School of Economics, QAU

Name: Ahmed Zahid

Reg no: 04091913007
Section: A
Submitted to: Sir Adnan Razzaq
Subject: Business Ethics EC-257

ASSIGNMENT NO 1

PHILANTHROPIC DIMENSION OF SOCIAL

RESPONSIBILITY
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TABLE OF CONTENTS
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1. Business Ethics (General Idea)

2. Levels of Business Ethics
▪ Metaethics
▪ Normative Ethics
▪ Applied Ethics
3. Social Responsibility
▪ Social responsibility and ethics
▪ Advantages of Social Responsibility
▪ Disadvantages of Social Responsibility
4. Historical Perspective of CSR
5. Dimensions of Social Responsibility
6. Philanthropic Responsibility
7. History of Philanthropy
▪ Evolution of Philanthropy with time
▪ Industrialization and the Rise of Modern Philanthropy.
▪ Emerging Trends in Philanthropy

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8. Difference Between Philanthropy and Charity

9. Distinction between the Philanthropic Responsibility and
the Ethical
10. Philanthropic Responsibility Components
11. Strategic philanthropy
12. Advantages of Philanthropy.
▪ Competitive Advantage
▪ Private giving satisfies deep human needs
▪ Private giving improves capitalism
▪ Increase Employee Engagement and Productivity
▪ Improve Brand Awareness and Reputation
▪ Attract Top Talent
▪ Community Support and Market Creation
13. Conclusion
14. References
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1. Business Ethics (General Idea)

Business ethics comprises organizational principles, values, and norms that
may originate from individuals, organizational statements, or from the legal
system that primarily guide individual and group behavior in business.

In simple terms, Business ethics/corporate ethics are practically concerned with

the entire gamut of functions of an organization which scrutinizes and sets the
codes related to the moral/ethical principle to find the solutions to the problems
faced by an employee in specific and the organization in general.

Business ethics are related to

• morally right and wrong behavior,
• including questions of fairness, justice, and equity that which require
application of moral standards by persons in the organizations, and
• the moral standards that are not separate, but derived from society
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2. Levels of Business Ethics

It’s hard to come up with a definition of ethics that is both precise and satisfactory
to everyone. But it helps to think about the levels at which ethical discussion and
analysis take place.

Most concrete ethical issues involve questions about what we ought to do in a given
situation. Underlying these questions are more abstract ones
about right and wrong and good and bad more generally. And some discourse in
moral philosophy is even more abstract.

Philosophers divide ethics into into three different levels, which range from the
very abstract to the concrete: metaethics, normative ethics, and applied ethics.
Understanding these levels is a good step toward grasping the breadth of subject.
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▪ Metaethics
Metaethics is the most abstract and philosophical level of ethics. Where normative
and applied ethics seek to determine what is moral, metaethics concerns itself with
the nature of morality itself. It deals with the following types of questions:

• What does it mean when someone says something is “good” or “right”?

• What is moral value, and where does it come from?
• Is morality objective and universal, or is it relative to specific individuals or
cultures?
• Do moral facts exist?

These and other metaethical questions are important, but if you’re trying to figure
out if a particular action is right or wrong, you might never get there pondering
them. On the other hand, questions like Why be ethical? or Why do the right
thing? are metaethical questions that are important for anyone interested in ethics.
And they’re not so easy to answer.
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▪ Normative Ethics
Normative Ethics is concerned with the appropriate standards for right and wrong
behavior. Normative ethical theories establish prescriptions – whether by
foundational principles or good character traits – for how one ought to act or live.

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The following are prominent normative ethical approaches:

• Virtue Ethics focuses on a person’s moral character. Virtue ethicists say we

ought to develop virtuous characteristics – such as generosity, courage, and
compassion – and exhibit virtuous behavior. This is different from other
normative theories that propose more precise principles and rules for
conduct.
• Deontological theories emphasize one’s moral duties and obligations. They
focus on the act itself, as either intrinsically good or bad, regardless of its
consequences.
• Consequentialist theories determine whether something is right or wrong
by looking at its consequences. The ethical thing to do is that which has the
best consequences (i.e., results in the most benefit, happiness, good, etc.)
among the alternatives.
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▪ Applied Ethics
Applied ethics consists of the analysis of specific moral issues that arise in public
or private life. Whereas normative ethics attempts to develop general standards for
morality, applied ethics is concerned with specific moral controversies. Abortion,
stem cell research, environmental concerns, and the appropriate treatment of
animals are all applied ethics issues.

