Notesale: Turn your study into money

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Corporate Social Responsibility
Intro:
Ethics education = part of the human right to education
...

- 2nd aim: develop critical thinking skills (ability to reflect and deliberate on one’s motives, as well as the
theoretical and practical consequences of individual and collective human actions)
→ Encourages development of moral motives and willingness of individuals to act according to their morals
Aims = create ethical competency in managerial decision making to explain the importance of this
dimension to others
→ feel confident in introducing ethics into managerial decision making
→ problem-solving strategies in ethical dilemmas
• The Primary Function of Business is NOT “to make money”!
–There is a profit motive for being in business, but it is not the primary function of business!
–This misconception is at the root of many ethical issues in business!
– The people had the ability to go about their own specialisations to correct for “government failure”
(i
...
GF = what governments do not produce for society…e
...
cars, music, groceries etc
...
g
...
)
= The Primary Function of business = is to correct government failure
→ profit = by-product, the higher the profit, the better the competency of management
Decision Making in Business
- Ethical issues arise in all aspects of business activity
- Ordinary ethical perspectives as applied to business activity have limited scope as that activity has an
economic character and takes place in impersonal organisations
Decision making:
Decisions can be made from:
1
...
the moral
2
...
economic
3
...
legal points of view
CSR:
- new in Germany:
1
...
rapidly processing globalization (increasing difficulty to regulate multi national corporations
3
...
g
...

→ visible in the legal system that requires taking stakeholders (employees) into account
= co-determination (Mitbestimmung)
= governmental regulations

- socio-cultural environment:
• weak voluntary social initiatives (rely on government, seen as governmental issue)
→ not supported after war (Nazi-regime, then communism)
• engagement usually done within organizations or associations (Vereine)
• USA: 44,2%, Germany: 34% = volunteers in civic purposes
• criticism: - CSR is the effect of Anglo-Saxon capitalism
– used for marketing purposes
– distraction for employees (“social tourism”), nothing good for society
- Status Quo:
– CSR= corporate citizenship
– charitable activities in Germany through: donations, sponsoring and foundations,
e
...
from 100 largest companies: 60% make donations, only 27% do corporate volunteering
→ also rather in sports and culture than in infrastructure and health care (fall into services provided
by the government)
→ less than 20% of companies see CSR management as important
– but still a development towards a culture of sustainability where consumers pressure companies to
fulfil certain expectations
- recommendations:
• cooperation between government, businesses and civic society
• still businesses are profit-oriented organizations, this structure shall not be changed
→ nevertheless CSR has to be part of core business
• advantages: - improve reputation
- differentiation from customers
- better supplier relation
- attract new customers
- opening of new market
- better community relation
- attract, retain and motivate employees
- cost savings due to more eco-efficiency
Q+A:
1) How old is CSR in Germany? = Mid 90s, early 2000s
2) Difference between Anglo-Saxon and German Approach? = ???
3) Explain these differences =
4) What is the issue with using CSR in Germany as a strategic marketing tool?
= Strategy (business) aims at reaching a goal/plan/outcome
→ not embedded in German companies, rather a part of government
→ no profit believed, additional costs
→ shouldn't be used for popularization (as in the US), should be voluntary/altruistic
- Types of business responsibility:
PHILANTHROPIC: - be a good corporate citizen, contribute resources to community (improve quality of
life)
ETHICAL:
- be ethical, obligation to do the right, just and fair (avoid harm)
LEGAL:
- obey the law = society's condicitation of right and wrong (play by the rules)
ECONOMIC:
- be profitable (foundation for all other responsibilities)
Economic:
– profit motive of businesses (achieve economic efficiency)
– business decision purely on economic grounds
– Ethics has no place in decision-making?
= ethics influences economic behaviour, e
...
bad behaviour causes bad reputation
= decision-making takes place within a framework of public policy, public policy utilized noneconomic values → politics as the reflection of society, acts in their will
= ethical justification of the market system → profit as a means to achieve a greater good
= ethics required, e
...
prohibition against theft/fraud between trading partners
= rules cannot be set by government alone, e
...
public system is unfair in the field of rental payment,
health system, education (do not get back what they have invested)

