Business Ethics and Social Responsibility

Introduction

Importance of business ethics and social responsibility in today’s business landscape.

Definition: Moral principles and values guiding ethical behavior in business.
Involves:
- Integrity, honesty, fairness, and respect for stakeholders.
- Acting as a moral compass in complex situations.
- Evaluating consequences of actions.
- Complying with laws and regulations.
- Fostering an ethical culture within the organization.

Definition: Broader obligations of businesses towards society, beyond mere ethical behavior.
Involves considering interests of various stakeholders: employees, customers, communities, and the environment.
Key Aspects:
- Environmental Responsibility: Minimizing environmental impact.
  - Sustainable practices, resource conservation, reducing pollution and waste.
- Community Engagement:
  - Supporting local development initiatives.
  - Investing in social causes.
  - Fostering positive relationships within communities.

Business ethics provide the foundation for responsible decision-making.
Social responsibility expands the scope to consider broader societal impact.
Benefits of embracing both:
- Building trust.
- Enhancing reputation.
- Contributing to societal well-being and sustainable development.

Stakeholder Model: Current expectation that businesses consider the interests of all stakeholders, not just shareholders.
Shareholder Model:
- Popularized by Milton Friedman in the 1970s.
- Focused on profit generation for shareholders.
- Profit as the primary purpose of business, disregarding broader social conditions.
Transition from shareholder to stakeholder model over the decades, reflecting changing societal expectations.

Importance of awareness in business decisions regarding their impact on various groups.
Necessity for ethical frameworks and guidelines in decision-making processes.