Corporate Social Responsibilities and Managerial Ethics

Managers today are usually quite sensitive to issues of social responsibility and ethical behaviour because of pressures from the public, interest groups, legal and governmental concerns, and media coverage. It is less clear where to draw the line between socially responsible behaviour and the corporation’s other concerns, or between the conflicting expectations of ethical behaviour among different countries. The linkages, relationship and interface between ‘business’ and ‘Society’ are from their inception, however, over the years have undergone spectacular changes. The survival and effectiveness of any organizational entity depend on the quality of support it gets from all stakeholders, including the society at large. Although in the initial years of this interface between ‘society’ and ‘business’ Corporate Social Responsibility (CSR) was confined to ‘philanthropy’, there have been successive changes and developments in the understating of these stakeholders to make it more of ‘business strategy’ rather ‘philanthropy’. The CSR is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force, their families as well as of the local community and society at large. Business needs a stable social environment that provides a predictable climate for investment and trade. Understanding society’s expectation is quite simply enlightened self-interest for business in today’s interdependent world.


Ethical theories and principles bring significant characteristics to the decision-making process. Although all of the ethical theories attempt to follow the ethical principles in order to be applicable and valid by themselves, each theory falls short with complex flaws and failings. However, these ethical theories can be used in combination in order to obtain the most ethically correct answer possible for each scenario. For example, a utilitarian may use the casuistic theory and compare similar situations to his real life situation in order to determine the choice that will benefit the most people. The deontologist and the rule the rights ethical theory when deciding whether or not to speed to make it to the meeting on time. Instead of speeding, they would slow down because the law in the rights theory is given the highest priority, even if it means that the most people may not benefit from the decision to drive the speed limit. By using ethical theories in combination, one is able to use a variety of ways to analyze a situation in order to reach the most ethically correct decision possible. We are fortunate to have a variety of ethical theories that provide a substantial framework when trying to make ethically correct answers. Each ethical theory attempts to adhere to the ethical principles that lead to success when trying to reach the best decision. When one understands each individual theory, including its strengths and weaknesses, one can make the most informed decision when trying to achieve an ethically correct answer to a dilemma.

Objective of the study

Primary objective:

The first and most important objective of the assignment is to gather knowledge about social responsibility and managerial ethics. Why managers should follow this and what’s the importance of this.

Secondary objective

After studying this chapter, we will be able to do the following:

  1. Define ethics and explain how ethical behavior relates to behavior governed by law and free choice.
  2. Explain the utilitarian, individualism, moral rights, and justice approaches for evaluating ethical behavior.
  3. Describe how individual and organizational factors shape ethical decision making.
  4. Define corporate social responsibility and how to evaluate it along economic, legal, ethical, and discretionary criteria.
  5. Describe four organizational approaches to environmental responsibility, and explain the philosophy of sustainability.
  6. Discuss how ethical organizations are created through ethical leadership and organizational structures and systems.
  7. Identify important stakeholders for an organization and discuss how managers balance the interests of various stakeholders.

Methodology of the study:

For preparing this assignment we have used different kind of books, magazines, journals, daily newspapers. In addition to we have taken help from the websites related with this topic.

Details of the study:

Managerial Ethics:

Ethics is difficult to define in a precise way. In a general sense, ethics is the code of moral principles and values that governs the behaviours of a person or group with respect to what is right or wrong. Ethics sets standards as to what is good or bad in conduct and decision making. Ethics deals with internal values that are a part of corporate culture and shapes decisions concerning social responsibility with respect to the external environment. An ethical issue is present in a situation when the actions of a person or organization may harm or benefit others. Ethics can be more clearly understood when compared with behaviours governed by laws and by free choice. Human behaviour falls into three categories. The first is codified law, in which values and standards are written into the legal system and enforceable in the courts. In this area, lawmakers have ruled that people and corporations must behave in a certain way, such as obtaining licenses for cars or paying corporate taxes. The courts alleged that Enron Corp. executives broke the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong.

Factors that Affect Ethical Behaviour

Stage of moral development (Kohlberg) – Stage one – pre-conventional, rule following. Stage two – Conventional, living up to expectations of others. Stage three – Principled, following self-chosen path and respecting others.

Individual characteristics – values, knowing right from wrong. Ego strength, the power of your convictions. Locus of control, an internal locus of control means that you believe you control your own destiny, an external locus of control means you believe you have no control.

Structural factors – an organisation’s structure affects people’s ethical behaviour (e.g. clear ethical statements, policies and regulations).

Organisational culture – this is made up of the values and norms shared by people working for an organisation. A strong culture will exert more influence than a weak one.

Issue intensity – this refers to how important an issue is. Something not so important (e.g. making private local calls) has different ethical implications to something very large (e.g. embezzling $1 million). The act is the same (theft) but the intensity of the issue is different.

