PA 502

1. CHARLENE WOODS
ORGANIZATION THEORY AND BEHAVIOR
CRN 40374-201940
The Relationship Between Corporate Ethics in Determining the Morality, Performance, and Social
Responsibilities of Employees in an Organization

2. Abstract
• Changes in technology levels, increase in wealth divide, realignment towards
global trade and new ways of allocating and utilizing resources has prompted the
evolution of business ethics and corporate social responsibility.
• Ethics is an underlying principle that produces action to prevent substantial harm
to others in cases where an individual or a group can do so for their benefit.
• Every organization aims to portray a positive impression in the eyes of the
community so as to sustain its business for a long period. To achieve this,
businesses should partake in socially responsible projects keeping in mind the
corporate social responsibility and business ethicsprinciples, benefits, importance,
and challenges.
• Corporate social responsibility in business ethics deals with issues concerned with
moral principles, governance, decision-making, and codes of conduct for a
business.

3. Questions
• What is the relationship between the employees' perception of
corporate ethics and years of experience in an organization?
• What is the relationship between the employees' perception of
corporate ethics and the job position in an organization?
• What is the degree of employees' perception of corporate ethics and
the gender position of employees in an organization?
• What is the relationship between employees' corporate ethics and
their responsibilities inside and outside the organization?

4. Introduction
• Business ethics entails analyzing decisions, actions, and beliefs in line with business activities.
Businesses are expected to show ethical values and operate socially responsibly.
• Social responsibility encompasses business conduct concerning broader social values. Social
responsibility questions the role of the business to the entire society (Sims, 2003).
• Corporate social responsibility in business ethics deals with issues concerned with moral
principles, governance, decision-making, and codes of conduct for a business.
• Waldman, Kenett, and Zilberg define corporate social responsibility as "a management approach
that considers an integrated set of indicators that map the firm's impact and reciprocal effects
within the realm of its economic, societal, and environmental existence."
• Corporate social responsibility is a business model that incorporates self-regulatory mechanisms
into an organization's operations and practices to fulfill existing ethical standards. Reducing
government intervention in market regulations, increasing profits, promoting positive public
relations, and increasing employee satisfaction are some of the purposes of instituting these self-
regulatory mechanisms (Henn,2009).
• Social responsibility encompasses business conduct concerning broader social values. Social
responsibility questions the role of the business to the entire society (Sims, 2003).

5. • The principles, which include accountability, transparency, ethical behavior, respect for stakeholder
interests, and the rule of law, will be exhaustively discussed under this topic.
• The numerous policies concerned with corporate social responsibility and business ethics implore
many businesses to work in the best interest of the community and the environment. This ensures
that society derives several benefits from such policies. Under this topic, several benefits,
particularly to society and the environment, will be enumerated in detail.
• Modern customers emphasize corporate social responsibility and business ethics and tend to favor
businesses that demonstrate these two factors in their operations. This proves that the subject
matter is of great importance to consumers. Due to the changes in market dynamics, businesses
have to ensure that their policies are in line with the desires of their customers and that what is
important to consumers is equally important to businesses as they strive to gain market shares. This
topic will enumerate both the importance and influence of the subject matter on businesses and
employees.
• Focusing on sustainability, employees, customers, and supply chain management, this topic will
explain the challenges in the design and implementation of corporate social responsibility and
ethical business practices.

6. Corporate Social Responsibility and Business Ethics
• Corporate social responsibility in business ethics deals with issues concerned with moral
principles, governance, decision-making, and codes of conduct for a business.
• Business Ethics are “moral guidelines for the conduct of business based on notions of
what is right, wrong, and fair” (Business ethics and corporate social responsibility).
• Corporate firms are also obligated to protect social and environmental resources. In the
corporate world, social responsibility and profitability do not usually align. Corporate
social responsibility is costly in the short term especially because it involves the sacrifice
of profits. However, it is profitable in the long run.
• Business Ethics are “moral guidelines for the conduct of business based on notions of
what is right, wrong, and fair.” (Business ethics and corporate social responsibility).
• Corporate social responsibility is an integrative management concept that establishes
responsible behavior within a business, its objective management concept and the interest
of all the stakeholders (Meffert & Munstermann, 2005).

