Dept of marketing
Social Responsibility and Business Ethics Perspective Bangladesh Md. Mainul Hossain
2010
University of Dhaka
Social Responsibility and Business Ethics
Perspective Bangladesh
Prepared For Dr. Md. Anisur Rahman
Professor Department of Marketing University of Dhaka
Prepared By Md. Mainul Hossain
18th Batch, Evening MBA Program Department of Marketing Student No. 41018001
Date of submission Friday, August 13, 2010
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Letter of Transmittal th
13 August, 2010 NISUR R AHMAN DR . MD. A NISUR
Professor Department of Marketing University of Dhaka
Subject: Submission of term paper on Social Responsibility and Business Ethics
Dear Sir,
Here is the term paper on “Social Responsibility & Business Ethics: Perspective Bangladesh” as you instructed me to submit as a partial requirement of Master of Business Administration program. The study was a great opportunity for translation of theoretical conceptions of CSR activity in light of practical arena, which will help me a lot in my career to know the business. I have enjoyed working on this paper and have done my best to prepare this report to meet all your expectations.
Your humble consideration on some of my limitations in writing this paper will help me a lot. Your acceptance of this report will make my effort fruitful.
Yours sincerely,
MD. MAINUL HOSSAIN ID No. 41018001(18 th Batch) Department of Marketing Faculty of Business Studies University of Dhaka
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ACKNOWLEDGEMENTS
I want to thank my course teacher Dr. Md. Anisur Rahman, for his continuous support in the Course study. He is very much sincere to hear me and to give advice. He is responsible for involving me in to go through the Term paper. He taught me how to study and express my ideas. He showed me different ways to approach an academic paper and the need to be persistent to accomplish any goal. He has provided the outline of the whole term paper and also gave us some helpful documents and hints.
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Table of Contents
Letter of Transmittal.............................................................................................. 3 ACKNOWLEDGEMENTS ...........................................................................................4 Table of Contents................................................................................................... 5 Abstract.................................................................................................................7 Introduction ........................................................................................................... 8 Dimensions of Social Responsibility Concerns of Business.................................. 12 Objectives and Methodology of the Study........................................................... 14 CSR Activities of the Organizations of Bangladesh: Evidences from Some Cases 15 Case 1: Grameenphone (GP):........................................................................... 15 Case 2: Aktel: ................................................................................................... 16 Case 3: Citycell:................................................................................................17 Case 4: Banglalink: ...........................................................................................17 Case 5: British American Tobacco Bangladesh Ltd.(BATB): .............................. 18 Case 6: Dutch Bangla Bank Limited (DBBL):..................................................... 18 Case 7: Unilever:.............................................................................................. 19 Case 8: The Hong Kong and Shanghai Banking Corporation (HSBC):...............19 Analysis of the Evidences of the Social Responsibility Practices from the Cases. 20 Some Opposite Pictures....................................................................................... 22 Employee right violation: Example 1:............................................................... 23 Employee right violation: Example 2:............................................................... 24 Employment of Child Labor: Example 1:...........................................................24 Employment of Child Labor: Example 2:...........................................................24 Example of unsafe working environment:........................................................ 25 Consumer Rights Violation: Example 1:............................................................ 25 Consumer Rights Violation: Example 2:............................................................ 25 Example of malpractice by foreign companies:................................................ 25 Business Ethics....................................................................................................27 Potential Business Benefits............................................................................... 28 General business ethics .................................................................................... 28 Ethics of finance ............................................................................................ 28
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Ethics of human resource management ........................................................ 29 Ethics of sales and marketing........................................................................ 30 Ethics of production.......................................................................................30 Ethics of property, property rights and intellectual property rights ...............31 Ethics and technology................................................................................... 32 Corporate ethics policies .................................................................................. 32 Ethics officers................................................................................................... 33 Conclusion........................................................................................................... 34 Bibliography ......................................................................................................... 36
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Abstract
The main objective of this study is to identify the nature of Social Responsibility practices in Bangladeshi business sector. In order to fulfill this objective, firstly, a case study method was followed. To identify and analyze the Corporate Social Responsibility practices in the corporate sector of Bangladesh, the article analyzed the cases of some of the prominent companies of Bangladesh. The organizations examined include Banglalink, Dutch-Bangla Bank Limited, Citycell, Unilever, HSBC, Grameen Phone and, British American Tobacco Bangladesh Limited. Information was also collected from sources like newspapers, articles and web sites. Through analysis, two opposite pictures came under light. The analysis of these cases identified that on one hand, the corporate sector of Bangladesh is performing corporate social responsibility activities with issues like health, education, natural environment, women empowerment, disabled people, cultural development and infrastructural development of the country. On the other hand there are evidences of child labor, human rights violation, low wage, poor working environment, violation of governmental rules and regulations and others.
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Introduction
In recent years, the popular theories like ‘stakeholder theory’ and ‘legitimacy theory’ have emphasized the importance of ‘social responsibilities of businesses’ in a greater way. These theories are based on the argument that: apart from pursuing the profit maximizing objective, organizations need to be responsible for their activities in the society and thus, continued operation and success of business activities are dependent on compliance of societal expectations and gaining support for continued existence in the society (Alam, 2006). Stakeholder theory argues that the corporations should be accountable not only to the shareholders but also to the other multiple stakeholder groups like employees, consumers, government, suppliers, interest groups and the public. In general, a stakeholder can be defined as any group or individual who can affect or is affected by the achievement of the firm’s objectives (Freeman, 1984). Roberts (1992) said: “..social responsibility activities are useful in developing and maintaining satisfactory relationships with stockholders, creditors and political bodies. Developing a corporate reputation as being socially responsible through performing and disclosing social responsibility activities are part of a strategy for maintaining stakeholder relationships.” Another much related theory is legitimacy theory. This theory is based on the idea called ‘social contract’. Legitimacy theory also argues that the business organizations must concentrate on the public in total and not just the investors. The society will allow the business organizations to operate only when the organizations will fulfill the expectations of the society. Legitimacy is a condition or status which exists when an entity’s value system is congruent with the value system of the larger social system of which the entity is a part and when a disparity, actual or potential, exists between the two value systems, there is a threat to the entity’s legitimacy (Lindbom, 1994). Mathews (1993) states that: “The social contract would exist between corporations (usually limited companies) and individual members of the society. Society (as a collection of individuals) provides corporations with their legal standing and attributes and the authority to own and use natural resources and t hire employees. Organizations draw on community resources and output both goods and services and waste products to the general environment. The organization has no inherent rights to these benefits and in order to allow their existence, society would expect the benefits to exceed the costs to society”. In recent years, the impact of business on the society has become a crucial issue. Business corporations are considered accountable to society for their actions. Now it is said that businesses are accountable not only to the shareholders but also to a wide range of stakeholders – including business partners, employees, customers, suppliers and the overall
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community. This kind of social view gave birth to the concept of Corporate Social Responsibility.