Ethical Issues in Global Management

Ethical Problems:

Globalization has multiplied the ethical problems facing organizations. While domestic American companies may use general guidelines for appropriate behavior based on federal law and the value structure rooted in the nation’s Judeo-Christian heritage, such guidelines are not consistently applicable overseas.

International Business Ethics:

International business ethics refers to the business conduct or morals of MNCs in their relationships with all individuals and entities. Such behavior for MNCs is based largely on the cultural value system and the generally accepted ways of doing business in each essay Prepared for the 2nd Peter Drucker’s Challenge by Kidus G.Mehalu 5Social Responsibility and Ethics of MNCs country or society. Those norms are based on broadly accepted guidelines in religion, philosophy, the professions, and the legal system.

Rules and Values

The American approach is to treat everyone the same by making moral judgments based on general rules. Managers in Japan and Europe tend to make such decisions based on shared values, social ties and their perception of obligations.

Variation of Standards

The biggest single problem for MNCs in their attempt to define a corporate-wide ethical posture is the great variation of standards of ethical behavior around the world. U.S. companies are often caught between being placed at a disadvantage in doing business in some countries by refusing to go along with accepted practices, or being subject to criticism at home for going along with them to get the job done.

Ethical Limits

Whereas the upper limits of codes of ethics for international activities are set at any given time by the individual standards of certain leading companies, it is more difficult to set the lower limits of those standards. Laczniak and Naor explain: The laws of economically developed countries generally define the lowest common denominator of acceptable behavior for operations in those domestic markets. In an underdeveloped country or a developing country, it would be the actual degree of enforcement of the law that would, in practice, determine the lower limit of permissible behavior.


Recurring Challenges in Business Ethics Research

Throughout its history, research in business ethics has faced a consistent set of challenges. Many of these emanate from the nature of relationships among business ethics issues and the scholars interested in those issues. Popper’s (1972) observations on the structure of social systems provide some insight about the nature of these relationships. Popper (1972) distinguished between social systems that are like clocks and those that are like clouds (Cropanzano & Schminke, 1997; Guzzo & Shea, 1990). Clocks are rational, orderly, machines. Their parts move in predictable ways and in predictable relationships to the other parts. Alternatively, clouds are neither predictable nor orderly. To the extent that they have “parts,” they do not move in clearly defined or predictable ways in relation to the other parts. From a distance, they may appear to be substantial objects with clear boundaries. However, up close they are fuzzy, flexible, organic creations. This metaphor for social systems also describes research systems; some are like clocks and others are like clouds. Business ethics research is more cloudlike than clocklike. From a distance, it appears to be a singular, solid, substantial thing. But up close it is fuzzy, flexible, and organic. One of the greatest strengths of business ethics research lies in the diversity of those interested in knowing more about it. Where else could we find moral philosophers, industrial psychologists, political scientists, management scholars, organizational sociologists, and behavioural economists, all exploring the same issues? Scholars from these and other disciplines bring to the table an intriguing mix of skills and perspectives. In doing so, they reflect a common interest in questions regarding business, ethics, and the relationship between the two. However, with this strength also comes a weakness. Researchers from such diverse backgrounds often find it difficult to communicate with one another in meaningful ways. Nowhere has this been truer than with business ethics. Over the years, scholars have addressed the natural conflicts that arise between those with different perspectives on the field of business ethics. Much of this work echoes two central challenges facing business ethics scholars. First, how might we best integrate the two very different areas— business and ethics—that provide the scholarly foundation for the field?

Second, how might we create closer ties between business ethics research and real business settings? Helping to overcome those challenges is the central agenda for this volume.

