Are Socially Responsible Businesses Ethical as Well ? I India CSR

By Shweta Bapat

Ethical Behaviour and Social responsibilities are considered as keys of successful social performance of business. Being ethically wrong and socially irresponsible is undoubtedly not affordable to any business unit irrespective of its nature and category. Socially responsible behaviour of the business increases the trust in the mind of the society, while ethical behaviour gains the trust of the important stakeholders like customers, investors and employees etc. If company expects customer loyalty or employee loyalty, company should understand that they expect ethical behaviour along with corporate social responsibility.

Responsibility and Ethics:

Responsibility can be one of the elements of ethics along with honesty, justice, respect for autonomy, beneficence etc. Business actions can be responsible as well as ethical. As per utilitarian approach some actions can be justified in terms of outcomes and some actions can be justified in terms of principles by which that action is supported, it is called categorical approach. The question remains; is a company having good CSR performance always ethical? Though CSR is connected with business ethics, it actually goes further than only CSR. Social responsibility is limited to the actions that shows that company cares about the environment, surrounding and society to which they belong but business ethics demand for more.

The Interplay of Ethics and Financial Performance:

Sometimes we come across with the argument that only those companies which are ethically strong goes for CSR. In fact, there is a general understanding that the companies involved in CSR are having a management that has strong philosophical background that gives importance to values and ethics. But what happens when it comes to the financial performance of the company? Do all these companies still follow business ethics even if it is adversely affecting on their financial performance?

Challenges to Ethical Practices:

I think they may not, as being profitable is the primary objective of the business, these situations create pressure of survival. Tax evasion, bribery, corruption etc. are now the common ways and creative accounting can be a modern tool through which companies manage their financial performance.

Discrepancies in Performance:

In India and abroad we have come across some situations where the companies who have won many prestigious awards for their social performances have been found guilty as far as there financial performance is concerned.

Long-term Commitment to CSR and Ethics:

There are many companies which are involved in CSR since many years and are shouldering their responsibilities towards society and environment. These companies started CSR when it had no glamor or was not made mandatory by law. Since long these companies are following triple bottom line framework to evaluate their performance by taking in to consideration not only profit but also people and planet.

Leading by Example:

The founders of such businesses were the real visionaries who started developing the rich culture of CSR in their organisations to make their stakeholders aware about their responsibilities. These companies are not only responsible but also have strong ethical base which is followed by every person in the organisation and because of which they are sustaining as well as successful since years.

Organizational Ethics and Responsibility:

They believe that ethical behaviour and social responsibility should not be adopted by only few people but by the whole organisation. These organisations have set benchmarks as far as CSR and Business Ethics is concerned.