25123269

Social Responsibility and Ethics: Clarifying the ConceptsAuthor(s): Josie FisherSource: Journal of Business Ethics, Vol. 52, No. 4 (Jul., 2004), pp. 391-400Published by: SpringerStable URL: http://www.jstor.org/stable/25123269 .

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Social Responsibility and Ethics:

Clarifying the Concepts Josie Fisher

ABSTRACT. Students coming into a third-year business

ethics course I teach are often confused about the use and

meaning of the terms social responsibility and ethics. This

motivated me to take a closer look at a sample of the

management and business ethics literature for an expla nation of their confusion. I found that there are incon

sistencies in the way the two terms are employed and the

way the concepts are defined. This paper identifies the

different ways the relationship between social responsi

bility and ethics has been represented, the various uses of

these two terms, and the contrasting views regarding the

connection between morality and ethics. While this

analysis does not resolve any difficult substantive ques

tions, it does provide conceptual clarity as a necessary first

step towards facilitating students' critical engagement with

the substantive issues.

KEY WORDS: business ethics, descriptive ethics, ethics,

morality, normative ethics, social responsibility

Introduction

Students coming into a third-year business ethics course I teach are often confused about the use and

meaning of the terms social responsibility and ethics.

This motivated me to take a closer look at a sample of the management and business ethics literature for

an explanation of their confusion. I found that there are inconsistencies in the way the two terms are

employed and the way the concepts are defined. In

some cases the two terms are used interchangeably while some texts on business ethics do not have the

term social responsibility in their indices at aU. More

over, these terms are employed both in descriptive and normative ways often with no discussion of the

difference between the two uses. What makes the

situation even more compUcated is that it is not

simply a case of the management Uterature treating these concepts in one way and the business ethics

literature treating them in another way, there are

inconsistencies within the disciplines. This paper provides an overview of the different

uses and definitions of these terms as a first step in

addressing the confusion demonstrated by students.

In the foUowing sections I identify the different ways the connection between social responsibility and

ethics has been represented, I then go on to consider

the various ways the term social responsibility has been

employed, next the relationship between moraUty and ethics is considered and, finaUy, I canvass the

uses of the terms ethics and business ethics. In the

conclusion, some practical steps that teachers of

business ethics could take to address the confusion are identified.

Social responsibility and ethics

The evolution of the modern concept of corporate social responsibility has been mapped by Archie

CarroU (1999). In the 1950s, according to CarroU, a

formal Uterature on the subject began to be devel

oped. During the 1960s and 1970s definitions of

corporate social responsibility were expanded and

proUferated. A focus on empirical research and

alternative themes such as corporate social perfor

mance and stakeholder theory marked the 1980s.

Josie Fisher is a lecturer in the New England Business School at

the University of New England, Armidale, NSW, Aus

tralia. Her research interests include business ethics, corporate

governance and bioethics. She has published in a variety of

refereed journals including the Journal of Business Ethics, The

Leadership and Organization Development Journal, the

Journal of Medical Ethics and Medicine, Health Care and

Philosophy.

?M Journal of Business Ethics 52: 391-400, 2004.

r* ? 2004 Kluwer Academic Publishers. Printed in the Netherlands.



392 Josie Fisher

This focus continued through the 1990s to the

present with the concept of corporate social

responsibiUty providing the basis or point of depar ture for related concepts and themes. ParaUel to the

research into corporate social responsibility, man

agement researchers began studying business ethics

in the 1960s and at first it was claimed that this was

just another management fad, however, interest in

business ethics has increased ever since (Trevino and

Nelson, 1999). During the 1970s business ethics

emerged as a field of study building on the foun

dation provided by theologians (FerreU et al., 2000).

During the 1980s centres for business ethics were

formed which pubUshed research and offered cour

ses, conferences and seminars. It has only been since

the 1980s that the study of business ethics has been

promoted in business school curricula. Today, business ethics is stiU an evolving field. The issues

can be approached from various disciplinary per

spectives including philosophy and the social sci

ences, or they can be treated pragmaticaUy by

looking for solutions to specific problems (FerreU et al., 2000).

From a business perspective, the main focus has

been on corporate social responsibiUty, while phi

losophers have been involved in applying ethical

theory and analysis to structure the discipUne of

business ethics (Epstein, 1987; FerreU et al., 2000).

