Module 1

• Business ethics


  The rules, principles, and standards that govern a firm on deciding what is morally right or wrong when working
• Corporate Social Responsibility (CSR)


  A practice of firms to act in a manner so that their actions do not negatively affect society or the environment
• Importance of organizational ethics and integrity


  • Trust and Reputation
  • Legal Compliance
  • Employee Morale and Retention
  • Risk Management
  • Long-Term Sustainability
  • Social Responsibility
• Trust and Reputation


  • Ethical behavior fosters trust among stakeholders, including customers, employees, investors, and the community. Companies with a reputation for integrity are more likely to attract and retain customers, investors, and talented employees.
• Legal Compliance


  • Adhering to ethical standards helps organizations comply with laws and regulations, reducing the risk of legal consequences and associated costs.
• Employee Morale and Retention


  • Employees are more likely to be engaged and committed to their work when they believe their organization operates with integrity. A strong ethical culture can lead to higher employee morale, productivity, and retention rates.
• Risk Management


  • Ethical decision-making helps mitigate risks such as financial losses, regulatory penalties, and reputational damage associated with unethical behaviour.
• Long-Term Sustainability


  • Organizations that prioritize ethics and integrity are better positioned for long-term success. They build stronger relationships with stakeholders, adapt more effectively to changing market conditions, and create sustainable value for shareholders.
• Social Responsibility


  • Ethical organizations contribute positively to society by promoting fairness, honesty, and accountability in their business practices. They play a role in addressing social and environmental challenges and setting industry standards for responsible behaviour.
• Importance of corporate social responsibility (CSR)


  • Enhanced Reputation
  • Stakeholder Engagement
  • Risk Management
  • Innovation and Competitiveness
  • Employee Engagement and Retention
  • License to Operate
  • Long-Term Sustainability
  • Obligations to Stakeholders
• Enhanced Reputation


  • CSR initiatives help build a positive reputation for the company, which can attract customers, investors, and talented employees who prefer to engage with socially responsible organizations.
• Stakeholder Engagement


  • CSR activities demonstrate a company's commitment to stakeholders beyond just financial returns, fostering stronger relationships with customers, employees, suppliers, communities, and regulatory bodies.
• Risk Management


  • By addressing social and environmental issues proactively, companies can mitigate risks associated with regulatory non-compliance, reputational damage, and operational disruptions.
• Innovation and Competitiveness


  • CSR encourages companies to innovate and develop sustainable business practices, which can lead to cost savings, operational efficiencies, and competitive advantages in the marketplace.
• Employee Engagement and Retention


  • Engaging employees in CSR initiatives can enhance morale, job satisfaction, and loyalty, leading to higher levels of employee retention and productivity.
• License to Operate


  • CSR activities help companies earn the trust and support of the communities in which they operate, reducing the likelihood of opposition and regulatory challenges to their operations.
• Long-Term Sustainability


  • CSR promotes responsible business practices that consider the long-term impacts on society, the environment, and future generations, contributing to the sustainable development of both the company and the broader economy.
• Obligations to Stakeholders


  • Consumers
  • Employees
  • Shareholders
  • Community
• Obligations to Consumers


  • Ensure that they get value for their money, Fair and truthful advertisements, Ensure that products are safe and are of the highest standards, Offer after-sales service
• Obligations to Employees


  • Foster participation of employees in decision making, Provide proper working conditions, Fair treatment of all employees, Maintain proper communication lines, Provide opportunities for social gatherings
• Obligations to Shareholders


  • Give fair returns on shareholders' investments, Keep them informed of the business's performance, Provide a forum through which they can express views and give suggestions, Protect their investment
• Obligations to Community


  • Ensure that waste is properly disposed of, Reduce pollution, including that from air and noise, Lessen displacement caused by the building of factories or roadways, Give back to the community in which it operates
• Principles of Good Corporate Governance

  • Board's responsibility
  • Accountability and transparency
• Good Corporate Governance


  A set of rules, practices and processes which guide the way a business is operated
• Aim and objective of Corporate Governance

  To balance out the interest of shareholders of the company– that is, the firm must cater for the needs and interest of its stakeholder as much as possible
• Benefit of good corporate governance


  • Ensures that the rights of shareholders are not infringed, that they, along with other stakeholders, are treated fairly and equitably, and promotes disclosure and transparency on the part of management
• Today, most firms are operating within a competitive global environment and, as such, being a good corporate citizen is of the utmost importance. While aiming to generate a profit, the firm must also prove itself as being aware of the environmental impact of its operations and take steps to lessen that impact.
• A firm with poor corporate governance may find it difficult to attract potential investors. It could also lead to financial collapse, failure of privatisation attempts and an increase in corruption.
• The main purpose of the business plan is to communicate your ideas, plans, and strategies to potential investors or lenders.
• It can also be used as an internal document to guide decision-making within the company.