CHAPTER 5

Driving Forces behind Corporate Social Responsibility

Transparency
- Information-driven economy where business practices have become increasingly
transparent left companies with no choice but to change into CSR. Good or bad things
that happen within the company can be known by public and there is nothing that can
be hidden.
Knowledge
- Consumers and investors in information-based economy have more information at their
disposal. Thanks to the internet and other electronic platforms that has the flow of
information now it can be easily accessible and affordable communication technologies
have definitely changed the game.
Sustainability
- Because Earth resources depleting, it has been a huge topic lately around the world
since our population has crossed sustainable yield threshold of our natural
environmental systems that we heavily rely on. This leads to corporation increasing
pressure from diverse stakeholders to demonstrate business plan and strategies that are
environmentally sound.
Globalization
- Globalization nowadays represent new stage of capitalism which means that a standard
of a country is equally to the standard of another country. It is a government
intervention to balance private corporation’s interest against public interest for the
good practices. For example, the marketing practices issue of child labour environment
protection.
Failure of public sector
- In today’s world, many people in our societies have lost their faith in the government
and arguably expect less from them failed to keep old promises that they did with
citizens. So, the pressure has greatly increased to those who own businesses and
corporations, to act for their own social actions and do what is right for the people.
CHAPTER 8
What is Whistle Blower?
It is the employee that discovers evidence of misconduct or malpractice in an organization and
chooses to draw the attention of public.
- Internal – An employee discovering corporate misconduct decided to draw the attention
of his or her supervisor following the procedures within the organization.
- External – An employee discovering corporate misconduct and choose to draw attention
of law enforcement agencies as well as the medias.
Motivation
Discovery of illegal activities before the situation is revealed in the media can save
organizations million of dollars in fines, prevent potential harms from consumers and publics.
positive They are looked up to as brave men and women putting their careers and personal
lives at risk to the right thing – Models of honor and integrity
negatives They are considered as informers, spies and squealers who breached the trust and
loyalty they owe to their own employers of the corporation. They are not motivated to be
models of honor and integrity but instead mainly for money, fame and personal egos. Also
viewed as troublemakers who challenge the policies and practices of their employers while
claiming to act as the corporate conscience,

When is it really ethical?

1. When the company, through a product or decision, that will cause a very serious and
considerable harm to the public, consumers or break existing laws
2. When the employee identifies a serious threat of harm, he or she should report it and state
his or her moral concern
3. When the employee’s immediate supervisor does not act, the employee should exhaust the
internal procedures and chain of command to the board of directors.
4. The employee must have documented enough evidence that is convincing to a reasonable,
impartial observer that his or her view of the situation is accurate, and evidence that the firm’s
practice, product or policy seriously threatens and puts in danger the public or product user.
5. The employee must have valid reasons to believe that revealing the wrongdoing to the public
will result in the changes necessary to remedy the situation. The chance of succeeding must be
equal to the risk and danger the employee takes to blow the whistle.
When is it unethical?
Whistleblower will be rewarded in successful cases where the government recover funds lost to
fraud and they are also entitled between 10 to 30% of the amount recovered.
Whistle-blowing is considered unethical when the employee is motivated by the opportunity
for financial gain or media attention or that the employee is carrying out an individual vendetta
against the corporation based on personal egos.

Arguments for WB Protection

It is because the law recognizing whistle-blowing as a right gives people employees a chance to
abuse it. The law to protect whistle-blowers is against the traditional right of employers to
conduct business as it fits. And the legal contract between the employers and employees are
breached.
1. Whistle-Blower protection will protect the majority of the society.
•These benefits can only be achieved if the whistle-blowers are encouraged to come forward
•Employees are often the first to know about hazards, they should be protected in order to
encourage them to speak out
2. Legal protection for whistle-blowers appeals to the right of freedom of speech.
•Whistle-blowers are often led to speak out not by a desire to serve the public good but to do
what they feel is morally required of them.
•Employees should be given not only the freedom of speech, but also the right to follow one’s
own conscience.

Duty to respond :)
CHAPTER 10
The Impact of Persons
1. The Impact on Persons
•Advertising can shape our beliefs, attitudes and values.
•Advertising will lead us to consume more than we would.
•Advertising does not educate people to grapple with the complex problems of life
•Advertising has harmful effects on people’s conception of themselves.
2. The Impact on Society
•Advertisement on alcohol and tobacco might cause social issues
•Advertisement on fast food and soft drink contributed to obesity among the society

The Due Care Theory

•Manufacturers have an obligation to exercise due care, which means that they should take all
reasonable precautions to ensure that products they put on the market are free of defects
likely to cause harm.
•Manufacturers are liable for damages only when they fail to carry out their obligation.
•Need to be responsible for their ‘negligence’
Conducts which falls below the standard established by law for the protection of others against
unreasonable risk of harm.

