BUSINESS ETHICS AND

SOCIAL RESPONSIBILITY
PRESENTED BY:

 ERUM SHEHZADI 1010

 UMAIR MAZHAR 1059

 ANEES ASIF 1050

 HASEEB UL HASSAN 1061

INTRODUCTION

 Business ethics take into consideration responsibilities not just inside the
workplace, but also within the environmental, cultural, and social structures
of communities.
 Social responsibility is an ethical theory, in which individuals are accountable
for fulfilling their civic duty; the actions of an individual must benefit the
whole of society. In this way, there must be a balance between economic
growth and the welfare of society and the environment. If this equilibrium is
maintained, then social responsibility is accomplished.
INTRODUCTION

 The theory of social responsibility is built on a system of ethics, in which

decisions and actions must be ethically validated before proceeding. If the
action or decision causes harm to society or the environment then it would be
considered to be socially irresponsible.
 Moral values that are inherent in society create a distinction between right
and wrong. In this way, social fairness is believed (by most) to be in the
“right”, but more frequently than not this “fairness” is absent. Every
individual has a responsibility to act in manner that is beneficial to society
and not solely to the individual.
BUSINESS ETHICS

 The Principles and Standards that determine acceptable conduct in business

organizations
 The acceptability of behavior in business is determined by customers,
competitors, government regulators, interest groups, and the public, as well
as each individual’s personal moral principles and values.
SOCIAL RESPONSIBILITY

 Social responsibility refers to an obligation of business to maximize its

positive impact and minimize its negative impact on society.
 Corporate social responsibility is one of the newest management strategies
where companies try to create a positive impact on society while doing
business.
BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY
 Business ethics relates to an individual’s or a work group’s decisions that
society evaluates as right or wrong, whereas social responsibility is a broader
concept that concerns the impact of the entire business’s activities on
society.
BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY
 Ethical Behavior and Social Responsibility can bring
significant benefits to a business. For example they may:
 Attracts customers to the firm’s products, thereby boosting sales and profits.
 Makes employees want to stay with the business, reducing labor turnover and
therefore increase productivity.
 Increases the number of employees wanting to work for the business,
reducing recruitment costs and enabling the company to obtain the most
talented employees.
 Attracts investors and keeps the company’s share price high, thereby
protecting the business from takeover.
ROLES OF ETHICS IN BUSINESS

 Ethical companies have been shown to be more profitable.

 Improved employee and organizational Morale
 Increases ability to attract new customers
 Ethical behavior enhances leadership.
 Improves Customer Loyalty
 Reduces risk of negative exposure and public backlash caused by poor ethics
 Attraction of new stakeholders
 Making a positive impact on the community
BUSINESS ETHICS AND SOCIAL
RESPONSIBILITY WITH THE HELP OF VIDEO
RECOGNIZING ETHICAL ISSUES IN BUSINESS

 ETHICAL ISSUE:

 An ethical issue is an identifiable problem, situation, or opportunity that

requires a person to choose from among several actions that may be
evaluated as right or wrong, ethical or unethical
ETHICAL ISSUES

 Many ethical issues in business can be categorized in the context of their

relation to conflicts of interest, fairness and honesty, communications, and
business associations.

Lying to supervisors 45%

   

Falsifying records 36
   

Alcohol and drug abuse 36

Conflict of interest 34
   

Stealing or theft 27

Gift receipt/entertainment in violation of company policy 26

   
ETHICAL ISSUES

 CONFLICT OF INTEREST:
 A conflict of interest exists when a person must choose whether to advance
his or her own personal interests or those of others. For example, a man-ager
in a corporation is supposed to ensure that the company is profitable so that
its stockholder-owners receive a return on their investment. In other words,
the man-ager has a responsibility to investors. If she instead makes decisions
that give her more power or money but do not help the company, then she
has a conflict of interest—she is acting to benefit herself at the expense of
her company and is not fulfilling her responsibilities. To avoid conflicts of
interest, employees must be able to separate their personal financial
interests from their business dealings. E.g. Bribe.
ETHICAL ISSUES

 FAIRNESS AND HONESTY

 Fairness and honesty are at the heart of business ethics and relate to the
general values of decision makers. At a minimum, businesspersons are
expected to follow all applicable laws and regulations. But beyond obeying
the law, they are expected not to harm customers, employees, clients, or
competitors knowingly through deception, misrepresentation, coercion, or
discrimination.
ETHICAL ISSUES

 COMMUNICATIONS

 Communications is another area in which ethical concerns may arise. False

and misleading advertising, as well as deceptive personal-selling tactics,
anger consumers and can lead to the failure of a business. Truthfulness about
product safety and quality are also important to consumers.
ETHICAL ISSUES

 BUSINESS RELATIONSHIPS
 The behavior of businesspersons toward customers, suppliers, and others in
their workplace may also generate ethical concerns. Ethical behaviour within
a business involves keeping company secrets, meeting obligations and
responsibilities, and avoiding undue pressure that may force others to act
unethically.
ETHICAL ISSUES

