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Ethics and Social Responsibility

UNIT 8

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

READING SECTION

READING I.

ETHICS AND BUSINESS

Before you read

Key terms

Match the terms with their definitions.

Think ahead

1. Do you think there is a difference between ‘social responsibility’ and ‘ethics’? What is the purpose of business in your opinion? Give your reasons.

2. Match the following companies’ principles with the type of social responsibility strategies:

1) Go with the flow. a) obstructive

2) It is not our responsibility. b) defensive

3) Build a better society. c) adaptive

4) We do our best. d) proactive

TEXT 8.1. Read the text and discuss the difference between ‘ethics’, ‘business ethics’, ‘social responsibility’, ‘legal responsibility’.

Ethics and Social Responsibility

Ethics is concerned with the code of values and principles that enables a person to choose between right and wrong and therefore select among alternative courses of action.

Ethics is about norms, values, rights and responsibilities, sharing, fairness, obligation and exchange. It is more than just understanding the rules and how they apply to cases. It includes study of the origins of the rules and how they are developed and elaborated through experience of their application. An organization is such a community, one of whose purposes is to establish rules by which its members make decisions. Whether this happens formally, through the setting out of codes of conduct, or informally, through the gradual diffusion of the principles of the leaders, depends on the organization itself.

The subject of business ethics, however, looks at more than the issue of behaving in a socially responsible manner. Business ethics focuses on a wide range of conduct by managers and employees. Moreover, the focus is on both the results and the means to achieve this result. For example, most people would feel that bribing a foreign official to obtain a contract is unethical.

Scientists debate a lot what the purpose of organizations is. On the one hand, there are those who consider that an organization is an economic entity and should be solely concerned with being efficient in the utilization of its resources.

On the other hand, there are those who consider that organizations are more than economic entities. This view states that the modern organization is a part of an environment consisting of many components that the organization is dependent on for its very survival.

It is important to differentiate between the concepts of legal and social responsibility. Legal responsibility deals with specific laws and regulations that dictate what an organization may and may not do. There are hundreds, even thousands, of laws and regulations on such topics as how much toxic substances can be contained in industrial waste, what constitutes discrimination in hiring, what are minimal standards for product safety, what type of exports cannot be sold to foreign countries. An organization that obeys all these laws and regulations is behaving in a legally responsible way, but it is not necessarily being socially responsible.

Social responsibility, in contrast to legal responsibility, involves a degree of voluntary response from the organization. This response is above and beyond what is specified by a law or regulatory agency. For example, an organization that is supposed to hire 15 percent national minorities and does in fact hire 15 percent is legally responsible, but would not necessarily be considered socially responsible in the area of minority hiring. On the other hand, compliance with the law does not imply that the organization is socially irresponsible either. Another organization that hires more than 15 percent national minorities would be considered to be socially responsible in the area of minority-hiring practices. This same organization, however, might be violating laws regarding false advertising and would not be behaving in a legally responsible manner in that area.