The First Challenge: Integrating Business and Ethics Scholarship

Business ethics research consists of two distinct sub disciplines. Scholarship in business, which is primarily descriptive and based in the social sciences, addresses the question of “what is.” Scholarship in ethics, which is primarily normative or prescriptive and based in moral philosophy, addresses the question of “what ought to be.” Historically, these two approaches represented distinct areas of inquiry, and the literature points to a number of issues that inhibit efforts to integrate them. One roadblock to integration is fear. For example, Victor and Stephens (1994) note that historically, philosophy and social science have exhibited a sort of division of labour with respect to business ethics. Philosophers address normative issues and social scientists, descriptive ones. However, forces in each area impede attempts to integrate the two. For example, philosophers fear a creeping “naturalistic fallacy” in the face of advancing empiricism. That is, they fear that discoveries of “what is” may come to define our thinking of “what ought to be.” Similarly, social scientists express concern over breaking ranks with a positivist tradition, which asserts that facts are distinct from values. If “truth” cannot carry with it any value judgments, how can empiricists consider addressing questions regarding “what ought to be?” A second roadblock to integration is differences in purpose. For example, Fleming (1987) notes that there is “an almost complete lack of integration between normative and descriptive research efforts” (1987, p. 21) in business ethics. He predicts the two may eventually converge by developing distinctive contributions to practicing managers. That is, the normative approach would evolve into an instructive tool, identifying what constitutes moral behavior, how it is learned, and how it may be converted into business practices. The descriptive approach would develop predictive competence, to be implemented into practical business decision making. A third roadblock to integration lies in the background of scholars in each area. For example, Treviño and Weaver (1994) distinguish between business schools’ concentration on the business perspective of business ethics, and philosophy and theology departments’ focus on the ethics perspective. They point out that researchers from each area differ in a number of important ways, including academic background, language, and underlying assumptions, as well as how they use, apply, and evaluate theory. Although Treviño and Weaver reiterate previous calls for unity, they note that these calls for integration have, for the most part, failed to provide clear guidance as to what an integrated field would look like or how it might be accomplished. The challenges presented by these roadblocks continue to play out in business ethics research. Consider several recent attempts to understand business ethics at a more global level via literature reviews. O’Fallon and Butterfield’s (2005) review of the ethical decision making literature, Treviño, Weaver, and Reynolds’ (2006) review of the behavioral ethics literature, and McClaren’s (2000) review of the sales management literature each represent well-crafted reviews of substantial bodies of work. However, each embraces only the social science side of the mix. (For an exception, see Nill and Shibrowski’s (2007) review of the marketing ethics literature, which includes both normative and positive aspects of the literature.) Of course, decisions to limit reviews in this way are understandable. Space limitations often require that attention be focused on specific subsets of relevant literatures, and in this sense, business ethics research may be a victim of its own success. An ABI/Inform database search (limited to scholarly journals in business and economics only) reveals more than 3500 articles in which the word “ethics” appears in the title, and this is for work published just in the past decade! Thus, creating a manageable subset of the literature requires that authors make some coarse initial cuts on that literature. For better or worse, that cut often entails separating the philosophical or normative from the social science or descriptive and addressing only one or the other. However, such decisions influence how (and how often) business ethics scholars successfully integrate sound philosophy and social science in their work.

Towards a More Integrated Field

Kahn’s (1990) essay on creating an agenda for business ethics research may help to address the question of how to facilitate greater integration in the business ethics literature. Like others, he distinguishes between the normative (prescriptive) and contextual (descriptive) traditions in the field. He argues that at present the two areas resemble distinct circles in a Venn diagram that overlap little, if at all. Because the two areas rise from relatively distinct underlying disciplines, little shared ground exists between them. Further, individuals possess strong theoretical and methodological ties to their primary disciplines. As scholars attempt to reinforce their own areas, those areas may become even more impenetrable to others. Researchers continue to be inadequately grounded in at least one of the two disciplines, often differing significantly in how they identify ethical issues in business. Therefore, the shared ground is not likely to grow and may even shrink! He relates one author’s comments regarding the dilemma facing business ethics researchers: [Researchers] in applied ethics are in the inherently comic position of carrying water from wells they haven’t dug to fight fires they can’t quite find. (1990, p. 313) Kahn (1990) sketches four images—conversation, history, vision, and community—that he believes outline an ideal ethical system. Members of such a system would talk to each other. They would respect and understand each others’ historical roots. They would provide clear and imaginative ideas. Finally, they would work within the larger community toward shared goals. These images provide a sound basis for integrating business ethics researchers. That is, they would be an interactive community of scholars, with diverse historical (academic) backgrounds and imaginative ideas, working toward a shared goal of understanding and creating more ethical organizations and business systems. In all, most business ethics scholars agree that the question is not whether the two traditions represented by the philosophical and social science roots of business ethics should interact. They should. The more important question is what that integration should look like. That is, when the circles in the Venn diagram overlap, what should be going on in that shared territory? This is an important question for the development of the business ethics literature.

Parallel, Symbiotic, and Integrative Approaches

Weaver and Treviño (1994) propose three categories for thinking about the relationship between normative and empirical approaches in business ethics research: parallel, symbiotic, and integrative views. The three views represent a continuum of how tightly integrated normative and empirical approaches can be (or to take a more normative perspective, should be). Parallelism suggests that normative and empirical approaches are, and should remain, distinctly separate paths to understanding business ethics issues. Both practical and conceptual conflicts drive this view (e.g., differences in training and methodology, and differences in whether “is” or “ought” represents the correct question to be asked). Symbiosis reflects a cooperative, collaborative relationship between normative and empirical approaches. Shared research agendas and theoretical foundations may guide and inform the progress for each path of inquiry. Finally, integration represents an even stronger melding of normative and empirical approaches. Moving beyond simply sharing theoretical or methodological models, the integrative view seeks to create a unified hybrid theory of business ethics by melding the theoretical foundations of each area. In the end, Weaver and Treviño (1994) view symbiotic inquiry as the most promising, a position Donaldson (1994) echoes. Donaldson rejects parallelism, acknowledging that research in business ethics should include both normative and empirical insights. However, he also strongly rejects integration, stating that “the temptation to [fully] integrate must be boldly resisted” (p. 157). He argues that such a move to combine the fundamentally different normative and empirical approaches is akin to “combining tiring larity and circularity” (p. 157). Further, he believe  that such a combination would lead to confusion within and without the field and, eventually, irrelevance for the entire discipline. In the end, he supports a balanced, symbiotic approach. In the main, business ethics scholars generally suggest that a symbiotic relationship between normative and empirical approaches is not only possible, but desirable. However, the real issue is broader than a simple debate between normative empirical foundations. Not all of philosophy is normative. Not all of social science is empirical. Therefore, integrating the two is more complicated than simply applying sound empirical research methods to test ethical theory. For a truly sustainable symbiosis to emerge, business ethics researchers need to think beyond how one perspective’s research methodology or intellectual processes can inform the other’s thinking. We need to rethink the relationships between our basic theoretical models.

