CORPORATE SOCIAL

RESPONSIBILITY,
HUMAN VALUES &
ETHICS
(MS 208)
UNIT II

SYLLABUS
Unit I
Moral Values and Ethics: Values Concepts, Types and Formation of Values, Ethics and Behaviour.
Values of Indian Managers; Managerial Excellence through Human Values; Development of Ethics,
Ethical Decision Making,
Business Ethics- The Changing Environment and Stakeholder Management, Relevance of Ethics and
Values in Business, Spiritual Values. Modern Business Ethics and Dilemmas, Overview of Corporate
Social Responsibilities (CSR) and Sustainability. (12 Hours)
Unit II
Managing Ethical Dilemmas at Work: The Corporation and External Stakeholders, Corporate
Governance: From the Boardroom to the Marketplace, Corporate Responsibilities towards Consumer
Stakeholders and the Environment; The Corporation and Internal Stakeholders; Values-Based Moral
Leadership, Culture, Strategy and Self-Regulation; Spiritual Leadership for Business Transformation.
Organizational Excellence and Employee Wellbeing through Human Values. (10 Hours)
Unit III
Corporate Social Responsibility: A Historical Perspective from Industrial Revolution to Social
Activism; Moral Arguments for Corporate Social Responsibility, Development of Corporate
Conscience as the Moral Principle of Corporate Social Responsibility, Corporate Social Responsibility
of Business, Employees, Consumers and Community. Corporate Governance and Code of Corporate
Governance, Consumerism, Current CSR Practices of the Firms in India and Abroad. Challenges of
Environment: Principles of Environmental Ethics, Environmental Challenges as Business
Opportunity, Affirmative Action as a form of Social Justice. (10 Hours)
Unit IV
Issues in Moral conduct of Business and CSR: Failure of Corporate Governance, Social Audit,
Unethical Issues in Sales, Marketing, Advertising and Technology: Internet Crime and Punishment,
Intellectual Property Rights, Corruption in Business and Administration. BS / ISO Guideline on CSR
Management (ISO-26000). (10 Hours)
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UNIT II
MANAGING ETHICAL DILEMMAS AT WORK

THE CORPORATION AND EXTERNAL

STAKEHOLDERS

Stakeholders include any person, group or organization that

has an interest in the activities and affairs of a company.
Owners and employees are internal stakeholders, because
they own or work for the business. External stakeholders
include customers, communities, suppliers and partners,
creditors and the government.

THE CORPORATION AND EXTERNAL

STAKEHOLDERS

THE CORPORATION AND EXTERNAL

STAKEHOLDERS

Corporation (Internal) Shakeholders:

An employee contributes labor and/or expertise to an
endeavour of an employer and is usually hired to perform
specific duties which are packaged into ajob. An Employee is
a person who is hired to provide services to a company on a
regular basis in exchange for compensation and who does not
provide these services as part of an independent business.
Managementinbusinessandorganizationsis the function
that coordinates the efforts of people to accomplish goals
andobjectivesusing available resources efficiently and
effectively. Management comprises planning, organizing,
staffing,leadingor directing, and controlling an organization
to accomplish the goal.Resourcingencompasses the
deployment and manipulation ofhuman resources, financial
resources,technologicalresources, andnatural resources.
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THE CORPORATION AND EXTERNAL

STAKEHOLDERS

Ownershipof property may be private, collective, or

common, and the property may be ofobjects,land/real
estate, orintellectual property. Determining ownership in law
involves determining who has certain rights and duties over
the property. These rights and duties, sometimes called a
"bundle of rights", can be separated and held by different
parties.
External stakeholders:
Customers are one of the most immediate external
stakeholders that a company must consider. For retailers,
consumers are customers. Attracting, retaining and
generating loyalty from core consumer markets its critical to
long-term financial success. For business-to-business
companies, the customers are the businesses that buy goods
for business use.
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THE CORPORATION AND EXTERNAL

STAKEHOLDERS

External stakeholders:
Communities and governments are closely tied external
stakeholders. Companies operate within communities, and
their activities affect more than just customers. Businesses
pay taxes, but they are also informally expected by residents
to operate ethically and with environmental responsibility.
Communities also like to see businesses get involved in events
and local charitable giving.
Suppliers and business partners have become more critical
stakeholders in the early 21st century. More often, companies
build a number of small, loyal relationships with suppliers and
associates. This enables each business to develop shared
goals, visions and strategies. Trade buyers and sellers can
effectively collaborate to deliver the best value to end
customers, which is beneficial to each partner.
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THE CORPORATION AND EXTERNAL

STAKEHOLDERS

External stakeholders:
Creditors: Businesses commonly use lenders to finance
business ventures, building and asset purchases and supply
purchases. Banks often provide loans for major purchases,
such as a new building. Suppliers may provide product
inventory on account, which a business than pays down the
road. Current creditors basically expect that a business meets
its payment deadlines responsibly and consistently.

