business ethics and corporate social responsibility assignment

Preparation

Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, or responsible business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a self-regulatory mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and national or international norms. With some models, a firm’s implementation of CSR goes beyond compliance and engages in “actions that appear to further some social good, beyond the interests of the firm and that which is required by law.” The aim is to increase long-term profits and shareholder trust through positive public relations and high ethical standards to reduce business and legal risk by taking responsibility for corporate actions. CSR strategies encourage the company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.

Every year, Reputation Institute , a private global consulting firm based in New York, invites about 47,000 consumers, across fifteen markets, to participate in a study that ranks the world’s one hundred most reputable companies—all multinational businesses with a global presence. One of their recent studies found that 42 percent of how people feel about a company is based on their perceptions of the firm’s corporate social responsibility (CSR).

• Select a company (domestic or international) that will be the basis for your research.
• Research the company’s record in the area of CSR. Be sure to look at both their domestic and well as international reputation.
• A good place to begin your research is the LibGuide at Rutgers University: http://libguides.rutgers.edu/csr
• A brief (one-paragraph) summary of the business you selected.
• According to your research, how does the company rank with regard to CSR? Be sure to provide a source for this ranking!
• Describe specific examples of corporate actions that resulted in this company’s ranking.
• Does a company’s approach to CSR influence your purchasing decisions? Why or why not?

DO NOT write your paper as a series of answers to these numbered questions. This assignment should follow the written assignment guidelines for the course. Be sure to include APA-formatted citations of the Web sites or other sources you used for your research.

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15: Module 6- Business Ethics and Corporate Social Responsibility

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• Page ID 45309
• 15.1: Introduction to Ethical and Legal Behavior
• 15.2: Ethical and Legal Behavior
• 15.3: Introduction to Business Ethics
• 15.4: Building Business Ethics
• 15.5: Introduction to Ethical Challenges
• 15.6: Bribery and Kickbacks
• 15.7: Conflict of Interest
• 15.8: Whistleblowing
• 15.9: Examples of Unethical Business Behavior
• 15.10: Case Study- Microsoft’s Gift to Bloggers
• 15.11: Introduction to Corporate Social Responsibility
• 15.12: Corporate Social Responsibility
• 15.13: Examples of Corporate Social Responsibility
• 15.14: Case Study- Social Entrepreneurship at Tom’s Shoes
• 15.15: Controversies Surrounding CSR
• 15.16: Putting It Together- Business Ethics and Corporate Social Responsibility
• 15.17: Discussion- It’s Not Stealing if You Pay For It, Is It?
• 15.18: Discussion- Are They Simply Guidelines?
• 15.19: Why It Matters- Business Ethics and Corporate Social Responsibility
• 15.20: Assignment- What They Don’t Know Won’t Hurt Me
• 15.21: Assignment- Corporate Social Responsibility
• 15.22: Assignment- Business Ethics and Corporate Social Responsibility

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Chapter 2: Business Ethics and Social Responsibility

2.1 Misgoverning Corporations: An Overview 2.2 The Individual Approach to Ethics 2.3 Identifying Ethical Issues 2.4 The Organizational Approach to Ethics 2.5 Corporate Social Responsibility 2.6 Environmentalism 2.7 Stages of Corporate Responsibility 2.8 Cases and Problems

Exploring Business Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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11.4 Corporate Ethics and Social Responsibility

What is corporate social responsibility.

As introduced early in this chapter , Corporate Social Responsibility (CSR) “is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. By practicing corporate social responsibility, also referred to simply as social responsibility, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental” (Chen, 2020). Philanthropy is the simplest form of CSR, where a firm donates funds to a nonprofit organization such as the local volunteer rescue squad or the American Cancer Society. However, CSR can take many forms, with the end result that society benefits in some way. Environmental efforts in CSR might include reducing the company’s pollution or helping to clean up the plastic that washes up on beaches. Supporting the local literacy volunteers by encouraging employees to participate to help adults learn to read and write provides a social benefit.

The CSR approach is not without controversy. When CSR was introduced, the famous economist Milton Friedman opposed CSR on philosophical grounds. He believed, as some others did, that no profits should be diverted for CSR activities. The logic was that company investors and stockholders took a risk when they invested in the company, and therefore the company’s first obligation is to them. On the other hand, many who practice CSR believe that CSR activities ultimately do benefit the company investors and stockholders. The belief is that having a CSR strategy provides good public relations for the firm and enhances their brand image, creating loyalty and more sales long term. For example, some consumers may specifically shop for TOMS shoes because of the firm’s Buy One, Give One model, where the consumer feels their purchase is providing a positive social impact.