A Meta-Business Ethics View

Meta-ethics concerns the development of ethical theories and the relationships between different theoretical systems and disciplines (Fleming, 1987). We propose that a meta-business ethics view of the field is an appropriate path for advancing our understanding of business ethics. That is, a theoretical symbiosis must precede any meaningful and enduring methodological and empirical symbiosis. Thus, business ethics researchers must first identify and map the relationships between ethical and social science theories in order to discover and capitalize on synergies between the two. Striking examples of the efficacy of such an approach already exist in the literature. Perhaps the best known of these involves Kohlberg’s (1984) work on moral development. Kohlberg wedded an array of ethical theoretic bases (egoism, utilitarianism, and deontology) with Jean Piaget’s emerging social science theories of cognition and developmental psychology. This and related work (e.g., Rest, 1986) has exerted a more profound impact on research on ethical decision making than perhaps any other. That is no accident. It demonstrates that well-crafted theory that first integrates ethics and social science at the theoretical level provides a foundation on which significant additional work may build. For example, Rest’s Defining Issues Test, which draws heavily on Kohlberg’s work, has itself spawned over 500 studies (Rest, 1994). Kohlberg’s work has exhibited “legs” not in spite of its theoretical duality, but because of it. We believe this symbiotic theoretical approach holds the greatest promise for researchers seeking to make meaningful, lasting, contributions. Davis (1971) notes that the most significant research, that which gets noticed and has a lasting impact is, at its core, interesting. And it is interesting because it violates some (but not all) key assumptions of its audience. Research that denies no assumptions may be disregarded as “ho hum,” while research that denies all assumptions risks being dismissed as irrelevant (Campbell, Daft, & Hulin, 1982). Joint theoretical approaches to business ethics research are likely to reach that middle ground. On the one hand, research conceived, conducted, and distributed within either philosophy or social science is obviously more likely to conform to the theoretical and methodological assumptions of that field. It is therefore less likely to break with core assumptions of the field. On the other hand, research conceived and conducted within one field, but then distributed across the other, will likely violate so many basic assumptions of the target audience as to be dismissed out of hand. However, crafting symbiotic theoretical approaches may strike closer to Davis’s notion of moderate assumption violation. Thus, each area maximizes its opportunities to create not only new, but meaningful, research contributions. A number of promising joint theoretical approaches surfaced in the literature in the 1990s. For example, Donaldson and Dunfee (1994) united the organization studies constructs of bounded rationality and satisficing with the philosophical concepts of social contracts in creating their theory of integrative social contracts. Greenberg and Bies (1992) considered utilitarian, egoism, and Kantian approaches to ethics and their relationship to how we theorize about issues surrounding organizational fairness, rewards, and punishment. Ciulla (1995) melded normative theories of ethics with traditional models of leadership to shift the question from “what is leadership?” to “what is good leadership?” Others combined ethical theory with the economic concept of agency theory (Bowie & Freeman, 1992; Noe & Rebello, 1994), decision and attribution theory (Decker, 1994), business strategy (Singer, 1994) and social psychology theories of impression management and cognitive distortions (Payne & Giacalone, 1990). A reader familiar with the current business ethics literature will recognize many of these papers as the platform from which considerable additional work emerged over the past decade. Fortunately, joint theoretical approaches continue to emerge in the literature. Research on moral identity (e.g., Shao, Aquino, & Freeman, 2008), ethical leadership (Brown, Treviño, & Harrison, 2005), and ethics education (Donaldson,2008) have all benefitted from theoretical foundations based solidly in both philosophical and social science domains. Approaches like these provide the greatest chance of creating truly symbiotic partnerships between ethicists and social scientists in the quest to understand business ethics. In all, business ethics research has suffered from a lack of common ground between the business and ethics scholars who seek to understand its intricacies. However, longstanding critiques in the literature appear to be having a positive impact on the development of the field. More scholars, and more areas of scholarship, are benefitting from genuinely symbiotic approaches to research. When theoretical foundations from ethics and business are successfully wedded, they create groundwork upon which new, interesting, and important research streams may thrive. The chapters in this book provide additional examples of just this type of symbiotic, meta-business ethics theorizing.

