Business Ethics

(Chapter 02)

Sabbir Mahamud Chowdhury

District Legal Aid Officer
Dhaka
Social Responsibility of Business
 Corporation Should respond to wide range of
social problem because they have the expertise
and power to do so.
Definition of Social Responsibility
Grifin RW, Social Management, 1997
Social Responsibility is the set of obligations and
organization has to protect and enhance the society
in which it functions.
Davis Keith, Can Business afford to Ignore Social
Responsibility? 1960-
Social Responsibility is the management decision
and actions taken for reasons at least partially
beyond the organization's direct economic or
technical interest.
 Stoner JAF & Others. Management 1996-
Corporate Social Responsibility focuses on what
an organization does that affects the society in
which it exists
Hargreaves BJ A, Policy for Responsibility
1975-
Corporate Social Responsibility is the
interaction between business & other forces in
the society.
 Interest group of a business
organization
Owners /investors Customers
Employees Trade association
Suppliers Customers
Courts Creditors
Government Foreign government
Local governments State/central
government
Local community Colleges and
universities
What is socially responsible firm?
One that anticipates what the public will expect
from it and attempts meet these demands
before public focuses its criticism upon it.
Demand of the society is not only economic
one, but also social and environmental one.
 Not
Obligation and Reaction

But
Anticipation and Responsiveness
 Legal Measures of Social
Responsiveness
Law which places minimum wages for the
workers and put a ceiling on work hour per
week
The Social Security Act and Medicare
The Civil Rights act
Manpower development and training act
Workmens Corporation
Safety device requirement
 Child Protection Act
Labor rights act
Automobile information discloser act
Food and cosmetic act
Trade union
Environmental protection acts
Water pollution and collusion act
Nuisance
Oil, air pollution related act
Preservation of mineral act
Forest Act..etc.
Expectation to and from business and
society
Expectation of Business to the society
Rules are clear and consistence
Economically feasible rules
Make rules prescriptive no retroactive
Make rules within the boundary of feasibility
Make rule goal seeking not procedure
prescribing, tell organization what to do not
how to do it.
 Expectation of society to business
Society Desires-
Goods and services must be Quality and standard.
Reasonable price of the goods
Organization must by the raw materials with reasonable
price
Natural resources must be rationally used
Eradication of unemployment
Fair wages and healthy working condition
Availability of goods
Business persons and their workers must not involve with
anti-social activities
Rise of income and leaving standerd of the society
Keep the environmental pollution minimum
Continued

Make available of new technologies either

through innovation or import from outside
Business should behave like good citizen
Business should responsive to the opinion of
the society
Business should regard health, hygiene, safely
of the society
Non discriminatory environment policy
Ethnic values
avoidance of dirt, ugliness and negligence
 Carroll A B (1979) notes four types of
responsibilities that the society has of
business
1. Economic- Must be effective on producing
goods
2. Legal- Business should fulfill its economic
mission within the framework of law
3. Ethical- Fairness to customers and employees
and honesty in its dealing are ethical
responsibilities
4. Discretionary- Areas in which society desires
business to assume some social responsibility
Supporting community philanthropic
programs
Helping to prevent environmental degradation
Supporting to urban renewals
Training to unemployed
 Historical Development of CSR
Pase 1

1800 - 1920s Profit Maximizing

Pase 2

Late 1920s - early 1960s Trusteeship Management

Pase 3

Late 1960s - present Quality of life management

Degrees of Social Responsibility
Social Obstruction- Making goods and services available

Social Obligation- Following the law

Social Response- Attending Social request of doing

something for the benefit of the society

Social Contribution- Doing something without any formal

call or request from the society
 Government and business influence
Business influences the government through
Personal Contract and Networks
Lobbying
Political action committee
Favours and other influence tactics
The Government Influences Business through-
Legislation
Such as-
Environmental Protection Legislation
Employee protection legislation
Taxes and Charges
Security
Physical and Financial
 Managing Social responsibilities
Organizations need to fashion an approach to
social responsibilities the same way that they
develop any other business strategy. It requires
planning, decision making, consideration, and
evaluation. It may be accomplished through
both formal and informal dimension of
managing social responsibilities.
Formal Organizational Dimension-
Legal Compliance- following local, state,
central and international laws.
Ethical Compliance- Member of the
organization basic ethical standard behavior.
Some organization have forma Ethical
Committee who review new projects, help
evaluate new hiring strategies, ass new
environmental protection plan.
Philanthropic Giving- awarding of funds, or
gifts to charities, or other social programs.
Informal Organizational Dimension
Leaderships and culture- Jonson & Jonson
incident 1980s
Whistle Blowing- Beech Nut juice scandal
Thank you