Some examples of CSR efforts are:

• Reducing their carbon footprint—Coca Cola
• Ensuring contract manufacturers pay a living wage—Patagonia
• Improving sustainable manufacturing—BMW
• Matches employees’ donations to nonprofits—Microsoft and Google
• Reducing carbon emissions—United Airlines
• Promoting literacy among children—Twitter
• Eliminating foam cups—Dunkin’
• Donating employees’ hours to children’s tutoring—Salesforce

One criticism of CSR is that it is seen as an “add on” endeavor for firms. Often, CSR is not an ingrained component of the firm’s philosophy and operations. In response to this criticism, a rather new movement emerged in an attempt to remedy this deficiency. Michael Porter and Mark Kramer suggest that instead of CSR, wise corporations are shifting to a Creating Shared Value (CSV) model that argues that firms should address social issues by creating shared value, which is fundamentally focused on expanding the total pool of social and economic resources (Porter & Kramer, 2006; Porter & Kramer, 2011). Porter and Kramer re-frame the business proposition by trying to recognize that “societal needs, not just conventional economic needs, define markets, and social harms can create internal costs for firms” (Porter & Kramer, 2011).

Creating shared value (CSV) is a business strategy that creates a direct link between the success of the firm and the improvement of society. Generally, CSV can be considered to be a particular strategic approach within the more general CSR landscape. A key differentiating detail is the explicit focus of CSV in generating positive economic outcomes through its strategic investments. As a company prospers economically, so do those it impacts. However, CSV and CSR both take a longer-term, rather than a short-term, approach to measuring impact. For example, Whole Foods was one of the most high profile companies to adopt CSV as a guiding strategy. This strategy translated into investing in local schools to ensure a well prepared work force and supporting local agricultural communities so it could reliably source produce from local vendors. While one traditional view of “business as usual” is that when a company prospers, it is at the expense of the consumer and society. CSV and CSR flip this view.

Section Videos

Business Ethics: Corporate Social Responsibility [02:56]

The video for this lesson further explains corporate social responsibility.

You can view this video here: https://youtu.be/xoE8XlcDUI8 .

Insight: Ideas for Change—Michael Porter—Creating Shared Value [14:09]

The video for this lesson focuses on the differences between CSR and CSV.

You can view this video here: https://youtu.be/xuG-1wYHOjY .

Measuring Corporate Social Performance

TOMS Shoes’ commitment to donating a pair of shoes for every pair sold illustrates the concept of social entrepreneurship, in which a business is created with a goal of improving both business and society (Schectman, 2010). Using a CSR model, firms such as TOMS exemplify a desire to improve corporate social performance (CSP) in which a commitment to individuals, communities, and the natural environment is valued alongside the goal of creating economic value. Although determining the level of a firm’s social responsibility is subjective, this challenge has been addressed by other organizations that rate firms on a number of stakeholder-related issues with the goal of measuring CSP. They conduct ongoing research on social, governance, and environmental performance metrics of publicly traded firms and reports such statistics to institutional investors. For example, the KLD database provides ratings on numerous “strengths” and “concerns” for each firm along a number of dimensions associated with corporate social performance (Table 11.6 “Measuring Corporate Social Performance”). The results of their assessment are used to develop the Domini social investments fund, which has performed at levels roughly equivalent to the S&P 500. Some rating firms use an ESG framework for evaluating a firm. ESG stands for Environmental, Social, and Governance, and measures within each of these three dimensions are used to score a company.

Corporate social performance is defined as the degree to which a firm’s actions honor ethical values that respect individuals, communities, and the natural environment. Determining whether a firm is socially responsible is somewhat subjective, but one popular approach has been developed by KLD Research & Analytics. Their work tracks “strengths” and “concerns” for hundreds of firms over time. KLD’s findings are used by investors to screen socially responsible firms and by scholars who are interested in explaining corporate social performance. We illustrate the six key dimensions tracked by KLD below.

Assessing the community dimension of CSP is accomplished by assessing community strengths, such as charitable or innovative giving that supports housing, education, or relations with indigenous peoples, as well as charitable efforts worldwide, such as volunteer efforts or in-kind giving. A firm’s CSP rating is lowered when a firm is involved in tax controversies or other negative actions that affect the community, such as plant closings that can negatively affect property values.

