ethics csrr 1

8/8/2019 Ethics CSRR 1

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Ethics

&

Corporate Social Responsibility


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Ethics A live example of Merck

Dr. P. Roy Vagelos, There may be noinherent conflict between ethical behavior

and pursuit of profit. On the contrary ethicalbehavior creates the kind of goodwill andreputation that expand opportunities for

profit.


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ETHICS AND MORALITY

Ethics is the study of Morality. It is a kind of

investigation that includes both the activity of

investigating and the results of investigation.

Morality is the subject matter that ethics investigates

Morality are the standards that an individual or a group

has about what is right and wrong , or good or evil

CASE: B.F Goodrich v/s Kermit VandivierCharacteristics: injury, not establishes by authoritative

bodies, moral standards v/s self-interests, justice,

emotions


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Ethics Trying to Define

Ethics is a mass of moral principles orsets of values about what conduct oughtto be.

Business ethics is a specialized study of

moral standards as they apply tobusiness policies, institutions andbehavior.


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Scope of Business Ethics

At Societal Level:

Concern for poor and downtrodden

No discrimination against any particular sectionor group

Concern for clean environment

Preservation of scarce resources

Contributing to better quality of life


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At Stakeholders Level:

A. Employees

Security of job

Better working conditions

Better recommendation

Participative management

Welfare activities


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B. Customers

Better quality of goods

Goods and services at reasonable price

Not to practice discriminatory pricing

Not to make false claims about products inadvertisements


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C. Shareholders

Ensure capital appreciation

Ensure steady and regular dividend

Disclose all relevant information

Not to window dress balance sheet

Protect interest in times of mergers,

amalgamations and takeovers


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D. Banks and other lending institutions

Guarantee safety of borrowed funds

Prompt repayment of loans


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E. Government

Complying with rules and regulations

Honesty in paying taxes and other dues

Acting as partner in the progress of the country


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At Internal Policy Level:

Fair practices related to internal issues

Better communication at all levels


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At Personal Policy Level:

Not to misuse others for personal ends

Not to indulge in politics to gain power

Not to spoil promotional chances of others

Not to use office facilities for personal use


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Myths about Business Ethics

Business Ethics is more a matter of religion

than management

Our employees are ethical so we dont needattention to business ethics

An action is either right or wrong

Good employees do not do bad things You are born with your morality


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CSR Trying to Define

A commitment to improve community

well being through discretionarybusiness practices and contributions of

corporate resources.Philip Kotler and

Nancy Lee (2005)


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CSR Trying to Define

CSR is the continuing commitment by

businesses to behave ethically and

contribute to economic developmentwhile improving the quality of life of

the workforce and their families as well

as of the local community and societyat large .World Business Council for

Sustainable Development


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CSR Common Principles

underlining

CSR is a business imperative Whether

pursued as a voluntary corporateinitiative or for legal compliance reasons,

CSR will achieve its intended objectives

only if business truly believe that CSR isbeneficial to them.


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underlining

CSR is a link to sustainable development

Businesses feel that there is a need tointegrate social, economic and

environmental impact in their operation


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underlining

CSR is a way to manage business CSR is

not an additional add on to business, butit is about the way in which businesses

are managed.


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CSR A Historical Perspective

The concept of CSR in India is not new, the

term may be.

Philosophers like Kautilya from India and

pre-Christian era philosophers in the Westpreached and promoted ethical principles

while doing business


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The idea was also supported by several

religions where it has been intertwined with

religious laws.

Zakaat followed by Muslims

Dhramada followed by HindusDaashaant followed by Sikhs


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In the global context, the recent history goes

back to the seventeenth century when in

1790s, England witnessed the first large

scale consumer boycott over the issue of

slave harvested sugar.


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The term CSR came into common use in the

early 1970s.

By late 1990s, the concept was fully

recognized, people and institutions acrossall sections of society started supporting it.


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Facts: 1977 less than half of the Fortune 500

firms mentioned CSR in their Annual

Report.

By the end of 1990, 90% of the Fortune 500

firms included CSR in their Organizational

Goals and actively promoted their CSR

activities in Annual Reports.