CORPORATE GOVERNANCE: FROM THE

BOARDROOM TO THE MARKETPLACE

Corporate governance describes all the influences affecting

the institutional processes, including those for appointing the
controllers and/or regulators, involved in organizing the
production and sale of goods and services.
"Corporate governance is the system by which business
corporations are directed and controlled. The corporate
governance structure specifies the distribution of rights and
responsibilities among different participants in the
corporation, such as the board, managers, shareholders and
other stakeholders, and spells out the rules and procedures
for making decisions on corporate affairs.

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CORPORATE GOVERNANCE: FROM THE

BOARDROOM TO THE MARKETPLACE

The basic principles of effective corporate governance are:

Transparency

Accountability

Are the board telling us what

is going on?

Is the board taking

responsibility?

Good, effective
governance

Corporate Control
Is the board doing the
right thing?

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CORPORATE GOVERNANCE: FROM THE

BOARDROOM TO THE MARKETPLACE

The basis of corporate governance in the marketplace begins

with a question: What is the philosophical and ethical context
from which corporate governance and ethical decisions are
made?
Managing corporate social responsibility from the corporate
board of directors to the marketplace requires commitment,
and significant time, effort and resources from organizations.
At stake is a companys reputation and even survival.
External regulation is also required to help define guidelines
and practices for companies to act responsibly towards their
stakeholders, communities and society.
The corporation as social and economic stakeholders was
presented from the perspectives of the social contract and
covenantal ethic.
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CORPORATE GOVERNANCE: FROM THE

BOARDROOM TO THE MARKETPLACE

Free market theory holds that the primary aim of business is

to make profit. As far as business obligations towards
consumers, this view assumes an equal balance of power,
knowledge and sophistication of choice in the buying and
selling of products and services.
If businesses deliver what customers want, customers buy.
Customers have the freedom and wisdom to select what they
want and to reject what they do not want.
Faulty or undesirable products should not sell. If businesses
do not sell their products or services it is their own fault.

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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

Corporate Responsibility towards consumer:

Customers are the lifeblood of every business, including both
retail and business-to-business customers. Whether or not
you think of customer satisfaction as a social responsibility
issue, every business owner will think of it as a profitability
issue.
Time and resources put into understanding the customer
perspective is always a good investment. Strong and
effective customer relations can be the direct route to long
term success.
An organization is expected to fulfil its Responsibility towards
its Consumers
Consumer is one of important stakeholders of organization
who uses or consumes product and services for personal
purposes.
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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

Seven Components of Corporate responsibility towards

Consumers, namelyFair marketing, factual and unbiased information and fair
contractual practices:
Organization should use common language for providing
information about product and services would be
Complete, accurate and understandable by consumer and also
gives details about its location (local address), contact
including email etc
Fair contractual - to protect the legitimate interests of both
the parties i.e. suppliers and consumers by mitigating the
imbalance in managing power between them
Protecting consumers health and safety:
Protection of health from hazardous products and services
means
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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

product doesnt involve any risk or harm when used or

consumed
Adopt measures and instruct consumer in proper use of
products and also improve handling or storage of product in
case of consumers
Sustainable consumption:
Consumption of good and healthy food which satisfies the
present needs without compromise future needs that
consumption of products and resources at rates of consistent
with sustainable development
Promote and provide practical advice how to modify
consumption patterns and
Encourage consumers to use products and services which are
energy efficient, environment-friendly, socially beneficial and
eliminate or minimizing any negative health and
environmental impact
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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

Consumer service, complaints and dispute resolution:

Consumer services refer to proper installation, warranties and
guarantee, repair and maintenance, after sale service
Take measures to prevent complaints and reviews complaints
to improve the practices
Consumer data protection and privacy:
An organization collects and records consumer related
information
which is essential for the provision of products and services.
When an organization needed consumer information firstly
specify the purpose for which personal data are collected and
protect the data by adequate safeguards

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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

Access to essential services:

Essential services refers to basic needs such as health care,
right to essential utility services, such as electricity, gas,
water, drainage, sewage and communication
An organization should contribute to fulfilment of the right to
satisfy basic needs
Consumer Education and Awareness:
Education and awareness initiative helps consumer to be well
informed about their rights and responsibilities and
Also make their purchasing decisions or consumption
choices responsible to contribute sustainable development

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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

1.

