Ethics and Sustainability Flashcards
Corporate Social Responsibility (CSR)
the conduct of business so that is:
- economically profitable
- law abiding
- ethical
- socially supporting
Elements of CSR (5)
- Equal opportunities (non- discrimination)
- Human rights and labor standards
- Fair wages and trade
- Environmental practices
- CSR reporting
CSR Stakeholders (4)
- communities
- customers
- employees
- shareholders
Utilitarian Method of Ethical Decision Making
Actions have consequences. Maximize good and minimize harm.
Limitations: difficult to measure/compare “good” and “harm”
Rights Method of Ethical Decision Making
All humans have fundamental rights that should be respected
Limitations: conflicting rights are difficult to balance
Justice Method of Ethical Decision Making
All benefits and costs should be fairly distributed
**inequality is justified to benefit the least advantaged person
Limitations: difficult to determine the definition of a “fair share”
Caroll’s Pyramid of CSR
- Economic Responsibility
- Legal Responsibility
- Ethical Responsibility
- Philanthropic Responsibility
Triple Bottom Line (3BL)
Three measurements of success that are reported as a part of committing to CSR
- Economic
- Environmental
- Social
Shareholder v. Stakeholder Capitalism
Shareholder: the company’s highest priority is increasing shareholder value (old system)
Stakeholder: The company works to benefit all stakeholders that are impacted by the company (new system)
Benefits of CSR (4)
- increases consumer trust and brand loyalty
- differentiation from competitors
- good PR
- legal protections
Managers’ Views of CSR
- CSR professionals are unsure whether it adds value
- some argue it adds about 2-5%
- CFOs argue it adds no value
What Should I Do? v. What Could I Do?
Should: a more constricting question → ethical principles control your actions
Could: give the decision maker autonomy/control → encourages creative problem solving to balance competing values