Unsurprisingly, business leaders have taken concepts from these various approaches "with Uttle interest in

the definitional niceties so intriguing to scholars"

(Epstein, 1987, p. 103). The current situation is that

concepts of social responsibility and ethics are often

used interchangeably despite each having a distinct

meaning (see, for example, Epstein, 1987; FerreU

et al., 2000). There are four views concerning the relationship

between social responsibiUty and ethics that can be

identified in the Uterature. First, social responsibiUty is ethics in an organisational context; second, social

responsibility focuses on the impact that business

activity has on society while ethics is concerned with

the conduct of those within organisations; third,

there is no connection between social responsibility and ethics; and, fourth, social responsibiUty has

various dimensions one of which is ethics. In the

foUowing sections these different views are discussed

and the most plausible view is identified.

Social responsibility is ethics in an organisational context

According to the first view found in some man

agement literature, the difference between ethics and

social responsibility is that people "have" ethics

while organisations "have" a social responsibility to

protect and enhance the society in which they

operate. This view appears in Davidson and Griffin

(2000), which is adapted from Griffin (1999). To

understand this view it is necessary to identify how

Davidson and Griffin define social responsibility and

ethics. Their definition of social responsibility is

similar to many others writers: "The set of obliga tions an organisation has to protect and enhance the

society in which it functions" (p. 127). Ethics is

defined as "... an individual's personal beliefs

regarding what is right and wrong or good or bad"

(p. 114). This definition of ethics is discussed in

more detail below. For the purposes of this section, the important point is that according to Davidson

and Griffin, individuals within organisations have

ethics however, organisations themselves do not.

Presumably this is because organisations cannot have

"personal beliefs" about anything. Interestingly the

authors say (p. 127) "... organisations do relate to

their environment in ways that often involve ethical

dilernmas and decisions". The way they respond,

however, must have to do with social responsibility not ethics.

In discussing organisations and social responsibil

ity, Davidson and Griffin (2000) take a descriptive

approach. The level of social responsibility demon

strated by an

organisation is represented on a con

tinuum that identifies social obstruction, social

obligation, social response and social contribution. It

is only organisations whose actions and decisions fall

above social obligation on the continuum that do

any more than comply with the law. Organisations that adopt a social response approach meet their basic

legal and ethical obligations and do more in selected

cases, while organisations that adopt a social contri

bution approach are proactive in promoting the

good of society. This text provides a very limited definition of

ethics and does little more than assert that organi sations do not have ethics, rather they have social

responsibility. Furthermore, the authors go on to

contradict this statement referring to the ethical



Social Responsibility and Ethics 393

dimension of organisations' interactions with their

environment and ethical obUgations of organisations. Another popular management text by Scher

merhorn (2002) takes a similar approach. The

definition he provides of ethics is "... the code of

moral principles that sets standards of good or bad, or right or wrong, in one's conduct and thereby

guides the behaviour of a person or group" (p.

146). In the introduction to corporate social

responsibility he states "[i]t is now time to shift our

interest in ethical behavior from the level of the

individual to that of the organization" and "...

corporate social responsibility is defined as an

obligation of the organization to act in ways that

serve both its own interests and the interests of its

many external stakeholders" (p. 157). However, it

has already been claimed that ethics guides the

behaviour of both persons and groups so it is un

clear what Schermerhorn means by his introduction

to social responsibility. ImpUcitly at least he seems

to be saying that ethics has to do with individual

behaviour while social responsibility has to do with

organisational behaviour, yet this is inconsistent

with the way he goes on to discuss social respon

sibiUty. Like Davidson and Griffin, Schermerhorn, claims that organisations can be described as

adopting one of four strategies for addressing social

responsibility and although the terminology differs

slightly the scale is the same: obstructionist,

defensive, accommodative and proactive. The last

two strategies include fulfiUing ethical responsibili ties.

The view that social responsibility has to do with

the activities of organisations while ethics has to do

with the actions of individuals expressed by both

Davidson and Griffin, and Schermerhorn is clearly

inadequate. In discussing social responsibility the

term ethics is used in relation to organisations' activities, which leads to confusion and suggests that

this distinction is unhelpful.

Social responsibiUty focuses on the impact that business

activity has on society while ethics is concerned with the

conduct of people within organisations

The second view (found in the business ethics Ut

erature) concerning the distinction between ethics

and social responsibility is that ethics has to do with

the actions of employees and social responsibility has

to do with the consequences of business activity.

According to Boatright (2000, pp. 360-361),

[corporations are increasingly paying attention to

ethics in the conduct of employees at all levels of the

organization. Unlike the emphasis on corporate social

responsibility, which focuses on the impact of business

activity on society at large, the corporate ethics

movement addresses the need to guide individual

decision making and to develop an ethical workplace

environment.