CSP diversity strengths are scored positively when the company is known for promoting women and minorities, especially for board membership and the CEO position. Employment of persons with disabilities and the presence of family benefits such as child or elder care would also result in a positive score by KLD. Diversity concerns include fines or civil penalties in conjunction with an affirmative action or other diversity-related controversy. Lack of representation by women on top management positions—suggesting that a glass ceiling is present at a company—would also negatively impact scoring on this dimension.

The employee relations dimension of CSP gauges potential strengths such as notable union relations, profit sharing and employee stock-option plans, favorable retirement benefits, and positive health and safety programs noted by the US Occupational Health and Safety Administration. Employee relations concerns would be evident in poor union relations, as well as fines paid due to violations of health and safety standards. Substantial workforce reductions as well as concerns about adequate funding of pension plans also warrant concern for this dimension.

The environmental dimension records strengths by examining engagement in recycling, preventing pollution, or using alternative energies. KLD would also score a firm positively if profits derived from environmental products or services were a part of the company’s business. Environmental concerns such as penalties for hazardous waste, air, water, or other violations or actions such as the production of goods or services that could negatively impact the environment would reduce a firm’s CSP score.

Product quality/safety strengths exist when a firm has an established and/or recognized quality program; product quality safety concerns are evident when fines related to product quality and/or safety have been discovered or when a firm has been engaged in questionable marketing practices or paid fines related to antitrust practices or price fixing.

Corporate governance strengths are evident when lower levels of compensation for top management and board members exist, or when the firm owns considerable interest in another company rated favorably by KLD; corporate governance concerns arise when executive compensation is high or when controversies related to accounting, transparency, or political accountability exist.

Key Takeaway

• Many companies have adopted a Corporate Social Responsibility (CSR) philosophy to make improvements in the communities and society they operate. CSR is evolving to a Creating Shared Value (CSV) model which integrates the profit motive with solving social issues. Firms such as KLD provide objective measures of both positive and negative actions related to corporate social performance.
• How would your college or university fare if rated on the dimensions of CSR? Of CSV?
• Do you believe that executives behave more ethically as a result of legislation such as the Sarbanes-Oxley Act? Why or why not?

Chen, J. (2020, February 22). Corporate Social Responsibility (CSR) . Investopedia. https://www.investopedia.com/terms/c/corp-social-responsibility.asp .

Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review , 84(12), 78-92.

Porter, M. E., & Kramer, M. R. (2011). Creating Shared Value. Harvard Business Review .

Schectman, J. (2010). Good Business. Newsweek , 156, 50.

Image Credits

Figure 11.3: Kindred Grey (2020). “Business responsibilities.” CC BY-SA 4.0 . Retrieved from: https://commons.wikimedia.org/wiki/File:Business_responsibilities.png .

Figure 11.4: Chick-fil A. (2020). Photo used under Fair Use. Scholarship winners. Retrieved from https://thechickenwire.chick-fil-a.com/news/chick-fil-a-to-award-17-million-in-team-member-scholarships-in-2020 .

Video Credits

Study.com. (2013, December 31). Business Ethics: Corporate Social Responsibility. Retrieved from https://youtu.be/xoE8XlcDUI8 .

World Economic Forum. (2012, September 6). Insight: Ideas for Change-Michael Porter-Creating Shared Value. Retrieved from https://youtu.be/xuG-1wYHOjY .

Efforts by a firm to be socially accountable by contributing to community and/or societal goals through philanthropic, activist, or charitable activities

A business model whereby society’s needs and challenges are addressed as a firm prospers achieving its mission

Measuring the impact of a firm’s activities in corporate social responsibility

Strategic Management Copyright © 2020 by Reed Kennedy is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Module 6: Business Ethics and Corporate Social Responsibility

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Assessment Questions

Which of these concepts relates to utilitarianism?

• consequences

True or false? According to the Greek system of logic introduced by Socrates, normative ethical theories ultimately are grounded in reason.

Explain why ethical responsibilities go beyond legal compliance.

Describe the difference between normative and descriptive ethical theories.

Which of the following is not a stakeholder?

• corporate culture
• the environment

True or false? According to Milton Friedman, a company’s social responsibility consists solely of bettering the welfare of society.

