Difference between Ethics and Company Social Responsibility

Assignment Requirements


Demonstrate the difference between ethics and company social responsibility

Paper details:     

  • The essay will take the form of an issue paper.
  • Should develop a central question of the thesis to address.
  • The thesis statement will provide a short statement on the main point of the paper.
  • The thesis will be developed within the body of the essay.
  • The essay can take the form of an argumentative, cause and effect, persuasive, comparative or other forms.
  • The paper should be written in APA format.
  • 3-5 pages not including title page and references and appendix).
  • Doubled spaced.
  • Use Arial or Times New Roman.
  • Use 12 point size.
  • Must be free of spelling and grammatical errors.

Solution

Difference between Ethics and Company Social Responsibility

Ethics and corporate social responsibility are often taken to be synonymous and in most cases used interchangeably. Nonetheless, even though they share a few similarities, the two are not one and the same thing. While business ethics is mainly concerned with the principles and standards that determine acceptable conduct in business organizations, corporate social responsibility concerns itself with an organization’s obligation to maximize its positive impact on stakeholders and minimize its negative impact (Farrell, Fraedrich, & Ferrel, 2011). By contrast, business ethics and corporate social responsibility were more indistinct in (say) the 1890s or 1920s, codes of ethics for example comprised both of them(Abend, 2008). Money-back guarantee policy and policies against price discrimination, false advertising, and unhealthy business competition were all put in the same category. However, in the present day, there is a clear difference between business ethics and corporate social responsibility.        

            Ethical behavior determines whether what the business is engaged in is right or wrong. It is defined as “inquiry into the nature and grounds of morality where morality is taken to mean moral judgments, standards and rules of conduct” (Farrell, Fraedrich, & Ferrel, 2011). What is morally right for businesses is determined by customers, competitors, government regulators, interest groups and the general public as well as each individual’s moral principles and values. Therefore, while ethical behavior is what the society evaluates as right or wrong on the part of business individuals or workgroups, corporate social responsibility is a broader concept concerned with the impact of the activities of a business enterprise on the society.

            Although some authors argue that business ethics is a subset of corporate social responsibility while others postulate the exact opposite, most of them agree that the two concepts are not mutually exclusive (Abend, 2008; Freeman & Hasnaoui, 2011). Nevertheless, there are distinct clear cut differences between corporate social responsibility and business ethics which are discussed below.

            To begin with, while social responsibility is an obligation to the community, business ethics is a moral obligation of the business. Because all businesses operate in an environment, they have a responsibility to ensure that they coexist with the various stakeholders in that environment. The main objective of the businesses which is profit maximization should not conflict with the rights of the stakeholders. Pollution, for example, should be kept at a minimum because the inhabitants who live around the business location have a right to live in a pollution-free environment. In this case, the firm should portray corporate social responsibility by avoiding pollution and compensating those who are affected by pollution from the firm.

            On the other hand, a firm has no responsibly to initiate clean-up projects for instance if it does not pollute the environment, neither does it have a responsibility to assist those who are needy in the society. Some firms will, however, find it morally upright to engage in such projects, it would also weigh on their conscience to assist the needy in the society. Whether the management of the firm is genuinely philanthropic or carries out a clean-up project to merely improve its corporate image, it is considered as ethical behavior by the community.

            Another difference comes in when we look at how the community benefits, there is a tradeoff between profits to the firm and welfare to the society. For a firm to maximize profits there might be welfare loss to the society because laws have been put in place to safeguard the welfare of the society, a business has to forego some of its profits in a bid to exercise corporate social responsibility. There are things that are good for society that is not good for business and this is where social responsibility comes in. From the perspective of ethical behavior, there is nothing that compels the firm to exercise ethical behavior but the firm does so voluntarily to create a positive public image. If a firm were to retain all its profits, it would improve its financial standing at the expense of its corporate image. This would be good for the business but bad for the society which would not only have a bad attitude towards the business but also lose out on the firm’s community projects.

The final difference between ethics and company social responsibility is in their nature. Business ethics is determined by customers, competitors, government regulators, interest groups and the general public. It generally governs the relationship between the business and its various stakeholders. Good business ethics dictates that there should be a healthy and professional relationship between the business and its stakeholders. The business cannot exist without customers, suppliers and a favorable legal environment; as such it is morally obligated to exercise ethical behavior, “no man is an island”. A business should not, therefore, engage in vices like fraud, tax evasion and misrepresentation of products. With corporate social responsibility, the business should ‘give back to society’ which avails factors of production such as land, labor, and raw materials. In the process of carrying out their activities, businesses could have undesirable impacts on society. The business should compensate the society for such impacts and engage in business more responsibly.

            In conclusion, even though there is a lot of confusion surrounding corporate social responsibility and business ethics the two concepts are totally different. They complement each other a great deal and are cannot be mutually exclusive; notwithstanding, they should not be used interchangeably as has been the norm in the past. They are several differences between them in terms of the responsibility of the business to society, the benefits to society and their nature. They should therefore not be confused and be differentiated in their application to the business world.

References

Abend, G. (2008). A Genealogy of Business Ethics. Evanston: Northwestern University.

Difference Between Business Ethics and Social Responsibility. (n.d.). Retrieved April 19, 2013, from DifferenceBetween.net: http://www.differencebetween.net/business/difference-between-business-ethics-and-social-responsibility

Farrell, O., Fraedrich, J., & Ferrel, L. (2011). Business Ethics. Mason: Erin Joyner. http://125.234.102.27/bitstream/TVDHBRVT/19528/1/BusinessEthics.pdf

Freeman, I., & Hasnaoui, A. (2011). The Meaning of Corporate Social Responsibility: The Vision of Four Nations. Journal of Business Ethics, 419-422. https://link.springer.com/article/10.1007%2Fs10551-010-0688-6

Gabriel, F. (2007). Leadership and Business Ethics. Dublin: Springer. https://www.springer.com/gp/book/9781402084287