Corporate Social Responsibility and Ethics in Management in Light of Sustainable Development

Introduction

Corporate social responsibility (CSR) and ethics have attracted worldwide attention and acquired a new resonance in the global economy because of the events such as the collapse of Enron, the global financial crisis of 2008 through a failure of corporate governance and business ethics, the advent of international trade creating business complexity, the concern about a sustainable future including global warming, climate change and ecosystem degradation and societal problems like threats to cultural diversity and widening economic gaps within and among nations (Price & van der Walt, 2013; Smit, 2013; Jamali & Mirshak, 2006).

Development can be defined as eliminating poverty, unemployment and inequality. Sustainability is associated with satisfying a national economy’s needs for natural resources without compromising generations (Luke, 2013). Sustainable development is defined as “development that meets the needs of present without comprising the ability of future generations to meet their own needs” (UN Brundtland Report, 1987). The concept of sustainable development has become widespread amongst governments, politicians, corporations and other organizations throughout the world. As a response to the challenge of sustainable development, corporations have shown a growing interest in integrating their efforts regarding management of environmental and social issues (Oskarsson & Malmborg, 2005).

Governments and the agencies grouped under the umbrella of the United Nations (UN), World Trade Organization (WTO), International Monetary Fund (IMF) and World Bank (WB) have failed in their attempts to get rid of under-development. Large corporations and enterprises with their power and economic strength have taken a dominant position in societies assuming much more responsibility for development (Hopkins, 2007). In fact, large corporations and enterprises could easily be the main driver for development in the near future if there is a tendency for getting involved in development.

Today, there is a growing perception among enterprises that success cannot be achieved solely through maximizing short-term profits. The growing importance of CSR and ethics on business success and positive impact on society is accepted by the enterprises (İyigün, 2013). Sustainability, as everyday CSR policy and practice, emerges as a decisive new managerial aspiration. Sustainability not only has an interdisciplinary structure, which includes environmental, economic and social dimensions, but it also includes political and pragmatic variables as well (Tutulmaz, 2012). This shows that a management approach to CSR and ethics is needed in order to achieve sustainability, which reflects the relationships that underlie ecological, economic and social concerns (Luke, 2013; Trevino & Nelson, 2011).

CSR may be defined as a commitment undertaken to enhance the social welfare by means of optional business practices and enterprise resources (Kotler & Lee, 2006). The notion of ethics comprises in itself the concepts of integrity, honesty and responsibility (Ardelean, 2013). Ethics can be defined as a guide to moral behavior based on culturally embedded definitions of “right” and “wrong” (Werther and Chandler, 2006). Specifically, business ethics could be defined as the inherent conflict between ethics and pursuit of profit (Velasquez, 2002). Business ethics tries to reveal which behaviors are acceptable about the activities of organizations within the framework of a reciprocal relationship between ethical principles and activities by requiring respect and fairness for the employees (Bayraktaroğlu & Yılmaz, 2012).