What is corporate social responsibility (CSR)?

Describe a practical way to prioritize the claims of stakeholders.

Describe how a company’s ethical business practices affect its goodwill.

True or false? Family is generally a strong influence on our ethical standards.

Which normative ethical theory supports the idea of holding multiple ethical standards?

• utilitarianism
• virtue ethics
• none of the above

Describe the benefits of having a single ethical standard.

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Introducing Ethics and Corporate Social Responsibility at Undergraduate Level in the United Arab Emirates: An Experiential Exercise on Website Communication

• Published: 11 September 2011
• Volume 107 , pages 103–109, ( 2012 )

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• Valerie Priscilla Goby 1 &
• Catherine Nickerson 1  

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In this article, we describe an assignment undertaken by our third-year students at a University Business School in the United Arab Emirates. The assignment serves to introduce corporate social responsibility and ethics in the undergraduate curriculum and to raise student awareness of how corporate activity together with corporate social responsibility can impact a country’s social, political, and cultural landscapes. We outline the assignment, student response to it, and its contribution to student intellectual development in terms of ethical perspective, philanthropy versus ethics, economic development, and cultural diversity. We discuss the implications of this learning experience for our students and their greater understanding of items within the United Arab Emirates government’s strategic directions, namely, creating a cohesive society and a sustainable environment.

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Goby, V.P., Nickerson, C. Introducing Ethics and Corporate Social Responsibility at Undergraduate Level in the United Arab Emirates: An Experiential Exercise on Website Communication. J Bus Ethics 107 , 103–109 (2012). https://doi.org/10.1007/s10551-011-1025-4

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Received : 28 June 2011

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Published : 11 September 2011

Issue Date : May 2012

DOI : https://doi.org/10.1007/s10551-011-1025-4

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5 Examples of Corporate Social Responsibility That Were Successful

• 06 Jun 2019

Business is about more than just making a profit. Climate change, economic inequality, and other global challenges that impact communities worldwide have compelled companies to be purpose-driven and contribute to the greater good .

In a recent study by Deloitte , 93 percent of business leaders said they believe companies aren't just employers, but stewards of society. In addition, 95 percent reported they’re planning to take a stronger stance on large-scale issues in the coming years and devote significant resources to socially responsible initiatives. With more CEOs turning their focus to the long term, it’s important to consider what you can do in your career to make an impact .

Access your free e-book today.

What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a business model in which for-profit companies seek ways to create social and environmental benefits while pursuing organizational goals, like revenue growth and maximizing shareholder value .

Today’s organizations are implementing extensive corporate social responsibility programs, with many companies dedicating C-level executive roles and entire departments to social and environmental initiatives. These executives are commonly referred to as a chief officer of corporate social responsibility or chief sustainability officer (CSO).

There are many types of corporate social responsibility and CSR might look different for each organization, but the end goal is always the same: Do well by doing good . Companies that embrace corporate social responsibility aim to maintain profitability while supporting a larger purpose.

Rather than simply focusing on generating profit, or the bottom line, socially responsible companies are concerned with the triple bottom line , which considers the impact that business decisions have on profit, people, and the planet.

It’s no coincidence that some of today’s most profitable organizations are also socially responsible. Here are five examples of successful corporate social responsibility you can use to drive social change at your organization.

5 Corporate Social Responsibility Examples

1. lego’s commitment to sustainability.

As one of the most reputable companies in the world, Lego aims to not only help children develop through creative play, but foster a healthy planet.

Lego is the first, and only, toy company to be named a World Wildlife Fund Climate Savers Partner , marking its pledge to reduce its carbon impact. And its commitment to sustainability extends beyond its partnerships.

By 2030, the toymaker plans to use environmentally friendly materials to produce all of its core products and packaging—and it’s already taken key steps to achieve that goal.

Over the course of 2013 and 2014, Lego shrunk its box sizes by 14 percent , saving approximately 7,000 tons of cardboard. Then, in 2018, the company introduced 150 botanical pieces made from sustainably sourced sugarcane —a break from the petroleum-based plastic typically used to produce the company’s signature building blocks. The company has also recently committed to removing all single-use plastic packaging from its materials by 2025, among other initiatives .

Along with these changes, the toymaker has committed to investing $164 million into its Sustainable Materials Center , where researchers are experimenting with bio-based materials that can be implemented into the production process.

