ETHICS, CORPORATE SOCIAL

RESPONSIBILITY
&
SUSTAINABILITY
 Ethics
Rules and standards governing the conduct of a person or group

“Conception of right and wrong, moral and immoral, good and evil conduct”

Influenced by;
◦ Religious beliefs, society
◦ Family, upbringing, friends
◦ Schools, school teachers
◦ Colleagues, neighbors...
 Business Ethics
◦ Refers to ethical or unethical behaviors by managers/
employees in the context of their jobs

Ethical Behavior
Businesses are expected to
Compete fairly and honestly
Communicate truthfully
Be transparent
Not cause harm to others
What is Unethical at the Workplace?

Conflict of interest Insider trading Padding invoices Creative

when choosing a The use of and then splitting Accounting
course of action unpublicized the overcharge a business that is
will benefit one information that with the supplier in financial trouble
person’s interests an individual gains can be made to
at the expense of from the course of look attractive,
another his or her job to even to
benefit from government
fluctuations in the regulators and
stock market astute investors.
Martha’s Insider Trading

https://youtu.be/2OmRgNfEEE8?t=6
 Strategies for Supporting Ethical Behaviour

Start from the Define Craft a code of Train and Practice Provide
top expectations ethics with support transparency feedback
and set an visible employees channels
example consequences
/

Code of ethics Transparency Whistle-blowing

A written statement that
sets forth the principles
that guide an organization’s
decisions
The degree to which
affected parties can
observe relevant aspects of
transactions or decisions
The disclosure by a
company insider of
information that exposes
illegal or unethical behavior
by others within the
organization
What is Whistle-Blowing?

https://youtu.be/_nztjRpmOLQ
 Ethical Decision Making
Ethical dilemma
◦ A situation in which an individual or a group makes a decision that is morally wrong,
illegal, or unethical

Conflicts of interest
◦ Situations in which competing loyalties can lead to ethical lapses, such as when a
business decision may be influenced by the potential for personal gain.
Case Study: Ford Pinto

https://www.youtube.com/watch?v=PAI5T8UecEY
Ethical Dilemma:
Milton Friedman - The Value of a Human Life
Debate

https://www.youtube.com/watch?v=faSa3r8WIU0
 Finding the Right
Answer When Faced
Approach
Justice
Summary
Treat people equally or at least fairly in a way
with an Ethical Dilemma
that makes rational and moral sense.

Utilitarianism Choose the option that delivers the most good

for the most people (or protects the most
people from a negative outcome).

Individual rights To the greatest possible extent, respect the

rights of all individuals, particularly their right to Make sure you frame the Identify all parties who
control their own destinies.
situation accurately, might be affected by your
considering all relevant decision.
Individual Focus on the ethical duties of the individuals
responsibilities involved in the situation. issues and questions.

The common Emphasize qualities and conditions that benefit

good the community as a whole, such as peace and
public safety.

Virtue Emphasize desirable character traits such as

integrity and compassion.
Be as objective as
possible.
Costs Of Unethical Behavior
Personal Costs Organizational Costs
• Demotion or being fired • Decrease in the
• Decrese in trust credibility of the
• Unreliability company
• Loss of company image
• Reduced sales
• Increased customer
dissatisfaction
• Decrease in profitability
Societal Costs
• Costs towards elderly,
poor, handicapped
people and children
who are vulnerable to
the unethical acts
 In-class Activity: Ethical
Dilemmas
You are a qualified accountant. You have been asked by your line manager to
complete a costing exercise* with a very short deadline and limited resources. You
think the company’s chief executive plans to use this information to restructure the
company, including making some of your close colleagues redundant. You are
worried that your work cannot be robust enough to be used for such a big business
decision, but your line manager is putting you under a lot of pressure to complete
the work quickly.

QUESTIONS
1. What would be your key considerations in your approach to resolving the dilemma
presented?
2. What course of action would you take to resolve the dilemma?

* Monetary evaluation of the amount of resources and efforts that must be invested for the
production of a good or service.
Corporate Social
Responsibility (CSR)
The idea that business has obligations to society
beyond the pursuit of profits
◦ It covers social and environmental issues for all stakeholders
◦ CSR should not be separated from business strategy and
operations
◦ CSR is a voluntary concept.
The Relationship Between
Business and Society
◦ Consumers in contemporary societies enjoy and expect a wide range of
benefits, from education and healthcare to credit and products that are safe
to use.

◦ Profit-seeking companies are the economic engine that powers modern

society; they generate the vast majority of the money in a nation’s economy.

◦ Much of what we consider when assessing a society’s standard of living

involves goods and services created by profit-seeking companies.

