CSR and ethical behavior

There is no question that the concept of the social responsibility of businesses has become more and more, a hotly debated topic. Nevertheless, here in the Philippines, the concept is being practiced only by a limited number of firms, and these few firms do not practice real social responsibility but simple philanthropy. They believe that corporate social responsibility consists of merely sharing a portion of their profits with the less fortunate. The reason for this misconception is a failure to understand what the concept of CSR really means.

The doctrine of corporate ethical behavior and social responsibility states that in the pursuit of reasonable return on investment, business firms must behave as good citizens and maintain a balance between pursuing commercial goals and the common or public good. However, managers are regularly confronted with ethical conundrums that make it difficult to maintain this balance.

Roger Bennett, in his book “Corporate Strategy and Business Planning,” discusses a number of contemporary issues that illustrate the many problems that arise for business institutions where questions of ethics and social responsibility are difficult to address.

These are:

Bribery. This is the most common dilemma for Filipino businessmen. The common excuse is government corruption, but the biggest sources of bribery are businessmen. Bribery distorts market mechanisms, creates unfair competitive advantage and leads to inefficient allocation of national resources. In real terms, it adds tremendous additional costs to the food budget of the poor, removes improving efficiency as a motive for remaining competitive and discourages legitimate investments.

Disclosure and Confidentiality. The most effective weapon against corruption is transparency. However, most businessmen oppose complete disclosure often with the excuse that everybody keeps secrets.

Insider Dealing. This is not only limited to the stock market. It is a practice rampant in many firms especially in such sensitive areas like purchasing and sales.

Consumerism. There are four basic rights that corporations owe to the public, namely, safety, full information, choice, and redress.

For example, cigarette advertisements focus on images at the expense of information creating ignorance on the harmful effects of nicotine for many years until the appropriate laws were passed.

Determining Executive Pay. During the Marcos era when the danger of a communist takeover was a real possibility, many concerned corporate heads were discussing the possibility of agreeing on the gap between the highest- and lowest-paid workers in the company.  Some suggested that the highest-paid executive should not be paid more than 2,500 percent than the lowest paid. The Leftist threat has become negligible and this issue has also become forgotten.

There are other issues aside from these five areas such as environment and illegal activities such as smuggling.

One of the principal issues in all these areas is whether there is a framework for making ethical decisions. I believe that the most effective basis will be found in the spiritual values that an individual truly believes.  Perhaps, one only needs the courage to actually live the values he or she publicly espouses.

For those who prefer a framework for moral decision-making based on an ethical framework, an article from the magazine “Issues in Ethics” published by the Makkula Center for Applied Ethics (Winter 1996) entitled “Thinking Ethically” by Manuel Velasquez et al. states that philosophers have developed five different approaches to values to deal with moral issues, namely: 

Utilitarian approach. This was developed by John Stuart Mill in the 19th century and aims to provide the greatest balance between good and evil. First, identify the various courses of action suitable. Second, ask who will be affected by each action and what benefits or harms will be produced by each. Third, choose the action that will produce the greatest good and the least harm.

Rights approach. This was developed by the 18th century philosopher Immanuel Kant and others like him who believed that individuals have the ability to choose freely what they will do with their lives as long as their action respects the moral rights of everyone. These are the right to the truth, the right of privacy, the right not to be injured and the right to what is agreed upon.

Fairness of justice approach. This has its roots in the teachings of the Greek philosopher Aristotle. The basic moral question in this approach is, how fair is an action? Does it treat everyone in the same way or does it show favoritism and discrimination? Both favoritism and discrimination are unjust and wrong.

Common good approach. This is a notion that originated more than 2,000 years ago in the writings of Plato, Aristotle and Cicero. In this approach, the focus is on ensuring that the social policies, systems, institutions and environments which everyone depends on, are beneficial to all, such as affordable health care, effective public safety, a just legal system and an unpolluted environment. Society is a community which is comprised of individuals whose own good is inextricably bound to the good of the whole.

Virtue approach. In dealing with an ethical problem using this approach, the question asked is: What kind of person should I be? What will promote the development of character within myself and my community? This approach assumes that there are certain ideals which we should strive for, such as honesty, compassion, generosity, fidelity, integrity, fairness, and prudence, for the full development of our humanity.

There are many events in Philippine society that should heighten our awareness of the massive poverty surrounding the few rare islands of prosperity which are the gated villages the business managers live in. Corruption has to stop becoming a way of life for the business community. Business ethics has to be brought to the forefront as a topic of discussion throughout our society.

If the Philippines is to build a just and humane society, it must have an honest government and an ethical business community. 

Summer creative writing classes and workshop for kids and teens

Young Writers’ Hangout on April 7, 14, 21 and 28, May 12, 19 and 26 (1:30 pm-3 pm; independent sessions); Wonder of Words Workshop on May 7, 9, 11, 14, 16 and 18 (1:30-3:30 pm for 8-12 years old/ 4-6 pm for 13-17 years old) at Fully Booked BGC. For details and registration contact 0945-2273216 or [email protected].

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Email: [email protected].