Final Paper: Ethics & Corporate Social Responsibility

Simone T. Rodrigues

Bob Gaglardi School of Business & Economics, Thompson Rivers University

BUSN 6010: Ethics & Corporate Social Responsibility

Ryan Scorgie

December 6th, 2023

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Table of Contents
What is CSR?........................................................................................................................6

Areas of CSR.................................................................................................................7

Topics for CEO Familiarization..............................................................................................7

Stakeholder Identification....................................................................................................................7

Issue Analysis........................................................................................................................................7

Environmental Ethics & Corporate Sustainability.................................................................................7

Ethics Training......................................................................................................................................8

Code of Ethics & Code of Conduct........................................................................................................8

Triple Bottom Line................................................................................................................................8

Reputation Management.....................................................................................................................9

Social Impact Management..................................................................................................................9

Corporate Citizenship...........................................................................................................................9

Approaches to CSR.............................................................................................................10

The Stakeholder Theory.....................................................................................................................10

The Carroll CSR Pyramid Theory.........................................................................................................10

The TBL Theory...................................................................................................................................10

Navigating Ethical Challenges in CSR..........................................................................11

Ethical Challenges and how to address them......................................................................11

Challenge 1: Normalizing Mishaps......................................................................................................11

Challenge 2: Data Privacy & Cyber Crime...........................................................................................11

Challenge 3: The Rise of AI.................................................................................................................12

Challenge 4: Worker Well-being.........................................................................................................12

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Challenge 5: Economic & Environmental Impact................................................................................13

Tackling Ethical Challenges.................................................................................................14

Ethical Programs.................................................................................................................................14

Ethics Committees..............................................................................................................................14

Reporting Systems..............................................................................................................................14

Measuring and Reporting CSR............................................................................................................15

CEO’s role in Ethical Leadership.........................................................................................................15

Conclusion.................................................................................................................16

References.................................................................................................................17
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Final Paper: Ethics & Corporate Social Responsibility

With Globalization on the rise, especially after the pandemic has blurred international

trade borders, it is becoming increasingly important for companies to engage in social activities

and maintain ethical conduct to ensure their growth in today’s business environment. Recent

years have shown substantial evidence that stakeholders value CSR initiatives and this

involvement effectively contributes to creating a positive image and reputation, gaining a

competitive advantage, and fostering a conscious company ideology for the future, which in turn

leads to favourable return on investments and higher profit. (Barauskaite & Streimikiene, 2021).

Although the relation between CSR and company success is highly debatable, the impact of CSR

activities on stakeholder perception and market growth can be seen through various reports and

research.

Corporate Social Responsibility (CSR) research has changed dramatically over the years,

moving from a narrow focus on maximizing shareholder value to a more comprehensive

approach that benefits various stakeholders and society at large (Wickert, 2021). Considering

the increasing scrutiny of CSR practices, companies now face the challenge of not only

integrating CSR into their organizational strategy, but also transform organizational philosophy,

principles, and structures to align with CSR goals.

Historically, CSR has always been approached with a deontological perspective, where

companies treated CSR as a means for improving business performance. Although this approach

provided observable results, it did not necessarily align business activities with resolving and

boosting the areas of societal welfare that the business impacted (Siltaloppi et al., 2020). Today’s

business environment emphasizes the need for a holistic CSR strategy that takes society at large

into account as a key stakeholder.

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What is CSR?

Corporate Social Responsibility is the practice of businesses committing to long-term

economic development by improving stakeholder’s quality of life in a way that manages social

and environmental impact by restructuring its strategy and operations to generate maximum

value for both stakeholders and shareholders (World Business Council for Sustainable

Development, 2003; CSR Europe, 2003, as cited in Kakabadse et al., 2005).

Corporations are viewed as institutions with social responsibility; therefore, they have the

moral obligation to engage and collaborate with various stakeholders and participate in CSR

initiatives that have social, environmental, and economic benefits. There are several emerging

concepts that companies can direct their CSR activities toward corporate sustainability,

reputation and social impact management to establish a foothold in the realm of CSR and

position themselves as a socially responsible market leader.

The correlation between CSR and business performance and profitability in tech

industries have pushed organizations to integrate social responsibility practices and foster an

ethical workplace. In the contemporary landscape, technology companies have emerged as key

players, shaping not only economic paths but also impacting social welfare and the environment.

