must carry out sound business ethics in their role. And, they perform these duties corresponding with co-workers, clients and the public.
The brands and people in business are required to interact with the business. In addition, the success of the business is influenced by these exchanges. For example, small businesses rely on status and trust among people to thrive in the community.
By treating employees and customers well, businesses can increase support for the community. Unethical business practices directly influence the customers’ decision to interact with an organization.
False or biased advertising, negative treatment of employees and ignoring safety concerns in products can undermine consumer confidence. Legal action can also result.
Business leaders and organizations can study how social responsibility interacts with business decisions. This is generally a broad concept that can comprise social as well as cultural, economic and environmental issues.
By incorporating business ethics and principles of social responsibility, organizations can draw a difference in the world, thereby improving their reputation.
Some companies are built on the social entrepreneurship model of business. The social entrepreneurship model of business utilizes the practical, innovative, and sustainable application for approaching society. This approach is likely to benefit society. The shoe retailer TOMS is decisively one of the most popular examples of the social entrepreneurship model.
For every pair of shoes sold, the company delivers a new pair of shoes to children in developing countries.
Another example of performing business ethics and social responsibility is by focusing on bettering the environment. Seventh Generation, a Burlington, Vermont-based company that produces and allocates green products can be noted for an example.
According to Forbes, the company is recognized as the best company for the environment. Forbes also notes some of the reasons why selling products such as vegetable-based cleaning products, paper towels, eco-friendly, chlorine-free tampons and natural lotion baby wipes.
Developing an employee bonus program that rewards workers who work out how to make the company’s goods even more sustainable.
For example, an LED-certified building may have more than a quarter of the company’s fleet. The fleet may comprise of low-emissions cars. Moreover, more than a quarter of the energy burned in manufacturing its products may originate from renewable energy.
DEFINITION & CHARACTERISTICS
Corporate social responsibility is similar to ideas of social liability for individuals and businesses. Some sources offer similar definitions for the two terms, but commercial social responsibility is a precise business approach that began in the 1950s and 1960s, with definitions escalating in the resulting decades.
There is no commonly acknowledged meaning of corporate social responsibility, according to the Journal of Business Ethics, but two features can be used to distinguish corporate social responsibility from other activities:
- 1) They partly or completely advantage society and/or general interests; and
- 2) They are not compelled by law. Other aspects of corporate social responsibility can differ.
Domains comprise ecological friendliness, community support, limited products support, fair employee treatment and more.
Stakeholders comprise suppliers, customers, employees, communities, the environment, investors, and regulators.
Policies and activities embrace cause-related advertising (marketing programs that join sales objectives and helping creditable causes), support (connecting praiseworthy causes to a brand or association for money) and company charity (charitable donations).
Some organizations connect with corporate social responsibility activities for basic reasons: to assist and make communal contributions. Another reason is extrinsic, which relates to a business expecting fiscal or other benefits for publicly accountable behaviour.
Many studies reproduce helpful organizational outcomes for corporate social responsibility activities, the Journal of Business Ethics reports. Finally, the third reason for corporate social responsibility activities is meeting public expectations and stakeholder pressure.
According to a paper in Procedia Economics and Finance, corporate social responsibility is a rift of business ethics. This finish was made when screening corporate social responsibility under the normative stakeholder theory, or philosophy that “affirms that business corporations are ‘morally’ responsible to look after the concerns of a larger group of stakeholders which could include owners, customers, vendors, employees and community rather than its stockholders.” Some sources define stakeholders as groups that the organization depends on for its existence.
In this context, corporate social responsibility becomes identical with the duties and association between the business and the environment that assists its existence. Thus, it is not enough to cover certain principled practices in businesses.