◦ Companies cannot hope to operate profitably without the many benefits

provided by a stable, functioning society.
 • Accurate / Reliable Information
Responsibility • Fiduciary Responsibilities -safeguarding the company’s assets and
towards Owners handling its funds in a trustworthy manner

• Fair Profit Distribution

Responsibility • Social Responsibility
towards Investors • Ethical Behavior

• The right to safe products

• The right to be informed
Responsibility • The right to be heard
towards Consumers • The right to choose
• The right to digital security
• Equal opportunity & diversity – race, color, religion, age,
Responsibility • Safety and health
towards Employees • Freedom from sexual harassment, verbal and physical abuse
• Fair wages and benefits, equal pay

• Financial contributions
Responsibility • Volunteerism
towards Community • Supporting social causes – education, art, science etc.
Pyramid of CSR ( Carroll, 1991)

Philanthropic Responsibilities
Be a good corporate citizen.

Ethical Responsibilities
Be ethical.

Legal Responsibilities
Obey the law.

Economic Responsibilities
Be profitable.
 Philanthropy vs. Strategic CSR
Philanthropy
• Donating money, time, goods, or services to charitable, humanitarian, or
educational institutions.
• Bill & Melinda Gates Foundation - one of the largest private foundations in
the world ( $50 billion)

Strategic CSR
• Social contributions that are directly aligned with a company’s overall business
strategy.
• Social mission = company mission
The TOMS Story- a company that would match every pair of shoes purchased
with a pair of new shoes given to a child in need. One for One.™
 Perspectives on Corporate Social Responsibility

Minimalist CSR
◦ Minimal social responsibility by
paying taxes and obeying the law

Cynical CSR
◦ Company accused of irresponsible
behavior promotes itself as being
environmentally responsible but not
making substantial business actions

Defensive CSR
◦ Nongovernmental Organisations

Proactive CSR
◦ Purpose-driven company aspires to
accomplish more than just making
money for owners and investors

SCHNEIDER ELECTRIC
Corporate Social
Responsibility Examples
8.118
scholarships
81 cities
264 schools

81 cities
7 different plays
2 million children

Donations exceeding 35 million TL

300,000 individual philanthropists
33 Dormitories
12 Schools
Scholarships for 10,500 girls
L’Oréal-UNESCO
For Women in Science Programme

https://www.youtube.com/watch?v=hDXwpCl_tR0
A CSR Example: WeTransfer
During the pandemic, WeTransfer donated an additional
500 million ad impressions (equivalent to $5 million in
cash) on their highly-trafficked homepage wallpaper to
showcase the work of artists and organizations that support
them.

While you wait for your documents to load and be sent via
WeTransfer, you’re witnessing a subtle, but genius, CSR
example.

Since the creation of their company, WeTransfer has

donated 30% of their advertising space to artists and
causes they care about.

This has led to partnerships with artists like Björk, Marina

Abramović, FKA Twigs, and organizations such as the Nelson
Mandela Foundation and UN Development Program.
The Pros and Cons of Corporate Social Responsibility
Pros
• Balances corporate power with
responsibility
• Promotes long-term benefits
• Improves business value and
reputation
• Corrects social problems caused
by business
Cons
• Lowers economic efficiency and
profit
• Imposes hidden costs passed on
to stakeholders
• Requires skills business may lack
• Places responsibility on business
rather than individuals.
 Sustainability
“Meeting the needs of the present generation without compromising the ability of future generations to meet
their needs.”
Brundtland (1987)

Sustainable
development
Operating business in a
manner that minimizes
pollution and resource
depletion, ensuring that
future generations will
have vital resources
Strategic CSR &
Sustainability

https://www.youtube.com/watch?v=3_fGtQ_Dd1g
 Top 10 Environmental Issues

Climate Change
Energy
Water
Biodiversity and Land Use
Chemicals, Toxics, and Heavy
Metals
Air Pollution
Waste Management
Ozone Layer Depletion
Oceans and Fisheries https://www.youtube.com/watch?v=EtW2rrLHs08

Deforestation
 Why companies adopt green practices?
Opportunities or competitive advantage
Corporate Social Responsibilities (CSR)
Government pressure
Public pressure
Shareholder pressure
Customer pressure
Competitive pressure
Cost or profit issues
Enhance quality
 How companies go green?
Redesigning existing products or
services
 Everything from ingredients to
packaging

Designing new environmentally

friendly offerings
Changing production processes
 Eliminating waste, using non-toxic
materials, using renewable energy
resources etc.

Green marketing practices

 Product, price, place, promotion