Technological advancements have brought about transformative changes to the business world,

where technology is capturing and creating global wealth. However, this rapid growth also

contributes to environmental degradation, privacy concerns, ownership disputes and social

issues. These consequences have escalated the need for transparency, accountability, and public

responsibility within the tech industry. The financial performance of companies that invest more

in CSR initiatives is positively impacted, and in this way corporate governance is established

(Okafor et al., 2021).

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Areas of CSR

Topics for CEO Familiarization

Stakeholder Identification

Stakeholder engagement greatly influences the reputation and perception of the company;

therefore, Stakeholder identification and analysis is the key to understand significant groups and

their concerns and engage in CSR activities that address the concerns of these groups in order to

build the reputation and market value of the organization. This analysis involves identifying the

challenges and growth opportunities that these stakeholder groups present to the business, as well

as recognizing our social responsibility to these groups, and forming strategies to leverage these

opportunities (Scorgie R., 2023a).

Issue Analysis

Issue analysis involves a systematic effort to determine the cause, nature, and scope of a

question or conflict that a firm is facing. (Scorgie R., 2023a) It is an essential stage in making

well-informed decisions and developing strategic plans to deal with and overcome complex

ethical challenges.

Environmental Ethics & Corporate Sustainability

Corporate Sustainability (CS) refers to all the activities that contribute to the social,

environmental, and economic responsibilities that impact all stakeholders involved in the

functioning of business in the present as well as those activities that facilitate future development

(Scorgie R., 2023b). Most companies adopt a compliance-driven approach to CS and

Environmental Ethics merely following mandatory Government regulations; however, with the

booming tech industry, adopting CS with a synergistic or holistic approach will be favorable in

capturing stakeholder appreciation as the tech industry is one of the major contributors to
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environmental degradation. CS activities can be viewed as a means to make amends and find

innovative solutions to the adverse consequences caused.

Ethics Training

Ethics training is an integral component of HR policy that aims to educate employees

about the organization’s principle and guidelines of ethics (Scorgie R., 2023b). Ethics training

can be constructive for all levels of employees in an effort to align their personal behavior and

objectives with the company’s CSR goals. With the ever-changing technological world, it is

becoming increasingly important for employees at all levels of management to be aware of the

organization’s responsibilities towards society and the ethical challenges that they might face.

Code of Ethics & Code of Conduct

A clear set of principles and acceptable behaviors need to be established in today’s

business landscape to ensure that all internal stakeholders of the business comply with and

commit to the company’s CSR goals. This requires preparing a Code of Ethics and a Code of

Conduct for all employees to abide by. While a Code of Ethics takes the role of ideal principles

and values that guide ethical behavior within the organization, a Code of Conduct is a more solid

set of rules that clearly states and enforces the kind of behaviors that are acceptable and

requisitely urge employees to act ethically and by CSR values (Scorgie R., 2023b).

Triple Bottom Line

The Triple Bottom Line theory is a sustainability framework that broadens traditional

business performance metrics, encompassing an organization's influence on societal welfare,

ecological well-being, and economic fairness—commonly denoted as the three "P’s": people,

planet, and prosperity. This framework allows companies can integrate sustainable practices

across their operations, from supply chains to energy usage, aligning financial returns for
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shareholders with a commitment to societal well-being and environmental responsibility. (Miller,

2020).

Reputation Management

The rise of media and public scrutiny of the tech industry demands companies to take

accountability and responsibility for their actions as well as initiate efforts to maintain and

possibly, improve their reputation and brand image. Reputation Management begins with

identifying stakeholder’s perception of the business, acknowledging the impact of this image,

understanding which stakeholder engagement alters company image and developing strategies to

optimize these stakeholder relationships (Scorgie R., 2023b).

Social Impact Management

Social Impact Management is a concept that takes the company’s commitment towards

resolving societal issues one step further. It is an area of study that acknowledges and values

the interconnection between broader societal concerns and the business’ purpose, needs, social

responsibilities and evaluates how business performance should be measured taking societal

factors into consideration (Scorgie R., 2023b).

Corporate Citizenship

A company's commitment to taking into account its entire impact on society, the

environment, and its economic influence is reflected in its corporate citizenship. This means

acknowledging the societal significance of the business, which includes granting social, civil,

and political rights; it also means presenting corporations as accountable participants in local

communities by means of programs like community rights and duties, charity, and volunteerism

(Scorgie R., 2023b).

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Approaches to CSR

There are three prominent CSR theories that every organization needs to adapt to their

CSR strategy.

The Stakeholder Theory

This theory places greater emphasis on financial commitments and highlights the

interests of shareholders in maximizing profits, which compromises the focus on other social

responsibilities (Brin & Nehme, 2019).