There is however a chapter in this text titled "Ethics

and Corporations" with an opening case study -

Campbell Soup Company ? which details the treat

ment of farm workers who are employed by suppliers contracted to Campbell (p. 336). Clearly, this dis

cussion is not confined to activities or people within

the organisation. Another chapter in this text is titled

"Ethics in International Business", which again has

to do with the impact of organisational activities in a

broader context. Moreover, when defining the

concept of social responsibility, Boatright (2000, p.

340) identifies the view that social responsibility in

volves "... the selection of corporate goals and the

evaluation of outcomes not solely by the criteria of

profitability and organizational well-being but by ethical standards or judgments of social desirability".

The distinction made between ethics and social

responsibility is not sustained.

Similarly, Trevino and Nelson (1999) refer to

ethics within organisations and in considering the

role of business in society and obligations to stake

holders they refer to social responsibilities. However

this is misleading since, in the same discussion, they make reference to ethical responsibilities towards all

stakeholders. They also have sections headed "Ethics

and Consumers" (p. 181) and "Ethics and the

Community" (p. 187) which contradict their earlier

distinction. Given the inconsistencies in the use of

the terminology by proponents of the second view

there is no reason to accept this distinction.

Social responsibility and ethics are unrelated concepts

This view, referred to as the classical view of social

responsibility, is commonly associated with Milton

Friedman and Theodore Levitt. The only social



394 Josie Fisher

responsib?ity of business managers is to maximise

profits while complying with the "rules of the game". On this view, firms have a moral duty to maximise

profits and by pursuing their own self-interest they will thereby maximise overaU economic welfare

(Shaw and Barry, 2001). Of course the rules of the

game need to be clarified and a quote from Fried

man's article, first pubUshed in 1970, is often cited

... there is one and only one social responsibiUty of

business - to use its 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

(2000, p. 12).

However within this seminal article, which it is

claimed denies that business has broad social

responsibilities, there is another for the most part

ignored explication of the "rules of the game". Friedman (2000, p. 9) claims a corporate executive's

responsibility is to "... conduct the business in

accordance with [his/her employer's] desires, which

generaUy will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in

ethical custom" (emphasis added). Levitt, writing in

1958, put it this way: "[i]n the end business has only two responsibilities

? to obey the elementary canons

of face-to-face civiUty (honesty, good faith, and so

on) and to seek material gain" (quoted in Shaw and

Barry, 2001, p. 204). While profit maximisation without constraint has

never been seriously advocated, the classical view is

that business is required to meet the moral mini

mum, that is, comply with the rules of the game as

determined by society. Despite first appearances, this

account of the social responsibility of business re

quires compUance with society's ethical norms, so it

cannot correctly be claimed that social responsibiUty and ethics are unrelated concepts.

Social responsibility has various dimensions one of which is

ethics

The fourth, and most widely supported view, is that

there are four dimensions of corporate social

responsibiUty: economic, legal, ethical and philan

thropic. Carroll's "Pyramid of Corporate Social

Responsibility" (1991, p. 42) is widely cited (see, for

example, the following business ethics texts: Kitson

and Campbell, 1996; Ferrell et al., 2000; Trevino

and Nelson, 1991). This pyramid places economic

responsibilities at the foundation and moving up the

pyramid are legal, ethical and philanthropic respon sibilities. Society requires business to discharge its

economic and legal responsibilities, it expects busi

ness to fulfil its ethical responsibilities and it desires

that business meet its philanthropic responsibilities

(Ferrell et al., 2000). Interestingly, Boatright (2000) also includes this account of social responsibility in

addition to his claim that ethics has to do with the

actions of employees while social responsibility has

to do with the consequences of business activity. This view of the relationship between social

responsibility and ethics is consistent with the ap

proach taken by many business ethics texts. The

focus of these texts is predominantly on the rela

tionship between businesses and their stakeholders, both within the organisation and outside it

(including the natural environment and society).

Epstein (1987, p. 104) claims that social responsi

bility "... relates primarily to achieving outcomes

from organizational decisions concerning specific issues or problems which (by some normative stan

dard) have beneficial rather than adverse effects upon

pertinent corporate stakeholders".

This view is also found in some management texts. For example, according to Samson and Daft

(2003, p. 147) "[e]thics deals with internal values

that are a part of corporate culture and shapes decisions concerning social responsibility with re

spect to the external environment". Carroll's pyra

mid is included in this text.

Having identified this as the most common view

of the relationship between ethics and social

responsibility, it is nonetheless important to be aware

of the other ways the relationship has been charac

terised. In the following section I consider social

responsibility in more detail before turning to ethics.

