Ethics 5

Chapter 5
Business ethics includes

exploration of:
The underlying values of business, including those of
any particular professions in business, such as
accountants or managers.
• How values might be embodied in the corporation.
• Particular policies in areas such as corporate
governance or workplace relationships.
• The wider responsibilities of business, to the local
community and the environment and in global issues.
The importance of business ethics
Globalization
Information and communications technology (ICT)
Fiscal pressure
The growing importance of intangible values
Corporate social responsibility
• Corporate Social Responsibility is the continuing
commitment by business to behave ethically and
contribute to economic development while improving the
quality of life of the workforce and their families as well
as of the local community and society at large’.
Corporate Social Responsibility
CSR Initiatives
Guiding Principles for CSR Projects
• CSR is about corporate citizenship

• It is about giving back to the society
• It is about business sustainability
• It is about thriving in a competitive business environment
Benefits of CSR Corporate Social Responsibility
Legislative Framework
Winning new
s
fi t
businesses
ne
Increase in Enhanced
Be
Relationship with
customer retention
stakeholders
Saving money Attracting,

on energy and
operating cost
Benefits Retaining and
Maintaining a happy
of CSR workforce
Differentiating
yourself from the
Media interest
competitor
and good
s
reputation
fi t
Enhancing your
ne
influence in the Access to funding
Be
industry opportunities
Corporate Social Responsibility
Myths surrounding CSR
CSR is not for small businesses
It is too complicated and technical
It is too expensive
It is a market gimmick
It is a separate corporate initiative

Carroll’s four-part model of
corporate social responsibility.
Philanthropic Responsibility
Ethical Responsibility
Legal Responsibility
Economic Responsibility
Questions
Imagine that you are on the board of a tobacco firm
and that you have been charged with developing a
CSR policy. How would it look and how would you
justify it?.
Imagine that you are on the board of an arms firm,
with contracts for long range weapons. How would
you develop a CSR policy for this firm and how would
you justify the purpose of the firm?
AVIVA Group Corporate Social
Responsibility Policy
Standards of business conduct: We are committed
to ensuring that our business is conducted in all
respects according to rigorous ethical, professional
and legal standards.
Health and safety : We are committed to providing
a working environment which is both safe and fit for
the intended purpose and ensures that health and
safety issues are a priority for all business operations.
Conclusion
The old ethics was about something that was quite
distinct from business decision-making with areas of
social responsibility seen as philanthropy. The new
ethics sees CSR as part of the everyday decision-
making of business. It is about awareness of the social
and physical environment and working out
appropriate responses.
Case 5.1
General Electric
 For the past eight years or so, General Electric has had a company rule called Directive Policy 20.5,
which reads in part ‘no employee shall enter into any understanding, agreement, plan or scheme,
expressed or implied, formal or informal with any competitor with regard to prices.’ The trouble, at
least during the period covered by the court action and apparently for a long time before, was that
some people at General Electric, including some of those who regularly signed 20.5, simply did not
believe it was to be taken seriously. They assumed that it was window dressing, that it was in the
book solely to provide legal protection for the company and for the higher-ups and that meeting
illegally with competitors was recognized and accepted as standard practice and that often when a
ranking executive ordered a subordinate executive to comply with 20.5 he was actually ordering him
to violate it. Illogical as it might seem this last assumption becomes comprehensible in light of the
fact that for a time when some executives orally conveyed or re-conveyed the order they were
apparently in the habit of accompanying it with an unmistakable wink. Asked, at a later inquiry, by
Senator Kafauver how long he had been aware that orders issued in General Electric were sometimes
accompanied by winks, Robert Paxton, a senior executive, replied that he had first observed the
practice way back when his boss had given him an instruction along with a wink or its equivalent. [It
was] sometime later that the significance of the gesture dawned on him, and he became so incensed
that he had, with difficulty, restrained himself from jeopardizing his career by punching the boss in
the nose. Paxton went on to say that his objection to the practice of winking had been so strong as to
earn him a reputation in the company for being an anti-wink man.

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Chapter 5

Business ethics includes

• CSR is about corporate citizenship

Saving money Attracting,

CSR is not for small businesses

It is too complicated and technical

It is a separate corporate initiative

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