Ethical Issues & CSR

Financial Issues

Doing good deeds and helping the community often times costs money. This can still turn a profit for a company as the positive press can increase business and potential revenue. The company must weigh the overall expenditures even if it is willing to accept a loss for some of the community work. The business maintains an ethical responsibility to its shareholders and employees to be as successful as possible in order to ensure the security of the business long term. This is where the social financial responsibility gets murky. The benefits and costs must be analyzed to determine how much money the business can afford to pump into the community to fulfill a social obligation.

Social Issues

Because individual ethical codes vary greatly, businesses must find an identity, and this is usually by weighing the standard social norms. This keeps the company away from hot button issues and helps to provide a structure for business activity. It also outlines an ethical form of involvement with society yet steers away from offending potential consumers. While these are standard practices, other companies have increased success by tying in with a particular social cause or cultural phenomenon. In these cases the company should work to ensure the involvement is genuine and a part of the charter or mission to define its goals. Some companies work from a particular religious background, whereas others make improving education a goal. Sometimes these goals include donating portions of profits to social causes that the business has deemed worthy.

Environmental Issues

A growing concern for corporate social responsibility has been the treatment of the environment, especially those that manufacture or create goods. While the governments of areas tend to make the rules, companies can choose to hold a higher standard. This oftentimes gives a good face to the public and might increase business. Other issues include not doing business in countries where manufacturing is causing damage to the environment. While the transition to becoming a “green” company might require an initial investment, it is socially responsible, ethically sound and in the long run might end up saving significant amounts of money.

Labor Issues

Business continues to flee the United States due to the strict labor laws in place and the increase in the cost of workers due to the cost of living. It is much more economical to farm work out to locales where wages are lower. This has developed into an ethical issue of corporate social responsibility. While the profit margins might be greater if the labor is outsourced, many analysts believe companies need to look at the long-term effects of such moves as they might increase profits now; but if people can no longer afford your products, in time this move could damage the company and even put it out of business. Labor unions and the business world need to work together to ensure sustainability of the market for the overall success of society as well as the company.

Positive and Negative Rights Issues

Should companies’ CSR policies focus solely on avoiding harm, i.e. respecting negative rights? In answering this question it might be a good idea to start by briefly looking into what companies actually do. Probably, the most widespread of all CSR standards is the UN Global Compact (UNGC) principles, where the focus is mainly on respecting negative rights. It seems accordingly that companies’ main focus is on avoiding harm (against negative rights) rather than promoting the good. However, two points are worth noticing. First, even though the UNGC charter mostly concerns respecting negative rights, it also contain elements regarding positive duties, i.e. duties to actively do good. Companies are thus not only signing up for respecting negative human rights , they are in fact also committing themselves to support and promoting these rights, which mean that they are committing themselves to engage actively in human rights projects. Secondly, studies indicate that companies also feel that they have positive obligations toward needy stakeholders (Frederi ksen, 2010). This means that a company deciding to focus solely on avoiding harmful actions would be going against common CSR practice.

Scope Issues

If a company, decides that its CSR policy should focus both on avoiding harmful actions and on actively doing good, a new problem appears, namely the problem concerning scope. The question regarding whose (rather than which) rights companies should uphold and secure becomes a lot more difficult in relation to positive rights than in relation to negative rights.

Unlike respecting negative rights, which a company (at least in theory) is able to do universally, securing positive rights, or fulfilling positive duties, is not something a company is necessarily able to do for everyone. Since a company cannot take care of all the problems in the world, it has to decide which persons it should assist. (Of course, the quest ion of “which agents should we count as morally relevant” arises irrespectively of one’s view concerning positive and negative rights; the point is that it becomes more pressing as one accentuates positive duties and rights.)