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Stakeholders: people or groups that have an interest in the

organization.
Stakeholders include employees, customers, shareholders,
suppliers, and others.
Stakeholders often want different outcomes and managers
must work to satisfy as many as possible.

Ethics: a set of beliefs about right and wrong.


Ethics guide people in dealings with stakeholders and others,
to determine appropriate actions.
Managers often must choose between the conflicting interest
of stakeholders.

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The Con
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Ethical Env
High profile investigations and
arrests in headlines.
Vast majority of businesses
ethical.
New corporate officers charged
with deterring wrongdoing and
ensuring ethical standards.

Ethics is a conception of right and wrong behavior,


defining for us when our actions are moral and when
they are immoral.

Business ethics, on the other hand is the application of


general ethical ideas to business behavior.

Business ethics is the art and discipline of applying


ethical principles to examine and solve complex moral
dilemmas.

Ethics is different from religion

Ethics is not synonymous with law

Ethical standards are different from cultural traits

Ethics is different from feeling

Ethics is not just a collection of Values.

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On-theDilemmas
Situationinwhicha
businessdecisionmay
beinfluencedfor
personalgain.

Employees
disclosureof
illegal,
immoral,or
unethical
practicesinthe
organization.

Tellingthetruthand
adheringtodeeplyfelt
ethicalprinciplesin
businessdecisions.

Businesspeopleexpect
employeestobeloyal
andtruthful,butethical
conflictsmayarise.

Integrity

Impartiality

Accountability

Honesty

Transparency

Responsiveness to public interest.

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Individu
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f
f
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A
Individuals can make the
difference in ethical
expectations and behavior
Putting own interest ahead of
the organization
Lying to employee
Misrepresenting hours
Safety violations
Internet Abuse
Technology is expanding
unethical behavior

To protect its own interest


To protect the interests of the business community as a whole so
that the public will have trust in it.
To keep its commitment to society to act ethically
To meet its stakeholder expectation
To prevent harm to public interest
To build trust with key stakeholder group
To protect themselves from the abuse of unethical employees and
competitors
To protect their own reputation
To protect their own employees
To create an environment in which workers can act in ways
consistent with their values.

There is evidence showing that ethical managers benefit


over the long run.

Ethical Control System: a formal system to encourage


ethical management.

Firms appoint an ethics ombudsman to monitor practices.


Ombudsman communicates standards to all employees.

Ethical culture: firms increasingly seek to make good


ethics part of the norm and organizational culture.

CSR is a concept whereby companies integrate social and


environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis.
-European Union

We define CSR as business' commitment to contribute to


sustainable economic development, working with employees,
their families, the local community, and society at large to
improve their quality of life.
-World Business Council for Sustainable Development

It urges businesses to embrace the triple bottom-line approach


whereby its financial performance can be harmonized with the
expectations of society, the environment and the many
stakeholders it interfaces with in a sustainable manner.
-The Social, Environmental & Economic Responsibilities
of Business, MCA, July, 2011.
Corporate

Social Responsibility is a companys commitment to


its stakeholders to conduct business in an economically, socially
and environmentally sustainable manner that is transparent
and ethical.
- DPE guidelines on CSR and Sustainability

Levitt (1958) could be credited with setting the agenda for the
debate about the social responsibility of business in his Harvard
Business Review article 'The Dangers of Social Responsibility', in
which he cautions that 'government's job is not business, and
business's job is not government'.

Friedman (1970), The business of business is to maximise


profits, to earn a good return on capital invested and to be a good
corporate citizen obeying the law no more and no less.

Edward Freeman (1984) introduced the stakeholder theory and


argued that socially responsible activities helped business in building
strong relationships with stakeholders, and that management must
pursue actions that are optimal for a broad class of stakeholders rather
than those that serve only to maximise shareholder interest

John Elkington( 1998) first introduced the concept of Triple Bottom


line to emphasise that a companys performance is best measured by
the economic, social and environmental impact of its activities.

Porter and Kramer (2011) Creating Shared value - Michael


Porter, while explaining the concept of creating shared value at the
2011 World Economic Forum at Davos said that We need to
understand that whats good for the community is actually good
for business. Michael Porter and Mark R.Kramer authored the
concept of Shared Values

Phases

Approach

Proponent

Ethical

Voluntary
Commitment
organisations to public welfare

Statist

State ownership
and legal Jawaharlal Nehru
requirements determine corporate
responsibilities

Liberal

Corporate responsibilities limited to Milton Freidman


private owners (shareholders)

Stakeholder

Organisations respond to the needs


of
stakeholdersCustomers, R Edward Freeman
creditors,
employees
and
communities etc.

by Mahatma Gandhi

Corporate Sustainability 3-Legged


Stool
Sustainability = Sustainable Development (SD)
= Corporate Social Responsibility (CSR)
= Triple

Economy Profits
Growth, Jobs,
Taxes
Products
Services

Bottom Line (TBL) = 3Es = 3Ps

Environment Planet
Eco-efficiencies
Eco-effectiveness
Equity - People
Employees
Community /
Culture
World

Satisfied employees

Satisfied customers

Branding and creating Goodwill

Costs reductions

Business Sustainability

Improved financial performance

Enhanced brand image and reputation

Increased sales and customer loyalty

Increased ability to attract and retain talent

Reduced regulatory oversight

Innovation and learning

Risk Management

Easier Access to capital

Reduced operating cost