Question 1: “There are several approaches to business ethics which are new, though these theories are not

commonly referred to in business ethics, but they offer exciting perspectives in the context of ethical decision-
making from a managerial perspective.” In light of the above statement discuss some of the contemporary
approaches to business ethics.

Answer 1: Several contemporary approaches to business ethics offer fresh perspectives on ethical decision-
making from a managerial standpoint. These approaches emphasize different aspects of ethical behaviour and
provide frameworks for guiding ethical decision-making processes in organizations. Here are some of the notable
contemporary approaches to business ethics:
 Stakeholder Theory: Stakeholder theory posits that organizations should consider the interests of all
stakeholders affected by their actions, not just shareholders. This approach recognizes that businesses
have ethical responsibilities not only to shareholders but also to employees, customers, suppliers,
communities, and the environment. Managers using stakeholder theory must balance the competing
interests of various stakeholders when making decisions, aiming to create value for all parties involved.
 Corporate Social Responsibility (CSR): CSR emphasizes the ethical obligations of businesses to
contribute positively to society beyond maximizing profits. This approach entails integrating social,
environmental, and ethical considerations into business operations and decision-making processes.
Managers practicing CSR strive to align business activities with ethical principles, promote
sustainability, support community development initiatives, and minimize negative impacts on society and
the environment.
 Ethical Leadership: Ethical leadership focuses on the role of leaders in fostering ethical behaviour and
organizational culture. Ethical leaders lead by example, demonstrate integrity, transparency, and
accountability, and promote ethical values throughout the organization. They encourage open
communication, ethical decision-making, and responsible conduct among employees, inspiring trust,
loyalty, and commitment.
 Principled Decision-Making: This approach emphasizes the importance of adhering to ethical
principles and moral values when making decisions. It involves analysing ethical dilemmas through the
lens of established ethical frameworks such as deontology (duty-based ethics), consequentialism
(outcome-based ethics), virtue ethics, or ethical relativism. Managers apply ethical reasoning and
judgment to evaluate the moral implications of their actions and make decisions consistent with ethical
principles.
 Ethical Culture and Climate: Ethical culture refers to the shared values, norms, and beliefs that shape
ethical behaviour within an organization. Ethical climate refers to the prevailing perceptions of ethical
conduct and practices among employees. Managers play a crucial role in fostering an ethical culture
and climate by promoting ethical values, providing ethical leadership, establishing clear ethical
standards, and encouraging ethical behaviour through rewards, recognition, and sanctions.
 Ethics of Care: The ethics of care approach emphasizes the importance of interpersonal relationships,
empathy, and compassion in ethical decision-making. This approach recognizes the moral obligations of
individuals and organizations to care for others, particularly those who are vulnerable or marginalized.
Managers practicing the ethics of care prioritize empathy, trust, and solidarity in their interactions with
employees, customers, and stakeholders, seeking to promote well-being and social justice.
 Integrative Social Contracts Theory (ISCT): ISCT combines elements of ethical universalism and
ethical relativism to propose a framework for ethical decision-making that considers both universal
ethical principles and local cultural norms and values. This approach recognizes that ethical standards
may vary across different cultures and contexts but also identifies fundamental ethical principles that are
universally applicable. Managers using ISCT must navigate the tension between respecting cultural
diversity and upholding universal moral standards in their decision-making.

Question 2: Elaborate on different approaches of business strategy for Corporate Social Responsibility (CSR).

