Business Ethics and Social stockholders, and the society, in
Responsibility general.
I. Corporate Social Responsibility
Corporate Social Responsibility refers to:
 Practices and activities that business
organizations adopt in the course of
their operations
 These practices and activities have
social and environmental impacts and
relevance
Practicing CSR means business organizations
commit to developing business policies and
business practices that ensure:
 Sustainability of environmental
resources;
 Ethical treatment of employees; and
 Protection of community welfare
Business organizations have at least three social
responsibilities that are described in three levels,
basing on how demanding or binding the
responsibility is.
1. Duty not to cause harm to others
2. Prevent harm at all cost
3. Responsibility to do good
SOCIAL RESPONSIBILITIES
Duty not to Cause Harm
 Duty not to cause harm even if an action
may result in avoidable harm is not
explicitly prohibited by the law.
 If a company caused harm to a
property or person, and if the harm
could’ve been avoided by exercising due
care or proper planning, then both ethics
and law should be held liable for
violating responsibilities.
 Here, the harm is already caused, and
the business enterprise is responsible to
avoid further harm.
Responsibility to Prevent Harm
 Companies sometimes don’t cause
harm but have the potential or
capability to prevent harm.
 Company’s ethical responsibility:
prevent harm from happening.
 Often referred as duty of care.
 All organizations have duty of care to
their stakeholders – employees,
 Example:
o Having an organizational policy
or specific rules and regulations.
 Anti-Sexual Harassment
Act of 1995
 An organization (based from last
module) formulates code of conduct
which serves as an organization’s
reference when certain decisions have
to be made.
 This is particularly important when
violations or offenses in the workplace
during work hours occur, wherein the
employer can be held liable for damages
or losses caused.
 Companies create and implement
programs and protocols not only to
maintain the quality of their
products/services but to ensure the
health and safety of their employees.
Responsibility to do Good
 Business organizations have the social
responsibility to do good things by
making the society a better place.
 Providing social solutions to social
issues
o Lack of access to education;
and
o Poor hygiene
 Giving support to education, arts, and
culture.
 Companies have already taken CSR
initiatives to positively impact the
environment, people and overall, the
society.
o E-waste recycling programs;
o Establish partnerships with
NGOs to create social change;
o Provide school supplies and
hygiene kits to indigent children;
and
o Regularly carry out medical and
dental missions to far-flung
barangays
 Motivation
o Attract and retain employees;
o Tax reduction;
o Improve brand name/reputation;
and
o Build customer relationships
with customers and
communities
  Bottom line is companies are socially
responsible to do good for others, and
not merely run a business for profits.
MODELS OF CORPORATE SOCIAL
RESPONSIBILITY
There are different views on how companies
can integrate and execute CSR.
Economic Model
 Based on traditional view that a
businesses’ raison detre (reason of
existence) is to:
o Respond to the demands of the
market
o By providing products or
services
o To earn profits for its
shareholders
 This model posits that the society
benefits from the success of business
organizations which are indirectly
fulfilling their social responsibility by:
o Contributing to the growth of
economy
o Providing jobs to more people
as they grow and expand
 The business outsourcing (BPO)
companies have contributed to the
significant growth of the Philippine
economy and has provided employment
to Filipinos
 Government give incentives to BPOs:
o Tax holidays;
o Simplified import-export
procedures;
o Tax exemptions on imported
capital requirement; and
o Freedom to employ foreign
nationals
 Uses two fundamental ethics norms for
its justification: utilitarian considerations
of social well-being and individual rights
and the balance of ethical interests of all
affected parties
Philanthropic Model
 Defined by Mirriam-Webster Dictionary
as, “an act or gift done/made for
humanitarian purposes”
 Practice of giving or doing something
(money/time) to help life better for other
people
 Describes the free will of business
organizations to contribute to social
causes as a matter of philanthropy.
 Business organizations are not required,
but encouraged to participate in helping
the society beyond what is required by
the law
 There are several reasons why a
company gets involved in charity work:
o Positive publicity;
o Earn tax holidays or deductions;
o Truly give back to community
(not seeking for reputational
benefit)
Social Web Model
 Business organizations as citizens of
society in which they operate
 Business organizations must conform to
the normal ethical duties and
obligations that are expected of them
 Companies have a duty to their
shareholders to pursue and grow their
profits
 As long as a company is able to comply
with the “moral minimum” (respect
human rights) and it causes no harm, it
is realizing the responsibility to
maximize profits
 Companies have social responsibility to
o Uphold welfare of employees;
o Ensure a safe and healthy
workplace;
o Observe other human rights
 They also have the responsibility to
cause no harm to consumers and
uphold consumers’ right by:
o Providing safe products
o Not overstating or exaggerating
the value or capabilities of their
products
Stakeholder Theory
 Every business decision has an impact
on a wide variety of people, that is,
providing benefits to some and
imposing costs on others
 Stakeholders are defined as any group
of individuals that can be affected by the
organization
o Suppliers;
o Employees;
o Customers;
o Investors;
 o Competitors; ensure the availability of resources for
o Government; and generations to come
o General public
 Opportunity cost – involves
opportunities or choices that are given
up
 Business organization may affect a wide
variety of people resulting in benefit for
some and cost to others
 Theory addresses morals and values in
managing a business, with consideration
of the stakeholders’ interest
 Find answers to question: “for whose
benefit at whose costs should the
business be managed?”
 No stakeholder should be prioritized
over another
 Balance on the part of the management
must be the top consideration in keeping
a good relationship among stakeholders
 Business organizations exist in a web of
relationships with different
stakeholders which create different
responsibilities to each one of them
 This theory posits that it is not possible
for a company to satisfy the
requirements of all stakeholders, but
the company must learn to make
decisions that would prioritize
competing and conflicting
responsibilities
Integrative Model of CSR
 There are also for-profit organizations
that fulfill mission to provide solutions to
social issues
o Social entrepreneurship
o Sustainability at the core of
business model
 Social enterprise is a for-profit
business organization that seeks
solutions to pressing social issues
 Business organization bring social goals
into the core of its business model and
fully integrates economic and social
goals
 Sustainability holds that a company’s
financial goals must be balanced
against, and may be overridden by,
environmental considerations
 The success of a business organizations
should not only be based on profits but
also on how the organization
demonstrates sustainability practices to