- climate change: ignoring climate change could reduce GDP by 20% by the end of the century (to avoid it,
should spend 1% of total GDP a year)
1) mitigation (avoid, reduce emissions), e
...
growth rate of Australian national income would
be higher at the end of the century than without
2) adaptation (to environmental change), strong impact on businesses, especially manufacturing
operations
Legal:
– the law as the only moral standard to follow, when its legal then it is ethically okay?!
→ limitations of law: law is inappropriate for regulating certain aspects of business activities, some
behaviour is immoral but legal
– Law is no guarantee = does not cover everything, e
...
not to hire handicapped people is lawful but
unethical or minimum wages for full-time employees
– law is a long/slow process, e
...
procedures to pass a law
– problems: → law includes moral concepts that are not precisely defined, like terminologies are not
clear, require interpretation, e
...
act in “good faith”
→ law is fluid, not literally applied (inefficient in regulating ethical conduct)
Example: Bank: governments pay banks to avoid their bankruptcy = not legal because they are private
entities (own responsibility), but not helping will also impact other people= flexible law
Ethical:
–
Business success: = competition, stealing market share, exploitation of legal loopholes, conquest
power, tough decision-making
[unequal] Ethics: = be nice to people, obey the law, fairness, accommodate needs of others, respect rights of
others, maintain dignity, pursue outcomes only for those affected by your actions, balance selfinterest and honesty, e
...
good treatment of slaves and bad treatment of slaves = both unethical
because treatment is not regarded, slavery in general is unethical
→ oxymoron: ethics and business are two contradictory words
–
myth: unethical behaviour is more profitable and an essential part of businesses
–
but then: businesses would be anti-social, predatory institutions = no difference to “organized crime”
only in degree of crime
Philanthropic:
Managerial Social Responsibility = it's like being pregnant: either you are or you're not
= it is about being able to justify your actions
→ rationalization of actions does not mitigate ethical responsibilities!, e
...
stealing less than
colleagues is more ethical = wrong, still theft
Ethical Relativism:
• ethics examines and justifies the decision-making process: what is right or wrong?
but morals are set by society, should be an universal philosophy, e
...
human rights are accepted by
190 nations (breaches occur, subjective)
• the process occurs at the:
◦ organizational level (middle)
◦ individual level (micro)
◦ business system level (macro)
• decision-making from ethical, legal and economic point of view? (see notes before)
= governmental intervention or laissez-faire
•
Ethics vs
...

– ethics = universal
– ethical statements are objective facts
– right and wrong from distance possible

Ethical Relativism
- ethics = relative
- ethical statements are subjective options
- judgements are emotional responses to
specific situations
- self-defeating notion: “as long as the other person
believes the actions were ethical
...
g
...

by Mill:
= actions are right if they promote happiness, actions are wrong if they promote opposite of happiness
→ happiness: intended pleasure (absence of pain)
→ unhappiness: pain (deprivation of pleasure)
= aim: maximizing pleasure, e
...
higher pleasure: intellectual or cultural refinement
Utilitarianism= an action is right only if it produces the greatest balance of pleasure over pain for everyone
affected by an action
– Tip: only consider affected parties, all affected people are considered equally, probabilities are not
considered, foreseeable consequences will occur
→ relies on consequences
(consequentialist)
→ identified good with pleasure
(hedonist)
→ the greatest good
(maximalist)
→ all parties affected will be considered (universalist)

–

2 Forms:
Act Utilitarianism
- evaluates rightness of each and every act by
its consequences
- assumptions: all actions are consequentially
bound (need to be considered on their own)
look at actions

vs
...
g
...
g
...

= others do (productivity, goods
...
g
...
)
4) Compare results and select alternative (most good or least bad)
→ PRO: a “common sense” method= easy to conceptualize, flexible, pragmatic, when used correctly
it is objective and fair (legislation is generally based on utilitarian analysis), actions are linked
to consequences
→ CONS: responsibility of all the consequences of our choices, integrity (put aside self-interest/own
morals), intentions (about consequences, “duty to everyone”), ethical luck (must await result
to find out if an action was good or bad), who does the calculating? (decision-maker: set of
values), who is included? (group-egoism (own group), nationalism (own country), racism
(same skin colour), theocratism (share religion), humanism (all beings)
– Criticism: - measure goodness and predict consequences is time consuming and highly subjective
- own benefits tend to be over-emphasized, while under-emphasize burden of others
- relationship to rights and justice: how is utility distributed--> focus on “good” or “number”
- minority groups may be adversely affected, incorrect to use risk management in business
– Conclusion: - a demanding ethical theory (as self-interested beings we are) is not very good in
applying
- Utilitarianism is most appropriate for policy decisions (as long as human rights are guaranteed)
- theory required that ethical agents are impartial and seek the welfare of everyone
–
Kantianism:
Duty
Ethics:
Deontological → Right Action
Right
Teleological → Being Good
Character
→ Consequences
Relationship
– Deontological:
= decide if an act is ethical or unethical without considering the consequences
= “universal ethical imperative!” (imperative= must do)
= reasons tell us that something is always right
...
always follow universal principles
without considering
2
...
always respect the autonomy of others
(animals do not count, only when they are the property of someone)
duty= should/ ought to do, directed towards others (comes from the inside)
morality= does not make you happy, but gives you the right to be happy ( directed to myself)

– Kantianism:
= not based on consequences of an action but on human reasons which has the power to define ethical laws
binding all rational beings
= rational beings should respect the dignity of other rational beings when deciding on an action
= we can rationally derive ethical laws for all rational beings to follow
= there are some things we “ought to do” and some we “ought not to do”
= we /rational, cognisant beings) are able to formulate ethical laws (maxims= principle behind your
decision) by which all rational beings will act
= duty (maxim) is internally imposed and is not concerned with following orders, feelings or inclinations
= actions are taken in obedience to the maxim without regard to consequences
= maxims= subjective rules that guide actions, all actions (good or bad) have maxims, e
...
never lie to our
friends, deriving a maxim can be most difficult ( important to try and define ethical dilemma
choices in its most basic terms (hint: identify intent of decision-maker)
– The Categorial Imperative:
= fundamental principle of Kantian ethics
→ act only according to that maxim (intent) that can become a universal ethical law
→ avoid maxims that are internally inconsistent
→ or: act only on rules (maxims/intents) that you would be willing to see other rationa beings follow in
similar situations, e
...
like a law for the whole world



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