Business deals in a society. It has to procure its raw materials, labor and other inputs from the society and with the help of all these, it will produce the finished products and sell those to the people in the society. Business cannot work independently. Like an individual, it also has to live in an environment surrounded by socio-cultural, economic, technological, competitive, legal and political forces. In order to survive, it has to adjust itself within these forces. As a result, just like any other social units, it has to live like a member of a community or a citizen of a country. It has to abide by several rules and ethical considerations so that it does not do anything that is harmful for the society. As a body that deals with the society and utilizes the people or other resources of the society, it has some duties and responsibilities to the society also. In order to perform their task in the society, businesses must act as the ‘socially responsible citizens’. What should be the responsibilities of a firm was a major issue of debate among the academicians over a long period of time. Friedman (1970) argued that there is only one social responsibility of business and that is to use resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. But Carroll (1979) did not support this view in total. Carroll’s view extended the responsibility of the business beyond only economic responsibility. According to Carroll, the managers of business organizations have four responsibilities and these are economic, legal, ethical and, discretionary (table 1). Table 1: Carroll’s four responsibilities of business RESPONSIBILITY
DESCRIPTION
Economic (must do)
To produce goods and services of value to the society so that the firm can repay its creditors and shareholders.
Legal (Have to do)
Government in laws that management is expected to obey.
Ethical (should do)
To follow the generally held beliefs about behavior in a society.
Discretionary do)
(might Purely voluntary obligations a corporation assumes. Examples are philanthropic contributions, training the hard core unemployed, and providing day care centers.
Frost (2001) argued that companies have two kinds of responsibility – commercial and social. On one hand, commercial responsibilities involve running a business fruitfully, breeding profit and satisfying shareholder expectations. On the other hand, social responsibilities involve taking on responsibilities as an actor in the society and the community by engaging in
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activities that go beyond making a profit – as such protecting the environment, looking after employees, addressing social issues, and being ethical in trade.
Both Carroll and Frost had consensus with Friedman that economic or commercial responsibility is important for the firms in order to survive. But the only point of disagreement was that Friedman considered economic responsibility as the only responsibility of the organization. He argued that by making discretionary responsibilities like making expenditures to reduce pollution, or by hiring the hardcore unemployed, the company is spending the shareholders’ money for general interest of the society. By taking this load of the social costs, the business becomes less proficient. There are so many arguments for and against whether businesses should perform social responsibilities or not. Griffin (1997) explained the arguments in favor of performing social responsibilities in his text. The arguments for social responsibility are: 1. Business creates problems (such as air and water pollution, resource depletion) and should therefore help to solve them; 2. Corporations are citizens in our society and should not try to avoid their obligations as citizens. 3. Businesses often have the resources necessary to solve the social problems as many business organizations often have surplus revenues. 4. Business is a partner in our society, along with the government and the general population. The arguments against social responsibilities are also there. It is said that the purpose of business is to earn profit for the owners. It is also argued that involvement in social programs gives business too much power. Businesses lack the expertise to manage social problems (Griffin, 1997). The society and the business organizations have a symbiotic affiliation between them. According to Bhuiyan and Anowar (1997), in past, at the time of industrial revolution, the key affair for every business organization was profit maximization. At that time, a business used to take its actions for the benefit of the stakeholder group who were directly involved with the business, means the shareholders or owners. But over the years, the characters of businesses were changed. Businesses were becoming bigger and complicated. Moreover, they were crossing borders. As a result, they were affecting the society at a larger extent. Social stance and expectation towards the business were also changing. As the business had to work in the society, business people became more watchful about the ethical issues. Moral obligations towards the society started to get significance. Modern society presents business with immeasurably intricate problems it did not have formerly (Davis, 1975). There is no doubt that business is a social unit and in order to subsist and survive in the society it has to appreciate the ethical values of the society.
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Therefore, even after so many debates, the concept of social responsibility remained one of the most talked about issues in the business world for several decades. According to Davis (1980), now,
“There is a call for higher business ethics and more responsible business behavior. This new expectations reflect what we call a socioeconomic model of business. The socioeconomic model of business is a framework that views business as a subsystem of the society, with a need to satisfy both its economic and social relationships with the society…… The model recognizes that business and society each are part of a total system and therefore are interdependent. Their interdependence requires mutual cooperation and supportive behavior…. The socioeconomic model sometimes is called the “social responsibility model” or “social accountability model”. The socio-economic model of business is highly different from the traditional economic model of business. This difference is presented in table 2: Table 2: Economic vs. Socioeconomic model Economic model:
Socioeconomic model:
primary emphasis:
primary emphasis:
Production
Quality of life
Exploitation of resources
Conservation of resources and harmony with nature
Market decisions
Some community controls on market decisions
Economic return on resources
Balanced economic and social returns on resources.
Individual interests
Community interests
Business as a closed system
Business as primarily an open system
Minor role of government
Active government involvement.
Source: Davis, K., (1980), Business and Society: Environment and Responsibility, 4th Edition, McGraw-Hill Book Company, NY. Today a business lives in a ‘Glass House’ and that is why business has bigger ‘Public Visibility’ (The extent that an organization’s activities are known to persons outside the organization) in comparison to other institutions in the society (Davis, 1975). Society is very much attentive to know the actions of the business. The rising status of ‘social welfare’ is also gripping the business to carry out some social responsibilities. Society’s new revelation towards the corporate world begot some new views like ‘Corporate Social Responsibility (CSR hereafter)’ and ‘social responsibility accounting’. Corporate social responsibility can be
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described as the voluntary commitment of the business organizations to contribute to social and environmental goals.