Social responsibility

While corporate social performance is receiving

increasing attention, especially in management




Uterature, I have confined my discussion to social

responsib?ity. This is because a clear understanding of the social responsib?ity of business is necessary before turning to the question of how weU a par ticular business has met its social obUgations, that is, an assessment of its social performance.

The concept of social responsib?ity is ambiguous. De George (1999) has identified four different ways the term is used: First, when a corporation is de

scribed as being sociaUy responsible this can mean

simply that it meets its legal obUgations. Second, when a corporation is described as being sociaUy

responsible it sometimes means that, in addition to

meeting its legal obUgations, the organisation also

fulfils its social obUgations. The important point about these two uses of the term is that they refer to

the level of commitment that particular organisations do, in fact, demonstrate, thus these uses are

descriptive. The possible levels of commitment have been

represented in management texts as a continuum

that, at one extreme, identifies resistance to social

demands, then a defensive or social obUgation ap

proach (the organisation meets its economic and

legal responsibilities), foUowed by accommodation

or a social response approach (in addition to meeting its economic and legal responsibilities, the organi sation also fulfils society's ethical expectations) and, at the other extreme, a proactive, social contribution

approach (see, for example, Davidson and Griffin, 2000 and Schermerhorn, 2002 (discussed above), and Samson and Daft, 2003). A sim?ar scale is

adopted by Black and Porter (1999): defenders, ac

commodates, reactors and anticipators. Robbins

et al. (2000) identify four stages of social responsi

b?ity based on the stakeholders to whom the orga nisation sees itself as having a responsib?ity. At stage one management is responsible only to stockholders, at stage two

employees are added, at stage three

stakeholders in the specific environment (e.g. cus

tomers and suppUers) are included, and at stage four

society as a whole is added.

The term social responsibility is also used to stand

for the obUgations themselves ? either those imposed

by society, or those assumed by a particular organi sation (whether or not these reflect society's con

cerns). These are the third and fourth uses identified

by De George (1999). Since these are obUgations

that ought to be fulfilled (according to society or the

particular organisation) this indicates a normative use

of the term.

The claim that businesses do have a social

responsibility, that they ought to act in certain ways and refrain from acting in other ways is not new, it

has been discussed in the literature for over 50 years

(Carroll, 1999). Social responsibility, used this way, refers to the obligations businesses have toward

society. So far this is uncontroversial, however, there

is debate about how content can be given to the

concept.

A major reason for there being no consensus

about the social responsibilities of business is that

there is no general agreement about the purpose of

business nor who has legitimate claims on it. One

way the debate about the requirements of social

responsibility has been framed is in terms of two

competing views of the role of business in society: the classical (or free market view, or narrow view) and the socioeconomic view (or broader view) (see, for example, Kitson and Campbell, 1996; Robbins

et al., 2000; Schermerhorn, 2002). According to the

former view, attributed to Friedman and Levitt, the

only social responsibility of business is to maximise

profits. It was pointed out above, however, that this

is a misrepresentation. Profit maximisation is con

strained by the "rules of the game", which require

compliance with the law and other social norms.

Thus, the "rules of the game" identify the social

responsibilities of business. According to Friedman

(2000) these are to engage in open and free com

petition without deception and fraud, and to con

form with the norms of society. Levitt is less specific, however, he identifies the responsibility of business to act honestly, in good faith "and so on" (cited in

Shaw and Barry, 2001, p. 204). This view might more accurately be identified as the minimalist ap

proach to social responsibility. Business has a social

responsibility to do what is demanded by society and no more.

The socioeconomic view offers a broader account

of social responsibility. According to this view, business has obligations that go beyond pursuing

profits and include protecting and improving society

(see, for example, Robbins et al., 2000; Shaw and

Barry, 2001). "The concept of corporate social

responsibility is often expressed as the voluntary



396 Josie Fisher

assumption of responsibilities that go beyond the

purely economic and legal responsibilities of business

firms" (Boatright, 2000, p. 340). Boatright goes on

to say that by implication businesses must be wilUng "... to

forgo a certain measure of profit in order to

achieve noneconomic ends" (p. 340). According to

FerreU et al. (2000) a business that is sociaUy

responsible wiU maximise the positive effects it has

on society and minimise the negative effects. Writ

ing in 1975, Backman identified some examples of

corporate social responsib?ity: "Employment of

minority groups, reduction in poUution, greater

participation in programs to improve the commu

nity, improved medical care, improved industrial

health and safety" (cited in CarroU, 1999, p. 279). What level of social responsib?ity is expected?