The Second Challenge: Business Ethics in Real Business Settings

The second theme that emerges from an examination of the field of business ethics reflects a long-standing interest in forging closer ties with real business settings and issues (Jackson, 2006; McDonald, 2000; Shaupp & Lane, 1992). The chapters that follow address this concern as well. As such, it is useful to explore more deeply how we might define success on this front. In an essay entitled “What’s the Matter with Business Ethics?” Stark (1993) wondered why professions like law, medicine, and government have had much greater success than business in integrating ethical philosophy with practitioners’ daily concerns. Most major corporations are active in integrating ethics into their organizations. However, many observers still lament what seems to be a misfit between the type of expertise and advice business ethics scholars bring to their organization and the organizations’ needs. Stark (1993) suggested that business ethicists must shoulder much of the blame. Historically, business ethics has tended to be too general, too theoretical, and too impractical to be of much use to practicing managers. It is perceived as too general, often attempting to address meta-issues like the moral justification for capitalism or broad corporate social responsibility issues, rather than the workaday concerns of organizational members. It is thought to be too theoretical in that it often couches ethical issues in lofty terms like formalism, and utilitarianism, teleology, and deontology. Managers are left to wonder how these relate to everyday work experiences. Finally, it is seen as too impractical in that it does not give very clear guidance to managers trying to behave morally in a complex world with often-conflicting business, personal, family, and moral pressures. In response, Stark proposed a “new” business ethics. This approach may be more business friendly in that it allows for conflict to exist between individuals’ ethics and their pursuit of personal and organizational interests. It seeks to guide managers as they try to behave ethically and socially responsibly, without jeopardizing their careers or companies. It calls “the creation of actionable strategies for the pragmatists” (1993, p. 48) the most critical task in business ethics. In more recent years, others have made similar observations, questioning how researchers might contribute more to understanding what Treviño and Weaver (1994) refer to as morally significant business practices, with particular emphasis on practices (e.g., Jackson, 2006; McDonald, 2000). Still other scholars have taken the cause even a step further. Not content to simply call for a more practical study of business ethics, Kahn (1990) proposed a multidimensional research agenda for business ethics that integrates practice with theory. He suggested that researchers should pursue research questions that reflect philosophical ethical principles, organizational context, and a balance between philosophic ideals and pragmatic work demands. His model not only tolerates but embraces the potential conflict between ideal ethical settings and pragmatic workplace pressures. He noted that ethical principles and organizational contexts carry equal relevance to those struggling to live morally, and those meaningful ethical systems will be created where those forces intersect. Perhaps the most direct call for a more applied approach to business ethics research was offered by Robertson (1993), who provided three directives that relate directly to this issue. The first is to provide an increased normative focus for ethics research. She noted investigators’ common reluctance to address the “what ought to be” issue because of questions about what exactly constitutes ethical behavior. Yet she correctly noted that normative decisions have always played a role in descriptive research; experimental treatments often reflect implicit normative ethical positions. (For example, studies may assume that kickbacks, padding expense accounts, “churning” clients’ investment portfolios, and so on, are unethical.) Even such basic decisions as what issues are worth studying carry normative overtones (Forsyth, 1980). The second directive is to emphasize behavior as the key dependent variable. Robertson (1993) believes that since the purpose of business ethics research is to discover the meaning and causes of ethical behavior, then behavior should be the focus. Moral attitudes and moral reasoning may represent important determinants, but behavior is key. Because managers commonly seek assistance in understanding what to do, this suggestion addresses those concerns. The third directive is to build links to managerial and public policy applications. Robertson (1993) contends that the ultimate purpose of business ethics research is to guide higher-quality ethical decision making. Therefore, researchers’ focus must be on how to make research results useful to those in positions to influence policy, like providing assistance in creating corporate codes of ethics. Over the past decade, researchers have been quite successful meeting the second of these challenges, an increased focus on behavior. Ten years ago the term behavioural ethics was not in common use in the literature. However, by 2005 sufficient research—and interest in that research— existed to motivate the editorial team of the Journal of Management to invite a review of the literature for their annual review issue. For many, the publication of the Treviño et al. (2006) review of behavioural ethics legitimized the area as a valid component of the business ethics literature. Several of the chapters that follow explicitly embrace a behavioural ethics label. We believe this focus on ethical behavior, its causes, and its consequences, cannot help but improve the picture in terms of the first and third issues as well: a more applied approach to business ethics research that will lead to improved managerial applications. Of course, this issue of increased applicability of research goes beyond business ethics; it emerges in organizational studies in general. For example, Daft and Lewin (1990) stated that “organization studies have been a recurrent source of disappointment for practitioners” and “the body of knowledge published in academic journals has practically no audience in business or government” (p. 1). Campbell, Daft, and Hulin (1982) identified several characteristics of significant research in organizational studies. Three of these in particular provide sound guidance for business ethics researchers committed to exploring and understanding real business issues:

1. Significant research is an outcome of investigator involvement in the physical and social world of organizations. Investigators should go into organizations, talk to managers and practitioners, and use these contacts to inform their thinking about worthwhile research subjects.