Answer 2: Corporate Social Responsibility (CSR) involves integrating social, environmental, and ethical
considerations into business operations and decision-making processes. When developing CSR strategies,
organizations can adopt various approaches that align with their mission, values, and stakeholders' expectations.
Here are different approaches to business strategy for CSR:
 Philanthropic Approach: In this approach, organizations engage in charitable giving and philanthropic
activities to support social causes and community development initiatives. This may include donating
funds, resources, or volunteer time to charitable organizations, sponsoring community events, or
contributing to social welfare programs. The philanthropic approach demonstrates a commitment to
giving back to society and making a positive impact on communities, without necessarily linking CSR
activities directly to business objectives or core operations.
 Strategic Approach: The strategic approach to CSR integrates social and environmental
considerations into the organization's core business strategy and operations. Rather than treating CSR
as a separate initiative, organizations align CSR activities with business goals and objectives to create
shared value for both the company and society. This approach involves identifying areas where the
organization can leverage its core competencies, resources, and expertise to address social or
 environmental challenges while also generating business benefits, such as enhancing brand reputation,
mitigating risks, attracting talent, and fostering innovation.
 Sustainability Approach: The sustainability approach focuses on minimizing the environmental impact
of business operations and promoting sustainable practices throughout the value chain. Organizations
adopt environmentally friendly policies, practices, and technologies to reduce resource consumption,
waste generation, and greenhouse gas emissions. This may involve implementing energy-efficient
processes, sourcing renewable materials, reducing carbon footprint, and promoting recycling and waste
reduction initiatives. The sustainability approach aims to achieve long-term environmental sustainability
while also improving operational efficiency and cost-effectiveness.
 Shared Value Approach: The shared value approach emphasizes creating economic value for both the
company and society by addressing social and environmental challenges through business innovation
and collaboration. Organizations identify opportunities to address unmet social needs or market
inefficiencies through new products, services, or business models that generate positive social impacts
while also delivering financial returns. By aligning business interests with societal needs, the shared
value approach enables organizations to unlock new growth opportunities, drive innovation, and create
sustainable value for all stakeholders.
 Ethical Approach: The ethical approach to CSR emphasizes conducting business in a responsible and
ethical manner, guided by moral principles, integrity, and respect for human rights. Organizations uphold
ethical standards in their interactions with employees, customers, suppliers, and other stakeholders,
ensuring fairness, transparency, and accountability in all business practices. This may include adhering
to labour rights, promoting diversity and inclusion, combating corruption, and respecting human rights
across the supply chain. The ethical approach aims to build trust, credibility, and reputation by
demonstrating a commitment to ethical conduct and corporate citizenship.
 Compliance Approach: The compliance approach focuses on meeting legal and regulatory
requirements related to social, environmental, and ethical issues. Organizations ensure compliance with
applicable laws, regulations, and industry standards governing areas such as labour practices,
environmental protection, product safety, and consumer rights. By complying with legal obligations and
industry norms, organizations mitigate risks, avoid penalties, and maintain their license to operate.
However, the compliance approach may be limited in its ability to address broader social or
environmental challenges beyond regulatory compliance.
 Integrated Reporting Approach: The integrated reporting approach involves transparently
communicating the organization's financial performance, environmental impact, social contributions, and
governance practices in a comprehensive and integrated manner. Organizations produce integrated
reports that provide stakeholders with a holistic view of the organization's value creation process,
including its financial, environmental, and social impacts. Integrated reporting aims to enhance
transparency, accountability, and stakeholder engagement while promoting long-term value creation
and sustainability.

Question 3: Nowadays lots of companies are focusing on Corporate Social Responsibility (CSR) initiatives.
Discuss some of the initiatives of few Indian companies.

Answer 3: Many Indian companies have been increasingly focusing on Corporate Social Responsibility (CSR)
initiatives to contribute to the well-being of society and address various social, environmental, and economic
challenges. Here are some examples of CSR initiatives undertaken by notable Indian companies:
Tata Group
 Tata Steel's Tribal Development Program: Tata Steel has been actively involved in the development of
tribal communities living near its operational areas. The company implements various initiatives focused
on education, healthcare, skill development, and livelihood enhancement for tribal populations.
 Tata Power's Community Development Initiatives: Tata Power undertakes several CSR initiatives aimed
at promoting sustainable development and improving the quality of life in rural and tribal communities.
These initiatives include programs for renewable energy access, education, healthcare, and women
empowerment.

Reliance Industries Limited (RIL)

 Reliance Foundation: The philanthropic arm of Reliance Industries, Reliance Foundation, implements a
wide range of CSR initiatives across India. These initiatives focus on healthcare, education, rural
development, disaster response, and environmental sustainability. Notable programs include healthcare
services through mobile medical units, rural education initiatives, and disaster relief efforts.
 Sustainable Livelihoods: RIL has also been actively involved in promoting sustainable livelihoods for
rural communities through initiatives such as agriculture and dairy development, vocational training, and
microenterprise support.

Infosys
 Infosys Foundation: Infosys Foundation, the philanthropic arm of Infosys Limited, focuses on promoting
education, healthcare, rural development, and social welfare. The foundation supports initiatives such
 as education scholarships for underprivileged students, healthcare services, rural development projects,
and disaster relief efforts during natural calamities.
 Environmental Sustainability: Infosys has implemented several initiatives to promote environmental
sustainability, including energy conservation, renewable energy adoption, waste management, and
green building practices across its campuses.

