Trending: Call for Papers Volume 4 | Issue 3: International Journal of Advanced Legal Research [ISSN: 2582-7340]



The concepts of business ethics and corporate social responsibility have come to force in the recent years. These two concepts are increasing rapidly in developed as well as developing nations because of the result in the growing sense of corporate wrongdoing. Both concepts can bring significant growth to any business enterprise and there is also a basic idea that business enterprise has some of its responsibility towards the society also rather than just making profits for the shareholders which has been around from centuries. Both business ethics and corporate social responsibility are very important for the organizational growth and success of any business. This paper will highlight the basic details of both the concepts and how these concepts are important for the growth of any corporation.


The ethical behavior and corporate social responsibility can bring significant benefits to a business. From centuries business enterprises or corporations are giving importance to the responsibilities they have towards the society other than just making profits. Every business has two kinds of responsibility, which are- one is ethical responsibility and the second is economical responsibility. The ethical responsibilities can be referred to the behavior that the stakeholder and the society expect from the company, like the duty of the company towards the public and the society. While the economical responsibility of the business is to, produce and sell goods and make profit for the stakeholders of the company. Many companies have started to act in a more responsible and serious manner towards the society and their managers also want to do so because of the fear of consumer pressure and the environmentalist and the media. These things help a corporation to a work for the welfare of the society in order to make their public image in a positive manner. Business ethics is all about the working of the business on a particular set of guidelines which are based on what is right and wrong and fair. It provides all the basic details which make every business to follow the good ethics in the business processes. At times without the business ethics, the business gets affected badly and creates disturbance among the employees, environment and also hampers the overall growth of the business. Many times in an enterprise employees gets affected by their seniors or colleagues while making any decision and by this they feel pressurized and then they tend to behave in an unethical manner while making profits for the enterprise. In order to avoid these things, companies have developed a code of conduct which is to be followed by the organization for the smooth working of the employees and to create a healthy environment for them. Both the corporate social responsibility and business ethics play a key role in any organization and provides many benefits to it. Each and every company should adopt the corporate social responsibility and business ethics for its rapid growth. Some of the benefits provided by corporate social responsibility and business ethics are as follows-:

  • Corporate social responsibility helps the business enterprise to improve the public image as it is the consumer who makes the decision before buying or using a product and at this moment the public image plays a key role. While the business ethics helps in explaining that how the company acts in the social as well company’s environment. This helps the enterprise to act good towards the employees and customers and also helps in creating an overall public
  • Corporate social responsibility and the business ethics together helps in increasing the brand awareness and recognition as they both help in creating awareness among the public in the society by spreading news and therefore more people hear about your brand which definitely create brand image among the market and the consumers and drive them towards your product and
  • Corporate social responsibility helps in decreasing the overall manufacturing cost and many simple changes can be achieved with the help of business ethics which makes the company to move towards
  • A company which has accepted corporate social responsibility and business ethics can easily take advantage over the competitors as it can create itself as an organization which is committed towards corporate social responsibility and business ethics and can move one step further by considering all the social and environmental factors and can make itself different from other companies.
  • Both the corporate social responsibility and business ethics help in increasing customer satisfaction if the company is using sustainable systems and social media can help to promote the brand by advertising each and every effort that is made by the company and the sustainable change which is the demand of today’s world makes the customer to trust more on the brand which increases its satisfaction for the company’s products and its
  • Corporate social responsibility and business ethics helps in employee engagement by developing a working friendly environment inside the business enterprise and by this the employees always want to work and enjoy the workings for a business enterprise which has a good public An employee will always retain in a company which is providing human rights and following good business ethics within the organization.
  • When a company starts to practice corporate social responsibility and business ethics it automatically creates a positive and productive working environment inside it and the employees voluntarily encourage to the personal and professional


Ethics are the code of values and principles that exercise control over the actions of a person or group of people regarding what is right and what is wrong and therefore, ethics set standards as to what is right and what is wrong in the organization’s conduct and decision making. Business ethics deals with the internal values that are part of corporate sector and also provides shapes to the decision with respect to the social responsibility for the external environment. In the concept of business ethics, ethics refers to the principle of honesty and fair dealing with the employees and customers. In the corporate sector ethics applies to the form of applied ethics or professional ethics that examines the ethical problems that arise in the business environment. Business ethics can be defined as the rules, regulations, standards, codes and principles that provide guidance for morally right behavior in the decision making related to the operations of the corporations and relationship of the business with the society. It applies to those aspects of the business conduct that is adhere by each and every individual of the corporation as well as by the corporation as a whole. The overall growth of the business depends on the good ethical code of conduct that has been set to guide the management as well as the employees in the daily activities of the business. The basic idea for the practice of business ethics is that a good ethical framework will create a systematic and healthy work environment for the employees and will drive to the development of ethical human resource practices. There are various advantages of the ethical behavior in the business enterprise, which are as follows-:

