3. CSR and Ethical Behaviour

Step 1 of 1

3. CSR and Ethical Behaviour

Ethics could be defined as “how people should live togheter”(Warnock, 1967).

With the terms “Business ethics” we are referring to that kind of behavior that ensure that a certain required level of trust exists between consumers and various forms of market participants with businesses. For example, a portfolio manager must give the same consideration to the portfolios of family members and small individual investors. Such practices ensure that the public receives fair treatment. So it is possible to state that business ethics is characterized by a huge conflict of interests. Indeed the first goal for firms is profit maximization but they also should face issues of social responsibility and social service.  In this way ethics could be described as “the set of rules prescribing what is good or evil or what is right or wrong for people” (Warnock, 1967, 1970; Ashman, & Winstanley, 2006).  According to Adams et al. (1992, 2001) business ethics means honesty, confidence, respect and fair acting in all circumstances. Ethics can also be defined as overall fundamental principles and practices for improving the level of wellbeing humanity.

A business which does not respect ethical criteria and do not try to improve them will distrupt its integrity and unity (Aras and Crowther, 2009).

There are several kind of business ethics. Following lines reports the main definitions of ethics.

Ethical behavior and ethical business has effects not only on stakeholders and shareholders but also on the entire economy, indeed when we act ethically in business decision making process this will ensure more effective and productive utilization of economic resources. However ethics is a problematical area as there is no absolute agreement as to what constitute ethical or unethical behavior. There are different position that are summarized in the following paragraphs.

Deontological ethics: according to deontologist certain actions are right or wrong in themselves and so there are absolute ethical standards which needs to be upheld. This position do not explain how people can understand (and distinguish) what is wrong and what is right.

Teleological ethics: according to teleologicalist “the right encompassing those ac tions which maximize the good. Thus, it is a oucome which determine what is right rather than the imputs in terms of ethical standards.

Utilitarianism: utilitarianism is a theory based on the idea that outcomes are all that matter in determining what is good and that the way in which society achieves its ultimate good is thorough each person pursuing his / her own self interest.

Ethical relativism: is a theory according whom nothing is completely right or wrong. According to this view the definition of right or wrong depends on the prevailing view of a particoular individual culture or historical period.

Ethical objectivism: the view that there are universal moral principles, valid for all people at all times and climes. This has formed after a rejection of ethnocentricism and a shift in public opinion about morality.

However a concern with ethics has been introduces explicitly into organization theory and strategy in recent years and this has led to an increased interest in CSR.