2. Significant research focuses on real problems. Abstract academic notions are useful. They provide theoretic guidance and understanding. But research that addresses real problems of real people in real organizations carries the greatest chance of enduring.

3. Significant research reaches into the uncertain world of organizations and returns with something clear, tangible, and well understood. Investigators might view organizational actors and actions through lenses thick with theory and jargon. However, the final product should be precise and ordered and most importantly, usable. In all, the business ethics literature has been both persistent and consistent in its assessment of the main challenges we face as we look to the future. For business ethics research to be useful, it must eventually touch business. But to do that in a sustainable way, it must be grounded in sound theory that integrates ethics and social science perspectives. The chapters that follow in this book attempt to do both.


Ethical Leadership

In a study of ethics policy and practice in successful, ethical companies, no point emerged more clearly than the crucial role of leadership. Employees are acutely aware of their bosses’ ethical lapses, and the company grapevine quickly communicates situations in which top managers choose an expedient action over an ethical one. The primary way in which leaders set the tone for an organization’s ethics is through their own behavior. In addition, leaders make a commitment to ethical values and help others throughout the organization embody and reflect those values. If people do not hear about values from top leadership, they get the idea that ethical values are not important in the organization. Peter Holt, CEO of the Holt Companies, sees himself as the company’s chief ethics officer. Ethical values are woven into the organizational culture, and Holt continually works to renew the values and signal his total commitment to them. Most importantly, he visits each of the firm’s locations twice a year to meet with employees, answer questions, and talk about the importance of each employee upholding Holt’s core values every day in every action. Holt’s evaluation and reward systems are tied to how well managers and employees live the values in their everyday actions. Using performance reviews and rewards effectively is a powerful way for managers to signal that ethics counts. Consistently rewarding ethical behavior and disciplining unethical conduct at all levels of the company is a critical component of providing ethical leadership.


Implementation of The Environment Protection Plan

You and/or your employees represent the greatest opportunity for success of the environmental program. If everyone is interested and committed to the program, it will virtually run itself. However, if it is not supported, the program will have a hard time getting started and staying around. If everyone perceives the environmental program as ‘theirs’, they will make more of an effort towards making it a success. If you have employees, establish a training/coaching program. Training should be introduced in a sensitive manner with strong consideration for the staff that will be affected. Begin raising environmental awareness and interest by providing information on local environmental issues that may be important to your staff. Try placing environmental information relevant to the business in an environment section on your bulletin board or in the lunchroom. Invite an environmental expert to make a presentation on some of the issues that are potential problems for your employees or business. This is also a great opportunity for owners and employees to ask vital questions that may require expertise. Provide practical guidance and support by giving training sessions that provide not only the practical application of the program but include a full picture so that staff has a complete understanding of the goals and benefits of the plan. Once they understand that the whole business is participating and the kind of results that can be achieved, there will be more willingness to participate. Motivation is important to ensure employee involvement. Try informing employees of the environmental objectives but also allow them to use their own creativity or innovation to determine how to meet those objectives. Be open to their ideas and suggestions. Give praise for involvement and initiative. Don’t insist on mandatory involvement, if there is resistance sit down and talk with the resistors and find out what their concerns are. Pace the changes so staffs are not faced with too many changes in a short space of time since it may be overwhelming for some people. An example of Green management: Samsung Electronics Samsung Electronics recognizes that working and prospering together with society is the only way to  stay in corporate survival, and the Company is committed to m king contributions to people everywhere. The Green Management Initiative places the priority on ESH concerns, as Samsung works to increase the “greenness” of management, products, processes, workplaces, and local communities.


The Greening of Management

The Company-wide Environment/Safety Management Committee has been formed to implement Green Management policy. The Committee sets targets for specific areas and establishes the mid /long-term vision for the Company as a whole. In addition, the company has embraced international ESH standards, installed the Green Management Information System (GMIS) and adopted environmental accounting practices, providing a framework for continued improvement.

The Greening of Products

Samsung Electronics is firmly established as a global company and is fulfilling its concomitant obligations by engaging in diverse activities based on a “product environment” strategy. The Company’s ability to develop environment friendly products continues to strengthen; a global recycling system is being established and the environment friendly corporate image is improving. The Company’s goal is to provide consumers with products that are the most environments friendly.