Dimensions of Social Responsibility Concerns of Business
The notion of CSR has developed very speedily over the last few years in the developed countries. As a consequence, the companies have developed an extensive range of exercises which cover different levels of activities that have an effect on corporate governance, employee relations, supply chain and customer relationships, environmental management, community involvement as well as key business operations. Corporate responsibility covers a number of aspects of the dealings of the business. Skinner and Ivancevich(1992) argues that consumers, special interest groups, and the general public are aware of business’ impact on the society and demand firms to do more than try to create profits. At present, nearly all managers view social responsibility as a required duty of doing business. Social responsibility provokes many difficult questions for business firms (Skinner and Ivancevich, 1992): 1. To whom are we responsible? 2. How far should we go to satisfy our customers and achieve organizational objectives? 3. Will our decisions affect any segments of our society that we have not considered? Skinner and Ivancevich also state: “generally we can say that business organizations have an impact on consumers, employees, the environment and to those who invest in the firm” (figure 1). Figure 1: Social responsibility concerns of business
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Source: Skinner, S.J. and Ivancevich, J.M. (1992), Business For the 21st Century, Irwin, Boston. According to CPD (Center for Policy Dialogue) Report (2002) on Corporate Responsibility Practices of Bangladesh, the some corporate responsibility issues that are followed by many other countries as well as Bangladesh include Sustainable Development, Business Ethics, Human Rights, Legal Compliance, Corporate Governance, Stakeholders’ Dialogue, Fair Employment, Health and Safety, Labor Standards, Community Relations and, Environmental Responsibilities. Frost (2001) states that corporate social responsibility can provide opportunities to enhance financial viability and for corporations to be a responsible corporate citizen. This opportunity can be realized through: a. Creating new lens for sourcing new business opportunities and in doing so open up new revenue sources from entirely new markets in emerging industries. b. Enhancing company reputation through a much more powerful brand and improved stakeholder dialogue. c. Fostering new partnerships between business, government, investors and civil society. d. Strengthening a position as an employer of choice. e. Increasing productivity of staff as they derive deeper meaning and value from the work that they perform, contributing to higher levels of morale and employee engagement. f. Influencing positive share market valuation through Global Social Investment. g. Allowing innovation in strategies for leadership development and in particular lifelong learning, diversity and entrepreneurship.
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h. Gaining more international exposure and affiliations with organizations such as United Nations, and, i. Contributing to making the world a better place and achieving long-term sustainability. So, it can be said that, in today’s business world, the social responsibility performance is also getting huge importance along with the financial performance.
Objectives and Methodology of the Study
The main objective of this study is to identify the nature of CSR practices in the corporate sector of Bangladesh. In order to fulfill this objective, case study method was followed. The purpose of case study method is to obtain information from one or a few situations that are similar to the researcher’s problem situation (Zikmund, 2003). In case studies, the researcher explores in depth a program, an event, an activity, a process, or one or more individuals (Creswell, 2003). This study is basically a desk research. To identify and analyze the CSR practices in Bangladeshi companies, the article analyses the cases of some of the prominent companies of Bangladesh. The organizations examined include Banglalink, Dutch-Bangla Bank Limited, Citycell, Unilever, HSBC, Grameen Phone and, British American Tobacco Bangladesh Limited. Information about these companies was collected from the World Wide Web. Some of the other information was collected by informal interviews given by some personnel and staffs of these organizations. Several evidences were also collected from the newspaper articles. One limitation of case study research is that generalization from a few cases is dangerous because most situations are atypical in some sense (Zikmund, 2003). But even if situations are not directly comparable, case studies can provide with a number of insights and hypotheses that can be used for future researches. The next section of this article covers the case studies of the above mentioned organizations in relation to their CSR activities. It is very tough to present all the CSR activities of these
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highly active and successful enterprises through short cases. So, definitely so many (even some very important) activities of them could not be mentioned here. It is another limitation of this study.
CSR Activities of the Organizations of Bangladesh: Evidences from Some Cases
This section describes the activities related to CSR practices by the previously mentioned organizations through short cases. Definitely, compiling all the activities (in relation to CSR) of these big companies in short cases is a daunting task. That is why the cases prepared hereafter only covers some instances of CSR practices of these companies. These cases are mainly developed from the information that is provided in the respective web sites of these companies.
Case 1: Grameenphone (GP): In its official website Grameenphone defines CSR as ‘A complimentary combination of ethical and responsible corporate behavior as well as a commitment towards generating greater good in society as a whole by addressing the development needs of the country.' In this website, they also mention that:
“Grameenphone started its journey 10 years back with a belief that "Good development is good business". Since its inception, Grameenphone has been driven to be inspiring and leading by example, when it comes to being involved in the community. At Grameenphone we believe that, sustainable development can only be achieved through long term economic growth. Therefore, as a leading corporate house in Bangladesh we intend to deliver the best to our customers, business partners, stakeholders, employees and society at large by ‘being a partner in development.'”
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Over the years GP has performed many CSR activities throughout the country. The organization mainly focuses on health, education and empowerment. Some of them are described here. The Village Phone Program (VPP) is one of its most prominent CSR programs. Commencing its operation in March 1997, the VPP is a unique initiative to provide telecommunications facilities in remote, rural areas where no such service was available before. It has brought about a quiet revolution in mobile telephony in Bangladesh, by putting cell phones in the hands of the rural poor, many of them women, who had never seen a telephone before. GP gives a huge importance on the education sector development. As a result they took initiatives of providing access to education, especially for children from disadvantaged backgrounds who might not otherwise get the opportunity. It is the main goal of Grameenphone’s CSR education initiatives. GP tried to make a positive contribution to the underprivileged community of Bangladesh by helping in improvement of the health perils in the country as much as possible. Grameenphone has embarked upon a CSR partnership with Grameen Shikhkha, an organization of the Grameen Bank family to provide scholarships to the underprivileged, but bright students at various academic levels. In response to the worldwide movement against HIV and AIDS and the Millennium Development Goals set by the Bangladesh Government, Grameenphone is working as a catalyst to unite leaders behind this cause. Grameenphone extended its support to the Acid Survivors' Foundation (ASF) in its effort to rehabilitate the acid victims by providing employment opportunities. Grameenphone has already taken six individuals who have been supported by the Acid Survivors' Foundation and provided them with employment within the company. These individuals will also be provided with necessary skills training required to help them take on their new responsibilities in the company. Grameenphone Ltd. has signed an agreement with CARE Bangladesh to launch a project titled ‘Tathyo Tari' (Information Boat) that is designed to provide necessary livelihood information to the riverine communities of Bangladesh. The main objective of this project is to educate and empower rural communities with necessary and appropriate livelihood information.
Case 2: Aktel: In recognition of its CSR effort, AKTEL is the first among all mobile phone operators to win “Standard Chartered-Financial Express Corporate Social Responsibility Award-2006”. AKTEL has established a tradition of providing scholarships every year to three promising individuals to complete their higher studies in Multimedia University in Cyberjaya, Malaysia. To provide a world-class teaching and learning resources for Bangladeshi professionals AKTEL joined hand with Chittagong Skills Development Centre (CSDC), Underprivileged Children's Educational Programs (UCEP-Bangladesh), etc. AKTEL has joined hands with Anjuman-Mufidul-Islam, a hundred year's old civic organization in distributing bedding & clothing to the underprivileged people of the city. As part of CSR initiative, Ms. Nora Junita Hussaini, Chief Financial Officer of AKTEL distributed the bedding & clothing among slum dwellers & orphanages for both boys and girls at old Dhaka. Other senior functionaries of AKTEL were also present. AKTEL had taken initiative of executing various activities in recently held Bishwa Estema, the 2nd largest Muslim gathering in the world after Holy Hajj
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in which millions of people came from different parts of the world to participate in this pilgrimage. Among the initiatives, are to provide instant primary aids to the pilgrims through free medical check-up by a team of certified doctors' at the AKTEL voluntary medical service point from morning to night. AKTEL also served free pure drinking water for the pilgrims of Bishwa Estema.
