Transcript Business_Ethicsx

Business Ethics
Ethical Advertising
Fairtrade
Dame Anita Roddick
“The business of business should not
be about money, it should be about
responsibility. It should be about
public good, not private greed”
What is CSR?
• An obligation, beyond that required by the
law, for a business to pursue long term goals
that are good for society
• About how a company manages its business
to produce an overall positive impact on
society
Is CSR the same as business ethics?
• Ethics concerns actions which can be assessed
as right or wrong by reference to moral
principles
• CSR is about the organisation’s obligations to
all stakeholders, and not just shareholders
In practice ...
• What does this mean?
• Supermarkets hurting suppliers
Cash strapped consumers move away
from ‘ethical’ shopping
Case against CSR
• Only social responsibility of business is to
create shareholder wealth
• Efficient use of resources will be reduced if
businesses are restricted in how they act
• Businesses cannot decide what is in society’s
interest
• Extra costs will be incurred which must be
passed on to consumers
• Unwelcome extra responsibility for business
BUT
• Businesses do not have an unquestioned right
to operate in society
• Those managing business should recognise
that they depend on society
• There is a social contract between business
and society involving mutual obligations that
society and business recognise that they have
to each other
Arguments for CSR
•
•
•
•
It is the ethical thing to do
Improves a business’ image and reputation
Necessary to avoid excessive regulation
Improved social environment will be beneficial
to business
• It will be attractive to some investors
• It can increase employee motivation
• AND
It can be profitable
How cynical am I?
• Starbucks
Warren Buffett
“It takes 20 years to build a reputation
and five minutes to ruin it.”
Niall Fitzgerald, Former CEO, Unilever
“Corporate social responsibility is a
hard-edged business decision. Not
because it is a nice thing to do or
because people are forcing us to do
it ... because it is good for our
business”
Competitive Advantage
• Sustainable in the long-run?