BUSINESS ETHICS AND

CORPORATE SOCIAL
RESPONSIBILITY
By: MARY AZEAL G. AMAYA
OBJECTIVES
To know what is business ethics and corporate
01 social responsibility and its role in management

To learn the importance of business ethics and

02 CSR to long term company goals

03 To compare business ethics and CSR

04 To understand the ethical management of profit

05 To distinguish what business ethics is not

Business Ethics – a form of applied ethics that examines ethical
rules, theories, and principles in business context. It includes the
correct understanding of any moral duties or obligations that
apply to persons who are engaged in commerce. Also known as
Ethical Management.
 Guide Questions
IS IT TRUE?
OR IS IT
Business ethics pushes the practitioner to DECEITFUL
study and evaluate how he/she makes ?
business decisions in accordance with
moral concepts and judgments. DOES IT
CAUSE IS IT FAIR?
BODILY OR
EMOTIONAL
OR IS IT
HARM TO UNJUST?
OTHERS?

IS IT THE
RIGHT
THING TO
DO?
Is Business Ethics an oxymoron?
According to Maximiano, business ethics is one
of the phrases listed at www.oxymoronlist.com.

BUSINESS is associated with maximizing profit

while ETHICS deals with anything other than
profit. It is a specialized study of what is right or
wrong.

Ironically, in a generic sense, people gets into

business whether it is done rightfully or wrongly
while ethics is made to control and minimize
wrong doings.
.
 ROLE OF ETHICS IN MANAGEMENT
Ethical management in the WORKPLACE
EM is the foundation of CSR in the workplace
which protects the employer-employee SUCCESS
relationship such as the rights and obligations
justly owed between them. BUSINESS
Ethical management regarding INTELLECTUAL
PROPERTY RIGHT

Get a modern PowerTakes into account

bioprospecting (considered ethical) and
biopiracy (considered unethical), copyright,
patent, and trademark infringement, business
intelligence, and etc.
 ROLE OF ETHICS IN MANAGEMENT
Ethical management in SALES, ADEVERTISING,
AND MARKETING
Deals with the issues on pricing and price fixing,
moral dimension of anti-trust or anti cartel law,
viral marketing.
SUCCESS
Ethical management in PRODUCTION BUSINESS
Deals with the duties and responsibilities of the
company with regards to their products and
ensure that production processes do not cause
harm.
Ethical management in FINANCE,
ACCOUNTING, and AUDITING
Deals with the responsibilities of the companies
to make sure that the company’s financial
statements are just and is not manipulated.
Corporate Social Responsibility – is the action
– a concept wherein businesses interact with its
stakeholders by responding to its needs and providing
projects that will have long term benefits
When business does not attempt to
see a rigorous respect for the
moral, cultural, and spiritual
requirements, based on the dignity
of the person and on the proper
identity of each community… then
all the rest (availability of goods,
abundance of technical resources
applied to daily life, a certain level
of material well-being) will prove
unsatisfactory and in the end
contemptible.
Pope John Paull II’s 1987 document Rei socialis
Can a company become a corporate citizen without being ethical?

NOT BUT
SUB OB
JEC JEC
TIVE TIVE
The wisest thing to do, it seems, is to practice business ethics first, and then practice CSR.
Should there be a CSR Department?

It is advantageous if a company
has a CSR department.

But the biggest challenge is to

actually implement and sustain
ethical management before
having a CSR Department.
 Authors’ Thoughts
Leaders are increasingly
becoming involved with
responsibilities toward the
community beyond legal
limits imposed on them.”
(Herbet Simon, 1945)
Author, Administrative
Behavior
…a corporate ethics program
is made up of values, policies,
and activities that impact the
propriety of organizational
behaviors. In other words, CSR is
business ethics concretized and
reflected in corporate values.
(Brenner, 1992)
Writer, Business Ethics
Journal 1992
…the moral reasoning in
business ethics may be
considered a foundation of
doing CSR. In other
words, ethics is the theory
while CSR is the practice.
(Griffin, 2000)
Author
 Authors’ Thoughts
…continuing commitment by There is only one universal
business to behave ethically and langauage for all business
contribute to economic practitioners and professional
development while improving the everywhere – the true, the just, the
quality of workforce and their
fair, and the good.
families as well as of the local
community and society at large.