Through all of these initiatives, Lego is well on its way to tackling pressing environmental challenges and furthering its mission to help build a more sustainable future.

Related : What Does "Sustainability" Mean in Business?

2. Salesforce’s 1-1-1 Philanthropic Model

Beyond being a leader in the technology space, cloud-based software giant Salesforce is a trailblazer in the realm of corporate philanthropy.

Since its outset, the company has championed its 1-1-1 philanthropic model , which involves giving one percent of product, one percent of equity, and one percent of employees’ time to communities and the nonprofit sector.

To date, Salesforce employees have logged more than 5 million volunteer hours . Not only that, but the company has awarded upwards of $406 million in grants and donated to more than 40,000 nonprofit organizations and educational institutions.

In addition, through its work with San Francisco Unified and Oakland Unified School Districts, Salesforce has helped reduce algebra repeat rates and contributed to a high percentage of students receiving A’s or B’s in computer science classes.

As the company’s revenue continues to grow, Salesforce stands as a prime example of the idea that profit-making and social impact initiatives don’t have to be at odds with one another.

3. Ben & Jerry’s Social Mission

At Ben & Jerry’s, positively impacting society is just as important as producing premium ice cream.

In 2012, the company became a certified B Corporation , a business that balances purpose and profit by meeting the highest standards of social and environmental performance, public transparency, and legal accountability.

As part of its overarching commitment to leading with progressive values, the ice cream maker established the Ben & Jerry’s Foundation in 1985, an organization dedicated to supporting grassroots movements that drive social change.

Each year, the foundation awards approximately $2.5 million in grants to organizations in Vermont and across the United States. Grant recipients have included the United Workers Association, a human rights group striving to end poverty, and the Clean Air Coalition, an environmental health and justice organization based in New York.

The foundation’s work earned it a National Committee for Responsive Philanthropy Award in 2014, and it continues to sponsor efforts to find solutions to systemic problems at both local and national levels.

Related : How to Create Social Change: 4 Business Strategies

4. Levi Strauss’s Social Impact

In addition to being one of the most successful fashion brands in history, Levi’s is also one of the first to push for a more ethical and sustainable supply chain.

In 1991, the brand created its Terms of Engagement , which established its global code of conduct regarding its supply chain and set standards for workers’ rights, a safe work environment, and an environmentally-friendly production process.

To maintain its commitment in a changing world, Levi’s regularly updates its Terms of Engagement. In 2011, on the 20th anniversary of its code of conduct, Levi’s announced its Worker Well-being initiative to implement further programs focused on the health and well-being of supply chain workers.

Since 2011, the Worker Well-being initiative has been expanded to 12 countries and more than 100,000 workers have benefited from it. In 2016, the brand scaled up the initiative, vowing to expand the program to more than 300,000 workers and produce more than 80 percent of its product in Worker Well-being factories by 2025.

For its continued efforts to maintain the well-being of its people and the environment, Levi’s was named one of Engage for Good’s 2020 Golden Halo Award winners, which is the highest honor reserved for socially responsible companies.

5. Starbucks’s Commitment to Ethical Sourcing

Starbucks launched its first corporate social responsibility report in 2002 with the goal of becoming as well-known for its CSR initiatives as for its products. One of the ways the brand has fulfilled this goal is through ethical sourcing.

In 2015, Starbucks verified that 99 percent of its coffee supply chain is ethically sourced , and it seeks to boost that figure to 100 percent through continued efforts and partnerships with local coffee farmers and organizations.

The brand bases its approach on Coffee and Farmer Equity (CAFE) Practices , one of the coffee industry’s first set of ethical sourcing standards created in collaboration with Conservation International . CAFE assesses coffee farms against specific economic, social, and environmental standards, ensuring Starbucks can source its product while maintaining a positive social impact.

For its work, Starbucks was named one of the world’s most ethical companies in 2021 by Ethisphere.

The Value of Being Socially Responsible

As these firms demonstrate , a deep and abiding commitment to corporate social responsibility can pay dividends. By learning from these initiatives and taking a values-driven approach to business, you can help your organization thrive and grow, even as it confronts global challenges.

Do you want to gain a deeper understanding of the broader social and political landscape in which your organization operates? Explore our three-week Sustainable Business Strategy course and other online courses regarding business in society to learn more about how business can be a catalyst for system-level change.

This post was updated on April 15, 2022. It was originally published on June 6, 2019.

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