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Social Responsibility...

an organizations obligation to maximize its

positive impact on stakeholders and tominimize its negative impact

includes legal, ethical, economic, and

philanthropic (discretionary) dimensions


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Legal Dimension...

refers to obeying governmental laws andregulations

civil law: rights & duties of individuals andorganizations

criminal law: prohibits specific actions andimposes fines and/or imprisonment aspunishment for breaking the law


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Ethical Dimension...

behaviors and activities that are expected or

prohibited by organizational members, the

community, and society (not codified intolaw)

standards, norms, or expectations that

reflect the concern of major stakeholders


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Economic Responsibilities...

how resources for the production of goods

and services are distributed within the social

system

Do you think consumers favor socially

responsible companies or are they most

enamored with companies that maximizeprofits?


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Philanthropic Dimension...

businesss contributions to society

strategic philanthropy Strategic philanthropy is a unique and powerful

way to combine your company marketing goals

with your desire to increase the well-being of

mankind. Two of the more popular names are cause -

related marketing or community partnering.


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Why Social Responsibility for Business?

Arguments against Social Responsibility

Contrary to basic functions of business

Domination of Business ValuesInefficiency in the system

Arguments for Social Responsibility

Business: A Part of the SocietyAvoidance of Govt Regulations

Long-run self interest of Business


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Principles of corporate citizenship

Good corporate citizens strive to conduct all business dealings in an ethical

manner, make a concerned effort to balance the needs of all stakeholders,

while working to protect the environment.

1) Engages in fair and honest business practices in its relationship with stakeholders.

2) Sets high standards of behavior for all employees.

3) Exercises ethical oversight of the executive and board levels.

4) Strives to manage the company for the benefit of all stakeholders.

5) Initiates and engages in genuine dialogue with stakeholders.

6) Values and implements dialogue.

7) Fosters a reciprocal relationship between the corporation and community.

8) Invests in the communities in which corporation operates.

9) Respects the rights of consumers.


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CASE: Lifebuoy Swasthya Chetna

HLL is a premier fast moving consumer goods company operating in India.

Its various products have been categorized into three broad groups-home &personal care, food & beverages, and industrial and agricultural.

Lifebuoy is the brand name of toilet soap manufactured and marketed by HLL.This soap is positioned as a means for improving health & hygiene.

In order to increase awareness of health & hygiene in rural India, HLL launcheda five-year Lifebuoy Swasthya Chetna (LSC) programme in 2002 in eight statesacross India.

The objective of this programme was to educate around 200 million people inrural areas about the importance of health & hygiene practices.

The programme aimed to debunk the misconception that visibly clean is safeclean.

It spread awareness about germs and their adverse impact on health, and howproper health & hygiene practices, such as bathing and washing hands with soapcould prevent diseases like diarrhea, the 2nd largest cause of death amongchildren in India.


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The LSC programme was implemented in various phases.

In initial phase, HLL executives interacted with school children and other

influencers like medical practitioners and panchayat members.

People were educated about health & hygiene practices through lectures,

demonstrations, use of visual aids, & quizzes. The programme used media vehicles like cinema vans, wall paintings, weekly

markets, fairs, & festivals.

The programme was later extended to parents & other adults.

The messages on health & hygiene were reinforced through regular contact

programmes. Finally, children & parents were recruited as volunteers to start health clubs that

would help sustain the health & hygiene awareness.

At each stage, LSC programme involved local community in the programme so

that the beneficiaries saw this as their own programme & felt a sense of

ownership.


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For making LSC programme successful, HLL had committed Rs. 240 million to

be spent over a period of five years.

By the end of 2006, HLL had covered around 27,000 villages across the country.

According to the company, LSC programme was not a philanthrophic activity,

but a marketing programme with a social benefit. HLL sought to grow Lifebuoy brand in India by attracting consumers who never

used a soap.

In th eprocess, the company sought to bring about a behavioural change by

convincing people to use soaps more frequently, thus, creating more users for its

brands. On April 7, 2006, on the occasion of Wworld Health Day, the Department of

Posts of Govt of India released a special Lifebuoy Swasthya Chetna Postal

Cover, making Lifebuoy the Indias brand to be featured on a postal cover.

The special cover was released in recognition of the work done by HLL to

increase awareness of health & hygiene in rural India.


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Questions:

Comment on the social responsiveness of

HLL that is reflected in Lifebuoy Swasthya

Chetna programme.

In what way, will this programme benefit to

the society?

ethics csrr 1

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