(Phillips, 2003) (Maximiano, 2005)

Author, Administrative Author
Behavior
WORDS WILL LACK REAL
WEIGHT UNLESS THEY ARE
ACCOMPANIED FOR EACH
INDIVIDUAL BY A LIVELIER
AWARENESS OF PERSONAL
RESPONSIBILITY AND BY
EFFECTIVE ACTION.
(Octogesima adveniens, 48)
EMOTIONS ARE IMPORTANT, AND NO
YOU.
ONE DENIES THAT. BUT WE CANNOT
RELY ON THEM TOO MUCH BECAUSE
THEY ARE CHANGEBLE, FLEETING,
DO.
NOTE.
AND ALMOST ALWAYS CAPRICIOUS.
 Authors’ Thoughts
It is not enough to recall
principles, state intentions,
point to crying injustice,
and utter prophetic
denunciations.
(Pope Paul VI)
…business is for every
Morality should not only be
man and woman, and all
lectured in classrooms. It should
be an operative experience that business activities
is founded on personal and (including CSR) are only a
cooperative integrity. means for the total and
wholesome development
of the humamn person.
(Francisco Tantoco Jr. ) (Paul VI, 1968)
Former Caritas Manila Author
Executive Director
 PHILOSOPHICAL LINKS
(theo, divine-spiritual level)
– focuses on the
2 Profound Links relationship with God, other,
his family, and fellowmen,
(anthropos, human level) and the environment.
human person with dignity 1. Anthropological Business should be at
who is subject to socio Order service of the human person,
political, moral, and and not human person at
2. Theologico-
economic issues. Philosophical Order the service of business.
EVOLUTION OF ETHICS
AND CORPORATE
SOCIAL RESPONSIBILITY
 Conforms Institutiona
Complies
Profit to Ethical lizing
Laws and
Maximization Requirements Corporate
Regulations
Service
Responsibi
lity
Ethical Management of Profit
PROFIT
RESIDUAL BETWEEN THE VALUE OF OUTPUT AND
OTHER COST

VARIANCES/NUANCES OF PROFIT
RETAINED PROFITS/ PROFITS AS DIVIDENDS/
ECONOMIC VALUE ADDED

RETAINED PROFITS
REINVESTED TO THE BUSINESS

ECONOMIC VALUE ADDED

TAKES ON ACCOUNT THE TOTAL COST OF AN
OPERATIONAL CAPITAL
NOPAT – (CAPITAL * WACC)
 S U C C E S S
B U S I N E S S
SHAREHOLDER VALUE refer to the primary goal of business, which is to enrich or
add value to its shareholders by paying dividends

valuation of assets and liabilities through investment analysis,

capital budgeting, merger and acquisition transactions, and
financial reporting

personal nonmaterial values of the manager matter so much

in creating and maximizing shareholders value. …doing
things right, doing the right things.
FRIEDMANIAN APPROACH

…there is one, and only one social

responsibility of business- to use its
resources and engage in activities designed to
increase its profits so long as it stays within
the rules of the game, which is to say, engages
in open and free competition without
deception or fraud. (Friedman, 1982)
 Stakeholder Theory
Investors
Creditors
Government
Capital Fair &
Funds Repayment
Commitment attractive and Return
return

Board

Oversig Price
ht Mgt Customers
Performance
Accountability Value through products & services which support positive human values

Trust
Members
Society
Community meeting basic needs of members
Trustworthy behavior
 BUSINESS ETHICS IS NOT. . .
WHATEVER IS USEFUL IS GOOD

“Do whatever produces the greatest good for the greatest

number ”(Boatright, 1997)
UTILITARIANISM
An action is ethically right when the sum total of benefits (hence
‘greatest good’) produced by the act is greater than the sum total of
benefits produced by any other act could have performed in its place.

BUT UTILITARIANISM IS NOT

ABSOLUTE AND THEREFORE
RESTRICTED AND LIMITED
Thank
You