2.

Corporate Responsibilities towards stakeholders:

Increase the Profit: Nobel prizewinning economist Milton
Friedman wrote in 1970 that the "one and only one social
responsibility of business" is "to increase its profits,"
assuming an honest and open marketplace.Companies
should focus on honestly earning as much money as possible
for their stakeholders.
Put the Customer First: Mackey believes that while profits
are indeed the core element of running a business, the
modern company must "create value for all of its
constituencies." Mackey noted that the successful companies
typically "put the customer first." Putting the customer first
may not guarantee the most in profits, but it does ensure
that "customer happiness is an end in itself," which may lead
to greater customer loyalty.
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CORPORATE RESPONSIBILITIES TOWARDS

CONSUMER, STAKEHOLDERS AND THE
ENVIRONMENT

Corporate Responsibilities towards environment:

Corporate responsibility towards the environment is
absorbed and honed through publicity and education, the
influence of educated trends, and a core concern for the
continued liveability of the environment oblique rather
than direct pressures.
With CSR specifically carbon reduction weighing on the
corporate mind, the many decisions of the corporate body
may be incrementally tailored to the needs of the
environment and the instincts for preservation of our way of
life.
In market-speak, the direct and indirect costs of carbon
need to outweigh the profits of pollution, in the corporate
subconscious. That is where victory will be won against
carbon and any other pollution.
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THE CORPORATION AND INTERNAL

STAKEHOLDERS

Internal stakeholders are those within an organization who benefit

financially from their contributions to an organization's success.

Internal stakeholders (also known as primary stakeholders) are those

within an organization with an interest in its success and failure,
since they may be rewarded or punished accordingly. Employees,
managers, corporateleaders, and owners/stockholders are examples
of internal stakeholders.

For internal stakeholders, the continuance and success of the

organization is the paramount concern. Other interests may vary
between the different types of internal stakeholders.

For example, employees may be most concerned about such things

as job security, pay andbenefits, rewards and recognition, while
stockholders care most about business growth, share price,
andprofitability. On occasion, doing what is best for one group may
be detrimental to another, and in such instancesethicaljudgment
can come into play.
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THE CORPORATION AND INTERNAL

STAKEHOLDERS

Internal stakeholders can influence both the ethicalstandardsof an

organization and the extent to which they are followed. Increasingly,
corporations are motivated to become more socially responsible
because their internal stakeholders expect them to understand and
address relevantsocialand community issues.

Understanding what social causes are important to employees and

acting on them can produce benefits including increased employee
engagement and satisfaction, higherperformance, and
improvedretention.

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VALUES-BASED MORAL LEADERSHIP

Values are important and enduring beliefs or ideals about what is

good or desirable and what is not. Value exert major influence on
the behaviour of an individual and serve as broad guidelines in all
situations.

Implicit values are assumed values of the leader and open to

misinterpretation.

Explicit values are reflected in the organizations policies, visions

and systems.

Self-enhancement values:

1.

Achievement (pursuit of personal success)

2.

Power (dominance over others)

3.

Hedonism (personal gratification)

Self-transcendent values:

1.

Benevolence (concern for immediate others): include honesty,

responsibility and loyalty

2.

Universalism (concern for the welfare of everybody)

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VALUES-BASED MORAL LEADERSHIP

Organizational values:

Beliefs and ideas about what kinds of goals members of an

organization should pursue and ideas about the appropriate kinds or
standards of behaviour organizational members should use to achieve
these goals.

A good leader encourages others to take action, sharing with them

the vision that gives them the desire to follow. An inspirational
leader remains positive even in the face of insurmountable
circumstances and continues to motivate the team. This type leader
involves the team in changes and provides the support needed for
them to carry out their responsibility.

With this quality a leader is more interested in results than process,

allowing members the flexibility to plan and implement their
strategy.

