ETHICS, CSR,

AND CORPORATE BEHAVIOR

What is Ethics?
• Ethics shows a corporation how to behave properly in their
all business and operations.

• Ethics is the set of rules prescribing what is good or evil, or

what is right or wrong for people.

• Business Ethics means honesty, confidence, respect and fair

acting in all circumstances
 ETHICAL PHILOSOPHIES

Ethics is however a problematical area as there is no absolute agreement as to what

constitutes ethical (or unethical) behavior.

For each of us there is a need to consider our own ethical position as a starting point
because that will affect our own view of ethical behavior.
Deontological Ethics

Teleological Ethics

Utilitarianism
 Relativism is the denial that there are certain universal truths.
Ethical Relativism Thus, ethical relativism posits that there are no universally valid
moral principles.
 Ethical it asserts that although moral principles may differ between
cultures, some moral principles have universal validity whether
Objectivism or not they are universally recognized.
 Corporate behavior is important for company success both
financially and concerning the relationship between corporate
and business interests (stakeholders).

Corporate behavior has effects not only on stakeholders and

shareholders but also on the entire economy.

The components of Corporate behavior

CORPORATE BEHAVIOR
The Corporate Behavior Pyramid

Carroll (1979: 500) describes CSR in these

terms: “the social responsibility of business
encompasses the economic, legal, ethical, and
discretionary expectations that society has of
organizations at a given point in time”.
 The reputation of the corporation is often the
most important factor in gaining a
Corporate Reputation
competitive advantage as well as building
financial and social success.
Creating Value
The managers of most companies recognize that their
function is to serve the needs of the owners of that
business – in other words, their shareholders.
 There has been a revival of interest in economic
Value for shareholders techniques to measure the value of a firm the use of
economic value added as a technique for measuring such
value to shareholders.
 This approach to managing an organization is based upon
Value-based the assumption that maximizing the value of a firm to its
shareholders also maximizes the value of the firm to
management society at large.
 A stakeholder approach to managing an organization can be
considered to exist when the management of that organization
considers the impact of its operations on its stakeholders.

Management for
stakeholders
 A stakeholder managed organization therefore attempts to
consider the diverse and conflicting interests of its stakeholders
and balance these interests equitably.

Multi-dimensional performance
management
Value Creation and Performance Creating value for shareholders through the management process
automatically creates value for other stakeholders.
Traditional Measures of Value Created

Measures of profitability

Measures of efficiency

Measures of liquidity

Measures of risk
Conclusion
Ethical behavior and ethical business has
effects not only on stakeholders and
shareholders but also on the entire economy.
We believe that when acting ethically in the
business decision-making process this will
ensure more effective and productive
utilization of economic resources.

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References
• Aras, G. and Crowther, D. 2008. “Introduction to CSR”
• Aras, G (2006), “The Ethical Issues in the Finance and Financial Markets”, in
Globalization and Social Responsibility, Eds. David Crowther & Kıymet Caliyurt,
Cambridge Scholars Press.
• Aras G & Crowther D (2008); The social obligation of corporations; Journal of
Knowledge Globalization 1 (1), 43-59
• Carroll, A. B. (1979). A three-dimensional conceptual model of corporate social
performance; Academy of Management Review, 4, 497-505.
• Fisher, J. (2004) Social Responsibility and Ethics: Clarifying the Concepts, Journal of
Business Ethics 52: 391–400.
THANK YOU