  1. Developing customer’s loyalty– a loyal customer is the base for a business enterprise to a long-range success. If a customer feels that he or she has been treated unfairly by the enterprise, they will not be repetitive customer. By the help of good business ethics a company’s reputation grows in a positive way in the marketplace and this brings more customers by the help of referrals. It is strongly possible that a bad ethical framework can lead to the chances of losing customers as well as it can decrease the number of new customers
  2. Retaining good employees– for a company to have a rapid growth it should have talented and hardworking employees at each and every level of the management and the company who have the practice of fair dealing with the employees have a good and great chance of retaining the most talented and hardworking
  3. Positive work environment– it is the responsibility of the company and its employees to work in an ethical manner. They must be honest and should be very clear about their capabilities as well as about their responsibilities. Employees who work according to a set ethical framework work as a team rather than working as an individual and this creates a healthy and positive work environment for the other co-workers.
  4. Avoiding legal problems– it is possible in a business enterprise that for the higher rate of profit, policies complying with the environmental regulations and labor laws are kept aside and also safety of the workers is ignored or use of toxic materials in products is If the company is caught in such acts, penalties can be severe like legal fees or fines or sanctions by governmental agencies. These things result in creating a negative public image of the business enterprise and the reputation of the company can get hampered. All these things can be avoided if the business enterprise is following a good ethical framework.

Characteristics of Business Ethics

Business ethics has its own specific characteristics, which are as follows-:

  1. The base of business ethics is the social value that is accepted on the norms of what is right and what is wrong.
  2. Business ethics is based on features, standards, traditions and social
  3. Business ethics regulate the habits and resources for an improved and better business
  4. Business ethics set guidelines and principles for the best and most suitable way of performance of a business enterprise.
  5. Business ethics deals with the study of human behavior and
  6. Business ethics sets a procedure to regulate the standards of common communication between the individuals or group of employees within a business
  7. Business ethics provide guidelines for a proper code of conduct that has to be followed with in a business enterprise.
  8. Business ethics helps in motivating the concept of service motives for the customer point of
  9. Business ethics setup goals for highlighting more corporate social responsibility of business enterprise towards the
  10. Business ethics covers each and every aspect of the business and can be applied to both the fields of arts and

Levels of Ethical Standards

There are three levels of ethical standards which are followed by a business enterprise. The three standards are- law, policies and procedures and moral standards of employees.

  • Law– law as a whole defines those actions that are permissible and those actions which are not for the society. The law establishes the minimum standards of behavior for every individual and the same time there are some actions that are legal but are unethical in nature. Therefore, just obeying the law is not sufficient to achieve the ethical
  • Policies and Procedures– both policies and procedures together serve the specific guidelines for the people and the employees as they make daily decisions in there day to day
  • Moral standards of employees– these are those standards that employees inherit and take decisions for a situation that is not governed by the laws or organizational policies and


Corporate Social Responsibility or CSR is defined under section-135 of companies act, 2013. Companies or corporations have now started to look beyond their profits and interests and now they are prioritizing the services to be rendered to the society in which they operate. This concept has been arisen because the business owners operate within the society and in return the society expects that business should also be responsible towards it. It is now clearly impossible for a business enterprise or a corporation to experience a good economic prosperity in a closed environment forms the stakeholders within its environment. Therefore, the relationship of a business enterprise with its employees and stakeholders like the customers, investors, suppliers, public and governmental officials, activists and communists are the most important key for success of the business enterprise. It refers to a business system that provides the production and distribution of the wealth for the betterment and rapid growth of the business enterprise as well as keeping in mind the needs and goals of stakeholders by applying the ethical system of operation and sustainable management operations in day to day operations of the business enterprise. Therefore, corporate social responsibility or CSR refers to the responsibilities of the business enterprise for its impacts towards the society and the consequences of the integration of social, environmental and customers concerns in the business operation with the close collaboration with the motives and objectives of the stakeholders. The concept of CSR or corporate social responsibility can be defined as responsibilities that go beyond the economic and legal responsibilities of the business enterprise and look towards the environmental responsibilities. It also refers to the discretionary activities and policies of the business enterprise to engage itself in providing a positive social change and environmental sustainability in the environment within which the business enterprise works. Corporate social responsibility also refers to the selection of institutional objectives and analyzing the results not only with the help of criteria of profitability and welfare of organization but by the help of ethical standards and judgments of social desires. According to this, the concept of corporate social responsibility and its practice should be in consistency in a business enterprise operation and with this there should be willingness to give away some degree of benefits in order to achieve the non-economic objectives that are set for the business enterprise. In the recent years the concept of corporate social responsibility has been subject to debate. On the one hand, one point of view speaks that, the sole purpose of the business enterprise is to earn profits only and the other point of view speaks that, the business enterprise should work for the satisfaction and completion of desired corporate goals and also take care of the society in which the business enterprise works. Corporate social responsibility can be achieved when the business enterprise goes beyond the compliance and involves itself in the actions which are suitable for the social good, beyond the interest of earning profit. One of the most relevant theories by Mc Whilliams and Siegel, the stakeholder theory became the dominant example in the field of corporate social responsibility. A well-established model of corporate social responsibility was proposed by Caroll, which is known as the “Four Part Model of Corporate Social Responsibility”. The corporate social responsibility has both economic and legal aspects for a business enterprise. The economic aspect of the corporate social responsibility states that-