Case 3: Citycell: Citycell is the pioneer in mobile phone business in Bangladesh. Over several years this organization is performing several CSR activities all over the country. Some important examples of their CSR activities over last few years are cited here. In 2005, this pioneer mobile operator signed up an agreement with Bangladesh Red Cross Society to carry out fund raising program for human welfare through Short message Service (SMS). The fund collected through SMS was contributed to Bangladesh Red Cross Society for the betterment of the citizens. In 2004, Citycell distributed relief among the fire victims of Bau Bazaar area (a slum area in Dhaka city). As in this fire almost 2000 huts were burnt and a lot of family possessions were devastated, Citycell distributed relief among almost 2500 families. In 2004, Citycell handed over a cheque for Taka 2,500,000 to the then prime minister of Bangladesh for flood affected people of the country. Other than this, this organization handed over relief to the Rotary club for aiding the flood-affected people. In the same year Citycell sponsored Saline project for helping the flood affected people of the country. In 2004, Citycell launched its community program ‘Citycell Changing Lives’ and donated to the children of an organization named Society for the Welfare of the Intellectually Disabled (SWID). On December 05, 2004, Citycell donated physiotherapy equipment to SEID (Special Education for Intellectually Disabled Children) trust. Citycell works for increasing the level of public awareness and for this it provides stickers with the phone numbers of Police Control Room in order to register traffic complaints faced by the commuters of CNG auto rickshaws and taxi cabs. Citycell introduced media award and it is given to journalists in print and electronic media. Citycell is sponsoring a music award with the help of a popular television channel in Bangladesh- ‘Channel-i’.
Case 4: Banglalink: Another leading mobile telephone service provider Banglalink divided its CSR activities into three subdivisions: environmental responsibilities, economical responsibilities and social responsibilities. Some of the important instances of their CSR practices over last few years are described here. Banglalink has provided 200 recycle bins in Cox’s Bazaar and Potenga sea beach. The organization has employed 15 men to clean up the Cox’s Bazar beach every day since November 2006. Banglalink has also cleaned Potenga sea beach in June 2006. To reduce air pollution, Banglalink has provided filters in brick factories. They have also performed tree plantation activities in several areas of the country. Banglalink is providing internship opportunities to the students of some of the best universities of Bangladesh. Banglalink is spending money in constructing over bridges and underpasses in the major
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traffic points of the big cities of Bangladesh. Banglalink is spending money in construction of roads in rural areas of the country. The organization has also donated money for the development of Zia International Airport, Chittagong port, Mongla sea port and Benapol and Hili land ports. In March 2005, Banglalink arranged charity concert and donated the money collected from this charity concert to “Bangladesh Protibondhi Foundation” who work for the handicap children and disabled men and women.
Case 5: British American Tobacco Bangladesh Ltd.(BATB): BATB is a leading multinational cigarette manufacturer in Bangladesh. It was previously known as Bangladesh Tobacco Company (BTC). Some of the important instances of their CSR practices over last few years are described here. In 2001, BATB launched Youth Smoking Prevention (YSP) program in TV, press. Outdoor and retail level. In 2002, BATB expanded this program by conducting a comprehensive school education program with the help of an Anti Tobacco body in 20 schools in Bangladesh. In 2002, BATB formed a free basic IT education program (called Dishari) among the rural youth. BATB runs several partnership programs with the universities of Bangladesh. One of these programs is called ‘Battle of Minds’ which is a talent promotion program. BATB regularly interact with the university students and graduates through their internship programs, job fairs and campus presentations. BATB has been contributing to the country’s afforestation drive by implementing a huge afforestation program. This organization helped in planting trees along roadside, canal banks and farmers’ landholdings. This organization has received the Prime Minister’s national award for afforestation for several times. BATB has been supporting Shandhani’s eye donation program since 1984. BATB does not employ child labor in any area of their operations. This organization encourages and motivates their farmers to send their children to school. BATB has introduced ‘Star Search Program’ as an attempt at identifying hidden musical talents in the country. BATB acknowledges the risk of smoking and support the right of informed adults to smoke. For this purpose, they distribute consumer leaflets to the customers.
Case 6: Dutch Bangla Bank Limited (DBBL): DBBL is the first Bangladesh-European Joint venture bank in Bangladesh. This bank performs CSR practices in the areas like health, education, information technology and disaster management. This organization was awarded ASIAN CSR AWARD – 2005 for its outstanding program on CSR. Some of the important instances of their CSR practices over last few years are described here. In September 2006, DBBL has donated an amount of Tk.9.36 crores for the expansion of Ibrahim Cardiac Hospital and research institute. For rehabilitation of the disabled children in Bangladesh, this organization has given financial assistance amounting to Tk. 18.50 lacs to 17 NGOs in 2006. In the same year DBBL has donated Tk. 15 lacs for purchasing Endoscope machine to national Medical College Hospital and it has also distributed medical support to 50 HIV/AIDS patients. In education sector also, DBBL contributed a significant amount. For example, in 2005, it has given scholarship to
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about 150 students among whom there were 6 blind students also. In 2006, the organization has donated Tk. 15 lacs to Banglabandhu Sheikh Mujib Medical University to purchase academic reference books. In June 2006, it has donated a Toyota Hi-Lux pick-up van to Bangladesh Agricultural University. In order to select and award better mathematicians in the country, DBBL and The Daily Prothom Alo (a renowned daily newspaper in Bangladesh) jointly have arranged Mathematical Olympiad. DBBL jointly arranged an IT award cer emony with Bangladesh Association of Software and Information Services (BASIS) in 2005.
Case 7: Unilever: Over last four decades Unilever is operating in Bangladesh successfully. This organization is also renowned as a socially responsible corporate. Some of the important instances of their CSR practices over last few years are described here. In May 2006, Unilever’s Fair & Lovely foundation in a joint effort with Khan Foundation has helped over 100 under privileged young women in gaining economic empowerment by providing them with IT training. In 2005, Fair & Lovely foundation had initiated a Supplementary Education Program where 200 women who have passed HSC each received a Tk. 25,000 scholarship to support her tertiary level education. In 2004, Unilever’s The Fair & Lovely WEALTH program trained 310 women in 9 districts across the country. The eleven day long training project was divided into two parts: first five day’s training consisted of business management and the next six days were dedicated to practical hands on training. To give the marginalized people an opportunity to health care, Unilever worked with an NGO called ‘Friendship’. They established a floating hospital to bring essential health services to the char (Small Island) dwellers. Sponsored by their Pepsodent toothpaste, they have arranged a bus with modern dental check-up facilities that enable professional dentists to visit schools and neighborhoods. To discover the hidden singing talents in Bangladesh, Unilever launched Close-up 1 talent hunt program that got immense popularity and fame all over the country. Under the name of their famous soap Lux, they have successfully launched Lux-Channel-i Superstar program to find out new glamour icons for Bangladeshi cultural arena.