Mahindra Group
 Project Nanhi Kali: Mahindra Group, through its CSR arm Mahindra & Mahindra Ltd., supports Project
Nanhi Kali, which aims to provide quality education to underprivileged girl children in India. The initiative
focuses on improving access to education, addressing gender disparities, and empowering girls through
education.
 Sustainable Rural Development: Mahindra Group undertakes various CSR initiatives for sustainable
rural development, including watershed management, agriculture productivity enhancement, skill
development, and rural electrification projects.

Aditya Birla Group

 Aditya Birla Centre for Community Initiatives and Rural Development: Aditya Birla Group's CSR
initiatives focus on community development, healthcare, education, and sustainable livelihoods. The
group supports initiatives such as healthcare facilities, education scholarships, vocational training, and
women empowerment programs.
 Environment Conservation: Aditya Birla Group emphasizes environmental sustainability through
initiatives such as afforestation, waste management, water conservation, and renewable energy
adoption across its operations.

Question 4: Discuss the policy guidelines regarding Quantum of Corporate Social Responsibility (CSR) spending
and transfer of the unspent amount in a particular year.

Answer 4: In India, Corporate Social Responsibility (CSR) spending and utilization are governed by the
Companies Act, 2013, and the CSR Rules, 2014, as amended from time to time. The Act mandates certain
classes of companies to spend a specified percentage of their average net profits over the preceding three
financial years on CSR activities.
Here are the policy guidelines regarding the quantum of CSR spending and transfer of the unspent amount in a
particular year:
 Mandatory CSR Spending: As per Section 135 of the Companies Act, 2013, certain classes of
companies meeting specific financial thresholds are required to spend at least 2% of their average net
profits made during the three immediately preceding financial years on CSR activities. These companies
include:
o Companies with a net worth of INR 500 crore or more, or
o Companies with a turnover of INR 1,000 crore or more, or
o Companies with a net profit of INR 5 crore or more.
o Calculation of CSR Spending: The CSR expenditure is calculated based on the average net
profit of the company over the preceding three financial years. The net profit is determined as
per the financial statements prepared under the Companies Act.
 Eligible CSR Activities: The CSR activities that companies can undertake are specified in Schedule VII
of the Companies Act, 2013. These activities include promoting education, eradicating hunger and
poverty, promoting healthcare, environmental sustainability, gender equality, and social welfare projects.
 Disclosure Requirements: Companies are required to disclose their CSR policy, CSR initiatives
undertaken during the year, amount spent on CSR activities, and any unspent CSR amount in their
annual reports. The disclosure must include details such as the projects or programs undertaken, the
amount allocated to each activity, and the implementation status.
 Utilization of Unspent CSR Amount: If a company fails to spend the prescribed CSR amount in a
particular financial year, it must provide reasons for such non-spending in its board report. The unspent
CSR amount is required to be transferred to a dedicated CSR fund, specified under Schedule VII of the
Companies Act, within six months of the end of the financial year.
 Utilization of Unspent CSR Fund: The unspent CSR amount is to be utilized for CSR activities in
subsequent financial years. Companies are required to spend the unspent CSR amount within three
financial years from the date of transfer to the CSR fund. However, if the unspent amount relates to an
ongoing project, it can be carried forward and spent in the subsequent financial years until the
completion of the project.
 Monitoring and Compliance: Companies are required to constitute a CSR Committee of the Board,
which is responsible for formulating and monitoring the implementation of CSR policies and programs.
The board of directors is ultimately responsible for ensuring compliance with CSR obligations and
reporting requirements.

Question 5: Write short notes on the following

 1) Social Audit

 Social audit is a process that evaluates an organization's performance in meeting its social, ethical, and
environmental responsibilities and commitments. It involves assessing the impact of an organization's
activities on stakeholders, communities, and the environment, and evaluating the extent to which the
organization's actions align with its stated values and objectives. Here are some key points to note
about social audit:
 Purpose: The primary purpose of social audit is to enhance transparency, accountability, and
stakeholder engagement by systematically evaluating and reporting on an organization's social, ethical,
and environmental performance. It provides a mechanism for organizations to assess their social
responsibility efforts, identify areas for improvement, and demonstrate their commitment to responsible
business practices.
 Scope: Social audit examines various aspects of an organization's operations, including its policies,
practices, and impacts on stakeholders, communities, and the environment. It covers areas such as
labor practices, human rights, community development, environmental sustainability, ethical business
conduct, and corporate governance.