Sethi claims that social responsibiUty can be defined

as "... bringing corporate behaviour up to a level

where it is congruent with the prevaiUng social

norms, values, and expectations" (quoted in Boat

right, 2000, p. 340). Social responsib?ity encom

passes those expectations society has of

organisations (economic, legal, ethical and discre

tionary) at a given point in time. They are "... the

behaviours and norms that society expects business

to foUow (CarroU, 1999, p. 283)". Society expects businesses to make a profit and obey the law and, in addition, to behave in certain ways and conform

to the ethical norms of society. These behaviours

and practices go beyond the requirements of the

law, and seem to be constantly expanding (CarroU,

1999). The focus of the socioeconomic view is on

how society beUeves business ought to behave, therefore it is a normative view. Society identifies

what business firms are expected to do beyond

making a profit, and this varies over time and is

becoming more demanding (De George's third use

of the term). De George (1999, p. 208) sounds a

warning about the level of social responsib?ity business can reasonably be expected to bear:

If as a society we decide that corporations should be

forced to rebu?d the inner city, should not be aUowed

to close down unprofitable plants, or should be made

to train the hard-core unemployed, these demands

should be thought through, discussed in the political forum, and then clearly legislated. They are contro

versial social demands and should not be confused with

what is moraUy required.

The reason society can make demands on business

is because business functions by public consent and

its purpose is to serve society (see for, example, Carroll, 1999; Grace and Cohen, 1998; Robbins

et al., 2000). "We can expect organisations to be

socially responsible because that is part of the con

tract out of which they were created, a condition of

the permission that society granted that they exist in

the first place" (Kitson and Campbell, 1996, p. 98). Since society does expect business firms to demon

strate genuine social responsibility, and stakeholder

expectations receive a lot of public attention, there

are prudential reasons for businesses to take seriously their social responsibility.

Since the 1960s it has been claimed that social

responsibility and long-term profits are not

incompatible, however, it was Drucker writing in

1984 who claimed he was proposing a "new idea" - that being socially responsible could be converted

into business opportunities (Carroll, 1999). Studies

on the relationship between social responsibility and financial performance are, however, ambiguous

(Robbins et al., 2000). In examples where there is

both good financial and social performance it is

unclear whether good social performance leads to

increased financial performance, or if good financial

performance provides the resources to fund good social performance. In contrast, there is evidence

that there is a link between social irresponsibility and negative stock market returns (Trevino and

Nelson, 1999).

According to an alternative view,

[t]o qualify as

socially responsible corporate action, a

business expenditure or activity must be one for which

the marginal returns to the corporation are less than

the returns available from some alternative expendi

ture, must be purely voluntary, and must be an actual

corporate expenditure rather than a conduit for indi

vidual largesse (Carroll, 1999, p. 276).

This is consistent with Boatright's (2000) claim, identified above, that a business should be prepared to sacrifice some profit in order to promote non

economic goals. Of course, this view does not rule

out the possibility of good financial performance, rather it claims that maximum economic returns

have not been achieved because of the focus on

social performance.




The views expressed by Drucker, on the one

hand, and CarroU and Boatright, on the other,

represent diverse opinions about social responsib?ity. The former suggests that being sociaUy responsible can be made to serve the economic interests of the

business, while the latter claims that it is only when

economic interests are sacrificed that an action or

decision counts as being sociaUy responsible. The above discussion draws attention to the var

ious ways ?

descriptive and normative ?

the term

social responsibility is employed in the literature. It is

easy to see how these different uses can cause readers

unfamiUar with these various concepts to become

confused.

Ethics

Just as there are several ways the term social respon

sibility is employed in the literature, so too are there

ambiguities in the use of the terms ethics and business

ethics. It is not my purpose to argue that any par ticular use is to be preferred, rather, it is to draw

attention to the differing uses and the resulting po tential for confusion. First, I focus on competing views concerning the relationship between ethics

and moraUty, then I turn my attention to ethics and,

finaUy, to business ethics.

Ethics and morality

Some authors make a distinction between moraUty and ethics. For example, Beauchamp and Bowie

(2001) claim that morality refers to the principles or

rules of moral conduct as defined by society. An

analogy is drawn between morality and poUtical constitutions and language. "... [M]orality exists

prior to the acceptance (or rejection) of its standards

by particular individuals. In this respect morality cannot be purely a personal poUcy or code" (p. 1).

Ethical theory, a branch of philosophy, on the other

hand, has to do with reflecting on the nature and

justifications of right and wrong. A similar view is expressed by De George (1999,

P- 19):

Ethics studies morality. Morality is a term used to

cover those practices and activities that are considered

importantly right and wrong; the rules that govern

those activities; and the values that are embedded,

fostered, or pursued by those activities and practices.

