Cover Story
Cover Story
Spring 2018 / Issue 57
Ethical Business – the Foundation of CSR
Many business people believe that caring about social and ethical issues is the job of the governments and the job of the business is to do business . This may mean that it is justified for the businesses to be slightly immoral , does it not ? Not really !
Attitudes toward the moral stance of business seem to have changed over time . While in the 1980s it was acceptable to talk how “ greed is good ,” a line used by the famous Gordon Gekko in the movie “ Wall Street ,” it would be completely the opposite today .
About a decade earlier , in the early 1970s , the distinguished economist Milton Friedman showed disgust for the term “ social responsibility ”, calling it a “ fundamentally subversive doctrine ” in a free society . He further states that in a free society ( capitalism ), the only social responsibility of business is to use resources in a way to increase its profits . However , Friedman also adds that in their striving for profits , the businesses needs to stay within the rules of the game , to engage in open and free competition without deception or fraud .
Nowadays , the discussion seems to have been modified . The 2008 financial crisis may have helped develop a different vision on the issue . Much harm was created to society by the proponents of the “ greed is good ” philosophy .
The concept of corporate social responsibility ( CSR ) gradually developed to a point where the world- famous MBA programs started to compete to include CSR and ethical topics in their
Autor : Verica Hadzi-Vasileva Operating Officer , M6 Educational Center , and CEO , AAG – Analysis and Advisory Group
curricula , alongside traditional efforts of teach future executives how to read financial statements or manage people and organizations . The issues that are covered in these curricula run along the following lines : how to run a business , or build a factory without affecting the local environment ; how to treat employees responsibly ; how to take care about their health , safety and welfare ;, how to treat men and women equally ; how to be inclusive of ethnical minorities ; how to involve and engage the disabled ; how to treat farmers and other suppliers fairly ; how to run the business sustainably ; how to support the local community ; how to run a transparent and accountable business ; how to prevent corruption , both public and corporate ; how to employ good business practices … how to be a good corporate citizen and not harm others , including all stakeholders involved or connected to the business .
Businesses operate in a complex environment which gets more complex every day . Businesses are increasingly globalized and they become subject to various complex legislation they need to comply with . Social media allows the fast spreading of information , both good and bad , and breaches of privacy and compliance where even the perception of a breach can be damaging . A multitude and diversity of NGOs contribute toward the dialogue for or against certain business practices . Many watchdogs observe corporations ’ behaviour and watch for possible misconduct .
What would an ethical business look like ? The good ethical positioning of the business should be expressed in the values it espouses . These values should not only be derived from consultation with employees , resulting in policy and a Code of Conduct , but they should also be believed and lived with , first of all by the leadership and then by the employees . Leaders who promote ethical behaviour and make ethical choices in their decision-making process will be much more successful in creating a culture of ethical business . Ethical business demonstrates integrity in its everyday dealings with stakeholders , it acts openly and honestly , with respect and concern for the people and places it affects . Such companies attract the affection and loyalty by their customers , their staff , their suppliers , and the local communities which give them licence to operate .
Investments that take account of environmental , social , and governance ( ESG ) issues have started to flourish in many countries and they attract much attention from governments , NGOs , and local communities .
There are several guidelines and standards from the International Labour Organization ( ILO ), Organisation for Economic Co-operation and Development ( OECD ), UN Global Compact
6 AmCham Macedonia Magazine