Applied ethics can use normative ethical theories, principles or rules derived from
such theories, or analogical reasoning (which analyzes moral issues by drawing
analogies between alike cases). Context-specific norms or expectations, such as
those characterizing a particular profession (e.g., medicine or journalism),
arrangement (e.g., an agreement between two parties), or relationship (e.g., the
parent-child relationship) are also relevant to applied ethical analysis.

Bioethics, business ethics, legal ethics, environmental ethics, and media ethics are
all applied ethics fields.

The different levels of ethics can overlap and inform one another. Normative
theories, for instance, are based on metaethical assumptions (or even explicit
metaethical propositions), such as the existence or non-existence of objective and
universal notions of right and wrong. And, as noted above, applied ethics can draw
on normative theories to resolve moral disputes. Metaethical perspectives can also

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drip into applied ethical analysis. A moral relativist, for example, may contend that
a practice deemed egregious by his own culture’s standards is truly morally
permissible, or even obligatory, in the culture in which it occurs.
Despite the overlap between the three levels, distinguishing between them is useful
for clarifying one’s own views and analyzing those of others.

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3. Social Responsibility
Being socially responsible means acknowledging accountability for the
impact of one’s choices on the larger world

Social responsibility is a moral obligation on a company or an individual to take

decisions or actions that is in favour and useful to society. Social responsibility in
business is commonly known as Corporate Social Responsibility or CSR.

Examples of socially responsible actions companies can take include:

• Espousing fair labor practices
• Incorporating ethical standards into contracts
• Implementing environmentally sustainable practices
• Matching employees’ donations to non-profit organizations

Social responsibility is an ethical framework in which individuals or corporations are

accountable for fulfilling their civic duty and taking actions that will benefit society as a
whole. If a company or person is considering taking actions that could harm the
environment or society, then those actions are considered socially irresponsible.
According to this concept, managers must make decisions that not only maximize profits
but also protect the interests of the community and society as a whole
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▪ Social responsibility and ethics

Ethics refer to a set of moral principles that govern a company's or person's
behavior. Companies should incorporate ethics into their daily actions, particularly
those decisions that affect other people or the environment. A code of social
responsibility and ethical behavior should be applied within an organization as
well as during interactions with others outside of the company. As long as a
company upholds strong ethical standards and maintains social responsibility

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within the company, then the environment and employees are held as equals to the
focus on profitability. However, if the company ignores its ethical standards and
takes actions that are socially irresponsible, such as disregarding environmental
regulations to increase profitability, government interference is often necessary.

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▪ Advantages of Social Responsibility

A company can boost its morale and enhance work culture when they can engage
their employees with some social causes. There are many factors that can have a
positive impact on the business while delivering social responsibilities. Such few
factors are

• Justification for existence and growth

• The long-term interest of the firm
• Avoidance of government regulation
• Maintenance of society
• Availability of resources with business
• Converting problems into opportunities
• A better environment for doing business
• Holding business responsible for social problems
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▪ Disadvantages of Social Responsibility

Like there are many advantages of social responsibility there are similarly many
disadvantages for business. Few factors are mentioned below.

• Violation of profit maximization objective

• Burden on consumers
• Lack of social skills
• Lack of broad public support

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4. Historical Perspective of Social Responsibility

The concept of social responsibility that prevailed in the US during most of the history
was fashioned after the traditional or classical economic model. The classical view held
that a society could best determine its needs and wants through the marketplace. If the
business is awarded on this ability to respond to the demands of the market the self
interested pursuit of that reward would result in society getting what it wants. Thus, the
invisible hand of the market transforms self-interested into societal interest.

