Running head: BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 1

Business Ethics and Corporate Social Responsibility

Name

Course

Affiliate

Date
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 2

Business Ethics and CRS

Introduction
In today’s business environment, as a result of the increasing sense of corporate
mistakes, the concepts of CSR and business ethics have come to the limelight in the
last two decades (Chell, Spence, Perrini, & Harris, 2016). With the notion that
businesses have an obligation and some accountability to the community beyond just
making profits for stakeholders, creates the need for business enterprises to become
more responsible and ethical in dealing with the society around them (Ferrell &
Fraedrich, 2015). As such, this accounts to partly for the reason why the idea of CSR
has continued to develop in significance and importance. Business enterprises have a
core value that entails they have both ethical and social accountable, including, the
economic aspect of building value for owners or shareholders of the organizations
(Chell et al., 2016). It is a collaboration of organizations in ensuring that they are socially
responsible in accordance to their operations and their participation for benefiting the
society at large.
Over the years, the notion of corporate social responsible has generated a
considerable controversies and debates globally. These two concepts are very
significant for organizational success and growth, in that, it results in positive worker,
clients, and society relations (Chell et al., 2016). Additionally, adherence to business
ethics and CSR helps to create a better public reputation for the business, build a
healthier and stronger society relation, and greater client loyalty that have the ability to
inure to the benefit of businesses that are corporate responsible (CR). Ethical
responsibilities are generally termed as those activities or behaviors that businesses are
expected to adhere to by the community and other shareholders such as workers
(Ferrell & Fraedrich, 2015). Therefore, this research essay seeks to answer the
following questions: Does the rise of interest in CRS and business ethics always mean
that business is becoming more ethical? What are the dangers and the benefits of
corporate social responsibility and ethical behaviour, for organizations?
Content Analysis
Business Ethics
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 3

Ethics play a significant function to the overall growth and success of any
business. The term business ethics refers to the moral standards and principles that
govern and guide the actions or behavior of an individual or an institution in the world of
business (Ferrell & Fraedrich, 2015). As such, this acts as a set of standards that
measures the rights and wrong in an organizational decision making and conduct.
Businesses that are ethically responsible tend to be also socially responsible since it
helps businesses to shape their decision-making process regarding social responsibility
with regard to the external surrounding. Being ethical, in business setting, generally
means applying laws of fairness and honesty to connections with clients and coworkers.
Furthermore, it examines ethical principles and issues that may arise in a business
environment (Ferrell & Fraedrich, 2015).
Corporate Social Responsibility (CSR)
CSR refers to the organizational obligation to become directly or indirectly
involved in the improvement of community well-being. On a voluntary basis, the
organization opts to address all the social, environmental and ethical effects that result
from its business relations with the community it serves. Socially responsible
organizations strive to address all the concerns of both its primary and secondary
stakeholders (Chell, et al., 2016). They have the interests of the customers and
communities at heart, and they engage in ethical production, marketing, and promotion
of their products and services to reduce the potential social harm.
There is an increasing demand facing business enterprises to go beyond just
making profits and their own interests and to focus on more on the communities in
which they operate in. The idea that companies should go beyond the making of profits
and begin to focus on the need for developing its environmental setting. This is because
organizations and corporations host their business operations within the community
(Setó-Pamies & Papaoikonomou, 2016). Therefore, in return, the community expects
the organizations to demonstrate accountability for aspects of their operations. Growth
and success of a business is directly dependent on the corporate social responsibility
(Chell et al., 2016). This is because the success of the business is related to how well
the business relates with its key stakeholders and the overall members of the
community.
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 4

Corporate social responsibility (CSR) helps organizations to cause positive

environmental sustainability and social change. Existing literature has demonstrated the
legal benefits and advantages of organizations that currently adhering to activities that
benefit the society and fundamentally provide a social responsible state. The term CSR
has over the years been defined by several scholars and researchers to help
businesses to understand this corporate (Chell et al., 2016). As a result, CSR refers to
principles that guide institutions and establishes a responsible behavior within an
organization. It is a collaboration of organizations in ensuring that they are socially
responsible in accordance to their operations and their participation for benefiting the
society at large.
Analysis of Becoming More Ethical
Becoming more ethical is not necessary mean that businesses have a more
interest in the overall business ethics and CSR. As businesses grow they tend to be
dependent on its established guidance of sound ethical code of conduct that is favoring
the aspects workers and management in its daily activities. It is obvious that as
businesses grow there is a need to become more ethical, especially when there is a rise
in CSR and business ethics (Ferrell & Fraedrich, 2015). Although businesses are
growing an interest in CSR and business ethics it does not necessarily mean that they
are actually becoming more ethical. These two concepts are generally a matter of
businesses overall obligation to the workers and society (Weber & Wasieleski, 2018).
The sole aim for every business is to make profits and generate more revenues. As
such, it becomes a burden for them to incorporate other responsibilities that demands
more from them, which may not help increase corporation efficiency at the end. It is
therefore the need for every business to behave ethically whether they like it or not but
sometimes the businesses may want to avoid extra costs brought by the CSR (Chell et
al., 2016).
Becoming morally ethical should not be an aspect of established laws by the
government by a matter of organizational behavior. Organizations know that for them to
creating client loyalty, retain and sustain good workers, enhance a positive work
surrounding and avoid legal issues they have to legally gravitate towards the overall
mandate to observe and adhere to ethical principles and establish a core standard of
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 5