Case 8: The Hong Kong and Shanghai Banking Corporation (HSBC): Like in the other countries, HSBC is operating successfully in Bangladesh also. Some of the important instances of their CSR practices over last few years are described here. HSBC Bangladesh supports the work of the Acid Survivors Foundation (ASF) in providing medical support and assistance to the victims of acid abuse. HSBC, teaming up with the Department of environment placed roadside digital banners at various locations in Dhaka city to raise awareness about World Environment Day and the protection of the environment. In June 2006, HSBC held a daylong environmental program at Dhanmondi lake area. In 2003 this organization sponsored school environment fair in Gazipur. HSBC helped Gulshan Literacy Program (GLP) School with Tk.100,000 to expand the educational program of the school. In November 2006, HSBC launched the Young Entrepreneurs Award. In August 2002, HSBC took initiative of computer training to some top class students. In 2006, HSBC along with
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Bangladesh Red Crescent Society inaugurated the first HSBC Red Crescent Thalasaemia Center. In December 2004, HSBC hosted the 3rd annual “Annual Golf Tournament” at the Bhatiary Golf and Country Club in Chittagong.
Analysis of the Evidences of the Social Responsibility Practices from the Cases
Though the cases presented in the previous section do not cover everything that these companies have performed in order to discharge their corporate social responsibilities, it can be identified that they are trying to contribute mainly in the economic, health and education sector of Bangladesh. There are some important features that can be identified from these cases. 1. Taking initiatives after natural disasters: The corporate sector of Bangladesh is helping the natural disaster affected people in Bangladesh. Natural calamities like flood, cyclone etc. are common phenomenon in Bangladesh and huge resources get devastated every year because of these disasters. A good number of families loose everything they belong. By providing relief to these people, the corporate sector is helping the country. 2. Protecting the natural environment: Many of these corporations are aiding in the protection of natural environment of Bangladesh. These days pollution of natural environment has become a burning question in this country and pollution control demands a huge amount of investment. The government will be benefited if corporate sector continues investing in the solution of this problem. 3. Contributing in education: In a country like Bangladesh where the literacy rate is very low, the involvement of corporate sector in the education sector can become helpful for the overall development of the country. By providing scholarship to meritorious students, several companies are facilitating the education sector of the country. Other than providing scholarships, the corporate sector is also contributing by arranging several talent hunt
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programs to find out talented citizens of the country. They are also performing some programs where people’s awareness about education is growing. They also invest in the Information Technology Training programs. 4. Working for disabled people: From the cases presented in this article, it can be easily identified that the corporate sector is working heavily for the disabled children, men and women of this country. Thus they are helping in ensuring human rights which is a relatively ignored issue in Bangladesh. 5. Women empowerment: These corporations are working a lot for the women empowerment. By providing training to this socially deprived section of the community, the corporate sector is helping in the development of human resources and making the women self dependent. These organizations are also working on growing the awareness about acid abuse which is a significant problem in this country. 6. Contributing in health sector: The health sector of this country is getting benefited from the several activities of the corporate sector. They are working on recent health problems like HIV/AIDS. They are donating to several hospitals and NGOs who work for ensuring the healthcare facilities of the country. Health facility is a basic need for all human beings. This sector needs a lot of investment also. That is why the contribution from the corporate sector in this sector is praiseworthy. 7. Cultural Development: Corporate sector is getting involved in the cultural sector of the country. By arranging several talent hunt programs new cultural talents are coming in front of the country people. Definitely these kinds of programs are expensive and these organizations are taking this responsibility. 8. Employment creation: These companies are creating employment and definitely unemployment is a serious problem in Bangladesh. By providing with internship programs for university graduates, the corporations are participating in the human resources development of the country. 9. Infrastructural development: Lastly, it was seen from one of the case studies that corporate sector is contributing in the infrastructural development of the country also by investing in the development of ports and construction of roads in rural areas. Definitely this kind of initiative will help in the overall economy of the country.
The common CSR practices in Bangladesh can be summarized through figure 2. Figure 2: Main Dimensions of Social Responsibility practices in Bangladeshi business Sector
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Some Opposite Pictures
Though over the last few years, the business sector of Bangladesh has seen a phenomenal growth in the social responsibility practices, some opposite evidences also exist. This section deals with several news releases over last few years in some printed media and in World Wide Web. It can be noticed from these evidences that though several companies are practicing social responsibilities, many business organizations in Bangladesh are not doing the business in a socially responsible way. Haque (2007) states: “Lack of effective good governance in Bangladesh has resulted significantly in lack of business ethics and poor CSR culture. In Bangladesh, the private sector seems to focus on earning profits in the short term, ignoring the issue of responsible behavior and the desirability of earning the trust of the consumers, which are important for the long-term success of their operations. Selling of adulterated low quality products at high prices, cheating in weight, and above all, hoarding to reap dishonest profit, all confirm this. In the absence of socially responsible behavior in the private sector, there is need to enhance capacity building on the part of the state to intervene and implement sanctions effectively to enforce compliance.”
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In some respects, the many organizations are showing contradictory behavior which is against the principles of CSR. The article has already described the several CSR practices followed by two telecommunication giants like Grameenphone and Aktel. Recently these organizations faced with legal actions for illegal use of Voice Over Internet Protocol technology. The following news is extracted from the web site of voip-buzz.: “The country’s telecom watchdog fined Aktel Tk 145 crore for its involvement in the illegal use of VoIP (Voice over Internet Protocol) or call termination business. Bangladesh Telecommunication Regulatory Commission (BTRC) in a press release said during recent raids by the law enforces, Aktel’s involvement in illegal call termination business was ascertained. Talking to The Daily Star, BTRC Chairman Maj Gen (retd) Manzurul Alam said, "Aktel has already paid Tk 72.50 crore to the national exchequer." Telekom Malaysia International Bangladesh (TMIB) is the 70 percent stakeholder of Aktel. Aktel is not alone in paying the government compensation. Earlier, country’s largest mobile phone service operator Grameenphone announced it would pay the government Tk 168.4 crore while another major operator Banglalink said they would pay Tk 125 crore. The BTRC chairman said, "We hope that no telecommunication operator will facilitate any illegal VoIP ventures… No one will be spared if found involved in any capacity in the illegal call termination business." The BTRC in a press statement yesterday said international call termination to Bangladesh is a licensed service and is currently reserved only for the state-owned telephone operator Bangladesh Telegraph and Telephone Board (BTTB). Law enforcement agencies and the BTRC started joint operations on illegal VoIP operators after this interim government took office in January. Aktel, the second largest mobile phone service operator in Bangladesh, already made a loss in the third quarter, due mainly to the compensation it will pay the government. However, Aktel’s earnings before interest, taxes, depreciation and amortization (EBITDA) fell sharply due to the government compensation.” (Source: Bangladesh Fines VoIP Providers, including Grameenphone from http://voip-buzz.com/2007/11/11/bangladesh-finesvoip-providers-including-grameenphone/ browsed on 20 August 2008.)
