MGT Reviewer
MGT Reviewer
MGT Reviewer
Components of CSR
• CSR is a process by which an organization thinks about and evolves its
relationships with stakeholders for the common good and demonstrates ● Economic Responsibility
CSR is a way of conducting business, by which corporate entities visibly ● Ethical Responsibility
● Sustainability
- end goal is not to simply maximize pro ts but positively impact the
environment, people, and society
● Accountability
● Transparency
Environmental Responsibility
- e ect which action taken in the present has upon the options available in Common actions:
the future
- Reducing pollution, greenhouse gas emissions, the use of single-use
- use no more of a resource than can be regenerated
plastics, water consumption, and general waste
Accountability
Transparency
Ethical Responsibility
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- fair treatment of all stakeholders, including leadership, investors,
- example, a business might set its own, higher minimum wage if the one
mandated by the state
Philanthropic Responsibility
- business aim to actively make the world and society a better place
● Legal requirements:
Economic requirements:
Carroll Model(1991)
Carroll Model(1991) ● Stakeholders are those groups that have a “stake in” or claim on the
Philanthropic requirements:
resources / activities of the company.
● Donation, gifts, helping the poor. It ensure goodwill & social welfare.
● Each has a right to be treated as a end itself not just means for
enrichment of the stockholders
Ethical requirements:
● Follow moral & ethical values to deal with all the stakeholders.
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Best Practices of CSR
• It a type of investment.
• Corporate should have some moral & social obligations to undertake for
the welfare of the society.
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THE RELATIONSHIP BETWEEN ETHICS AND In today's highly competitive environment, there is a pressure to
stay pro table for the sake of good return of investments to please
BUSINESS stakeholders. Often this pressure however, leads to unethical decisions
just to deliver positive results. When a decision-maker justi es such act
Ethics has a big role in the operations of a business. A bad knowing it is wrong, this may develop into becoming part of the
business could be the consequence of unethical business practices. While organizational structure sooner or later. Eventually, subordinates will see
e ective practices could be the outcomes of good and valuable ethical this as an example and such short of moral judgment will multiply.
practices. This simply proves that ethics and business really go hand and
hand. Indeed, ethics must have a place in every business organization.
The society nowadays desires immediate satisfaction and people
look forward to instant outcomes. This could possibly be the main
Ethics should actually start from the time the goals and intentions explanation on the unethical practices of some businesses. Certainly, bad
are being framed at the beginning of the venture. So that once a business business practices when tolerated may cultivate unsound moral
is launched, ethics already becomes a part of its internal infrastructure. philosophies which would decline moral acts. When this happen defective
Ethics should be part of the management structure of any business. It or faulty products, invalidated ring of employees, and misrepresentations
must be a component of the core rules of business operation for an of products to consumers will grow to be common in the business
e ective management. In every relationship inside the business, an environment. These practices may present an appearance of pro t, yet in
organization needs ethics as its foundation such as that of employers and the long run will have a negative and costly impact to the business. The
employees, business itself and its partners and the organization and its reputation of any business will su er ultimately with these unethical acts.
customers. For instance, an employer must have its moral obligation to The business may not necessarily close down but due to corrupt
his employees in the form of respect and loyalty, just and fair wage and practices, may not have the chance to boost revenues to its maximum
good working condition.
potential.
There must always be the motive to contribute some social There must be no basis why a business organization cannot create ethical
bene ts despite the primary objective of a business to produce pro t. A decisions and cannot act ethically while still making pro t. Deceitful and
business needs to satisfy a need or a want in order to o er something of dishonesty do not add value to a business and may also a ect its
value to its customers. Indeed, in this case a business must consider operation negatively. Employees and good reputation are two vital assets
social needs and should involve ethics in doing so. Obviously, while of a company that need to be enhanced by encouraging a morally ethical
espousing ethics, a business must not forget its primary objective which is environment for both employees and customers.
generating pro ts. Ethics must be regarded as a support and not a hinder
in making money for the business. Being hand and hand, both pro t Trust and con dence coming from consumers can serve a lot of
motive and contribution motive should go along well. Businesses that bene ts to the business company. Once a business becomes popular as a
demonstrate and support strong corporate ethics often turn to be company that treats everyone fairly, with expertise and very
pro table in the long run.
knowledgeable sta about the company, more customers would be
attracted to buy because of such reputation of honesty and integrity. The
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large network that would be created will result to a lot of economic The only way to ourish is to gain pro t. In order to control and
bene ts for the business. In this case, the company should continue to manage material reality, a person must not lose any assets or just have a
promote ethically good behavior in the workplace as its primary objective break-even. Pro ts come in a lot of di erent shapes. One may grow
for its best interest.