Years later, when laws constraining business behaviour began to proliferate it might be
said that a legal model emerged. Society’s expectations of business changed from being
strictly economic in nature to encompassing issues that have been previously at
business’s discretion. Over time, asocial model or stakeholder model has evolved.

The period from the 1950’s to the present may be considered the modern era in which
the concept of corporate social responsibility gained considerable acceptance and
broadening of meaning. During this time, the emphasis has moved from little more than
a general awareness of social and moral concerns to a period in which specific issues
such as product safety, honesty in advertising, employee rights, affirmative action,
environmental sustainability, ethical behaviour and global CSR have been emphasized.

CSR refers to the corporation’s effort to make positive social change; actually, CSR has
the role of an NGO in the society. The main goal of a business is to obtain profit but,
more than that, the company is searching for ways of survival, trying to stay in business.

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5. Dimensions of Social Responsibility

Social responsibility is the concept that people should be accountable for their
actions and not impact their society in a negative manner. When applied to
businesses, corporate social responsibility (CSR), which is also referred to as
corporate citizenship, involves being aware of the impact a company has on the
community or world around them. Businesses that have a corporate social
responsibility mandate frequently work to enhance their communities in
different ways.

There are four key aspects of social responsibility:

▪ ethical
▪ legal
▪ economic and
▪ philanthropic.

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6. Philanthropic Responsibility
The Greek word ‘philanthropy’ means literally ‘the love of the fellow
human.’

The use of this idea in business context incorporates activities that are, of course,
within the corporation’s discretion to improve the quality of life of employees, local
communities, and ultimately society at large.

Making donations to charitable institutions, building of recreational facilities for

employees and their families, support for educational institutions, supporting art
and support activities, etc. are the examples of philanthropic responsibilities
discharged by the corporations. It is important to note that the philanthropic
activities are desires of corporations, not expected by the society.

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7. History of Philanthropy
The word "philanthropy" derives from the Ancient Greek phrase
philanthropia, meaning "to love people."

Today, the concept of philanthropy includes the act of voluntary giving by

individuals or groups to promote the common good. It also refers to the formal
practice of grantmaking by foundations to nonprofit organizations.
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▪ Cultural Origins of Philanthropy

Philanthropy in the world develop due to multiples culture reason such as
• Strong religious beliefs and traditions
• Practices of collective hunting, food distribution and potlatches in Native
communities
• Cultures of mutual assistance and support among multiple waves of settler
and immigrant communities
It wasn't until after the Civil war that the modern business of philanthropy began
to form. Until then, charity was a mostly fragmented endeavor driven largely by
religious groups and characterized by almsgiving and volunteerism aimed at
assisting the immediate problems of the urban poor.
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▪ Evolution of Concept of Philanthropy with time

Philanthropy dates back to Greek Philosopher Plato in 347 B.C. He instructed his
nephew to use the proceeds of family farm to fund the academy that Plato founded.
The money help students and faculty keep the academy running.
Around 150 years later, Pliny the Younger contributed one-third of funds for a
Roman school foor a young boys.

• In 1630, John Winthrop of Massachusetts Bay Colony preached to puritan

settlers that rich have an obligation to take care of poor.

• 1770 – The St. George Society is founded to help impoverished colonists in

New York City. Branches soon followed in Philadelphia and Charleston, and
later in other American states and in Canada, Australia, New Zealand and
elsewhere. The society exists today as the St. George's Society of New York
and is considered the oldest charity in the United States

• 1907 – The first private family foundation in the U.S., the Russell Sage
Foundation, is founded to study and disseminate knowledge about social
problems

• 1911 & 1913 – Both the Carnegie Corporation of New York (started by
Andrew Carnegie with a donation of $125 million) and the Rockefeller
Foundation (started by John D. Rockefeller with a donation of $35 million)
are founded, mainstreaming the modern private foundation

• 1912 – John D. Rockefeller hires Frederick T. Gates to be his assistant,

pioneering the role of modern foundation staff in handling Rockefeller's
philanthropic activities.