The Carroll CSR Pyramid Theory

The Carroll CSR Pyramid Theory requires businesses to operate in a legally, ethically,

and in a charitable manner. The risk, though, is in possibly ignoring external influences,

especially those related to society and the environment. Understanding the community's social

and environmental demands is essential to successfully implementing this strategy (Brin &

Nehme, 2019).

The TBL Theory

In order to promote sustainable business practices, the TBL Theory incorporates

environmental considerations in addition to the social and economic elements. A paradigm

change in the field of corporate social responsibility is being witnessed as corporations are being

pushed to prioritize moral accountability over profit-making to achieve social and environmental

goals (Brin & Nehme, 2019). Therefore, adopting this integrated approach in the tech industry

seems optimal to establish oneself as a leader in CSR activities. A successful incorporation of

this CSR approach in the organizational strategy will ensure focus on satisfying all groups of

stakeholders and addressing most aspects of CSR concerns.

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Navigating Ethical Challenges in CSR

Ethical Challenges and how to address them

Challenge 1: Normalizing Mishaps

Tech companies are grappling with the challenge of integrating ethics into their

operations, often adopting diverse approaches based on internal frameworks, such as aligning

ethical considerations with legal and business risk assessment by defining acceptable levels and

managing consequences within a justifiable cost range. However, this absence of ethical

boundaries may normalize ethical violations and reduce ethics to merely organizational

procedure. Instead, it is crucial to embed ethics as a fundamental value in organizational design,

ensuring the efficacy of ethical initiatives and preventing unintended consequences (Metcalf et

al., 2019).

Recommendation: It is imperative to foster a culture of ethical behaviour in the

organization to guide responsible decision making through training programs, communication of

the company’s CSR objectives and ethical principles and also, place emphasis on leading by

example.

Challenge 2: Data Privacy & Cyber Crime

The tech industry’s rapid growth, coupled with the dependence of corporations as well as

the government on technological advancements raises concerns about information security and

privacy. Despite the digital ecosystem’s robustness, it is not impervious to risks such as

cybercrime, data breach etc. Therefore, the adoption of digital ethics is important to safeguard

sensitive information and mitigate these threats (Susanto et al., 2021).

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Recommendation: Organizations in the tech industry to display utmost transparency in

regards to their data collection and use policies to build trust and informed consent among

stakeholders in an era where data privacy is paramount. Internal stakeholders should also be

made aware about ethical data handling procedures and the strict consequences should be set in

place in case of misuse or violation.

Challenge 3: The Rise of AI

Ethical issues become more urgent and complex as AI products reach higher intelligence

stages. For example, improved AI capabilities frequently require more customer data, which

increases our awareness of cybersecurity and privacy concerns. The increased independence that

AI products have in carrying out different duties for users highlights how important it is that

these products correctly reflect the ethical values and priorities of users (Du & Xie, 2020).

Recommendation: The organization can improve transparency in AI training data and

algorithms at the product level by conducting audits or quality control procedures and

incorporating ethical values into products. It is also necessary to implement fair and transparent

privacy policies to address consumer privacy concerns by empowering consumers with control

over data collection and management, internalizing cybersecurity costs. On a societal level, the

company can benefit from supporting positive engagement and relationships with all

stakeholders to address digital issues, fostering a more ethically conscious culture (Du & Xie,

2020).

Challenge 4: Worker Well-being

Adverse working conditions pose challenges to the well-being and efficiency of

employees. It becomes increasingly difficult for tech companies to strike a balance between the

moral obligation to create a safe and supportive work environment and the necessity for
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innovation and productivity. As a result, their ethical priorities and practices must be critically

examined.

Recommendation: A good way to meet business objectives and improve employee well-

being is to link employee health with organizational performance. Employee job satisfaction and

readiness to negotiate to resolve conflicts are positively impacted by CSR tactics in their day-to-

day work, which in turn promotes long-term employment relationships. In order to develop

external social responsibility, one must first establish internal social responsibility, which is why

responsible and effective communication, and team building are seen to have positive results.

(López‐Concepción et al., 2021).

Challenge 5: Economic & Environmental Impact

The growing reliance of society on digital technologies for essential functions, systems,

and supply chains, such as energy grids, healthcare, food distribution, and online banking poses

an ethical dilemma. While these technologies have made lives easier, they have also caused

disruptions such as environmental degradation, pandemics, economic downfall (Ashok et al.,

2022).