material reality from intellectual pro ts or gains of knowledge. A person
may also obtain pro ts from technical means or gains of skill, and material
Indeed a positive image of a company would mean higher pro ts pro ts or gains of property. A gain in health and tness is also known as
and a lot of better services intended to its customers. In order to be an physiological pro ts. A gain in valuable relationships is called social
e ective company, ethics and business should not be separated. In the pro ts. A gain of money is termed as monetary pro ts. Each person
long run it will be a win-win situation for everyone if a strong ethical policy values these types of pro ts in a di erent degree depending on the ways
is truly implemented. These days of highly competitive business in which that individual desires to ourish.
leisure goods with money. Most people purchase gift items especially
during special occasions to preserve positive social relations. Obviously,
In life, every individual will obtain some bene ts from material
some people invest their money into obtaining valuable assets to make
reality only if he acts and utilizes his reasoning. For a person to act in the
more money. Money indeed performs a big role in attaining the ourishing
ways he desires there will be expenses that he needs to spend. When a
goal in life.
man's gains are equal to his expenses, that means a break-even for him,
and he survived. Simply, this means he is no worse o than he was when
Pro t that is used to ourish and elevate one's life from poverty is
he started. When a man wants to ourish, his gains should be greater than
moral. By its very nature money cannot destroy a man’s life. Although,
his expenses. Hence, it necessitates for him to produce a pro t.
some people assert that money may unmake the lives of others. This also
is something very impossible to happen.
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A man may basically generate pro ts in two ways. First he can cause resources to be ine ciently distributed away from their most
take an action bene cial to himself but is immaterial to the rest of people. advantageous uses. If the businessman gains pro t this way, it means he
Possibly, he may pursue an action towards his individual's self- is able to place the resources to an improved application than before.
improvement or a direct change of nonliving things without the Simply, people around him are agreeable to pay him more than previously
involvement of anyone. In this situation, no person is placed in danger and because of this new allocation of resources. Through removing arbitrage
there will be a lot of indirect advantages to other people coming from the opportunities, business people are able to correct market aws and
results of the person's self-improvement and his direct change of balance supply and demand to fully satisfy human needs.
nonliving things. Secondly, he may secure the participation and team with
other people to attain an objective that is helpful to everyone. An Further, mandatory economic rules would stop every individual in
individual may connect with a charitable trade with someone or work in discovering how to ourish in his own approach, other people might be
partnership with others on a project or just bond in a mutually cherished
harmed. Those market aws that have been corrected might come back,
friendship. Here, in this condition, there would be direct advantages to remain and shall keep on resulting to misappropriated resources. A lot of
other people, which earning a pro t might be one of them.
bene cial and worthwhile trades for everyone will be hindered. Sadly,
numerous people will discontinue improving themselves and limitations on
Man needs to be free in obtaining pro t. He must rely on his own certain activities such as money-making will not ourish. In its place, there
reasoning to make a choice on what is pro table for him and decide on will be great losses because of the useless and damaging rigid system.
how he does it. He cannot act in his best interest or ourish up to his
ceiling if he would be restricted to follow his choice or someone shall If ourishing is moral and improving oneself is moral, then the
enforce unbene cial strategy on him. He needs laissez-faire capitalism to pursuit of pro t is the same. If pursuing pro t is moral, so men could do
let him ourish freely. Laissez- faire capitalism is a political, social, and economic activities freely. Hence, with this line of logic everyone supports
economic system which allows everyone to do pro t-seeking activities the highest economic autonomy under the principle of laissez-faire
without any complications or interventions. Under the principle of laissez- capitalism.
faire, anyone has the autonomy to make a decision on the value he will
give to each kind of pro t, the manners he will use to gain said pro t and
kinds of connections he will pursue with others to ourish.
Profit for Christians
In addition, in order for a businessman to gain pro t on the free
The Bible is the base ethics of all Christians. Pro t is a very di cult
market, he must monitor and remove arbitrage opportunities which come
issue, considering most Christians have the viewpoint that the Word of
from extensive inaccuracies of opinion. Arbitrage opportunity is an
God says any point of it is unethical.
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more bene ts than cost is the resulting pro t. In the present time, pro t is such quantity of money could also be spent into other advantageous uses
actually a reward for doing something that is helpful to other people.
such as food and clothing. While in this world, Christians as humans also
need to consider materials things as necessary like food, clothing, shelter,
Obviously, one must not take advantage of one's su ering by medical care and education among others. Once again the important sign
taking the situation as an opportunity for pro t. The presence of is given by pro t.
from reducing pain or curing certain illnesses. The housing problem could
be answered by a construction business through building shelters for a
pro t. Schools make pro ts by o ering courses that would increase the What Makes Profits Unethical
knowledge of students. The wages of employees are their pro t in
exchange for using their time and abilities by their employers.
