HDB 2153

Ethics and Social Responsibility

May 2017
Project : Social Responsibility from Companies Persepctive
Group Members : Aiman Bin Nooruddin 22221
Amirul Ashraf Bin Abdul Razak 23157
Fadzrin Anwar Bin Maarop 21776
Muhammad Farhan Hazeeq Bin Hamdan 22287
Nik Mohd Naif Bin Amran 22122
Lecturers Name : Puan Haryanni Harun
INTRODUCTION

Ethics is an arrangement of moral principles. They influence how individuals make

decisions and lead their lives. Ethics also described as moral philosophy and it is concerned
about what is good for people and society. The term is gotten from the Greek word ethos which
can mean custom, propensity, character or attitude. There are several dilemmas cover by ethics
includes how to live a good life, moral decisions on what is good and bad, our rights and
responsibilities and also the language of right and wrong. The concepts of ethics have been
derived from philosophies, religions and cultures. They infuse debates on topics like human
rights, professional conduct and abortion. However, ethics is about the others. At the heart of
ethics is a concern about something or someone other than our own desires and self-interest.
Ethics is concerned with other people's interests, with the interests of society, with God's
interests, with ultimate good, and so on. So when a person 'thinks ethically' they are giving at
least some thought to something beyond them.

On the other hand, there is also corporate social responsibility which is significant to
ethics. It is often called CSR. CSR is a corporations initiatives to assess and take responsibility
for the companys effect on environmental and social wellbeing. The term generally applies to
efforts that go beyond what may be required by regulators or environmental protection groups.
CSR may also be referred to as corporate citizenship and can include causing here and now
costs that don't give a quick money related advantage to the organization, yet rather advance
positive social and environmental change. Consumers nowadays are looking for more than just
material products or quality services when choosing a company to work with: Nine in 10
consumers expect companies to not only make a profit, but also operate responsibly to address
social and environmental issues.

Many companies now focus on and practice a few broad categories of corporate social
responsibility (CSR) when they are recognizing how important social responsibility is to their
customers. The CSR practices include environmental effort, philanthropy, ethical labor practices
and volunteering. Environment becomes one primary focus of CSR because every business
regardless of size have a large carbon footprint. Thus, any steps that they can take to reduce
those footprints are considered both good to the company and society as a whole. Besides,
businesses also practice social responsibility by donating to local and national charities. This is
what we called philanthropy. It can give benefit to charities and local community program
because businesses have a lot of resources. Next is ethical labor practice. Companies can
demonstrate their CSR by treating employees ethically and fairly. This is important for them to
have a strong relationship and connection between each other in order to make the company
success and run smoothly. Lastly, volunteering is also one of the CSR practices. By doing good
deeds without expecting anything in return, companies are able to express their concern for
specific issues and support for certain organizations. Plus, attending volunteer events says a lot
about a companys sincerity.

As a student, we need to learn and acknowledge about ethics and social responsibility.
Those are crucial for student to be able to identify and address conflicting ethical values and
develop a sense of responsibility for the broad impacts of individual actions and social
institutions. They will understand their role as citizens and their responsibility to work with
others in promoting quality of life and a sustainable society. Upon graduation, students should
be able to demonstrate a fundamental understanding ethical situations and CSR in business
then recommend practical applications for managers and public policy makers. Therefore, the
purposes of this project are to increase awareness of ethics and corporate social responsibility
among companies, to get individual perspective about CSR from different companies and to
promote global citizenship and ethical conduct within community.

LITERATURE REVIEW

Business management concept which companies not only taking profit into account
while also taken account social and ecological interests is the definition of Corporate Social
Responsibility. In todays world, to ensure that every company has a stable position in a market,
any steps would be taken to ensure their position. Long-term establishment would be added to
the main objective of a company aside from only focusing on production, distribution of
product and services satisfying clients needs. To arouse interest of a wide range of
stakeholders, enterprises have begun to pay attention to the needs of societies and problems
connected with the natural environment. The orientation of a company would change to
develop social development, promoting healthy lifestyle while also focus on the profit. Social
responsibility would also be encourage which encourages voluntary actions for the benefit of
the environment protection (Kadlubek, 2015).

From a business perspective, CSR is said to improve the competitiveness of the staffs in
the company. Financial success and CSR involvement in a company are said to link to have
positive relationship in a long-term process. Although relationship between CSR and financial
performance had been researched, the results vary which it seems like CSR does not support
any further development in business practice. The first supporting detail to support the
statement below is that the lack of a systematic framework linking investment in
responsibilities to social would inhibit the development of CSR. A framework or approach that
would allow companies to assess their business case for CSR on a company- and project-specific
level could facilitate the further implementation of CSR and support rational decision-making in
this area. The main question that is being asked in a company is how to measure company-
specific value of CSR activities (Weber, 2008).