business environment (Setó-Pamies & Papaoikonomou, 2016). Furthermore, business

ethics is fundamentally reliance on the established organizational culture of the
business to make decisions to do activities morally in order to align with their ethical
values. It is has become more necessary for businesses to become ethical in their
operations following the serious consequences that continue to be a challenge to the
society. For instance, businesses have continuously destroyed the environment through
the exposure of their activities in the process of producing toxic substance to the
environment. As a result, businesses are forced to become more socially responsible to
ensure the society is more safe and healthier, which in return, helps them to generate
more profits.
Benefits and Dangers of CSR
In the recent years, the notion of corporate social responsible has generated a
considerable controversies and debates globally. Corporate Social Responsibility
generates both merits and demerits to the firm (Chell et al., 2016). At the positive side, it
ensures that the organization pursues its objectives while protecting the societal
interests as well. Also, when an organization invests on philanthropic programs that
focus on contributing positively to the experiences of its shareholders, shareholders,
and the larger society, it improves its corporate image (Weber & Wasieleski, 2018).
This elevates its position in the market, and it will attract and retain customers. In
addition, social responsibility transcends the meeting of legal obligations, and it allows
the firm to go further in engaging and empowering its customers as it rolls out different
campaigns to promote healthy practices. It enables the organization to exercise self-
regulation, which involves monitoring its activities to ensure that they are compliant with
ethical standards (Chell et al., 2016).
On the downside, corporate social responsibility comes along with massive costs
to the organization. Small firms struggle to meet public expectations as a result of their
low capital gains. Today, the public is increasingly becoming aware of the requirements
that firms should be socially responsible. Satisfying these expectations is sometimes
difficult for start-ups (Setó-Pamies & Papaoikonomou, 2016). For most long-established
firms, it is also more costly to meet public expectations as they may be required to
invest more finances in adopting environmentally friendly production systems and
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 6

designs. Moreover, CSR reduces the amount of organization gains that shareholders
and employees receive. This is especially true in cases where a larger percentage of
profits are reverted to facilitating charitable programs.
A typical example of a company that practices corporate social responsibility is
Starbucks Coffee. Starbucks has a socially-oriented vision that inspires its customers
and partners around the around. It endeavors to bring all its business community on
board to act as innovators and contributors in the efforts to promote and sustain an
environment where all people thrive (Weber & Wasieleski, 2018). The company
operates in over 75 countries where it owns an approximate of 28,000 stores. In a
similar way, the company's commitment to generating positive impacts to its customers,
stakeholders and environment around the world continues to expand. There is an
increasing demand facing business enterprises to go beyond just making profits and
their own interests and to focus on more on the communities in which they operate in
(Setó-Pamies & Papaoikonomou, 2016). The idea that companies should go beyond the
making of profits and begin to focus on the need for developing its environmental
setting. This is because organizations and corporations host their business operations
within the community. Therefore, in return, the community expects the organizations to
demonstrate accountability for aspects of their operations.
Starbuck Coffee has a corporate social responsibility strategy that is premised on
three fundamental pillars, which include community, the environment and ethical
sourcing. To impact the community it serves, the company strives to develop
community-based stores and work in partnership with the local non-profit organizations,
which provide exist in service of their community needs (Chell et al., 2016). The
company donates finances to these organizations to facilitate campaigns that empower
communities. The company also hires some of its personnel from the community
organizations, and it offers the youth with training opportunities. All these are
community-centric activities that promote corporate social responsibility.
Furthermore, the company uses ethical sourcing in purchasing its products. It is
committed to ensuring that its manufactured products produced and purchased
ethically. It only purchases its products from farmers and manufacturers who are
conscious of ethical treatment. Environmentally, Starbuck's coffee regards the globe as
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 7

