Rubab Noor

Ms-15A-07
Topic:
Business Ethics and Corporate social responsibility

6.1

Perception of ethics in business:analysis of research

results W.Sroka &M.lorinczy(2015)
Ethics is derived from the Greek word ethos which means a
persons fundamental orientation toward life.

Ethics is a fundamental trait which one adopts and follows as

a guiding principle of basic phenomenon in ones life. It
implies moral conduct and honorable behavior on the part of
an individual (Paswan, 2015)

Most definitions focus on evaluating the moral acceptability of

the actions of management, organizational leaders and their
employees (De Cremer et al. 2011)
6.2

Perception of ethics in business:analysis of research

results W.Sroka &M.lorinczy(2015)

For example, Rok (2004) is of the opinion that the concept of

business ethics may be defined as: the systematic study of
moral issues (beliefs, norms,values, etc.) occurring in business
and the related behaviors of people, organizations, and
institutions.

the term business ethics comprises two words: business

and ethics, which cover the areas of moral principles,
beliefs, values, culture, governance issues and a code of
conduct for business (Dimitriades, 2007).

6.3

Perception of ethics in business:analysis of research

results W.Sroka &M.lorinczy(2015)

Therefore it can be stated that corporate social responsibility

operates on the principle that firms are obliged to meet their
responsibilities to their stakeholders and also shareholders
(Goel and Ramanathan, 2014).

6.4

The business ethics of management theory

Mark Schwartz (2007
)
(
Bluedorn (1986)
Management begins as a discipline
De George(1985)
Concept of ethics in business is from the begning of the business
Different questions & criticism
For example:
So what does business ethics have to do with business anyways?
What is the answer ?

6.5

The business ethics of management theory

Mark Schwartz (2007)
Answer must be the ethical implications and arguments of three
significant theorists :
(1) Taylor (1903, 1911, 1912, 1947);
(2) Barnard (1938, 1948, 1958); and
(3) Drucker (1946, 1954).
The brought the evolution or historical development of US
management thought during the first half of the 1900s.

6.6

The business ethics of management theory

Mark Schwartz (2007)
Frederick Taylor
(Shop Management; The Principles of Scientific Management;
and Testimony Before the Special House Committee)

Observations of workers at steel mill led to three resons for why

workers can not achieve maximum output:

Job insecurity due to material increase in out put by another

worker or machine
Defective management system
Inefficient work methods
6.7

The business ethics of management theory

Mark Schwartz (2007)
Introduced scientific system:
Stop watches for production rate
Training system
Incentives when meet optimum standards
There were some issues like Taylor not specifically addressed
about :
Employees Rights
Job satisfaction
Incentives may give raise to competition
Issue of human relation
6.8

The business ethics of management theory

Mark Schwartz (2007)
Chester Bernard
(The Functions of the Executive, Organization and Management)
If the individual and organizational goals match and
cooperation is achieved, the system is considered effective.
Acceptance theory
Understanding of orders
Consistency with purpose of organization
Compatibility with personal interests
Mental and physical ability to comply

6.9

The business ethics of management theory

Mark Schwartz (2007)
Individual motives and organizational goals should be same
Defined Responsability as:
the power of a particular code of morals to control the
conduct of the individual in the presence of strong contrary
desires or impulses
In later Work:
as an emotional condition that gives an individual a sense of
dissatisfaction because of failure to do what he feels he is
morally bound to do or because of doing what he thinks he is
morally bound not to do, in particular concrete situations.

6.10

The business ethics of management theory

Mark Schwartz (2007)
Responsibilities which executives have in relation to morals:

leaders must hold some moral code

leaders must demonstrate a high capacity for responsibility
leaders must be able to create moral codes for others

Barnard may also have been one of the first to recognize the
importance of external stakeholders to the corporation.

6.11

The business ethics of management theory

Mark Schwartz (2007)
Peter Drucker
(Concept of the Corporation and The Practice of Management)

Drucker arguably provided two major contributions to

management theory:
(1) advocacy of the federally decentralized organization
(2) the concept of management by objectives (MBO).