Both marketing and management researchers stated that internal stakeholders have
taken a liking on the influence of CSR performance. Nowadays, CSR initiatives can be broadly
understood from an employees perspective. CSR initiative can be categorized as internal or
external, depending on the type of stakeholders that it intends to satisfy. Specifically, internal
CSR activities involve employees welfare and business ethics (e.g., non-discrimination policies
in the workplace, in-house education, and vocational training). Consideration towards external
CSR or corporate citizenship performances which refers to the various forms of company
involvement with charitable causes and nonprofits is conducted in the present research (Ryong
Kim et al., 2010).

Four levels of CSR in business which are economic level which refers to sustainable
development and carrying out due policy of the division of earned profits; legal level which
refers to compliance with legal requirements and providing products compliant with
regulations; ethical level which refers to the ethical consistency of an enterprise and activities
compliant with regulations; philanthropic level refers to charities and supporting art while
improving the quality of social life. The above four categories of responsibility have been
identified by the authors on account of the degree of social expectations based on Maslows
hierarchy (pyramid) of needs. At two levels of the base of the pyramid there are: economic
responsibility, which means the necessity to develop the revenue providing at least the survival
of the company, and legal responsibility, amounting to the necessity of compliance with legal
regulations. Above, there is ethical responsibility, understood as fair and decent actions. On the
other hand, at the top of the pyramid there are philanthropic activities, resulting exclusively
from the decisions of the company, which is not imposed, required or imposed legally
(Kadlubek, 2015).

Companies focus on five main areas which CSR business benefits from which the first
one would be positive effects on company image and reputation. Image of the company held by
its audiences are important as the main influencer are by communication messages. Second
main area would be increases employees motivation and recruitment. On the one hand, effects
in this area can result from an improved reputation. Similarly, CSR activities can directly or
indirectly affect the attractiveness of a company for potential employees. Next main area
would be cost savings. Efficiency gains could result from a substitution of materials during the
implementation of a sustainability strategy, improved contacts to certain stakeholders such as
regulators resulting in time savings, or improved access to capital due to a higher sensitivity of
investors to sustainability issues. Second last main area would be the increment of revenue
from higher sales and market sale. This could be due to the image being displayed by the brand.
The last main area could be CSR-related risk management. : CSR can also be used as a means to
reduce or manage CSR-related risks such as the avoidance of negative press or customer/NGO
boycotts (Weber, 2008).
METHODOLOGY

Primary Data Analysis

1. Interview
For our assignment, we interviewed one representative from two different companies,
one is from PETRONAS and another is from Panasonic Energy Sdn. Bhd. Our objective of
conducting these interviews is to get their perspective about CSR or corporate social
responsibility. The interview consists of seven questions. The questions are as follows:
I. Do you know what Corporate Social Responsibility is?
II. Do you know about your organization/company sustainability strategy?
III. What are the initiatives taken to promote/enhance CSR in your
organization/company?
IV. What do you think of the service your organization/company provides?
V. Do you think it is environmentally friendly?
VI. Does helping the society help your organization/company grow?
VII. Does your company have any problem implementing CSR?

Secondary Data Analysis

1. Library based sources

We referred to articles and journals from book in library to get a good grasp on the topic
itself as well as getting ideas on other studies on social responsibility in the business
world.
2. Internet based sources
Apart from library, we also used search engine from the internet such as Google Scholar.
This is because we did not have much time to spend further researches at the library
thus we decided to search further into the topic by finding articles from the internet.
RESULTS AND DISCUSSIONS

We were required to perform primary data analysis on companies about their

perspective and policies about corporate social responsibility. Two companies were chosen for
the interview and we provided them with questions to understand more about their stands on
this topic. The first company we chose is PETRONAS and the representative is Mr. Nooruddin
Abdullah, Head of Legal Upstream while the second representative is Pn. Norharita bt Ibrahim
from Panasonic Energy Sdn Bhd.

1st interview, PETRONAS

1. What do you know about CSR?

CSR means corporate social responsibility and this is what the corporate, e.g. PETRONAS
itself is doing for the society. For examples, we have charity works in schools, education
funding like scholarships, beautifying the environment and many more. These are all the
examples that we are giving back to the society from their business revenue of profit.
2. Do you know about your company sustainability strategy?
Sustainability strategy in our company is a plan that is carry out to sustain or make sure
that our resources is produced as long as possible by any means, may be by good
technologies or any ethical ways all for the environment and future generations.
3. Briefly state some initiatives to promote and enhance CSR in your company?
Initiatives like cleaning the environment, e.g. beaches and rivers. It helps in introducing
CSR to our employees as well as implementing it in them.
4. What do you think of the service your company provides?
i) Do you think it is environmental friendly?
Yes, some of the initiatives do includes the environment and PETRONAS is
currently improving the efforts in waste reduction, recycling and recovery
through strict compliance with regulations as well as internal procedures.
ii) Does helping the society helps you company grow?
 Of course, by helping society, it helps our business because the society will
recognize us and buy and use our products. They will love us. When we
implement CSR, contingently it will help us build and maintain our good name.
5. Does your company encounters any problems in implementing CSR?
The most obvious challenge is that we need to make an investment first but the yield or
profit may be late. But since we have items and products to sell, they help us on the
revenue.