If Carroll’s (1979) social responsibility dimensions are considered, it can be said that these two organizations have focused a lot on the discretionary responsibilities but sometimes ignored the legal and ethical responsibilities. From several news media, it is also becoming evident that many business organizations are not careful about the employee rights and employee movement is becoming a common incident in the country. Some of the examples are cited here. Employee right violation: Example 1: “Seventy Bangladeshi factory workers trekked seven kilometers yesterday, in an attempt to escape from their employer whom they claimed beat them and deprived them of wages. One
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of them claimed the group were denied wages of between two and three months. "When we asked our bosses for our salaries, they beat and kicked us. They treated us like animals and made us work without caring for our welfare". It is unclear which company the men worked for but they were heading to the Bangladeshi Embassy to request help.” (from: http://csrasia.com/index.php?cat=42 published on 29 May 2008).
Employee right violation: Example 2: “Tejgaon is home to some of Bangladesh's top garment factories. Garments are Bangladesh's biggest export earners with sales abroad fetching more than nine billion dollars, or threequarters of the country's total export earnings, in the last fiscal year. But the industry has been hit by a series of protests over low wages and poor working conditions. Sixteen factories were torched and hundreds vandalized last year in the country's worst ever labor unrest. The protests came to a halt late in 2006 when the government, unions and the employers agreed to a 25-dollar monthly minimum wage. The government has issued several warnings to the factories to implement the minimum wage but according to the unions just 20 percent have done so. "We have conducted surveys in the country's main industrial zones and found that only 20 per cent of the country's some 4000 factories have implemented the minimum wages," Moshrefa Mishu, president of Garment Workers Unity Forum, said. In the latest warning, the government has said it will take legal action against factories that fail to implement the minimum wage by September 30. The deadline has so far been deferred at least twice.”(from: “25,000 textile workers protest poor wages in Bangladesh” posted on 23 September 2007 in http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/ 301478/1/html).
One of the four dimensions of social responsibility practices (consumer, investor, employee and environment) suggested by Skinner and Ivancevich (1992) is violated here and that is, employee perspective. Moreover, there are evidences of employing and misusing child labor. Some examples are given here: Employment of Child Labor: Example 1: “According to a survey conducted by Save the Children, UK, about 10 million children under the age of 18 are involved with different sorts of risky and harmful jobs in Bangladesh, reports the New Age (3 May). The survey found that 24 percent of them are engaged in hazardous work while about 99 percent of child laborers are deprived of having any basic facilities at their workplaces.” (from: http://csr-asia.com/index.php?page=2&cat=42 posted on 09 May 2007). Employment of Child Labor: Example 2: “A British television program has accused Tesco PLC, Britain's biggest retailer, of selling clothes made by two contractors in Bangladesh who are alleged to have used illegal child labor. The program, made after a four-month investigation, focuses on Harvest Rich and Evince, suppliers based in Dhaka. Both are established suppliers to Tesco and produce clothes under the Florence and Fred brand, one of the supermarket group's clothing lines.
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They also supply other Western companies.” (found in http://csr-asia.com/index.php?page= 6&cat=42 posted on 09 October 2006). Moreover, there are evidences of making the employees work in a hazardous and dangerous environment also: Example of unsafe working environment: “At least 21 deaths have occurred this year in Bangladesh's ship-breaking industry along the southern Bangladesh coast, near the harbors of the port city of Chittagong, making the job of recycling obsolete ocean liners one of the world's most dangerous occupations. Human rights activists put the blame on the absence of minimum safety measures and the lack of quick response to hazards.” (found in http://csr-asia.com/index.php?page=8&cat=42 posted on 28 July 2006).
Violation of consumer rights from the part of the manufacturers is a common phenomenon. Unjustifiable increase in price and providing shoddy, unsafe and low quality product are some common practices regarding consumer rights violation. Some examples can be cited here: Consumer Rights Violation: Example 1: “The Bangladesh Observer (18 March) reports that since there is no pricing regulation in Bangladesh, companies usually sell the same products at different prices, cheating lots of consumers. Although many companies are using BSTI (Bangladesh Standards and Testing Institution) certified marks, most of them do not show retail price on the labels. According to marketing sources, around 90 percent of products, mostly non-essential items, are for sale without having their prices and manufacturing and expiry dates shown on the labels.” (found in http://csr-asia.com/index.php?page=3&cat=42 posted on 21 March 2007.) Consumer Rights Violation: Example 2: “In an examination by the Public Health Laboratory of the Government’s Public Health Institute it was found that the germs were beyond the tolerable limit in the water of Acme Agrovet & Beverages Limited. Though the management of this company did not agree with this result of the examination”. (from: The Daily Prothom Alo on 24 August 2008).
The absence of proper laws and their implementations and the presence of ample corruption in the governmental level, these days, even the foreign organizations are practicing several unethical tasks. An example is cited here: Example of malpractice by foreign companies: “In Bangladesh, the non-government members of a technical committee in charge of examining the development scheme of Asia Energy on Phulbari coalfield have observed in the committee report that there was no legal basis to allow the company to start mining, reports the New Age (25 September). The report, which is written by a 12-member committee headed by M Nurul Islam of the Bangladesh University of Engineering and Technology, stated that there were legal loopholes in the original agreement signed with the BHP in 1994 as the royalty rate was fixed at 6 percent despite existing mining rules during
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that period said it should be 20 percent. The report also said Asia Energy had proposed mining for 30 years following open-pit method although the rules did not permit mining for more than 10 years.” (found in http://csr-asia.com/index.php?page=6&cat=42 posted on 27 September 2006). If Carroll’s (1979) four responsibilities of business are considered and compared with the present situation of Bangladesh, it will be seen that on one hand there are ample evidences that the legal (have to do) and ethical (should do) responsibilities are not performed by many businesses, on the other hand, discretionary (might do) responsibilities are performed by several companies in a greater extent. Through the analysis of the cases and the news items, two opposite pictures came under light. The analysis of these cases identified that on one hand, the corporate sector of Bangladesh is performing corporate social responsibility activities with issues like health, education, natural environment, women empowerment, disabled people, cultural development and infrastructural development of the country. Almost all these contributions can be considered as discretionary responsibilities. On the other hand the news items indicated that there are evidences of child labor, human rights violation, low wage, poor working environment, violation of governmental rules and regulations and others. These are either legal or ethical responsibilities.