Employees
Deciding on various opposing needs is also critical. Say for
Reducing or even not providing the required bene ts due to employees to
instance that a person has a million pesos for his disposal with the
minimize costs is one of the most common unethical practices in
requirement of spending them for a much critical needs, so how will he
companies. In almost all industries, the largest percentage of expense
use such amount of money? The answer for numerous Christians would
concerns payroll. This bad practice of getting rid of bene ts has become
primarily be donating the money to the ministry of the gospel. However,
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an ethical issue that results to poor morale among employees in the 1. Air Pollution - It is any alteration of the physical, chemical and biological
workplace. In small businesses that have only few employees, this could properties of the atmospheric air.
Marketing 3. Noise Pollution - It is the excessive sound that causes hearing loss,
A company' marketing may contribute a lot to its generating of pro ts. A stress, fatigue, irritability, tension, headaches, and high blood pressure.
common reason for these unethical practices is cost. It is highly costly for
companies to positively impact the environment, especially for small
businesses. There is a need for a lot of extra cash to continuously operate ETHICS AND MORALITY IN BUSINESS
a much safer factory or plant. Producing pollutants may seem to be an
advantage and less costly although it may bring a negative impact to the It is basically ethics that decides whether certain actions, conducts
environment.
and behavior are right or wrong, good or bad, moral or immoral and just or
unjust. In general, ethics creates the rules and standards that direct the
Environmental pollution could be in the form of: proper behavior of both individuals and groups. It considers honesty of
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primary intention, possible would-be harm and harmony with customary 3. Gives protection to social groups - Business ethics give protection to
values and rules.
di erent social groups such as consumers, employees, small
businessmen, government, shareholders, creditors, and other
On the other hand, morals are judgments, standards and rules of stakeholders.
happen.
activities but by fair means and not through illegal activities or corrupt
practices.
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Sources of Business Ethics common that are transferred from one generation to another. It also refers
to the pattern of development re ected in a society's pattern of
knowledge, ideology, values, laws, social norms and everyday rituals
Basically, ethics in business is a ected by three important sources
di ers from society to society. It is the culture that primarily determines
which are culture, religion and laws of the state. Thus, there are no
what is wrong and what is right and de nes certain behavior as
uniform or totally the same standards across the globe. These three
acceptable and others as unacceptable.
real and signi cant (for example God, Allah, the Tao, and Brahman). It is
mechanism that guides and shapes the attitudes and behavior of people.
the belief that wrongdoing, vice, disillusionment, and illusion may be
Managers have to run an industrial enterprise on the cutting edge of
defeated by grace, prayer, practices. In addition, living in harmony, unity,
cultural experience. The tension that their actions create makes the
or friendship with what is real and signi cant are all part of religion. A
business ethically more complex.
Laws are procedures and code of conduct that are laid down by
the legal system of the state. They are meant to guide human behavior
Religion is one of the oldest foundations of ethical standards.
within the social fabric. The major problem with the law is that all the
There are numerous religions which exist across the whole world. Every
ethical expectations cannot be covered by the law and specially with ever
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CHAPTER 3
Basic Elements of Good Governance
GOOD GOVERNANCE AND CODE ETHICS
• Rule of Law
“Where do the evils like corruption arise from? It comes from never- Good governance requires the rule of law.Rule of law is the protection of
ending greed.The ght for a corruption-free ethical society will have to be human rights and civil liberties particularly those of minorities by the
fought against this greed and replace it with ‘what san I give’ spirit”.
independent,unbiased and principled law enforcement agencies.
-A.P.J.Abdul Kalam
• Transparency
Governance describes the overall management approach through Good governance requires transparency of the decision- making process
which senior executives direct and control the entire organization, using a to make certain that information is easily and freely obtainable to those
combination of management information and hierarchical management who will be a ected by such decisions as well as the outcomes resulting
control structures.
by the decision taken.
in its totality.
Responsiveness is a requirement in governance.
• Consensus oriented
interest of the entire stakeholder group and how thus can be achieved in a
practical way.
organization or society must feel the sense of belongingness and must not
which something is governed”.
authority”.
1. A sense of uniqueness
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2. A sense of belonging
INDIVIDUALS INFLUENCES ON ETHICAL
Employees on the other hand,experience a sense of exclusion when
BEHAVIOR
they feel:
Individual FactorsA ecting Ethics
1. Degraded, dismissed, or discounted for the exceptional qualities they
bring to the company.
1. Stages of moral development
2. Treated like outsiders because of their di erences such gender, race/ 3. Family in uences
6. Social norms
7. Religious beliefs
BEHAVIOR
Accountability is a key requisite of good governance. Institutions such as
government agencies,civil society,and the private sector ought to be
➢ Issue Related
institutional stakeholders.
• Participation
5.Concentration of e ect
➢ Ethics
➢ Values
➢ Morals
Moral Framing
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1. Harmony
2. E ciency
Context Related
1. Reward
2. Authority
3. Bureaucracy
4. Work Roles
5. Organizational Cultures
6. National Context
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