Everyone wants to feel appreciated. Great leaders use gratitude to

motivate their team and to create a positive workplace. Learn to
complement even the smallest thing. If employees can experience
small successes, it can lead to even greater successes. 24

VALUES-BASED CULTURE, STRATEGY AND

SELF-REGULATION
Strategy influences the goals and objectives of the company and its
stakeholders.
Sets the overall direction of business activities
Reflects and models activities that management values and
prioritizes
Sets the tone and tenor of business activities and transactions inside
the organization

Corporations formulate at least four levels of strategies:

Enterprise
Corporate
Business
Functional

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VALUES-BASED CULTURE, STRATEGY AND

SELF-REGULATION
The strategy management process involves:

Formulating goals
Formulating strategies
Implementing strategies
Controlling strategies
Evaluating strategies
Analyzing the environment

A corporations culture is the shared values and meanings its

members hold in common, which are articulated and
practiced by an organizations leaders.
Organizational cultures are:
Visible and invisible
Formal and informal

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VALUES-BASED CULTURE, STRATEGY AND

SELF-REGULATION
Organizational cultures can be studied by:
Observation
Listening to and interacting with people
Other ways

Signs of cultures in trouble or weak cultures include:

An inward focus
A short-term focus
Morale and motivational problems
Emotional outbursts
Fragmentation and inconsistency
Clashes among subcultures
Ingrown subcultures
Dominance of subculture values
No clear values or beliefs
Many beliefs
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VALUES-BASED CULTURE, STRATEGY AND

SELF-REGULATION
Signs of cultures in trouble or weak cultures include:

Different beliefs
Destructive or disruptive cultural heroes
Disorganized or disruptive daily routines

Establishing codes of ethical and legal conduct,

implementing stakeholder management assessments, and
enacting ethics programs can help a company financially and
morally.
Ethics codes

Value statements that define an organization

Ombudspersons and peer review programs

To manage the legal and moral aspects of potentially

problematic activities

Ethics programs

Another method for handling moral questions

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SPIRITUAL LEADERSHIP FOR BUSINESS

TRANSFORMATION

"Spirituality has many meanings:

Tapping into a deeper meaning of life
Living in harmony with the essential nature of Creation
Having a relationship with the Source of Creation
Experiencing union with Divinity.

One definition of spirituality in leadership is aholistic

approachto leadership in which the leader strives to
encourage a sense of significance and interconnectedness
among employees
Spiritual leadership involves the application of spiritual
values and principles to the workplace. The spiritual leader
understands the importance of employees finding meaning in
their work and demonstrates a genuine concern for the
"whole" person, not just the employee.
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SPIRITUAL LEADERSHIP FOR BUSINESS

TRANSFORMATION
Spiritual leadership tries to assist others in finding meaning
in their work by addressing fundamental questions such as:
Who are we as a work team, department, or organization?
Is our work worthy? What is our greater purpose?
What are our values and ethical principles?
What will be our legacy?

The spiritual leader strives for a workplace that is truly a

community, consisting of people with shared traditions,
values, and beliefs.
Spirituality in leadership implies that the focus will be less on
formal position power and more on people; less on conformity
and more on transformation and diversity; and less on
controlling and more on partnership, collaboration, and
inspiration.
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SPIRITUAL LEADERSHIP FOR BUSINESS

TRANSFORMATION
Spirituality in leadership does not require that the leader
adhere to a particular religion or that he or she attempt to
convincesubordinatesto pursue a specific set of religious
principles.
While leaders who emphasize spirituality may base their
leadership approach in Christianity or another religious
tradition, they may also have so-called "non-traditional"
religious beliefs or may not adhere to any particular religion
at all.
Spirituality in leadership is more concerned with the
development of employees as "whole people"people who
exhibit compassion to other employees, superiors,
subordinates, and customers.

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SPIRITUAL LEADERSHIP FOR BUSINESS

TRANSFORMATION
If a leader in the workplace possesses a strong sense of
spirituality that affects his or her attitudes, emotions, and
behavior in a positive way, then the leader is likely to
influence subordinates to pursue the development of
spirituality in their own lives.
This raises at least two questions: "What leadership approach
or style effectively promotes spirituality in the workplace?"
and "What benefits are derived from fostering spirituality in
the workplace?
Two leadership approaches seem to be more closely related
to the concept of spiritual leadership than others: servant
leadership andtransformational leadership.