Recommendation: A contemporary concept, Corporate Environmental Ethics (CEE) can

be integrated with the organizational strategy that involves formalizing green principles and

values through environmental policies and incorporating environmental awareness into decision-

making. Businesses must develop clear rules and secure corporate support for innovative

solutions that include the environment. (Guo et al., 2020).

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Tackling Ethical Challenges

Ethical Programs

Ethical programs are organized efforts put in place inside a community or organization to

support and encourage moral behavior among its constituents. These initiatives help to set forth

explicit rules and values that specify desired behavior norms. A clear code of ethics, in-depth

training sessions, and communication tactics intended to increase public knowledge of ethical

concepts are all elements of ethical programs. Ethical programs support an organization’s

overarching ethical framework by encouraging a culture of accountability and integrity.

Ethics Committees

To discuss ethical concerns within an organization or society, people with a variety of

professional backgrounds and specialties are assembled into ethics committees. The main goal is

to offer direction, counsel, and suggestions regarding moral issues. The committee serves as

venues for in-depth talks and provide guidance and answers for handling challenging moral

conundrums.

Reporting Systems

Reporting systems are formalized processes designed to help people privately report

ethical issues, transgressions, or wrongdoings in an organization. These mechanisms are meant

to provide people the confidence to express their concerns without worrying about consequences,

which will help identify and address ethical problems early on. Channels like hotlines, internet

portals, and other private ways for people to report information are parts of reporting systems.

Often, anonymity plays a crucial role in protecting whistleblowers. Reporting mechanisms are

essential for upholding moral principles, averting any damage, and promoting an open and

responsible corporate culture.

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Measuring and Reporting CSR

A corporation's economic, ethical, social, and environmental responsibilities and actions

are documented through CSR reporting, sometimes referred to as corporate sustainability

reporting, which is an essential management function. In the tech industry, where influence and

innovation are prevalent, corporate social responsibility reporting is especially important. It acts

as a channel for tech companies to openly communicate with stakeholders about their dedication

to moral behaviour, social responsibility, and sustainability. In an environment when

stakeholders are beginning to place a higher value on socially conscious companies, CSR

reporting not only improves a company's reputation but also fosters trust. Tech companies use it

as a strategic tool to highlight their initiatives for bettering society, connect their business

operations with sustainable standards, and contribute to the greater good.

CEO’s role in Ethical Leadership

There are three essential forms of ethical leadership in business and corporate social

responsibility. First and foremost, leaders need to cultivate an ethical conduct culture and

effectively convey ethical standards. Second, accountable leadership has two main objectives:

achieving financial success and broadening the scope to include stakeholder interests. Last but

not least, servant leadership combines a sincere desire to serve others with a driving force behind

leadership: a significant emphasis on the welfare of others. This strategy emphasizes the

significance of creating an ethical environment within companies for sustainable and ethical

business operations by actively planning and implementing corporate ethics programs. By

exhibiting these behaviours, the CEO can cultivate a culture of ethical behviour in the

organization and lead by example (Scorgie, R., ß2023c).

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Conclusion

Globalization is making trade borders less distinct, and stakeholders are placing a higher

value on corporate social responsibility (CSR) efforts. As a result, businesses need to understand

how CSR can improve their reputation, provide them a competitive edge, and develop a

conscious corporate culture. The technology industry, which has a significant influence on

societal well-being and economic trajectories, presents several moral dilemmas. To effectively

handle these obstacles, recommendations include establishing an ethical organizational culture,

making sure company policies and regulations are transparent, incorporating environmental

ethics, and implementing ethical to measure CSR activities and take accountability for the same.

Adopting these CSR principles is not only favourable to stakeholders but also essential for

sustainable success and societal well-being in a time when ethical issues are of on the rise.

We also understand the contemporary trends in Corporate Social Responsibility (CSR)

and emphasizes the importance of transparency, stakeholder engagement, effective

communication, measuring and reporting, and advocacy. Transparency is crucial for building

trust and credibility with stakeholders, while stakeholder engagement is a dynamic process that

integrates diverse interests into decision-making. Effective communication enhances

accountability and contributes to building a positive brand image. Measuring and reporting are

essential components for evaluating CSR strategies and providing a basis for continuous

improvement. Advocacy is essential for organizations to extend their influence beyond their

immediate sphere of operation, aligning with values that resonate with conscientious consumers.

These trends align businesses with societal expectations and position them as responsible

stewards in a world where corporate impact extends beyond profit margins.

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