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Business Ethics
Business ethics (also known as Corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Applied ethics is a field of ethics that deals with ethical questions in many fields such as medical, technical, legal and business ethics.
Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have redefined their core values in the light of business ethical considerations.
Business ethics being part of the larger social ethics, always been affected by the ethics of the epoch. At different epochs of the world, people, especially the elites of the world, were blind to ethics and morality which were obviously unethical to the succeeding epoch. History of business, thus, is tainted by and through the history of slavery history of colonialism and later by the history of cold war. The current discourse of business ethics is the ethical discourse of the post-colonialism and post-world wars. The need for business ethics in the current epoch had begun gaining attention since 1970s. Historically, firms started highlighting their ethical stature since the late 1980s and early 1990s, as the world witnessed serious economic and natural disasters because of unethical business practices. It should be noted that the idea of business ethics caught the attention of academics, media and business firms by the end of the overt Cold War.
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Potential Business Benefits
Discussion on ethics in business is necessary because business can become unethical, and there are plenty of evidences as in today on unethical corporate practices. Even Adam Smith opined that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. Business does not operate in a vacuum. Firms and corporations operate in the social and natural environment. By virtue of existing in the social and natural environment, business is duty bound to be accountable to the natural and social environment in which it survives. Irrespective of the demands and pressures upon it, business by virtue of its existence is bound to be ethical, for at least two reasons: One, because whatever the business does affects its stakeholders and Two, because every juncture of action has trajectories of ethical as well as unethical paths wherein the existence of the business is justified by ethical alternatives it responsibly chooses. One of the conditions that brought business ethics to the forefront is the demise of small scale, high trust and face-to-face enterprises and emergence of huge multinational corporate structures capable of drastically affecting everyday lives of the masses.
General business ethics
Ethics of finance Fundamentally finance is a social science discipline. The discipline shares its border with behavioral science, sociology, economics, accounting and management. Finance being a discipline concerned technical issues such as the optimal mix of debt and equity financing, dividend policy, and the evaluation of alternative investment projects, and more recently the valuation of options, futures, swaps, and other derivative securities, portfolio diversification etc., often it is mistaken to be a discipline free from ethical burdens. However frequent economic meltdowns that could not be explained by theories of business cycles alone have brought ethics of finance to the forefront. Finance ethics is overlooked for another reason: issues in finance are often addressed as matters of law rather than ethics. •
Creative accounting, earnings management, misleading financial analysis.
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Insider trading, securities fraud, bucket shops, forex scams: concerns (criminal) manipulation of the financial markets.
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Executive compensation: concerns excessive payments made to corporate CEO's and top management.
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Bribery, kickbacks, and facilitation payments: while these may be in the (short-term) interests of the company and its shareholders, these practices may be anti-competitive or offend against the values of society.
Ethics of human resource management ‘Human resource management’ occupies the sphere of activity of recruitment selection, orientation, performance appraisal, training and development, industrial relations and health and safety issues where ethics really matters. The field since operate surrounded by market interests that commodify and instrumentalize everything for the sake of profit claimed in the name of shareholders, it should be predictable that there will be contesting claims of HR ethics. Predictably, ethics of human resource management is a contested terrain like other sub-fields of business ethics. Business Ethicists differ in their orientation towards labor ethics. One group of ethicists influenced by the logic of neoliberalism proposes that there can be no ethics beyond utilizing human resources towards earning higher profits for the shareholders. The neoliberal orientation is challenged by the argument that labor well being is not second to the goal of shareholder profiteering. Some others look at human resources management ethics as a discourse towards egalitarian workplace and dignity of labor. •
Discrimination issues include discrimination on the bases of age (ageism), gender, race, religion, disabilities, weight and attractiveness. See also: affirmative action, sexual harassment.
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Issues arising from the traditional view of relationships between employers and employees, also known as At-will employment.
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Issues surrounding the representation of employees and the democratization of the workplace: union busting, strike breaking.
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Issues affecting the privacy of the employee: workplace surveillance, drug testing. See also: privacy.
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Issues affecting the privacy of the employer: whistle-blowing.
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Issues relating to the fairness of the employment contract and the balance of power between employer and employee: slavery, indentured servitude, employment law. Occupational safety and health.
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All of the above are also related to the hiring and firing of employees. An employee or future employee can’t be hired or fired based on race, age, gender, religion, or any other discriminatory act.
Ethics of sales and marketing Marketing Ethics is a subset of business ethics. Ethics in marketing deals with the principles, values and/or ideals by which marketers (and marketing institutions) ought to act. Discussions of marketing ethics are focused around two major concerns: one is the concern from political philosophy and the other is from the transaction-focused business practice. On the one side, following ideologists like Milton Friedman and Ayn Rand, it is argued that the only ethics in marketing is maximizing profit for the shareholder. On the other side it is argued that market is responsible to the consumers and other proximate as well as remote stakeholders as much as, if not less, it is responsible to its shareholders. The ethical prudence of targeting vulnerable sections for consumption of redundant or dangerous products/services, being transparent about the source of labor (child labor, sweatshop labor, fair labor remuneration), declaration regarding fair treatment and fair pay to the employees, being fair and transparent about the environmental risks, the ethical issues of product or service transparency, appropriate labeling, the ethics of declaration of the risks in using the product/service (health risks, financial risks, security risks etc.), product/service safety and liability, respect for stakeholder privacy and autonomy, the issues of outsmarting rival business through unethical business tactics etc., advertising truthfulness and honesty, fairness in pricing & distribution, and forthrightness in selling etc., are few among the issues debated among people concerned about ethics of marketing practice. •
Pricing: price fixing, price discrimination, price skimming.
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Anti-competitive practices: these include but go beyond pricing tactics to cover issues such as manipulation of loyalty and supply chains. See: anti-competitive practices, antitrust law.
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Specific marketing strategies: greenwash, bait and switch, shill, viral marketing, spam (electronic), pyramid scheme, planned obsolescence.
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Content of advertisements: attack ads, subliminal messages, sex in advertising, products regarded as immoral or harmful
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Children and marketing: marketing in schools.
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Black markets, grey markets.
Ethics of production This area of business ethics usually deals with the duties of a company to ensure that products and production processes do not cause harm. Some of the more acute dilemmas in this area
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arise out of the fact that there is usually a degree of danger in any product or production process and it is difficult to define a degree of permissibility, or the degree of permissibility may depend on the changing state of preventative technologies or changing social perceptions of acceptable risk. •
Defective, addictive and inherently dangerous products and services (e.g. tobacco, alcohol, weapons, motor vehicles, chemical manufacturing, bungee jumping).
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Ethical relations between the company and the environment: pollution, environmental ethics, carbon emissions trading
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Ethical problems arising out of new technologies: genetically modified food, mobile phone radiation and health.