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SPIRITUAL LEADERSHIP FOR BUSINESS

TRANSFORMATION
SERVANT LEADERSHIP: It suggests that leaders must place
the needs of subordinates, customers, and the community
ahead of their own interests in order to be effective.
Characteristics of servant leaders include empathy,
stewardship, and commitment to the personal, professional,
and spiritual growth of their subordinates.
TRANSFORMATIONAL LEADERSHIP: It focuses on attempting
to explain how leaders can accomplish extraordinary things
against the odds, such as turning around a failing company,
founding a successful company, or achieving great military
success against incredible odds. The theory also emphasizes
the importance of leaders' inspiring subordinates' admiration,
dedication, and unquestioned loyalty through articulating a
clear and compelling vision.

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ORGANIZATIONAL EXCELLENCE AND EMPLOYEE

WELLBEING THROUGH HUMAN VALUES
The key to organizational excellence is excellent leadership
and at the heart of excellent leadership lie four universal
values joy, hope, peace and love.
joy is defined as a spirit of gladness a state of deep
happiness that is not contingent upon external
circumstances. Hope is defined as optimism the belief that
one can positively impact the future.
Peace is defined as a freedom from inner conflict a sense of
well-being, and security.
Love is defined as a spirit of appreciation, acceptance,
respect, kindness, and support. Successful leaders realize
that these values can inspire, unify, and transform.

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ORGANIZATIONAL EXCELLENCE AND EMPLOYEE

WELLBEING THROUGH HUMAN VALUES
Positive values, though necessary, are not sufficient. In order
to achieve remarkable results, these values must be
translated into congruent behavior.
To do so is required new leadership strategies and skills
strategies and skills that will enable leaders to rise above the
status quo and create high performance organizations.
Organizational Excellence = Leadership Values +
Transformational Strategies+ Quantum Skills
Successful leaders share information freely. They view it as a
currency to be spent rather than a resource to be hoarded.
TRANSFORMATIONAL STRATEGIES
Attention through Vision: Excellent leaders have a vision that
captures the attention of their stakeholders.
Meaning through Communication: Organizational excellence
requires leaders to communicate the vision in a way that
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induces hope.

ORGANIZATIONAL EXCELLENCE AND EMPLOYEE

WELLBEING THROUGH HUMAN VALUES
TRANSFORMATIONAL STRATEGIES
Trust through Positioning: A key factor in the process of
establishing trust through positioning is integrity. Words
associated with integrity are themselves interesting: the
quality of being complete, unimpaired, moral soundness,
honesty, freedom from corrupting influence or practice, and
predictable strictness in the fulfilment of contracts and the
discharge of trusts.
Confidence through Respect: Effective leaders develop
confidence among their colleagues. This confidence is born in
the leaders self-confidence that worthy objectives can and
will be achieved. Such confidence is contagious, and in time
mutual love and respect among leaders and followers grow
and flourish.

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ORGANIZATIONAL EXCELLENCE AND EMPLOYEE

WELLBEING THROUGH HUMAN VALUES
Employee Wellbeing: Employees experiencing reduced productivity
while at work, or presenteism, attributable to health issues are
much more likely to report reductions in productivity attributable
to other factors, such as job overload, financial stress and personal
problems.
Well-being is missing from a lot of work cultures, but this is not
necessarily intentional. In most cases, cultures that discourage
well-being do so by accident. An employer might be growing quickly
and have difficulty forecasting staffing needs, thus creating an
environment where employees are required to work excessive
overtime in order to meet customer demands.
There are a number of steps that can be taken in order to infuse
well-being into a work culture. The core element is to ensure that
consideration, respect and value of the whole person are present.
While many organizations believe that they have these values, they
might not be enforced at the workgroup level.
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ORGANIZATIONAL EXCELLENCE AND EMPLOYEE

WELLBEING THROUGH HUMAN VALUES

Organizational policies need to be written or modified to

support well-being.
Setting policies that discourage smoking, encourage healthier
lifestyles and permit time off for family are key to making wellbeing a part of the culture. However, while policies are helpful,
they arent enough. Benefits need to be aligned to encourage
employees to comply with policy:
Prohibiting smoking at the workplace does little if employees
arent provided with a smoking cessation program to increase
the probability of quitting.
Written policies that employees will be allowed time for fitness
activities during the work day does little if employees dont
have a place to exercise.
Aligning executives to model well-being appropriately, writing
policies that provide guidance, and providing a benefit design
that supports the policies strengthen the concept of well-being
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in a workplace culture.