2nd Interview, PANASONIC

1. What do you know about CSR?

Yes. It is a way that a company give back to the community.
2. Do you know about your company sustainability strategy?
Yes.
3. Briefly state some initiatives to promote and enhance CSR in your company?
1. Yearly environmental CSR
2. Community CSR
3. E.g. installation of solar panels
4. What do you think of the service your company provides?
i) Do you think it is environmental friendly?
Of course, we are HIT photovoltaic (PV) modules manufacturer. We believe our
product able to provide Green Energy solution to the world.
ii) Does helping the society helps you company grow?
Yes. In line with our Business Philosophy that embodies our mission and
devotion to the progress of society and the well-being of people worldwide
thoroughly our business activities.
5. Does your company encounters any problems in implementing CSR?
No. We receive good support from local authorities and related communities.
 Todays consumers hold companies to a higher standard than before. As stated in the
introduction before, apart from being able to give a top class services and products, they
require companies and organizations to apply social and ethical standards to clarify their roles
in the society (Lichtenstein et al., 2004). Corporate social responsibility or CSR can be
considered as one of the vital factors in building a company nowadays. Both representatives of
chosen companies from our interviews recognize what CSR is and both of them defined it as
ways or methods for the companies to give back to the communities by either helping or
funding the society or even the environment itself. Mrs. Norharita and Mr. Noorudin both know
the sustainability strategies of their companies and also the initiatives that their companies
take to implement it. Actions like cleaning the environment, e.g. beaches and rivers and funding
education are ways for them to contribute to the society for all their supports. Even Mr.
Nooruddin stated that from PETRONAS perspective, their sustainability strategy is for the
greater good of future generations and the environment. These prove that companies or
organizations at the moment, acknowledge the importance of CSR and requires their
employees to practice understand it.

Even though the major purpose of a business is to make profit, these companies are also
responsible to improve the society apart from the people themselves as large companies prove
to be immensely powerful entities in shaping the world. Their products can pose a large effect
to the environment. As for example, PETRONAS is mainly based on oil and gas, so, incidents like
oil spill can damage and harm the ecosystems. On the other hand Panasonic is a company that
manufacture electronics, electronics that sometimes can emits harmful gases to the
environment. Hence, as stated by Mr Nooruddin, PETRONAS themselves took a lot of iniatives
and still currently improving their solutions to these problems. Improving waste reduction,
recycling and recovery are some of the approach that has been made by PETRONAS. While for
Panasonic, they believes that their company is creating a more less-polluted world by providing
Green Energy. This Green Energy project is run by using HIT photovoltaic modules technologies
where there is no harmful greenhouse gases emitted. By using this kind of technology, besides
from attracting consumers, it also met the objective of CSR, which is to create a better world
for the society. Thus, in parallel with the meaning itself, social responsibility, a duty carried out
for the society well-being (Suliman, Khatib & Thomas, 2016).

CSR also prove to be one of the sustainability strategies for companies. Sustainability
strategy, a strategy that helps in building companies longevity are not focused on the internal
factors only, e.g. manufacturing of quality products, employees engagement and others. But
currently, these strategies are more towards creating a sense of belonging and trust in the
society, which help the society or consumers to believe in them, that they themselves will be
leading us in developing a better world, and eventually earn the society supports to have a long
and successful existence in the business world. As stated by Tai & Chuang, 2014, CSR enables
companies to build and maintain their success by meeting the needs of all including suppliers,
investors, consumers and also employees.

CONCLUSIONS

To conclude, as stated before it is proved that every company in this global era
acknowledges the importance of ethics and social responsibility in building their success. They
see CSR as one of the way for the company to strive in the business world. They feel the need
to repay the support of the communities by investing in them and that is why so many
companies have their employees to understand their CSR policies as well as practice them. This
can be seen by our interviews; each representative from both PETRONAS and Panasonic Energy
were comfortable in answering those questions and did not feel the need to refer to the
written policies. This shows that some company has been successful in nurturing their
employees to appreciate and understand the significance of CSR in becoming more successful.
Last but not least, apart from helping the communities, most importantly the company needs
to help their employees first and ensure they were not left behind. As a wise man once said,
Clients do not come first. Employees come first. If you take care of the employees, they will
take care of the clients.
REFERENCES

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