Ethics training

Companies realising the importance of CSR, in particular business ethics ought to encourage ethical behaviour and discourage undesirable conduct by eliminating unethical persons and improving the firm’s ethical standards. An organisation should develope an organisational complaince program by establishing, communicating, and monitoring ethical values and legal requirements that characterise its history, culture, industry, and operating environment. A strong compliance program includes a written code of conduct, an ethics officer to oversee the program, and formal ethics training.

Codes of conduct are formal statements that describe what a company expects of its employees. Ethics officers are usually responsible for developing and implementing code of conduct, providing a confidential service to answer questions about ethical issues, and providing ethics training. Ethics training educated employees about firm’s policies, expectations, and resources available for ethical and legal advice; laws and regulations; and general standards. A company needs an effective ethics program to ensure that all employees understand the firm’s values and comply with policies and codes of conduct that create its ethical climate.

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Effective implementation requires that companies consistently enforce standards and punish those who violate codes of conduct. An effectively implemented program should help reduce the potential for misconduct as well as the possibility for penaltied and negative public reaction misconduct occur despite a firm’s best efforts to prevent it. Ethical concerns should be incorporated into the strategic planning process. The firm must develope a mechanism for assessing its progress in making ethical decisions that contribute to its efforts to be a decent organisation which doesn’t underestimate the importance of ethical issues.

Finally, corporate social responsibility includes another element that is called philanthropic activities which promote human welfare and goodwill. Increasing the welfare of community permits organisations to make reputation as a responsible company among the members of community. By making voluntary donations of money, time, and other resources, companies can contribute to their communities and society and improve the quality of life. For example, Hitachi Ltd.

of Tokyo established the Hitachi Foundation, a nonprofit philanthropic organisation that invest in increasing the well-being of underserved people and communities. With assests of $38 million, the foundation is considered a pioneer of global corporate citizenship. Although Hitachi is not required to support the community, similar corporate actions are increasingly desired and expected by people around the world. Many organisations have skillfully used their resources and core competencies to address the needs of employees, customers, business partners, the community and society, and the natural environment.

In order to pursue strategic philanthropy successfully, organisations must weigh the costs and benefits associated with planning and implementing it as a corporate priority. The benefits of strategic philanthropy are closely aligned with benefits obtained from overall implementation of CSR. Businesses that engage in strategic philanthropy often gain tax advantage. Research suggest that they may also enjoy improved productiviy, employee commitment and morale, reduced turnover and greater customer loyalty and satisfaction.

Research indicates that implementation of CSR has a positive influence on financial performance. In the future, many companies will devote more resources to understand how strategic philanthropy can be developed and integrated to support their core competencies. Another vital point is that the implementation of strategic philanthropy is impossible without the support of top management. To integrate strategic philanthropy into the organisation successfully, the efforts must fit with the company’s mission, values and resources.

Organisations must also understand stakeholder expectations and propensity to support such activities for mutual benefit. This process relies on the feedback of stakeholders in improving and learning how to better integrate the strategic philanthropy objectives with other organisational goals. In addition, companies will need to evaluate philanthropic efforts and assess how these results should be communicated to stakeholders. In particular, as it is necessary for any process in business, companies should generate reports for evaluation by which they could manifest their awareness of CSR which is called Social Audits.

More companies around the globe are beginning to audit their social performance and report the results of those assessments as a means of demonstrationg their commitment to corporate social responsibility. Accorting to Investor Responsibility Centre, 61 percent of S&P 500 companies have published as assessment of their environmental impact, and many more firms have announced their intention to provide enviromental reports in the future. Social audits is an tool to fulfil social responsibilities of organisations by which they can claim to be realising the concept of CSR.

In addition, regular audits permit stockholders and investors to judge whether a firm is achieving the goals it has established and whether it abides by the values it has specified as important. Moreover, it allows stakeholders to influence the organisation’s behaviour. Some investors, for example, are using their rights as stockholders to encourage companies to modify their plans and policies to address specific social issues. The process of social auditing can also help an organisation identify potential risks and liabilities and improve its compliance with the law.

The auditing process provides a mechanism to assess risks and detect problems, thereby presenting an opportunity to resolve such issues before they result in negative publicity or even fines or expensive litigation. For example, an audit might uncover operational practices that could endanger public health or harm the natural environment. Furthermore, the audit report may help to document the firm’s compliance with legal requirements as well as to demonstrate its progress in areas of previous noncompliance, including the systems implemented to reduce the likelihood of recurrence.

Stake holders, including government regulators, may look more favourably on a company that identifies such problems through audit, especially when the firm publicly reports the problems, demonstrated that it is attempting to resolve them, and implemenets systems that will reduce the likelihood of their recurrence. In conclusion, four elements of corporate social responsibility were assumed that there was a natural progression from economic to philanthropic responsibilities, meaning that a firm had to be economically viable before it could properly consider the other three elements.

Today, the transition between the elements is viewed in a more holistic fashion, with all four responsibilities being seen as related and integrated in a comprehensive social responsibility approach. Therefore, organisations are expected to simultaneously fulfill all four elements of corporate social responsibility – economic, legal, ethical, and philanthorpic – to be able to claim that they realise the concept of Corporate Social Responsibility. To conduct activities for one element and neglect another might not be enough to maintain the brand and the corporate success of any given organisation.


“How Business Rates: By the Numbers”. Business Week, February 11, 2004, pp. 148-149 “Corporate Social Responsibility – What does it mean? ” Available : http://www. mallenbaker. net/csr/CSRfiles/definition. html Beesley, M. E. (1986). Corporate social responsibility a reassessment. London: Croom Helm Hargreaves, B. J. A (1975). Business survival and social change. London : Associated Business


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