The morality of a society is related to its mores, or the

customs that a society or group accepts as being right

and wrong, as well as those laws of a society that add

legal prohibitions and sanctions to many activities

considered to be immoral. Hence, ethics presupposes

the existence of morality, as well as the existence of

moral people who judge right from wrong and gen

erally act in accordance with norms they accept and to

which they and the rest of society hold others.

This notion that morality is the subject of ethical

enquiry is also found in Boatright (2000), Ferrell

et al. (2000), Iannone (1989), and Petrick and Quinn

(2001). It is, however, common for the terms morality and

ethics to be used interchangeably in public debates.

Some authors also use these terms interchangeably without comment, while others do address the issue.

Shaw and Barry (2001) acknowledge that some

philosophers distinguish morality and ethics on the

basis that morality refers to human conduct and

values while ethics is the study of morality. They go on: "[e]thics does, of course, denote an aca

demic subject, but in everyday parlance we inter

change "ethical" and "moral" to describe people we

consider good and actions we consider right. And

we interchange "unethical" and "immoral" to

describe what we consider bad people and

wrong actions. This book follows that cornmon

usage" (p. 4). For Grace and Cohen (1998, p.4),

... there is no reason to make a distinction in meaning

between "ethical" and "moral". There is certainly no

difference in meaning which could be attributed to

their etymological roots. Sometimes some moral phi

losophers or "ethicists" distinguish them from each

other, but not all philosophers do; and those who do

distinguish them from each other do not all distinguish them in the same way... It is recommended here that

the words be considered as synonymous...

While not explicitly stating that the terms morality and ethics are used interchangeably, Trevino and

Nelson (1999, p. 12) define ethics as "... the prin

ciples, norms, and standards of conduct governing an

individual or group" and Schermerhorn (2002, p.



398 Josie Fisher

146) provides a sim?ar definition: "[E]thics can be

defined as the code of moral principles that sets

standards as to what is good or bad, or right or

wrong in one's conduct and thereby guides the

behavior of a person or group".

The different uses of the terms morality and ethics

highUght the need for care when trying to understand

just what particular authors are saying. For example, for those who maintain a distinction there is a sig nificant difference between claiming that some ac

tion is immoral (it contravenes society's accepted

norms) and the claim that some action is unethical

(which could mean that society's norms are found

wanting according to some ethical theory).

Descriptive and normative ethics

Just as the term social responsibility can be employed either in a

descriptive or a normative way, so too can

the term ethics. "Descriptive ethics refers to the

general beUefs, values, attitudes, and standards that, as a matter of fact, guide behavior ... descriptive ethics examines the typical beUefs or values that

determine what is customarily done" (Desjardins and McCaU, 2000, p. 4). Beauchamp and Bowie

(2001, p. 6) define the descriptive approach as the

"[f] actual description and explanation of moral

behaviour and beUefs". This activity is typicaUy carried out by anthropologists, sociologists and his

torians.

Normative ethics (sometimes also referred to as

moral phUosophy) in contrast to describing the val

ues, beUefs and norms that influence actual behav

iour, evaluates behaviour by appealing to standards

or norms that are independent of custom. "Rather

than describing the actual beUefs, values, and atti

tudes, normative ethics prescribes what we should

beUeve or value. The difference between descriptive and normative ethics, therefore, is the difference

between what is and what ought to be" (Desjardins and McCaU 2000, p. 5 itaUcs in original). Beau

champ and Bowie (2001, pp. 6?7) make the same

point: "[n]ormative moral ph?osophy aims at

determining what ought to be done, which needs to

be distinguished from what is, in fact, practiced". Iannone (1989) distinguishes three uses of the

term ethics: First, personal ethics (or morals) are

individuals' beliefs and assumptions about what is

right and wrong, good and bad. Second, social or

group ethics are the beliefs and assumptions about

right and wrong, good and bad held by a particular

group. In these two uses, ethics are something that a

person or a group has. Third, the term ethics refers to

an activity; it involves critical inquiry into ethical

issues. The first two uses are connected to descrip tive ethics, while the third is connected to normative

ethics.

Davidson and Griffin (2000, p. 114) define ethics

as "[a]n individual's personal beliefs regarding what is right and wrong or good and bad". They claim that what constitutes ethical behaviour

can vary from person to person, however, it will

usually be behaviour that is consistent with widely

accepted social norms. This definition relates to the

first two uses of the term ethics as identified by Iannone.

Schermerhorn (2002, pp. 146-147) provides a

similar definition:

For our purposes, ethics can be defined as the code of

moral principles that sets standards of good or bad,

right or wrong, in one's conduct and thereby guides

the behaviour of a person or group. Ethics provide

principles that guide behaviour and help people make

moral choices among alternative courses of action. In

practice, ethical behaviour is what is accepted as

"good" and "right" as opposed to "bad" or "wrong"

in the context of a governing moral code.