The Standards of Due Care

1. Design
•Products need to be designed according to government and industry standards and
need to be safe under all foreseeable conditions.
2. Materials
•Materials used should meet government and industry standards, with sufficient
strength and durability to withstand reasonable use.
•Testing should be done to ensure the materials are up to standard
3. Production
•Due care should be taken to ensure the parts are assembled correctly.
•Defects due to production should be minimized and nullified.
4. Quality Control
•Need to have a systematic program to inspect the products to ensure they are of
sufficient quality
 5. Packaging, labelling and warnings
•Proper packaging to avoid damage in transit and should not carry new hazard.
•Labels and inserts should include instructions for correct use and adequate warnings in
language easily understood by potential users.
6. Notification
•Manufacturers should have a system of notifying consumers of hazards that only
become apparent later
•Eg: Maintaining the list of buyers and notify them either by calls, or mail, or even paid
notices in media should things went wrong.

•Manufacturers are responsible for all harm resulting from a dangerously defective
product even when due care has been exercised.
•Build on the mere fact that a product is put into the hands of consumers in a defective
condition that poses unreasonable risk is sufficient for holding the manufacturer

The Strict Liability Theory (kantian ethics)

- Responsible to all harms from a dangerous defective product even when the due care has
been given.
- Rational human being should be treated as an end in themselves and not as a means to
something else. (Respect for persons)
ETHICAL THEORIES
Utilitarianism

- focusing on the greatest good for the greatest number of people and that the outcome of an
action is more important than the action itself.
(In this case, the lies written in the resume does not bring the greatest good for the greatest
number of people as only one person will be benefited from them all. The lies will be found out
sooner or later.)
Moreover. the firm could not be efficient as they have hired a person who is not up to the job
and trained properly as well as the employee would cost a lot for the company at the end. On
the basis, because of one person, a whole organization can be collapsed.
- Taleological theory.
ethically his actions which is lying in the resume is not right, but he still did some good doings by
bringing value to the company. So that, he has done something morally right and under
utilitarianism theory his action is right because it produces the greatest balance of pleasure over
pain to others.
- can be fall under those elements which is consequentialism and maximalism. It is because under
consequentialism, even though his action is wrong which is lying, he still he brought some values
to the company where this element determined the rightness of an action is solely by its
consequences whereas maximalism elements where known as a right action is the one with the
greatest amount of good consequences possible. His consequences of the action is right where
he did bring values to the company and many have been benefits because of his action. This is
why the board of directors decision is right if it is based on utilitarianism.

Kantian Ethics

- it is crucial for one to have a duty in performing their actions according to rules not because of
benefits but the nature of the actions which in this case lying means it is an action that
contradict with the rules from which they need to follow (and yet Marilee Jones, George
O’Leary, Scott Thompson and Ronald Zarrella chose the option to write lies in the assignment
instead.
- Kant also has mentioned that as far as the moral evaluations of our actions are concerned, the
outcomes of it does not really matter. So, for them to be lying in their resume and getting an
amazing outcome which is having a great job with high ranks in an organization through it is
totally the opposite of what Kantian Ethics wants people to follow.
- Kantian Ethics, their action is wrong which mean they need to be punished as they do not follow
the rules yet only some are punished and some got off hooks.
- Even though, he brought too much value to the company he still did something that is ethically
wrong where in Kantian ethics, only motive rather then consequences is considered.

Virtue Ethics

- it is more unethical. Here’s why. She could claim that her actions are not immoral, because her
colleagues do the same, but she is still actually lying. Even worse, for a longer period of time. It
is worse because, let’s say there’s another person who wants the same job she wants. He
 claimed to have 14 years of experience when all of that time, he was unemployed. That is an
extreme example, but you get the picture. Suppose my friend doesn’t get chosen and the guy
with false 14 years of experience gets hired. Wouldn’t that make everyone who applied get
angry and ask for justice if they found out the truth? If it’s equally immoral no matter the extent
of time of false claims, no one would be irritated. The reason why they’d get irritated is because
there are a set of virtues that goes through the society. And people will fight for it when
someone crosses it.

Whistle-blowing is considered unethical when the employees are motivated by the opportunity for
financial gain or media attention or that the employee is carrying out an individual revenge against the
corporation based on personal egos. For example, whistleblower will be rewarded between 10 to 30% of
the amount recovered. There are employees who are desperate for immediate financial gains so
whistleblowing is one of the way that they can get money. For a company that reached a RM885 million
settlement with the government, the employee can get about RM126 million after exposing them.