 PLAGIARISM

 Taking someone else’s work and presenting it as your own without mentioning
the source—is another ethical issue
MAKING DECISIONS ABOUT ETHICAL ISSUES

 Ethical decisions involve questions about how we ought to behave. The

decision process must consider cultural and religious background. A review of
the literature will reveal many possible frameworks for making ethical and
moral decisions, but all will consider the matter relative to those standards
held important by the decision maker. Such traits as honesty, compassion,
and fairness, as well as the individual’s sense of right and wrong, will play an
important part.
MAKING DECISIONS ABOUT ETHICAL ISSUES

 Recognize a moral issue.

 Get the facts.
 Evaluate the alternative actions from various moral perspectives. 
 Make a decision.
 Act, then reflect on the decision later.
THE NATURE OF SOCIAL RESPONSIBILITY
 
ECONOMIC RESPONSIBILITY

 The most basic responsibility of a business organization is to maximize its

profitability not only to attend to the interests of its shareholders but also to
contribute to the progress of the economy.
 A business is thereby an integral actor in economic development and nation
building. The more traditional economic model of corporate social
responsibility echoes this role. American economist Milton Friedman once
mentioned that prime responsibility of a business is to maximize profits and
to ensure that it is able to pay all taxes levied by the government.
 It is important to note that if a business is unable to produce profitable
products and maintain sustainability, it is impossible to attend to all other
succeeding social responsibilities.
LEGAL RESPONSIBILITY

 The concept of laissez-faire business is virtually inexistent in modern free-

market economies.
 Governments have now become regulators of businesses in order to maintain
the integrity of business practices and protect the interest of the public. Like
individual members of the citizenry, a business also has an obligation to
follow all written and codified laws that concern its existence.
 Some of the laws affecting a business include basic business permits and
requirements, tax laws, labor rights, intellectual property rights, consumer
protection, contracts and obligations, and anti-trust and competition laws,
among others.
ETHICAL RESPONSIBILITY

 The decisions and actions of a business organization affect the stakeholders in

several and varied ways. This fact makes it a moral actor. It also gives a
business an obligation to follow ethical standards, norms, and values of the
communities wherein it operates.
 An ethically responsible business is able to recognize, interpret, and act upon
multiple principles and values according to standards prescribed by a particular
context or within a given field. It is able to distinguish right from wrong and
make decisions and actions that serve the interests of concerned parties.
 Several business organizations have adopted a written Code of Conduct to
standardize the way managers and employees act or behave within an
identified ethical boundary. However, there are businesses that do not have
any written code. In this case, managers become the prime moral actors and
they base their decisions on their own standards of morality.
PHILANTHROPIC
RESPONSIBILITY 

 The fourth social responsibility of a business is dependent on whether it sees itself

as an active member and contributing entity in the society. This philanthropic
responsibility implies that a business has a duty to give back in some ways and
contribute to the betterment of the society.
 The first three responsibilities are straightforward. Businesses organizations are
obligated to fulfil their economic, legal, and ethical obligations in order to ensure
their survival. However, the fourth responsibility is not a mandatory. There are
businesses that do not have any philanthropic programs. This is especially true for
smaller or struggling businesses with limited resources. But over the years, some
businesses take pride of their philanthropic works. This responsibility gives them a
sense of purpose while also promoting their public image.
SOCIAL RESPONSIBILITY IMPORTANCE
SOCIAL RESPONSIBILITY ISSUES

 As with ethics, managers consider social responsibility on a daily basis as they

deal with real issues. Among the many social issues that managers must
consider are their firms’ relations with employees, government regulators,
owners, suppliers, customers, and the community.
The Arguments For and Against Social Responsibility

 FOR:
 Business helped to create many of the social problems that exist today, so it should play a
significant role in solving them, especially in the areas of pollution reduction and cleanup.
 Businesses should be more responsible because they have the financial and technical
resources to help solve social problems.
 As members of society, businesses should do their fair share to help others. 
 Socially responsible decision making by businesses can prevent increased govern-ment
regulation.
 Social responsibility is necessary to ensure economic survival: If businesses want educated
and healthy employees, customers with money to spend, and suppliers with quality goods
and services in years to come, they must take steps to help solve the social and
environmental problems that exist today.
The Arguments For and Against Social
Responsibility
 AGAINST:
 It sidetracks managers from the primary goal of business—earning profits.
Every dollar donated to social causes or otherwise spent on society’s problems
is a dollar less for owners and investors.
 Participation in social programs gives businesses greater power, perhaps at
the expense of particular segments of society.
 Some people question whether business has the expertise needed to assess
and make decisions about social problems.
 Many people believe that social problems are the responsibility of government
agencies and officials, who can be held accountable by voters.