its "most important business partner" (Weber & Wasieleski, 2018). Therefore, it invests
in various environmentally friendly activities such as recycling, water and energy
conservation as a way of contributing to addressing issues relating to global climate
change. It adopts ethical and sustainable approaches to the production and packaging
of its coffee products (Weber & Wasieleski, 2018). Besides, the firm is a major
supporter of natural products, such as Ethos Water, which provides clean water to many
people around the world.
The company believes that it has the role of giving back to the community it
serves by contributing its time and money, and providing environmentally friendly
products. Its interest is pegged on the desire to take part in improving people's lives
without necessarily focusing on profit maximization (Setó-Pamies & Papaoikonomou,
2016).Overall, Starbucks's activities supersede its business interests as it goes beyond
its legal obligations and pursues morally upright actions. Therefore, the company has
not only improved public relations but its profit margins have expanded, and its
corporate and legal risks have equally reduced. There is an increasing demand facing
business enterprises to go beyond just making profits and their own interests and to
focus on more on the communities in which they operate in (Chell et al., 2016). The idea
that companies should go beyond the making of profits and begin to focus on the need
for developing its environmental setting. This is because organizations and corporations
host their business operations within the community.
Therefore, although corporate social responsibility comes along with both
advantages to the firm, in many cases, the former outweighs the latter as seen in
Starbucks Coffee. The disadvantages of social responsibility are only experienced in the
short-run because after the organization adopts socially and environmentally practices,
its profitability increases and shareholders will receive increased gains (Setó-Pamies &
Papaoikonomou, 2016).Social responsibility uplifts the reputation of a company
because its environmental and social conscientiousness assists in the attraction and
retention of customers. It is a marketing tool that the firm can use in winning the
confidence of the public especially through environmental protection campaigns and
facilitation of community empowerment on a wide spectrum of issues. Therefore, in
return, the community expects the organizations to demonstrate accountability for
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 8

aspects of their operations. Growth and success of a business is directly dependent on

the corporate social responsibility (Weber & Wasieleski, 2018). This is because the
success of the business is related to how well the business relates with its key
stakeholders and the overall members of the community.
Conclusion
In conclusion, both CSR and business ethics play a significant role in the overall
success and growth of businesses globally. It is the responsibility of every business to
ensure they have operated both socially ethical and responsible for the society in which
they operate in (Chell et al., 2016). Therefore, in return, the community expects the
organizations to demonstrate accountability for aspects of their operations. Growth and
success of a business is directly dependent on the corporate social responsibility (Chell
et al., 2016). This is because the success of the business is related to how well the
business relates with its key stakeholders and the overall members of the community.
Additionally, adherence to business ethics and CSR helps to create a better public
reputation for the business, build a healthier and stronger society relation, and greater
client loyalty that have the ability to inure to the benefit of businesses that are corporate
responsible (CR).
Ethical responsibilities are generally termed as those activities or behaviors that
businesses are expected to adhere to by the community and other shareholders such
as workers (Chell et al., 2016). There is an increasing demand facing business
enterprises to go beyond just making profits and their own interests and to focus on
more on the communities in which they operate in. The idea that companies should go
beyond the making of profits and begin to focus on the need for developing its
environmental setting. This is because organizations and corporations host their
business operations within the community. Therefore, in return, the community expects
the organizations to demonstrate accountability for aspects of their operations (Chell et
al., 2016).
With the notion that businesses have an obligation and some accountability to
the community beyond just making profits for stakeholders, creates the need for
business enterprises to become more responsible and ethical in dealing with the society
around them. As such, this accounts to partly for the reason why the idea of CSR has
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 9

continued to develop in significance and importance. Business enterprises have a core

belief that entails they have both ethical and social responsibility, including, the
economic aspect of building value for owners or shareholders of the organizations. It is
a collaboration of organizations in ensuring that they are socially responsible in
accordance to their operations and their participation for benefiting the society at large.
BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY 10

References
Chell, E., Spence, L. J., Perrini, F., & Harris, J. D. (2016). Social entrepreneurship and
business ethics: Does social equal ethical?. Journal of business ethics, 133(4),
619-625.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases.
Nelson Education.
Setó-Pamies, D., & Papaoikonomou, E. (2016). A multi-level perspective for the
integration of ethics, corporate social responsibility and sustainability (ECSRS) in
management education. Journal of Business Ethics, 136(3), 523-538.
Weber, J., & Wasieleski, D. M. (Eds.). (2018). Corporate social responsibility. Emerald
Group Publishing.