• 1924 – The New York Community Trust is founded. As of 2008, it is the

nation's third largest community foundation by asset size and fourth largest
community foundation by total giving

• 1960s – The Ford Foundation leads the way in redefining the relationship
between private philanthropy and the state by shaping government policy.
• 1979 – The use of "intermediary" organizations begins. Intermediaries are
entities which stand between one or more foundations and grantee

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organizations, and which re-grant foundation monies or provide technical

assistance to the grantees. A key moment is the creation of Local Initiatives
Support Corporation by the Ford Foundation.
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▪ Industrialization and the Rise of Modern

Philanthropy.
At the end of the 19th century, charities started taking a more systematic approach
to the work of improving social conditions, and adopted management methods that
were gaining a following in the business world. Modern grantmaking was founded
on the large-scale donations of a number of individuals and families who made
their wealth during the late 19th and early 20th centuries in the steel, oil, railroad,
telegraph, and automobile industries (such as Sage, Carnegie, Rockefeller, and
Ford).
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▪ Emerging Trends in Philanthropy.

As of 2006, there were over 72,000 grantmaking foundations in the U.S., with total
assets of nearly $615 billion and yearly giving of $39 billion, reflecting roughly 3%
of the national GDP for that year.
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8. Difference Between Philanthropy and Charity

The words Charity and Philanthropy are often used interchangeably, but
actually there is a difference between these two concepts.

The origin of the word Philanthropy comes from the Greek language that translates
to: “Love of mankind”. A more modern definition is “private initiatives for the public
good which combines an original humanistic tradition with a social scientific
aspect”.

Philanthropy is an idea or an action that is done to better humanity and usually

involves some sacrifice as opposed to being done for a profit motive

Charity comes from the old French word Chrité and means, “Providing for those
in need; generosity and giving”.

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The practice of charity involves giving money, goods or time to the unfortunate,
either directly of by means of charitable trust or other worthy causes. Charity tends
to be emotional, immediate response which mainly focused on rescue and relief,
whereas Philanthropy is more strategic and built on rebuilding.

The main difference is that Charity aims to relieve the pain of a particular social
problem, whereas Philanthropy attempts to address the root cause of the problem.
An example is the difference between sending painkillers to malaria patients, which
is charity, versus educating the public in affected areas or supporting medical
research teams in finding a cure for malaria, which are philanthropy.
Charity is giving ... philanthropy is doing.
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9. Distinction between the Philanthropic

responsibility and the ethical
The distinctive characteristic between the ethical and the philanthropic
responsibility is that the expectations for the latter one are not regarded
ethically or morally. Communities want that the companies contribute with
money, facilities and time of their employees to humanitarian activities, but
they do not consider those companies as non-ethical if they do not offer the
above mentioned to the required level. That is why philanthropy is the
voluntary part of an enterprise, even if there are always some expectations
from the society in this regard

One reason to make the distinction between the philanthropic responsibility

and the ethical one is that some companies feel that they are socially
responsible if they are good community citizens, too. This distinction is the
most important idea according to which CSR includes the philanthropic
contributions, but it is not limited to them. As a matter of fact, one could
discuss about the fact that philanthropy is very much desired and cherished,
but in fact it is less important than the other three categories of corporate
responsibility. A suggestive way of representing graphically the four parts of
the definition is the four-component pyramid. The pyramid shows that the
whole responsibility of the company is made up of distinct elements forming
together a whole, without excluding one another.
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10. Philanthropic Responsibility Components.

Components of Philanthropic Responsibility are
• It is important to act according to philanthropic and charitable society
expectations.
• It is important to participate in fine arts.
• It is important that managers and employees participate voluntarily to
charitable activities in the local community.
• It is important to participate to the activities of public or private education
institutions.
• It is important to participate voluntarily to projects improving the quality of
community life.

Although the components were treated as separate concepts in order to be well

explained, they do not exclude one another and do not juxtapose over the economic
responsibilities of an enterprise. At the same time, treating the components
separately helps the manager notice that the different types of obligations are
tightly and dynamically linked. The most powerful connections are of course
between the economic and the legal ones, the economic and ethical ones, ethical
and philanthropic ones. The traditional supporters could interpret this as a conflict
between the company’s interest for profit and the company’s concern towards
society.
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11. Strategic philanthropy

Strategic philanthropy, defined as

The process by which the contributions are meant to directly serve the
interests of commercial activities, at the same time serving the beneficiary
organizations
Strategic philanthropy helps the companies gain a competitive advantage and, in
exchange, enhances the main activity. In this case, the corporate philanthropy is
used as a means of promoting the company’s interests
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12. Advantages of Philanthropy.

