Session 7

CSR Climate Change & Global Warming

CSR & Business Ethics Limitations of CSR

CSR through supply chain

ADIDAS KIPS of Suppliers through- 5C's Management Commitment & Responsiveness Management Systems Industrial Relations & compliance training for workers Transparency in communication & Reporting Compliance Performance

Business Ethics
In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done.

Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior

Business Ethics Development

The cultural context influences organizational ethics Top managers also influence ethics The combined influence of culture and top management influence organizational ethics and ethical behaviors

The Evolving Context for Ethics

From domestic where ethics are shared To international where ethics are not shared when companies:
Make assumptions that ethics are the same Ethical absolutismthey adapt to us Ethical relativismwe adapt to them

To global which requires an integrative approach to ethics

Emergence of a Global Business Ethic

Growing sense that responsibility for righting social wrongs belongs to all organizations Growing business need for integrative mechanisms such as ethics

Ethics reduce operating uncertainties Voluntary guidelines avoid government impositions

Ethical conduct is needed in an increasingly interdependent worldeveryone in the same game Companies wish to avoid problems and/or be good public citizens

Ways Companies Integrate Ethics

Top management commitment in word and deed Company codes of ethics Supply chain codes Develop, monitor, enforce ethical behavior Seek external assistance

External Assistance with Ethics

Industry or professional codes Certification programs, e.g., ISO 9000 Adopt/follow global codes
Caux Round Table Principles

Reasons for Businesses to Engage in Development of a Global Code of Business Ethics

Create the same opportunity for all businesses if there are common rules Level the playing field They are needed in an interconnected world They reduce operating uncertainties If businesses dont collaborate, they may not like what others develop

Four Challenges to a Global Ethic

Global rules emerge from negotiations and will reflect values of the strong Global rules may be viewed as an end rather than a beginning Rules can depress innovation and creativity Rules are static but globalization is dynamic

Business Ethics- A possible way forward.

Does the contemplated action: o Conform to important principles? o Create more good than harm? o Lead to fair outcomes? o Promote caring relationships? o Advance personal liberty? o Stimulate personal ideals? o Contribute to sustainability?

Limitations of CSR
1.No incentives, either legal or financial (eg carbon tax), to go more than marginally beyond competitors. 2.Doesnt address those who breach principles or repeat offenders. 3.Doesnt give stakeholders the right of redress. 4.Does address the fundamentals problems of unsustainable trading system and market economy.

How can CSR be enhanced ?

Incorporation of a section on social actions in annual reports of companies. Appointment of an independent social accounting committee to measure, monitor, evaluate and report impact of CSR in annual reports. Separate department to look after the CSR. Periodic training programs and awareness camps to train personnel on CSR. Linkage between CSR and financial success should be established. A certain percentage of profit should be earmarked for CSR & reflect in the annual balance sheets of companies.