Process: The social audit process typically involves the following steps:
 Defining the scope and objectives of the audit, including the key areas and indicators to be evaluated.
 Gathering data and information through surveys, interviews, document reviews, and site visits.
 Analysing the data to assess the organization's performance against relevant social, ethical, and
environmental standards, guidelines, and benchmarks.
 Identifying strengths, weaknesses, opportunities, and challenges in the organization's social
responsibility efforts.
 Reporting the findings and recommendations in a comprehensive social audit report, which is shared
with stakeholders, including employees, customers, investors, regulators, and the public.
 Taking corrective actions and implementing improvements based on the audit findings to enhance social
responsibility performance.

Benefits: Social audit offers several benefits to organizations, including:

 Enhancing organizational reputation and credibility by demonstrating a commitment to responsible
business practices.
 Strengthening stakeholder trust and relationships through transparent and accountable communication.
 Identifying opportunities for innovation, efficiency gains, and risk mitigation in social responsibility
efforts.
 Improving internal processes, policies, and practices to align with best practices and international
standards.
 Empowering stakeholders, including employees, communities, and civil society organizations, to engage
in dialogue and collaboration on social responsibility issues.

Challenges: Despite its benefits, social audit may face challenges, such as:
 Data collection and verification: Gathering accurate and reliable data on social, ethical, and
environmental performance can be challenging, especially in complex supply chains and global
operations.
 Stakeholder engagement: Ensuring meaningful participation and input from diverse stakeholders in the
audit process may require proactive communication and outreach efforts.
 Resource constraints: Conducting social audits can be resource-intensive in terms of time, expertise,
and financial investment, particularly for small and medium-sized enterprises (SMEs) and non-profit
organizations.

2) Corporate Citizenship and Business

 Corporate citizenship refers to the ethical and responsible behaviour of businesses towards society, the
environment, and stakeholders beyond their primary economic objectives. It encompasses a range of
activities and initiatives through which companies demonstrate their commitment to being good
corporate citizens and contributing positively to the communities in which they operate. Here are some
key points to note about corporate citizenship and its significance for business:
 Social Responsibility: Corporate citizenship involves fulfilling social responsibilities beyond legal
obligations, such as promoting human rights, supporting community development, advancing education,
and addressing societal challenges. It reflects a company's commitment to ethical conduct,
sustainability, and corporate governance.
 Stakeholder Engagement: Corporate citizenship emphasizes engaging with stakeholders, including
employees, customers, suppliers, investors, governments, and civil society organizations, to understand
their needs, expectations, and concerns. Companies actively seek input from stakeholders and
collaborate with them to address social and environmental issues effectively.
 Environmental Sustainability: Corporate citizenship encompasses environmental stewardship and
sustainability practices aimed at minimizing environmental impacts, conserving natural resources,
reducing carbon emissions, and promoting eco-friendly technologies and practices. Companies
implement initiatives such as energy efficiency, waste reduction, recycling, and sustainable sourcing to
mitigate their environmental footprint.
 Ethical Business Practices: Corporate citizenship emphasizes ethical behaviour, integrity, and
transparency in business operations, including fair treatment of employees, ethical sourcing practices,
anti-corruption measures, and responsible marketing and advertising. Companies uphold ethical
standards and values in their interactions with stakeholders and strive to build trust and credibility.
 Community Engagement: Corporate citizenship involves actively contributing to the well-being and
development of local communities through philanthropy, volunteerism, and community investment
initiatives. Companies support social welfare programs, education and healthcare initiatives, disaster
relief efforts, and infrastructure development projects to address community needs and foster
sustainable development.
 Corporate Governance: Corporate citizenship is closely linked to good corporate governance
practices, including accountability, transparency, and integrity in decision-making processes.
Companies adopt governance structures and policies that promote ethical conduct, risk management,
and shareholder value while balancing the interests of stakeholders.
 Business Sustainability: Corporate citizenship is essential for long-term business sustainability and
competitiveness. Companies that prioritize corporate citizenship are more likely to build strong
relationships with stakeholders, attract and retain talent, enhance brand reputation, mitigate risks, and
create value for shareholders over the long term.