The way Davidson and Griffin, and Schermer

horn define the term ethics implies that the standards

of right and wrong, and good and bad can be known

by identifying the beliefs and values of a particular

person or group. This use of the term ethics connects

with descriptive ethics. If, however, it is claimed that

people ought to act in accordance with these ac

cepted beliefs and values, then it becomes a nor

mative view that implicitly endorses ethical

relativism. Ethical relativism is a contested theory

according to which an action is right if it is accepted

by the relevant person or group (see for example

Beauchamp and Bowie, 2001). Boatright (2000, p.

9), in contrast, claims that "[m]oral rules should not

be accepted merely because they are a part of the

prevailing morality." Ethics, on his view, is con

cerned with a critical examination of the rules of



Social ResponsibiUty and Ethics 399

moraUty and represents Iannone's third use of the

term.

Business ethics

The different uses of the term ethics carry over into

discussions of business ethics. An example that

highUghts the distinction between ethics and

moraUty comes from Petrick and Quinn (2001, pp.

55-56) who claim that at times the morality of

management and management ethics are in conflict.

MoraUty may permit managers to succeed by con

forming to current social norms and behaviours, wh?e "... management ethics caUs for a sensitive,

reflective, and systematic endorsement of those

norms only after they have withstood critical chal

lenge".

The distinction between descriptive and norma

tive accounts of ethics is also found in discussions of

business ethics. According to Desjardins and McCaU

(2000, p. 4), in a business context, descriptive ethics

is concerned with "... the actual customs, attitudes,

values and mores that operate within business.

Business ethics in this descriptive sense is most at

home in fields such as sociology and management, which describe for us what goes on in business."

Beauchamp and Bowie (2001, p. 6) refer readers to

"Harvard Business Review articles and Forbes magazine

poUs that report what business executives beUeve is

moraUy acceptable and unacceptable". Robbins et al. (2000, p. 183) also provide a

descriptive account of ethics when they ask

[a]re ethical standards universal? Hardly! Social and

cultural differences between countries are important

environmental factors that determine ethical and

unethical behaviour. Some actions are considered

unethical (and often iUegal) in, say, Australia but are

considered standard practice in many other countries.

Other authors sUde from descriptive ethics to a

normative view. For example, FerreU et al. (2000, p.

6) claim that

[m]ost definitions of business ethics relate to rules,

standards, and moral principles as to what is right or

wrong in specific situations. For our purposes and in

simple terms, business ethics comprises principles and

standards that guide behaviour in the world of business.

Whether a specific required behavior is right or wrong,

ethical or unethical, is often determined by stake

holders, such as investors, customers, interest groups,

employees, the legal system, and the community.

Likewise Trevino and Nelson (1999) define eth

ical business behaviour as conforming to the prin

ciples, norms and standards that society accepts as

constraining business behaviour. According to Fer

rell et al. and Trevino and Nelson, right and wrong are identified by reference to what is considered

acceptable behaviour for business; the question of

what ought to be considered acceptable behaviour is

not canvassed.

As a form of normative ethics, business ethics

evaluates the rules, standards and moral principles identified in descriptive approaches. For example,

Desjardins and McCall (2000) claim that a normative

analysis could suggest that a policy of workplace

drug testing violates rights or principles of justice.

Epstein (1987, p. 104) also provides a normative

account: "Business ethics concerns the systematic,

value-based reflection ... on the moral significance

of personal and organizational business action and its

consequences for societal stakeholders." Similarly, Malachowski (2001, p. 1) defines business ethics as

"... a critical, normative discipline ?

one which

stands back from the whirlwind of commercial fife

and tries to establish impartial ethical standards for

the behaviour of business". For Shaw and Barry

(2001, p. 4), "[bjusiness ethics is the study of what

constitutes right and wrong, or good and bad, hu

man conduct in a business context".

The above discussion illustrates that the relation

ship between morality and ethics has been charac

terised in different ways. In some cases the terms are

used interchangeably while other authors claim there

is a fundamental difference between morality and

ethics ? most commonly that morality relates to

accepted principles and rules of conduct while ethics

is the study of morality. Compounding this potential for confusion is the different ways the terms ethics

and business ethics are employed. In some instances

the terms are used descriptively while in others a

normative meaning is intended. Moreover, there are

examples in which a descriptive use slips into a

normative use. Because authors often do not make

clear the way they are employing the terminology it

is hardly surprising that confusion can result.



