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Introduction

Ethics is the 'reasoning' that shapes how you and your organisation approach business and is incorporated into organisational culture and strategy. This chapter provides a framework for understanding social responsibility and managerial ethics.

International interest in business ethics and social responsibility is growing. In 1987, a group of European academics and managers created the European Business Ethics Network. Ethics is more than just a fad in management: it has become part of conducting business.

You can probably think of organisations or business people who have been scrutinised when it comes to meeting what their communities view as business' social responsibilities. You will be able to recall others considered socially responsible and take their responsibilities to different stakeholders or parts of the community very seriously. Banks are one type of organisation, for example, which come under constant community scrutiny and comment, as are advertising agencies.

Why all the constant interest in ethical behaviour and social responsibility? Social responsibility and ethics in an organisation operate at the micro (individual people) level and the macro (organisational) level. There are those who see them as important business objectives, compatible with and enhancing other business objectives. Many organisations include reference to their responsibility in their mission statement and stated objectives.

Others take a different view, where the responsibility of business is solely the maximisation of profits.

Consider

There is one and only one social responsibility of business - to use its resources and engage in activities to increase its profits.

Milton Friedman (American economist)

The purpose of this section is not to tell you right or wrong - that would be both presumptuous and unrealistic - but to raise your awareness and consciousness of the importance of encouraging and fostering ethical behaviour within your organisation.

Consider this

Pause to think about some of the ethical debates that are currently in the media. As I write, euthanasia is topical with the Dutch Parliament having recently introduced new legislation; the use of the public purse by politicians inappropriately comes quickly to mind.

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