The Greening of Processes

Samsung Electronics has been working hard to reduce the use of substances that contribute to global warming. The Company is also devoting great effort into energy control, developing products that conserve electricity and reduce energy use. Production processes continue to be improved and new technologies are being developed to curtail the required amounts of industrial water and various material inputs. These combined efforts have made Samsung an industry leader in reducing the environmental load.

The Greening of Workplaces

Samsung Electronics practices an environmental management program that minimizes pollutants from production processes. Strict control at the source of pollution generation and ongoing process improvements are reducing pollution emissions. Company policy dictates that the party who generates the waste is responsible for disposing of it properly. Therefore, Samsung is expanding its in-house treatment and recycling facilities, and the Company engages in various activities to protect resources and nature.

The Greening of Communities

Samsung Electronics’ Green Management covers all work processes such as product development, manufacturing, and sales in step with the Greening of Management, Product, Process and Workplace programs. At the same time, the Company is committed to the Greening of the Local Community. How Managers can Shape the Future- Managing Paradoxes As a good manager, you will be dealing with a complex and faster-changing world. You will need to bring intellect and passion to bear on your work. While you must strategies, you must also inspire; while you must implement, you must also be visionary; while you must be creative, you must also be ethical; while you must simplify, you must also cope with great complexity. These are the challenges that will test your mettle. While these requirements may seem paradoxical, they constitute the gauntlet (challenge) that has been cast in front of you. A fulfilling and exciting opportunity awaits those who can meet the challenge.


Responsibility toward Human Rights

What constitutes “human rights” is clouded by the perceptions and priorities of people in different countries. While the United States (US) often takes the lead in the charge against what they consider human rights violations around the world, other countries point to the homelessness and high crime statistics in the U.S.  The best chance to gain some ground on human rights around the world would be for large MNCs and governments to take a unified stance. A number of large, image-conscious companies have established corporate codes of conduct for their buyers, suppliers and contractors, and have instituted strict procedures for auditing their imports. Reebok (a multinational company manufacturing running shoes) has audited all of its suppliers in Asia. Levi Strauss multinational company manufacturing denim clothing, in particular jeans) announced this corporate policy: “We should not initiate or renew contractual relationships in countries where there are pervasive violations of basic human rights.”

There are three emerging perspectives about corporate social responsibility:

Business perspective

The business perspective recognizes the importance of ‘reputation capital’ for capturing and sustaining markets. According to this perspective, corporate social responsibility is basically a new business strategy to reduce investment risks and maximize profits by taking all the key stake-holders into confidence. The proponents of this perspective often include corporate social responsibility in their advertising and social marketing initiatives.

Eco-social perspective

The proponents of this perspective are the new generation of corporations and the new-economy entrepreneurs who created a tremendous amount of wealth in a relatively short span of time. They recognize the fact that social and environmental stability and sustainability are two important prerequisites for the sustainability of the market in the long run. They also recognize the fact that increasing poverty can lead to social and political instability which can, in turn, be detrimental to business, which operates from a variety of socio-political and cultural backgrounds. Seen from the eco-social perspective, corporate social responsibility is both a value and a strategy to ensuring the sustainability of business. It is a value because it stresses the fact that business and markets are essentially aimed at the well-being of society. It is a strategy because it helps to reduce social tensions and facilitate markets. For the new generation of corporate leaders, optimization of profits is the key, rather than the maximisation of profit. Hence there is a shift from accountability to shareholders to accountability to stakeholders (including employees, consumers and affected communities).

Rights-based perspective

This is a growing perspective that shapes the new principles and practice of corporate social responsibility. This perspective stresses that consumers, employees, affected communities and shareholders have a right to know about corporations and their business. Corporations are private initiatives, true, but increasingly they are becoming public institutions whose survival depends on the consumers who buy their products and shareholders who invest in their stocks. This perspective stresses accountability, transparency and social and environmental investment as the key aspects of corporate social responsibility. Link between corporate social Responsibility and financial performance evidence of a link between corporate social and financial performance is decidedly mixed. While some studies find that investments by firms in social responsibility translate into quantifiable financial benefits, other studies do not. Such conflicting results have not given values entered executives the evidence they need to convince sceptical peers, boards, and investors that doing good may contribute to a firm’s doing well. There are many reasons for the inconsistent evidence of social responsibility/financial performance link. Perhaps most importantly (and as any manager with responsibility for profits and losses knows), it is extremely difficult to isolate the effects of investments in corporate social responsibility on a company’s bottom line, especially since so many variables simultaneously influence financial performance. Additionally, most empirical studies have examined the financial upside of social responsibility, or whether a good reputation for social responsibility leads to increases in financial performance. What about the proverbial flip side of the social responsibility coin? Specifically, is there a “crisis” value to a firm’s reputation for social responsibility, in which the benefit of social responsibility comes not from increases in financial performance, but rather from insulation from negative financial performance? Some research suggests that firms having reputations for social responsibility may better withstand crises and experience fewer economic losses than will firms lacking such good reputations. Those who are sceptical to CSR anticipate that, such initiative may incur additional costs and hence would jeopardize overall performance and sustainability of an organization. On the other hand, those who advocate the adoption of CSR policies strongly feel that such practices may instead, enhance reputation and subsequently enable companies to reap long-term strategic benefits of maintaining its legitimacy, competitiveness and sustainability in the market.