7. Graph

8. • CSR as a business system aid in the production and distribution of wealth for the betterment of stakeholders
through integration and implementation of sustainable management practices and ethical systems (Knights &
Leary ,2006).
• ). The stakeholder theory asserts that business gain competitive advantages when they addressing significant
stakeholder’s issues (Friedman,1970).
• The stakeholders are groups that can affect or can be affected by the achievement of organization’s purpose
(Stanwick P. & Stanwick S. 2009).
• business is not isolated economic actors operating in solitude from the society and working solely for
stakeholders. Stakeholders can be internal or external of the firm.
• There are five major stakeholders that are recognized and prioritized by most business organizations. These
stakeholders are; business owners or shareholders, employees, customers, the local community and the
society in general (Carroll, 1989).
• Corporate social responsibility embraces multiple stakeholders in addition to investors (Mazurkiewicz, 2005).
• The nature of the relationships that an organization has with its key stakeholders including employees,
customers, community, investors, public, suppliers, activists, and government officials is essential to its
success (D’Amato et al, 2009).
• For a firm to implement corporate social responsibility, it needs committed employees who are aware of
corporate citizenship (Friedman & Tribunella, 2012).

9. • Corporate social responsibility and ethical behavior bring significant to a business. Business has
some responsibilities to the society, making profits for shareholders(Barry,2000). This idea has
been around for centuries partly accounting for its significant growth (Carroll & Shabana, 2010).
• Business organizations have social and ethical responsibility as well as economic mission of
creating values for business owners as well as shareholders (Carroll, 1989). The economic
responsibility of businesses is to produce goods and services necessary for the society wellbeing at
a price that can perpetuate the continuity of the business and also satisfy the business obligations to
investors.
• Business have social responsibilities that define the behaviors and activities expected by
employees, stakeholders as well as the society at large (Ferrell & Fraedrich, 1997).
• When a business indulges in an unethical behavior or it is unable to demonstrate corporate social
responsibility, the result is that, the business can damage its reputation or make it less appealing to
relevant stakeholders(Draft,2001). Corporate social responsibility and business ethics are often
used interchangeably, despite each having distinct definition (Shaw & Barry, 1995).
• Business ethics entails the moral principles and standards that guide behavior and conducts in the
world of business. Corporate social responsibility is an integrative management concept that
establishes responsible behavior within a business, its objective management concept and the
interest of all the stakeholders (Meffert & Munstermann, 2005).
• Business businesses that consistency demonstrate ethical behavior and social responsibilities
record better performance and they and up creating healthy relationships between them, their
employees, stakeholders and the society in general (Carroll, 1989).

10. Importance and Influence of Corporate Social
Responsibility and Business Ethics on
Businesses and their Employees
• Corporate social responsibility activities are a breeding ground for forging strong and productive
relationships between organizations and their employees (McWilliams et al., 2019).
• In the current world, the brand of an organization is a key selling point. CSR and business ethics
provides a clear opportunity for positive branding that organizations should not hesitate to take
advantage of. An organization that portrays itself to the public as a more socially responsible
organization has a likelihood of receiving numerous positive reviews and free human marketing
(Fernando, 2022).
• Another underrated importance of CSR and business ethics to business is that it acts as a risk
mitigation feature. A company that strategizes and implements corporate social responsibility as
well as engages in ethical business practices greatly lowers the risk of lawsuits, negative branding,
loss of customers, loss of investors, and resistance from pressure groups.
• Corporate social responsibility and business ethics provide an avenue for business entities to draw
more investors to invest in their businesses. As the world evolves, social responsibility has evolved
too to become an important element for investors as a consideration before investing. A very large
proportion of investors in the current world are socially conscious. Before they partner with or
inject their capital into the operation of a given company, they tend to conduct a background check
on whether the activities of the company and the decision are ethical.