  • It is important to perform in a manner that is equally consistent with the earnings per
  • It is very important to be profitable as much as
  • It is very important for a business enterprise to establish a strong competitive position in the
  • It is important to maintain a high level of production and good managerial
  • It is important that a business enterprise should be defined as the one which is consistently making

The legal aspects of the corporate social responsibility states that-

  • It is important for business enterprise to perform in a manner that is in consistency with expectations of the government and the
  • It is important to comply with various federal, state and local rules and
  • It is important to be law abiding corporate
  • It is important that a business enterprise should be defined as the one which fulfills its legal
  • It is important for a business enterprise to provide goods and services at the least minimum legal

There are some major activities that are related to the corporate social responsibility and which develops a positive impact on the business enterprise. Those activities are as follows-

  • A business enterprise can provide funds or other resources in a way of contribution in order to build awareness and concern about the social
  • Business enterprises can donate a part of their revenue to a specific cause based on their product
  • A business enterprise or a corporation should support the development and implementation of a behavioral change campaign for the purpose to improve health, safety and environmental well-being.
  • Business enterprises should directly contribute to charity in the form of cash donations or in any kind of
  • Business enterprises support and motivate the retail partners and franchise members to contribute their time in supporting a local
  • A business enterprise or a corporation adopts and conducts discretion based business practices that support social cause in order to improve community well-being and for protecting the

In the past year’s corporate social responsibility has become an inescapable priority of the corporations or business enterprises in each and every country. Corporate social responsibility is increasing day by day and that to at a fast rate and is becoming one of the important global practices. The concept of corporate social responsibility is immensely important in today’s global business time because the all the companies in the world are competing with each other and are in pursue of economic growth with the help of internationalization.

Advantages of Corporate Social Responsibility (CSR)

There are many benefits to a business enterprise that follows the principle of corporate social responsibility or CSR. The various benefits of corporate social responsibility are as follows-:

  1. Corporate social responsibility helps to avoid high rate of exploitation of labor, bribery and
  2. A business enterprise should be very clear about what the society is expecting from it and therefore while working for the welfare of the society the public image of the business enterprise improves
  3. Many aspects of the corporate social responsibility like reputation of the business enterprise, human resources, branding and legislation are good for the corporation and can help to improve profitability, growth and
  4. In some of the area like the downsizing, corporate social responsibility helps to redress the balance between the business enterprise and its
  5. Business enterprises with a less corporate social responsibility find it difficult to compete at lower


Corporate social responsibility and business ethics are the most important aspects of a business enterprise and they both play a key role in the growth of the corporation. Both these concepts help the business enterprise in ensuring to create a good brand image and to meet the competitors as well. In the recent years, many business enterprises have adopted the practice of corporate social responsibility and business ethics in which they have established a particular set of guidelines according to which the business operations will take place and the corporation will also keep in mind what the society is expecting from it within which the corporation is operating. By these practices business enterprises are expected to develop reliable products and to charge fair price with a fair profit margin and to pay a genuine amount of wage to the workers in order to maintain the customer loyalty and retaining of good employees. Corporate social responsibility and business ethics help in developing a good public image of the business enterprise with help of social practices and letting the people know about these practices. Customers look for such a company who is sustainable, socially responsible towards the environment in which it operates and follows a well-designed corporate ethical structure and together these things lead to a good public image and maintain the customer loyalty. Both these concepts together bring number of advantages to a business enterprise and are very beneficial to it. A company practicing both corporate social responsibility and business ethics has great results within the corporation as well as outside the corporation. Employee’s satisfaction is high in such an organization and this brings total customer satisfaction.

End Notes-

  1. Section-135 of Companies Act,
  2. Mc Whilliams & Siegel, 2001, corporate social responsibility and theory of
  3. Carroll, 1979, model of corporate social responsibility “Four Part Model of Corporate Social Responsibility”.
  4. Caroll & Buchholtz, 2000, Business and Society: Ethics and Stakeholder Management
  5. Jamshed “Importance of Corporate Social Responsibility and Business Ethics” (5th August, 2020) International Journal of Trend in Scientific Research and Development (IJTSRD), volume 4, issue 5, August 2020, page no: 799-801.
  6. Godfrey Adda, Dr. John Bosco Azigwe, Aboteyure Roger Awuni “Business Ethics and Corporate Social Responsibility for Business Success and Growth” European Journal of Business and Innovation Research, volume 4, No. 6, December 2016, page no: 26-42.

1 Student at Galgotias University