Evaluating Corporate Social Performance

A model for evaluating total corporate social responsibility is presented in the model indicates that total corporate social responsibility can be subdivided into four primary criteria: economic, legal, ethical, and discretionary responsibilities.50 These four criteria fit together to form the whole of a company’s social responsiveness. Managers and organizations are typically involved in several issues simultaneously, and a company’s ethical and discretionary responsibilities are increasingly considered as important as economic and legal issues Social responsibility has become an important topic on the corporate agenda in the light of corporate scandals, concerns about globalization, and a growing mistrust of business. Note the similarity between the categories in and those in both cases, ethical issues are located between the areas of legal and freely discretionary responsibilities has an economic category because profits are a major reason for corporations’ existence.


Limitation of the research

 i.            Time Limitation: as our submission date of assignment is 12th August we can’t get enough time to collect necessary data for enriching the assignment.

ii.            Budgetary Limitation: we are living in developing country & we are also student that’s why we don’t have sufficient money to spend for betterment of the assignment.

iii.            Internet Limitation: In our country the internet service is too slow that’s why we can’t access to internet so easily and find the data.

iv.            Shortage of necessary books: There are no sufficient books in our campus library about this topic.


Before preparing this assignment we were totally in dark about this topic but when we have started researching about it we came to know the topic in details. We can learn about the definition of social responsibilities and managerial ethics, why the managers should obey social responsibilities. How they can maintain this, what are the benefits of this and what are the obstacles on the way of obeying social responsibilities. We also came to know that how managers are dealing with different groups or organisations to perform their social responsibilities. Furthermore we also become familiar how the managers of other countries are dealing with the same thing. Moreover we also can learn about what will be the future trend of it.


As we know that managers run their business living in the society. That’s why they can’t deny there liabilities towards our society, culture and humanity as a result they have to perform some duties for the welfare of our society. They have to create a congenial atmosphere for the employees and ensure their family security. Making profit is not the only objective of business. Besides making profit managers should think about the welfare of customers. In addition to they should follow their managerial ethics strictly otherwise they will deviate from their goal. They should keep in mind that now-a-days it is quite impossible for an organisation to sustain in the competitive business world without this kind of service.


There is little evidence to suggest that socially responsible behaviour diminishes the long-term economic performance of an organisation. In fact, failing to be socially responsible can have negative effects, such as increased scrutiny of managerial decision making or extreme consequences such as having to withdraw from specific markets, long-term negative effects on brand and having to pay compensation costs. Another measure used to ascertain an organisation’s social performance is known as content analysis. This method calculates how frequently social responsibility topics are mentioned in annual reports and other company publications. This measurement method and the previously mentioned survey measurement have weaknesses. Assessments of reputations are subjective; writing about social responsibility is not the same as acting on it. On the other hand, the same situation poses a great challenge to the sustainability and viability of such mega businesses. Labourers, marginalized consumers, environmental activists and social activists have protested against the unprecedented predominance of multi-national companies (MNCs). The success of CSR initiatives, in future, will largely depend upon the relationship between the corporate system and the social and political systems. The notion of a generalized responsibility is not an operational concept, anymore than is the idea of profit maximization. Perspectives on Corporate Social Responsibility (CSR)A company’s goals, policies and strategies must be uniquely determined in the light of opportunities and threats sighted in its external environment, its internal resource strengths and weaknesses and the values hailed by its principal managers.


Bowie, N. (1987), “The Moral Obligations of Multinational Corporations,” Problems of International Justice, ed. LuperFay (New York: West view Press) 97 -113.

Carroll, A. B. (1979), “A three-dimensional model of corporate performance”, Academy of Management Review, 4(4), 497-505.

Getz, K.A. (1990), ”International Codes of Conduct: An Analysis of Ethical Reasoning”, Journal of Business Ethics, 9 pp 567-577.

Graedel, T.E and Allenby, B.R. (1985), Industrial Ecology, Upper Saddle River, NJ: Prentice Hall.

Laczniak, G.R and Naor J. (1985) “Global ethics: Wrestling with the Corporate Conscience,” Business, July-August-September, 152.

Peter F. Drucker (2007),People and Performance: The Best Of Peter Drucker On Management, Harvard Business Press

Zachary, G.P. (1994), “Levi tries to make sure contract plants in Asia treat workers well.” Wall Street Journal, July 28.


Corporate Social Responsibilities and Managerial Ethics