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IMPORTANCE OF ETHICS AND SOCIAL RESPONSIBILITY IN ORGANIZATIONS

PRESENTED BY: MEHREEN MASOOD NAYAB REHMAN RUHMA DAR SHAHEER BOKHARI USAMA GILANI USAMA SHAHID

DECEMBER 9, 2013

Abstract
This research paper is designed to find out the impact of ethics and Corporate Social Responsibility on customer value. Cause and effect relationship is used to find out the relationship between the two variables. Numerous examples from global organizations are used to develop a better understanding of the topic.

dependent variable is the result of the change caused by independent variable1. In this study, ethics and corporate social responsibility are the dependent variables whereas customer value is the independent variable. ethics and corporate social responsibility are the dependent variables whereas customer value is the independent variable.

Research Question
What is the relationship of ethics and corporate social responsibility in an organization with customer value?

Introduction
Few decades back, ethics and social responsibility were viewed as internal rules and regulations only but today the situation has evolved completely. It plays a significant role in todays competitive business world. Organizations are of the view that in order to succeed they must put in an extra effort to earn the trust and confidence of their customers by focusing on legal and ethical behavior. This demand for higher ethical values and corporate social responsibility has resulted in the accountability of the organization for their actions. In context of organizations, ethics refer to the standard of conduct practiced and corporate social responsibility includes being consistent in context of ethical values and principles and the acceptance of the responsibility of the organizations for its actions. This research focuses on highlighting the impact of ethics and CSR in creating values for its customers, increasing their loyalty and reducing the reputational risks in case crises arise.

Hypothesis
H0 : Ethics and corporate social responsibility in an organization does not have a positive impact on enhancing customer value.

H1: Ethics and corporate social responsibility


in an organization has a positive impact on enhancing customer value.

Theoretical Framework

Problem Statement
The research design that will be used in this study to find out the impact of ethics and corporate social responsibility in an organization on enhancing customer value is based on cause and effect relationship. Independent variable is the cause that brings a change whereas

Recycling of services in America in order to


reduce 70 % of the waste

Objectives of the Study


The basic objective of this research is to find out the effect of CSR and ethics of an organization on increasing customer value. Real life examples are discussed.

Supported programs that can help coffee farmers in reducing carbon emission from burning

Significance of Ethics and CSR in Enhancing Customer Value


PepsiCo Foundation
PepsiCos cloud model implementation has helped them in generating revenues for fundraising and donation activities and has earned them the reputation of "socially and environmentally responsible." According to their mission statement, they implement following rules to enhance customer value through CSR1 Care for our customers

Implementation of Young Action Program to help the upcoming generation to play a significant role in improving their

communities
Implementation of C.O.A.S.T fund to help in attaining clean water Ethics is the core value implemented and practiced by delivering high quality

products in order to satisfy customers. Company has never overstated with

customers and is making a consistent effort

Sell only products we can be proud of


Speak with truth Respect others and succeed together

to improve their product and services to


satisfy customers needs. On the whole, Starbucks has gained a huge benefit by engaging themselves in CSR. It has helped them attain competitive advantage by satisfying its customers across the globe through its effective CSR policies.

Additionally, the company has devised its policies to sustain growth and development by enabling people to make right purchase decisions morally and ethically by building trust among its customers. Their commitment towards CSR has helped them in enhancing their customer value as a result of which, PepsiCo has become the leader for CSR among food and beverage corporations.

Worth of Indian CSR in Enhancing Customer Value


Ethics and implementation of CSR policies by numerous organizations in India has become one of the major reasons of incredible success of businesses in the past few decades. Many big organizations like Tata, Unilever, ITC and Nestle has proved the significance of community involvement and has developed the idea that CSR cannot be referred as a side project.

Starbucks
Different CSR policies implemented by Starbucks that have in turn enhanced customer value are as follows:

It needs to be of primary focus for any organization to serve multiple purposes like development of not only a better community but also to build customer loyalty and enhancing customer values.

REFERENCES
Singh, H., Singh, J., & Peter, C. (2010). India Real Time. The Wall Street Journal, 22-33. Starbucks. (2013, October). Retrieved from http://www.starbucks.com/ Kumar, R. (2009). Research Methodology. New Delhi: Pearson Education. Pepsico. (2013, August). Retrieved from http://www.pepsico.com/.

ITC
A program named Mission Sunehra Kal was established by ITC which performed numerous functions like providing education, helping the people in finding employment opportunities, and provided poor farmers a platform to negotiate with suppliers. As a result of all these CSR policies, the Director of ITC claims that the company has gained customer loyalty and company has managed to establish goodwill across the country.

Research Design and Methods


The examples quoted of different organizations across the globe that have implemented CSR as their core policies have helped us to prove the hypothesis (H1) of the research.

Discussion and Conclusion


The cases of different organizations that have been benefitted by CSR in enhancing customer value prove our hypothesis (H1). From a customers view point, purchasing decision is basically an adjustment between the requirements to fulfill an egoistic value and the responsiveness towards the impact of personal consumption on the overall society. Thus, to attain customer value out of the ethics and CSR policies designed by a company it is very important to design a multi-faced values to gain customer loyalty and satisfaction and to attain competitive advantage side by side. These properly implemented CSR polices can play a significant role in attaining numerous benefits like motivating the target customers to pay premium for the products, reputation of the company is improved, create a significant competitive advantage and above all, brand loyalty is established.