Responsible Business Management

The concepts of corporate social responsibility (CSR) and business ethics have come to the fore in recent years as awareness among general public grew and the expectations to have sustainable business models developed. Corporations now a days are expected not to only generate profits, but also be good corporate citizens. This notion of conducting socially responsible business has led corporations to explore ideas that would help them implement CSR, business ethics and sustainability in a strategic and cost effective manner. CSR is a self-regulating business management concept that makes a corporation socially accountable to itself, its stakeholders and the general public. Being a very broad concept, CSR can be practiced in many different forms depending on the company and industry. CSR suggests that businesses not only need to fulfill their economic responsibilities to their shareholders, but rather practice the stakeholder theory by being legally compliant, following ethical practices and by giving back to society in form of philanthropic commitments. When practicing CSR and reporting the statistics, corporations usually encounter ethical dilemmas and get caught up in what is the right thing to do. Business ethics refers to how businesses and corporations should tackle these ethical dilemmas and controversial situations by defining principles, values and morals. Similar to CSR, business ethics is also a vast field as it can be studied from many different angles i.e. philosophically, scientifically, or legally. In addition to ethically practicing CSR, stakeholders expect organizations to have sustainable business models. Sustainability is a management model which is focused on creating and maximizing long-term economic, social and environmental value. CSR, business ethics and sustainability are closely related and this academic essay will discuss their similarities and differences, and how these theories can be used for responsible business management. To elaborate on argument being presented, relevant real world business examples will be shared. Lastly, the essay will conclude by reiterating the importance of CSR, ethical and sustainable practices. The triad of CSR, ethics and sustainability overlap conceptually and operationally in many ways. For responsible business management, it is required to practice good business ethics in whatever the organization does as it acts as an umbrella for all the activities and practices adopted to implement CSR and to achieve sustainability. Both, CSR and sustainability broadly categorize the activities that make an organization socially responsible, while business ethics enforces ethical principles, values and morals. If done right, both CSR and sustainability build a positive market reputation for the organization and help achieve economic goals while taking into consideration the social impacts of their actions. On the other hand, they are quite different in the way that CSR is based on giving back to society by creating value for its stakeholders and in return expects them to provide resources, while sustainability aims to provide long-term value for stakeholders without compromising the triple bottom line i.e. the people, the planet, or the profit. While CSR can be about reporting what the business has done or is doing, sustainability is usually about the plans for future. Organizations usually carry out CSR activities in order to protect and build on market reputation while the driver for sustainability is usually to capture new and emerging markets. Business ethics overcasts both of these practices and acts as a guiding principle for implementing and reporting the facts to achieve effective responsible management. Together they lay the foundation of responsible business management and guide any organization to do what is right.