11. Challenges to Corporate Social Responsibility
and Business Ethical Practices
• Business has become integral actors in social development in which consumers are not regarded as
a general market but as a community (Giacalone, 2004). The business need to follow the rules
enacted to maintain the socioeconomic order, joined on the shared values and most importantly
impact no harm to the society while pursuing profit.
• CSR plays a very crucial role in business management. firms, both private and public need to
incorporate responsibility in their organizational culture. Business ethics entails analyzing the
ethical beliefs, decisions and actions in line with other business activities. Business ethics
integrates several sets of ethics hence organization need to employ qualified individual as workers.
CSR questions the duties of business conduct to the society at large (Sims,2003).
• Businesses need to have a written code of ethics, transparency and consequences of ethics violation
at their starting point.
• They also need to be accountable to the public, employees and shareholders. American businesses
have an ethical responsibility of generating profit within the realm of a secure and ethical
environment. Businesses can only achieve this through creating and adhering to strong internal
controls purposed to eliminate the likelihood of waste, fraud and abuse (Fenwick & Bierema,
2008).

12. Lax law
• Multinational corporations also have the responsibility of learning and
understanding the laws and policies of a nation with which they conduct their
business.
• Different nations have different laws that govern human rights, environmental
resources and regulate competition. There are major companies that fail to honor
such policies and end up creating bad image and reputation in different nations.
• Businesses based in the US are mandated to follow strict laws and policies
regarding treatment of employees, antirust, anti-bribery, discrimination, minimum
wages and environmental responsibility (Leitao,2016).
• Most companies operating in America find laws regarding such matters laxer in
other countries. While these companies are bound to follow strict laws regarding
these subjects as equal opportunity hiring, they may tend to capitalize on lower
local wages or safety practices that saves the cost. Even though malpractices such
as bribery might be rampant in other countries, American companies remain
bound by laws against such practices.

13. Taxes
• Every nation has its own tax system that enable the government earn
revenue from companies that do business there. Although, companies
are technically required to pay the revenues, some companies exploit
loopholes and vague tax laws in order to duck paying taxes to host
countries (Payne & Raiborn, 2018). such schemes can cost host
nations billions and compel investigations into tax avoidance and
evasion.

14. Fraud and securities fraud
• Some business practice unethical behaviors and they end up defrauding the investors,
customers, public and the society at large.
• An example is Bernard L. Madoff investment securities that defrauded investors across
several continents billions of dollars (Kirchner, 2010).
• The federal bureau of investigation deemed the investment company as a Ponzi scheme
after operating over a decade and pulling investments funds from several savvy investors.
• Even though the SEC became aware of complaints in the 1990’s, they never investigated
the case and the case became an overt example of corporate malfeasance and the largest
financial fraud in the united states.
• every organization aims to portray a positive impression in the eyes of the community so
as to sustain its business for a long period. To achieve this, businesses should partake in
socially responsible projects keeping in mind the corporate social responsibility and
business ethics principles, benefits, importance, and challenges.

15. Conclusion
• Every organization aims to portray a positive impression in the eyes of the community so as to sustain its business for a long period.
To achieve this, businesses should partake in socially responsible projects keeping in mind the corporate social responsibility and
business ethics
• principles, benefits, importance, and challenges. Corporate social responsibility in business ethics deals with issues concerned with
moral principles, governance, decision-making, and codes of conduct for a business. When discussing these issues, the topic of
morality sprouts regularly and as a result, the definition of morality and its separation from business ethics and corporate social
responsibility is necessary.
• Waldman, Kennett, and Zilberg define corporate social responsibility as “a management approach that takes into consideration an
integrated set of indicators that map the firm’s impact and reciprocal effects within the realm of its economic, societal, and
environmental existence”
• Corporate social responsibility is a business model that incorporates self-regulatory mechanisms into the operations and practices of
an organization with an aim of fulfilling existing ethical standards. Reducing the intervention of government in market regulations,
increasing profits, promoting positive public relations, and increasing employee satisfaction are some of the purposes of instituting
these self-regulatory mechanisms. The principles which include accountability, transparency, ethical behavior, respect for
stakeholder interests, and respect for the rule of law.
• The numerous policies that are concerned with corporate social responsibility and business ethics implore many businesses to work
in the best interest of the community and the environment. This ensures that society derives a number of benefits from such policies.
The fact that modern customers emphasize corporate social responsibility and business ethics and tend to be inclined toward
businesses that demonstrate these two factors in their operations proves that the subject matter is of great importance to consumers.
Due to the changes in market dynamics, businesses have to ensure that their policies are in line with the desires of their customers
and that what is important to consumers is equally important to businesses as they strive to gain market shares.
•

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