6.12

The business ethics of management theory

Mark Schwartz (2007)
Advantages of decentralized organizations
Focus on performance and result
Better assessment of managers performance
Early and reasonable testing of employees in independent
command.
MBO is a process whereby decentralized superiors
subordinates set goals and objectives, performance is
measured against these objectives, and rewards
punishments are assessed based on the results.

and
then
and

6.13

The business ethics of management theory

Mark Schwartz (2007)

Druckers theory of managementspecifically

business ethics by making three arguments:

addresses

(1) Profits, although important, are not the purpose of business.

(2) Corporations are social institutions and therefore have social
responsibilities.
(3) Business has special responsibilities towards its employees.

6.14

Subject:

Issues In Current
Management
Presented By:
Javeria Jaan
(MS-15A-02)
MS ( Business Administration)
2nd Semester

A Stakeholder Approach
to Corporate
Social Responsibility: A
Fresh Perspective
into Theory and Practice
(2008 in Journal of
Business Ethics By Dima
Jamali)

Corporate Social
Responsibility

Definition:
The term CSR has indeed been defined in
various ways from the narrow economic
perspective of increasing shareholder
wealth (Friedman, 1962),
To economic, legal, ethical and
discretionary strands of responsibility
(Carroll, 1979)
To good corporate citizenship (Hemphill,
2004).
6.17

Corporate Social
Responsibility

Therefore it is stated that Corporate

Social Responsibility operates on the
principle that firms are obliged to
meet their responsibilities to their
stakeholders and also shareholders
(Goel and Ramanathan, 2014).

6.18

Responsive
Strategies
Be
Proactive

Be
Accommodativ
e

Be
Defensive

Be
Reactive
6.19

The CSP Model (Wood,

1991)

Principles of CSR1

Institutional Principle: Legitimacy(Act as a responsible social actor

in the environment)
Organizational Principle: Public Relationship(Impact of
organizational outcomes)
Individual Principle: Managerial Discretion(Individual Managers
Choices & preferences)
Processes
of CSR 2
Environmental Assessment:(Envir. scanning/analysis knowledge
used for strategies)
Stakeholder Management:(Exam.SMD e.g. employee newsletters,
public affairs, Corporate
Social Reporting)
Issue Management:(Devising & Monitoring responses to Social
Issues)
Outcomes of Corporate Behavior
Social Impact:(positive e.g. provision of jobs, wealth
creation,
By Wood
(1991)
technological innovation, Negative e.g. toxic waste, illegal payments
to politicians)
Social Programs:( used to implement responsibility)
Social Policies:(To handle issues & stakeholders interest)

6.20

Result of Both
Frameworks

Both frameworks hence seem more

oriented
toward advancing theory and research in
the field rather than influencing practice.
The complex and dynamic nature of the
social environment faced by most
modern organizations, implying the need
for on-going stakeholder management,

6.21

Research Hypothesis
Based on following
theories
1.Discriptive stakeholder theory:
Organizations are socially constructed & act in
accordance with shared perceptions
(Brickson,2007)
2.instrumental stakeholders theory:
Corporation is an instrument for wealth
creation with CSR conceived as a strategic
tool to promote economic objectives (Garriga
and Mele, 2004).
6.22

Research Hypothesis
Based on following
theories

3.Normative stakeholders theory:

Philosophically based moral
obligations towards stakeholders
(Brickson, 2007), focusing on the
ethical requirements that cement
the relationship between business
and society (Garriga and Mele,
2004).
6.23

Tenet of stakeholder
theory
Is that all stakeholders matter &
that organizations should
integrate their responsibilities to
the various stakeholder
constituencies, this balancing
exercise has proven difficult to
enact in practice (Galbreath,2006;
Vos and Achterkamp, 2006).
6.24

Research Hypothesis

(H1) Developing country firms prioritize

their stakeholders based primarily on
instrumental considerations.
(H2) Developing country firms are
according systematic attention to a limited
range of stakeholders.
(H3) Instrumental stakeholder management
inclinations are counter-balanced or
nuanced by normative flavors, particularly
vis--vis the community stakeholder.
6.25

Research Hypothesis

(H4) Stakeholder management is

affected by the relational attributes of
specific stakeholders (power, legitimacy,
urgency) as well the pressures they can
exert on corporations.
(H5) Multinational corporations have a
more balanced stakeholder management
process, translating into attention to a
wider range of stakeholders.
6.26

