What is the Difference Between Business Ethics and CSR

The main difference between business ethics and CSR (corporate social responsibility) is that business ethics mainly affect the employees, stakeholders, shareholders, and consumers or clients of a company, but corporate social responsibility affects the whole of society.

Business ethics and corporate social responsibility are two equally important concepts in the context of business. Business ethics are moral principles that act as a framework for the way a company or business conducts itself and its transactions. At the same time, corporate social responsibility is the concept that a company should be socially accountable to itself, its stakeholders, as well as the public.

Key Areas Covered

1. What is Business Ethics
– Definition, Features
2. What is CSR (Corporate Social Responsibility)
– Definition, Features, Pillars
3. Difference Between Business Ethics and CSR
– Comparison of Key Differences

Key Terms

Business Ethics, CSR, Corporate Social Responsibility

What is Business Ethics

Business ethics involves applying a moral framework to the way companies do business. They are also known as professional ethics. They deal with moral principles and are based on the premise of right vs wrong or good vs bad. The combination of business and ethics results in good ethical decision-making practices in the workplace. Business ethics include doing what’s best for employees, customers, stakeholders, as well as shareholders.

Business ethics are often codified into a set of rules or formal system; then, they are openly adopted by people in that profession. Some examples of ethics in a workplace may include time management, punctuality, transparency, and confidentiality. The employees of an organization have no choice but to follow the ethics of that particular organization.

Disclosing confidential information, misleading the client/patient, violating intellectual property rights, bribery, insider trading, and biased hiring practices are some examples of breaches of business ethics. Companies that focus mainly on profits tend to have poor ethical practices. But this can put people’s privacy, security, and livelihood at risk. Ultimately, poor business ethics can harm the company in the long run.

Corporate Social Responsibility or CSR is the concept that a company should be socially accountable to itself, its stakeholders, as well as the public. Corporate social responsibility ensures that companies are conscious of the impact they have on all aspects of society, including environmental, economic, and social impacts. In other words, a company practicing CSR makes sure that its business processes do not harm but benefit society and the surrounding environment. In addition to improving the various aspects of society, CSR helps to promote a positive brand image.

Corporate social responsibility has four main pillars: ethical responsibility, environmental impact, philanthropic endeavors, and financial responsibilities. Ethical responsibility is the pillar that ensures the company acts in a fair, ethical manner. For example, fair treatment for all types of customers, positive treatment for all employments, and hiring different suppliers from different genders, races, or economic statuses, etc. Environmental responsibility involves practices like reducing pollution and waste, recycling and minimizing negative impacts on the environment. Philanthropic responsibility, on the other hand, deals with how a company contributes to society; in simple words, how it uses resources to make the world a better place. This includes factors like whether a company donates to charities or charitable causes and whether it sponsors fundraising events. Moreover, financial responsibility ties all three of the above pillars together and deals with the financial aspects.

Definition

Business ethics are moral principles that act as a framework for the way a company or business conducts itself and its transactions, while corporate social responsibility is the concept that a company should be socially accountable to itself, its stakeholders, as well as the public.

Nature

Moreover, business ethics is the combination of business and ethics, which results in good ethical decision-making practices in the workplace, whereas corporate social responsibility is more about a company’s obligations to society.

Impact

Business ethics mainly affect the employees, stakeholders, shareholders, and consumers or clients of a company, but corporate social responsibility affects the whole of society.

Conclusion

Business ethics and corporate social responsibility are two equally important concepts in the context of business. The main difference between business ethics and CSR is that business ethics mainly affects the employees, stakeholders, shareholders, and consumers or clients of a company, but corporate social responsibility affects the whole of society.