Floating Icons on Left Border

What is the relationship between corporate social responsibility and business ethics?

  • 24th Aug'22

It’s been a trend in global multinational corporations for the past few decades to look beyond motivations that generate profit. They are keen on creating a social impact apart from the capital gains. But what motivates them to do this? 

Organizations must change along with the corporate social responsibility (CSR) pyramid as it develops. A triple bottom line proposal for corporate entities is being created by new structures that put social and environmental concerns on an equal footing with financial considerations, replacing popular ideas of business ethics that once held profitability as the only basic pillar. To establish procedures, messages, and corporate cultures that promote growth, it is essential to comprehend that basis and how business ethics contribute to its support.

What do you understand by ethics?

If you go through the Oxford dictionary it states that ethics is - "the moral principle that governs a person's behavior or how an activity is conducted." As an individual I like to have a work ethic; I do not work merely for attaining success. I have a moral duty to cultivate that ambition, and to assist people with leadership skills. Otherwise what type of life is working just for profit?


1. The difference between corporate social responsibility and business ethics 

CSR is the obligation of a company to act wherever possible in the interest and the benefit of the community. Sometimes this means adhering to this even at the expense of a lucrative opportunity that can have negative effects on the environment or people. This is also a sign of a healthy organziation.

2.Focus on corporate responsibility and generating high profits

Making the biggest profit possible does not necessarily coincide with doing the right thing. But that doesn't imply you should ignore corporate responsibility and moral business conduct.
It's possible that a company's primary emphasis on financial performance undermines business responsibility and ethics. Sometimes, doing what is best for the bottom line financially might lead you away from what is best for people or the environment. 

Customers, clients, and other stakeholders could eventually become aware of this and discontinue doing business with you. Businesses that uphold moral and ethical standards might cut expenses while concentrating on sustainability. The question remains the same is it possible for any business to pursue this?  Lego is setting the best example in this context - the company has pledged $400 million to make it’s packaging sustainable by 2025, and will be a carbon neutral company soon. Also, they will manufacture toys for educating children on environmental issues.

Value-based leaders are more likely to be devoted to the needs of their workforce, investing in programs that support work-life balance such as flexible scheduling, health and wellness initiatives, and others. Increased productivity and staff engagement result from this servant leadership strategy, which also increases cost savings and boosts output.

3. Businesses should not ignore Ethics and CSR

The pyramid that is based simply on financial prosperity is no longer comprised of ethics, values, and corporate social responsibility. For the future of enterprises, they are just as crucial as economic stability, especially in light of ethical consumerism and corporate accountability in the public sphere. Leaders often become busy with their business that they forget about this but Ethics and CSR. It is a msut to align with it.

4. The impact of organizational values on CSR 

The lists of economic added value and consumer added value have looked into the connection between CSR and organizational success.

The possible financial effects of hotels, restaurants, and airlines' CSR initiatives on good and bad earnings quality are also assessed by CSR-Economy. By educating your staff, clients, and suppliers about environmental issues, businesses in the business gift industry may help the environment. Encouragement campaigns such as the purchase of ecologically friendly promotional materials, and other actions can all help achieve this goal. The point is simple, the more you talk about it in your network, the more people would be aware.

5. Globalization Dimension and Overall Analysis of the Impact of CSR 

According to Gallén & Peraita’s2018 research paper, globalization has a significant impact on a company's CSR efforts, particularly in terms of laws, customs, and environmental concerns. Companies are now functioning in foreign markets as a result of greater globalization, where they may come into contact with other cultural traditions. The demands of ethics are suddenly perceived from a different angle, and things that previously did not matter much are now in conflict with them.
If you are a global company, your focus is crystal clear. You understand that not every law, not every CSR activity will have a positive effect on everyone.  

It’s good to keep a reality check at times of moral dilemma and to pay attention to the big picture of your company.


6. A good CSR practice benefits the business

Business ethics and corporate social responsibility when you combine these two, you will see immense benefits like - 
- Easy to attract and retain employees
-An increase in revenue 
-A positive image is created as a responsible corporate citizen
- Mildly affected by the negative press
- Strengthens the risk reduction factor for example - managing customer boycotts

So far what I have witnessed is CSR significantly improves the overall performance of organizations because your stakeholders see that you are more than a business. According to various research papers, CSR increases social capital which boosts an innovative approach to your business. You understand it not only enhances your brand image but also your profit margin. 

We will definitely witness a global transformation when business ethics and corporate social responsibility are implemented. 



Shellye is committed to helping people from diverse backgrounds to achieve their aspirations in careers and life. The content published above was made in collaboration with our members.

Shellye Archambeau is determined to help you with all possible strategies to climb the ladder of success. She values your feedback. Do mention them in the comment section.

Post Your Comment