Companies take actions that improve the society around them, such as donating
money or products and volunteering time. By helping those in need, businesses
make a positive difference in the lives of people in their communities. Here are
some advantages of philanthropy.

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▪ Competitive Advantage
The companies use philanthropy to increase their competitive advantage through
combinations of (external) markets and (internal) orientations of competences.
Through market orientation, the companies design their philanthropic activities to
match the external demands and to meet the requests of the stakeholders.
Therefore, the companies improve their competitive advantage through an
“improved marketing, through selling abilities, a greater attractiveness as an
employer or better relations with governmental and non-governmental
organizations.
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▪ Private giving satisfies deep human needs

It’s easy to overlook the fact that philanthropy doesn’t just help the ­recipients—it
offers profound life satisfaction to givers as well. It opens avenues to meaning and
happiness and ways of thriving that aren’t easily found otherwise.
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▪ Private giving improves capitalism

Capitalism and philanthropy have always been closely tied. In the 1600s when the
Netherlands was gestating free trade and many modern business patterns, there
were alms boxes in most taverns (where business negotiations generally took
place), and a successful deal was expected to conclude with a charitable gift.
Philanthropy and business are entwined especially tightly in America. One of the
most distinctive aspects of American capitalism is the deep-seated tradition of
philanthropy that has evolved among American business barons. Our capitalism
also differs from the capitalism practiced in other countries in two other important
ways—in its linkage to religiosity, and its preference for entrepreneurial forms.
Both of these are also connected to philanthropy.
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▪ Increase Employee Engagement and Productivity
Up to 78 percent of employees want to engage with corporate social responsibility
initiatives. Philanthropy programs that directly involve employees help create
deeper connections and increase employee engagement. Employee engagement
then improves productivity and business results. Research by Gallup even found
that teams with high employee engagement have 21 percent higher productivity
than their counterparts
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▪ Improve Brand Awareness and Reputation

The second key benefit of corporate philanthropy is improving your brand’s
reputation with employees, customers, prospects, partners, and the community at
large. The better you do, the better your brand perception will be. You also
maximize the opportunities your audience will have to connect your brand with
positive social initiatives
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▪ Attract Top Talent

Businesses are only as effective as their employees – and employees are starting to
demand attention to corporate responsibility, philanthropy included. It’s part of a
larger shift in society where employees want their employer to balance the pursuit
of profit. Employees are measuring the success of their careers and the businesses
they work for in both advancement and positive impact on the world around them.
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▪ Community Support and Market Creation
A major advantage that companies glean from their philanthropic practices is the
support of communities and the surrounding markets. Essentially, by using
profits derived from the community to benefit that same community (filled with
its customers) businesses can greatly increase their prospects of future revenue
flows. Supporting a community can led to greater local economic success -
creating income that can then be used at the business. For impoverished areas or
those without experience with particular products, philanthropy can actually be
used to create a market
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13. Conclusion
The perceptions of a company concern for the society shows the fact that the
company can develop mutual relations suggesting that the company can operate
and at the same time meet the expectations of the different groups of stakeholders.
Reputation and legitimacy make the company operate efficiently on the market.
Responsible activities increase the ability of a company to attract clients. Many
consumers are influenced in their purchasing decisions by the reputation of such
company. Even some employees express their preference to work for companies
which are economically responsible.

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The secret to living is giving”

That is to say, by contributing to the well-being of others, our communities

and the world at large, we find more meaning in life. Many high-profile people
have learned this lesson, choosing to donate their financial resources to
communities and causes that need support.
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14. References
▪ Bruch, H.; Walter, F. (2005) The keys to rethinking corporate
philanthropy
▪ Porter, M.E.; Kramer, M.R. (2002) The competitive advantage
of corporate philanthropy
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THE END

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