Corporate Social Responsibility (CSR) leads to profitability as consumers are willing to pay more for
products that meet to some social requirement and it is already proven with the study that has done in
United States and Europe. Moreover, companies that are known for social responsibility may look
desirable and attractive to the job candidates that they seek.CSR can also be a source of competitive
advantage as they provide a win-win opportunity in which a company and society can create a shared
value. In this case, profits and products and services. Competitive advantage can be gained from all of
CSR activites if a company could integrate CSR into their business operation to find new opportunities.

Children at young age find advertisements very fascinating and they began to form their own personal
beliefs and opinion based on what they see. Moreover, the advertisement that targeted to children can
be considered misleading and unfair as they do not know how to distinguish the advertisement to an
actual products or services. Therefore we can call this as a deceptive advertising whereby advertising to
children is equal to taking advantage of them who do not know about the actual programming in the
way adults can and do not have the rational decision making as adults do. For example, there is a toy
advertisement saying "The battery last even longer than before!".
In my opinion whistle-blowing should be encouraged as discovery of illegal activities before the situation
is revealed in the media can save organizations millions of dollars in fines and lost revenues. Not
justthat, it can also prevent potential harms from consumers and publics.

Based on the ethical theories Utilitarianism, which stands for focusing on the greatest good for the
greatest number of people and that the outcome of an action is more important than the action itself. In
this case, whistle-blowing can bring the greatest good for the greatest number of people as not only the
consumers will be prevented from getting harm, it can also save the company from having to pay for
fines for their misconduct as well as this can also alternately will save the jobs of other employees in the
same company since if the company have to pay fines and lost their revenues, they cannot pay the
salaries of the workers. Moreover. the firm could not be efficient if the misconduct in the company keep
going on forever without anyone being the whistleblower and it would also cost for the company at the
end. On the basis, if whistle-blowing is not being encouraged, a whole organization may collapsed
sooner or later. The employee who whistle-blowing does good doings by bringing value to the company
as what Utilitarianism theory is. So, under utilitarianism theory whistle-blowing is right because it
produces the greatest balance of pleasure over pain to others. Whistle-blowing can also be fall under
the elements of maximalism which known as a right action is the one with the greatest amount of good
consequences possible whereby in this case it can prevent potential harm that can affect the consumers
and society as well as the damage the company needs to face if they are exposed in the media what
would draw thousands of attention.

Whereas based on Kantian Ethics made by Immanuel Kant, it is crucial for one to have a duty in
performing their actions according to rules not because of benefits but the nature of the actions which
in this case whistle-blowing prevent the company from keep lying and continue to do the misconduct
within the company without being known by the government and society. Kant also has mentioned that
as far as the moral evaluations of our actions are concerned, the outcomes of it does not really matter.
So, no matter what the consequences that the employees might be facing after being the whistleblower,
it is considered ethical as they did what is right which is to draw the attention of the public about the
misconduct that is happening within the company even when their position as an employee might be
affected. But even so, they risked their careers and personal lives at risk to the right things as with what
Kantian ethics want people to follow.
Consumer's right to fairness may be violated by marketing as in every marketing transaction, each party
will have to give up something in value in return for something they value more and, in this case, the
values are cash. Such exchanges are fair if both parties act freely and has adequate information in which
it means the information cannot be manipulated and it is only fair when complete information are given.
But, providing information can be a problem. So that is why the responsibility to get information do not
rely on one shoulder but both since it involves two parties in the marketing transaction. There are terms
for this which are caveat emptor, meaning that letting the buyer beware and caveat venditor, meaning
letting the seller beware. For example, a consumer wishes to make a purchase from a retailer, their
expectations include wanting to be treated fairly by the salesperson and wanting to pay a reasonable
price.

Secondly, the freedom. Consumers should have the freedom in choosing what they want and not
making the consumers feeling like they need to have the wants. So, the freedom in business to business
market leads to them taking advantage of retailers as there are only one manufacturer or seller which is
also known as a monopoly whereby one firm produces all of the output in a market. Thus, both
consumers and retailers do not have any choice but to buy what is given to them and there is no rational
decision making involve as everything is controlled by the manufacturer in terms of products, services
and prices. Furthermore, since nowadays is the world of technologies, there are just so many
advertisements everywhere such as on social medias that it can leads this to invasion of privacy as well.
For example, there are many advertisements nowadays on Instagram.

Last but not least, the well-being. It is the impact of company’s product, product safety and the
advertisements toward the society. The products should not be harmful and it should be as what the
advertisement said it would be rather than giving misinformation about the specific products nor
services. For example, the products for little kids should not be harmful that can hurt the kids when they
are playing with it. The advertisement saying the battery of the phone will last long should be as what it
is said too.