Ethical Objectives and Corporate Social Responsibility (CSR)

1. Define
Ethics - the moral principles and values that society believes organizations should consider in their decision-making and strategies.
Morals - a society's view of right and wrong actions.
Corporate Social Responsibility - A business which acts morally towards ethical and environmental issues within the various stakeholder groups.
Social Auditing - an independent assessment including a review of a businesses environmental impact, staff management and contributions to society to ensure socially responsible objectives are being met.


2. Three Examples of Unethical Business Behaviour:
a) Financial Dishonesty - this encompasses illegal deliberate misinterpretation of financial accounts as well as morally unjust issues with business expenses being reimbursed to directors of companies.
b) Exploitation of the workforce - Encompasses the exploitation of employees in areas such as neglect of welfare issues, poor pay and unjust working conditions.
c) Exploitation of consumers - This is when firms knowingly exploit people or society by selling harmful products as well as charging excessive prices.


3. Advantages and Disadvantages of Businesses which behave ethically
Advantages:
- Improved Corporate Image - enhances the businesses reputation through treating employees fairly as well as being environmentally friendly.
- Increased Customer Loyalty - businesses build larger customer base though ethical and moral ideals of their objectives and actions.
- Cost Cutting - by being conscious of the environment (e.g. recycling, reduced excess packaging) businesses can often reduce some costs of production as well as reduce the risk of litigation costs from illegal actions.
- Improved Self Motivation - drives employees motivation, productivity and loyalty as they are working for an ethically and morally positive business as well reducing labour turnover.
- Improved Staff Morale - recruitment and retainment of motivated, quality staff as more want to work for business with strong ethical stance.

Disadvantages:
- Compliance Costs - acting ethically could be far more expensive due to additional money and time needed to produce the ethically supportive products (e.g. organic food is more expensive to harvest).
- Lower Profits - Higher prices due to compliance costs which in turn could cause an ethical dilemma where the business could need to adopt a less profitable course of action.
- Stakeholder Conflict - Organizational objectives within the various stakeholder groups could be different (e.g. financial investors are more concerned with the short-term profits as oppose to the firm's ethical stance).


4. How CSR helps a Business compete
The social responsibilities of a business play an important role in their corporate image.

5.Why Social Auditing is undertaken by a Business