400 Josie Fisher

Conclusion

The source of the confusion demonstrated by stu

dents concerning the use and meaning of the terms

social responsibility and ethics can be explained, at least

in part, by inconsistencies in the way the two terms

are employed and defined in both the management and business ethics literature. The above analysis identifies the different ways the relationship between

social responsibility and ethics has been represented, it draws attention to the distinction between

descriptive and normative uses of these two terms, and the contrasting views regarding the connection

between morality and ethics are identified. Wh?e

this analysis does not solve any difficult substantive

questions, it does provide conceptual clarity as a

necessary first step towards facilitating students'

critical engagement with the substantive issues.

One practical step teachers of business ethics

could take to address any confusion would be to

provide an overview of the different uses and

meanings of the terms social responsibility and ethics in

an introductory lecture, and clearly identify the focus

of the business ethics course they wiU be teaching.

Throughout the semester there would also be

opportunities to make expUcit particular uses and

meanings of the terms, and draw attention to the

implications of using a term in one way rather than

another. To illustrate the differences, part of a

practical session could be devoted to identifying and

discussing different uses and meanings in a selection

of excerpts from various readings. In addition to

addressing any confusion about the terms, such an

approach would provide students with insights into

the subject that would not otherwise be possible.

References

Beauchamp, T. L. and N. E. Bowie, (eds): 2001, Ethical

Theory and Business, 6th Edition (Prentice Hall, Upper Saddle River, NJ).

Black, J. S. and L. Porter: 1999, Management: Meeting New

Challenges (Prentice Hall, Upper Saddle River, NJ).

Boatright, J. R.: 2000, Ethics and the Conduct of Business, 3rd Edition (Prentice Hall, Upper Saddle River, NJ).

Carroll, A. J.: 1999, 'Corporate Social Responsibility:

Evolution of a Definitional Construct', Business and

Society 38(3), 268-295.

Davidson, P. and R. W. Griffin: 2000, Management:

Australia in a Global Context (W?ey, Brisbane). De George, R. T.: 1999, Business Ethics, 5th Edition

(Prentice HaU, Upper Saddle River, NJ).

Desjardins, J. R. and J. J. McCaU: 2000, Contemporary Issues in Business Ethics (Wadsworth, Belmont, CA).

Epstein, E. M.: 1987, 'The Corporate Social Policy Process: Beyond Business Ethics, Corporate Respon

sibiUty, and Corporate Social Responsiveness', Cali

fornia Management Review 29(3), 99?114.

FerreU, O. C, J. Fraedrich and L. FerreU: 2000, Business

Ethics, 4th Edition (Houghton Mifflin, Boston). Friedman, M.: 2000, 'The Social ResponsibiUty of

Business is to Increase its Profits', in Desjardins, J. R.

and J. J. McCaU (eds.), Contemporary Issues in Business

Ethics (Wadsworth, Belmont, CA), pp. 8-12.

Grace, D. and S. Cohen: 1998, Business Ethics: Australian

Problems and Cases, 2nd Edition (Oxford University Press, Melbourne).

Griffin, R. W.: 1999, Management, 6th Edition (Hough ton Mifflin, Boston).

Iannone A. P. (ed.).: 1989, Contemporary Moral Contro

versies in Business (Oxford University Press, New

York). Kitson, A and R. CampbeU: 1996, The Ethical Organisa

tion (MacmiUan, HoundmiUs).

Malachowski, A. R.: 2001, 'Introduction: Business Ethics

and Business Practice', in Malachowski, A. (ed.),

Business Ethics: Critical Perspectives on Business and

Management, Vol. 4 (Routledge, London), pp. 1-3.

Petrick, J. A. andj. F. Quinn: 2001, 'Nature and Value of

Management Ethics', in Malachowski, A. (ed.), Busi

ness Ethics: Critical Perspectives on Business and Manage

ment, Vol. 1 (Routledge, London), pp. 55?75.

Robbins, S. P., R. Bergman, I. Stagg and M. Coulter:

2000, Management, 2nd Edition (Prentice HaU, Syd

ney).

Samson, D. and R. L. Daft: 2003, Management: Pacific Rim

Edition (Thomson, Southbank, Victoria). Schermerhorn, J. R.: 2002, Management, 7th edition

(W?ey, New York). Shaw, W. H. and Barry, V.: 2001, Moral Issues in Business,

8th Edition (Wadsworth, Belmont, CA). Trevino, L. K. and D. A. Nelson: 1999, Managing Business

Ethics, 2nd Edition (W?ey, New York).

New England Business School,

University of New England, Armidale NSW 2351,

Australia

E-mail: [email protected]



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