Methodology

Contacted by phone,
Formal introductory letter with highlighted
research aim.
In-depth interviews conducted by author and 2
assistants(1 in each country)

6.27

Respondents

Interviewees were all Managers with Top

positions(Head of Public Relations,comm.
Unit,Marketig Managers,regional
managers)
Sector/Industry
Different Industries(Banking & Financial
Services, Internet & multi media services,
telecomm, energy & petrochemicals, Food
&
bevrages,hospitality,tobacco,pharma,sales/
distributions)national & international firms
6.28

A Quantitative Research
study
Sample Size
14/20 confirmed their participation in
Lebanon,
08/13confirmed their participation in
Syria.
Country
Lebanese & Syria
Time Frame
A Cross Sectional Study
6.29

Research tool

EPS(Ethical performance Score) by

Spiller,2000 for Qualitative
Measurement.
Lebanese Sample EPS Average,
Syrian Sample EPS Average,
A Comparative Benchmark-Lebanese
vs Syrian Samples Averages

6.30

Questionnaire

Demographics =Co.Name,Industry Type,Line

of Business.
EPS Constructs =6 Main Stakeholders
(Community,Environmet,Employee,Customers,S
uppliers,Stakeholders).
Items: were their Key Businesses Practices (61
items the author compiled based on lit.review.
5-point Scale is being used-2=Major Concern,
-1=Concern, 0=No Strength/concern,
1=strenght,2=Major Strength

6.31

Research Findings

Lebanon's Companies: seem to be more focused toward

Traditional Stakeholders(Shareholders, Employees,
Customers,& Suppliers) & Limited attention toward Silent
stakeholders(Community & Environment) Because silent
stakeholders tend to be less easily identifiable and less coherent
in articulating demands and hence relegated to lower priority in
a developing country context.
Syrian's Companies: seem to be more focused toward Economic
Stakeholders(Customers, Employees) & less attention towards
Social Stakeholders(Environment & Community).it is clear
from the both tables that stakeholders which represents rational
or economic motives for the firms gain more attention.
6.32

Research Findings

The comparison of Lebanese & Syrian Companies:

shows that Lebanese Companies exhibiting a slightly
better performance vis-a-vis organizational and
economic stakeholders (e.g. employees, customers
and shareholders) but worse performance vis-a-vis
the environment.
Findings: Shows an instrumental stakeholder
approach in developing countries (i.e. firms
addressing stakeholder interests that most directly
affect performance).
6.33

Future Research

EPS Methodology adopted is our limitation.

There is need for more research with in the context of
Stakeholder approach.
Research comparing the patterns of stakeholder management
of local companies and international firms or subsidiaries is
also very informative and can help build momentum towards
improved global practices.
Research illuminating the patterns of stakeholder management
and CSR in developing countries is also very much needed in
view of the paucity of studies in such contexts.

6.34

CORPORATE SOCIAL
RESPONSIBILITY IN PAKISTAN:
CURRENT TRENDS AND FUTURE
DIRECTIONS
Aymen Sajjad and
Gabriel Eweje
(2014)
6.35

Purpose
To provide a practical review of topical
developments in corporate social
responsibility (CSR) perspective within
Pakistani business environment.
Methodology/approach
secondary sources including extant literature
on CSR, government reports, publications of
international agencies, industry reports,
companies CSR/sustainability reports, and
newspaper articles.

6.36

Findings

The concept of CSR is relatively underdeveloped

in Pakistan.
There is a general perception among business
practitioners in Pakistan that CSR relates to
altruism or philanthropic activities.
Only few large local companies and
multinational enterprises hold a well-defined
CSR policy.
Small and medium enterprises limit their CSR
engagement to comply with codes of conduct
set by foreign buyers.

6.37

Research
limitations/assumptions

The empirical research is needed to validate

the findings of this study.
Industry-specific research would illustrate a
much clearer picture on how different sectors
in Pakistan are promoting CSR principles.
Practical implications
This study would help businesses and policy
makers to recognize the current state of CSR
progress and potential CSR challenges in
Pakistan.

6.38

Practical implications
Findings may assist the government,
private sector, and civil society to
devise future CSR agenda in Pakistan.
Originality/value
this is one of the few studies in
Pakistani context which attempts to
provide a comprehensive overview of
CSR-related developments in Pakistan.

6.39