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Product testing ethics: animal rights and animal testing, use of economically disadvantaged groups (such as students) as test objects.
Ethics of property, property rights and intellectual property rights The ethics of property, property rights and intellectual property rights are assiduously contested throughout the history of the concept. Discourse on property gained its momentum by the turn of 17th century within the theological discussion of that time. The idea of property is intrigued with the notion of self as individual. Property ownership is said to enhance individual liberty by extending the line of non-interference by the state or others around the person Seen from this perspective, property right is absolute and property has special and distinctive character that precedes its legal protection. However, The isolated, self-contained and often competitive and materialistic individual, responsible essentially for his/her own existence is a cultural construct molded by the unique historical matrix certain cultures went under rather than the truth about human condition. •
Patent infringement, copyright infringement, trademark infringement.
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Misuse of the intellectual property systems to stifle competition: patent misuse, copyright misuse, patent troll, submarine patent.
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Even the notion of intellectual property itself has been criticized on ethical grounds: see intellectual property.
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Employee raiding: the practice of attracting key employees away from a competitor to take unfair advantage of the knowledge or skills they may possess.
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The practice of employing all the most talented people in a specific field, regardless of need, in order to prevent any competitors employing them.
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Bioprospecting and biopiracy.
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Business intelligence and industrial espionage.
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Ethics and technology The computer and the World Wide Web are two of the most significant inventions of the twentieth century. There are many ethical issues that arise from this technology. It is easy to gain access to information. This leads to data mining, workplace monitoring, and privacy invasion. Medical technology has improved as well. Pharmaceutical companies have the technology to produce life saving drugs. These drugs are protected by patents and there are no generic drugs available. This raises many ethical questions.
Corporate ethics policies
As part of more comprehensive compliance and ethics programs, many companies have formulated internal policies pertaining to the ethical conduct of employees. These policies can be simple exhortations in broad, highly generalized language (typically called a corporate ethics statement), or they can be more detailed policies, containing specific behavioral requirements (typically called corporate ethics codes). They are generally meant to identify the company's expectations of workers and to offer guidance on handling some of the more common ethical problems that might arise in the course of doing business. It is hoped that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters. An increasing number of companies also require employees to attend seminars regarding business conduct, which often include discussion of the company's policies, specific case studies, and legal requirements. Some companies even require their employees to sign agreements stating that they will abide by the company's rules of conduct. Many companies are assessing the environmental factors that can lead employees to engage in unethical conduct. A competitive business environment may call for unethical behavior. Lying has become expected in fields such as trading. Not everyone supports corporate policies that govern ethical conduct. Some claim that ethical problems are better dealt with by depending upon employees to use their own judgment. Others believe that corporate ethics policies are primarily rooted in utilitarian concerns, and that they are mainly to limit the company's legal liability, or to curry public favor by giving
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the appearance of being a good corporate citizen. Ideally, the company will avoid a lawsuit because its employees will follow the rules. Should a lawsuit occur, the company can claim that the problem would not have arisen if the employee had only followed the code properly? Sometimes there is disconnection between the company's code of ethics and the company's actual practices. Thus, whether or not such conduct is explicitly sanctioned by management, at worst, this makes the policy duplicitous, and, at best, it is merely a marketing tool. To be successful, most ethicists would suggest that an ethics policy should be: •
Given the unequivocal support of top management, by both word and example.
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Explained in writing and orally, with periodic reinforcement.
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Doable....something employees can both understand and perform.
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Monitored by top management, with routine inspections for compliance and improvement.
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Backed up by clearly stated consequences in the case of disobedience.
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Remain neutral and nonsexist. Ethics officers
Ethics officers (sometimes called "compliance" or "business conduct officers") have been appointed formally by organizations since the mid-1980s. One of the catalysts for the creation of this new role was a series of fraud, corruption and abuse scandals that afflicted the U.S. defense industry at that time. In 1991, the Ethics & Compliance Officer Association (ECOA) – originally the Ethics Officer Association (EOA) -- was founded at the Center for Business Ethics (at Bentley College, Waltham, MA) as a professional association for those responsible for managing organizations' efforts to achieve ethical best practices. The membership grew rapidly (the ECOA now has over 1,100 members) and was soon established as an independent organization. Another critical factor in the decisions of companies to appoint ethics/compliance officers was the passing of the Federal Sentencing Guidelines for Organizations in 1991, which set standards that organizations (large or small, commercial and non-commercial) had to follow to obtain a reduction in sentence if they should be convicted of a federal offense. Although intended to assist judges with sentencing, the influence in helping to establish best practices has been far-reaching. In the wake of numerous corporate scandals between 2001–04 (affecting large corporations like Enron, WorldCom and Tyco), even small and medium-sized companies have begun to appoint ethics officers. They often report to the Chief Executive Officer and are responsible
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for assessing the ethical implications of the company's activities, making recommendations regarding the company's ethical policies, and disseminating information to employees. They are particularly interested in uncovering or preventing unethical and illegal actions. This trend is partly due to the Sarbanes-Oxley Act in the United States, which was enacted in reaction to the above scandals. A related trend is the introduction of risk assessment officers that monitor how shareholders' investments might be affected by the company's decisions. The foundation for ethical behavior goes well beyond corporate culture and the policies of any given company, for it also depends greatly upon an individual's early moral training, the other institutions that affect an individual, the competitive business environment the company is in and, indeed, society as a whole.
Conclusion
In past, the concept of social responsibility of business used to be considered as a phenomenon related to developed countries. The case is not the same anymore. This study identifies the CSR practices of some organizations dealing in Bangladesh and finds that the corporate sector of Bangladesh is performing corporate social responsibility activities with issues like health, education, natural environment, women empowerment, disabled people, cultural development and infrastructural development of the country. From this discussion it can be said that the business sector of Bangladesh is trying to aid in the general social problems of the country. These days, almost all the societies of the world are faced with new and complicated social and economic problems. Definitely, it is the responsibility of every government to try to solve the problems of the country, but in many developing economies, poor governments cannot deal with that in a good extent. In these cases, corporate sector can help in the solution of these kinds of problems. Though it can be said that the activities of these organizations are helpful for the overall development of the country and that is why it can be said that these activities are praiseworthy, a question can be raised in this case whether these discretionary responsibilities should get more importance than the legal and ethical responsibilities. It is a good sign that the government is encouraging the corporate sector for performing CSR activities in a greater extent but it is also important to set and implement proper regulations so that the business organizations become aware of the issues like employee rights, consumer rights and environment. Definitely it is very important to work for
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the welfare of the society but it is more important to ensure that the activities of any social unit should not harm the society in any manner. A greater emphasis on the legal and ethical responsibilities can ensure this matter. This study has its own limitations. The number of companies taken as samples is low. A wider study with more sample companies may reveal a clearer picture of this issue.
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Bibliography
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