3) Ethical Dilemmas

 Ethical dilemmas are situations in which individuals or organizations face conflicting moral principles or
values, making it challenging to determine the right course of action. These dilemmas often involve
difficult decisions where one choice may result in violating ethical principles while another may lead to
undesirable consequences. Here are some key points to note about ethical dilemmas:
 Conflicting Values: Ethical dilemmas arise when individuals or organizations encounter conflicting
values, beliefs, or interests that make it difficult to determine the morally correct action. These conflicts
may involve competing ethical principles, societal norms, legal requirements, personal beliefs, or
professional responsibilities.
 Complexity and Uncertainty: Ethical dilemmas are often characterized by complexity and uncertainty,
with no clear-cut solutions or easy answers. Individuals may struggle to balance competing interests,
weigh the potential consequences of their actions, and navigate ambiguous or ambiguous situations.
 Personal vs. Professional Ethics: Ethical dilemmas may involve tensions between personal values
and professional ethics. Individuals may face dilemmas where their personal beliefs or moral convictions
conflict with their professional obligations or organizational policies, requiring them to make difficult
choices between loyalty to their values and adherence to professional standards.
 Multiple Stakeholders: Ethical dilemmas often involve considerations of multiple stakeholders with
competing interests and perspectives. Individuals may need to consider the potential impact of their
decisions on various stakeholders, including customers, employees, shareholders, communities, and
society at large, and strive to balance these interests equitably.
 Legal and Ethical Compliance: Ethical dilemmas may arise when individuals or organizations
encounter situations where legal requirements conflict with ethical principles or moral obligations. While
legal compliance is important, individuals may face dilemmas where legal actions may not necessarily
be ethical, requiring them to navigate the complexities of legal and ethical frameworks.
 Ethical Decision-Making: Resolving ethical dilemmas requires a systematic approach to ethical
decision-making that involves identifying the ethical issues involved, considering alternative courses of
action, evaluating the potential consequences, consulting with relevant stakeholders, and making a
reasoned judgment based on ethical principles and values.
 Ethical Leadership: In organizational contexts, ethical dilemmas often require leadership to provide
guidance, direction, and moral clarity. Ethical leaders foster a culture of integrity, transparency, and
ethical conduct, empower employees to voice ethical concerns, and provide support and guidance in
navigating complex ethical dilemmas.

4) CSR and sustainable development

 Corporate Social Responsibility (CSR) and sustainable development are closely intertwined concepts
that emphasize the responsibility of businesses to contribute to the economic, social, and environmental
well-being of society. Here are some key points to note about the relationship between CSR and
sustainable development:
 CSR as a Driver of Sustainable Development: CSR refers to the voluntary actions and initiatives
undertaken by businesses to integrate social, environmental, and ethical considerations into their
operations and business strategies. By engaging in CSR activities, companies can contribute to
 sustainable development by addressing social issues, promoting environmental sustainability, and
fostering economic growth that benefits all stakeholders.
 Triple Bottom Line Approach: Sustainable development emphasizes the interconnectedness of
economic, social, and environmental dimensions, often referred to as the triple bottom line. CSR aligns
with this approach by encouraging companies to consider the impacts of their actions on people, planet,
and profit, and to pursue strategies that create value across all three dimensions.
 Social Responsibility: CSR initiatives aimed at social responsibility contribute to sustainable
development by addressing societal needs and improving the quality of life for communities. These
initiatives may include programs focused on education, healthcare, poverty alleviation, gender equality,
human rights, and community development, among others.
 Environmental Sustainability: CSR plays a critical role in promoting environmental sustainability by
encouraging businesses to adopt eco-friendly practices, reduce resource consumption, minimize
pollution and waste, and mitigate climate change impacts. Companies may invest in renewable energy,
energy efficiency, waste management, water conservation, and biodiversity conservation initiatives to
support environmental sustainability.
 Stakeholder Engagement: CSR emphasizes stakeholder engagement and collaboration, recognizing
that sustainable development requires the participation and cooperation of diverse stakeholders,
including employees, customers, suppliers, investors, governments, and civil society organizations. By
involving stakeholders in CSR initiatives, companies can build partnerships, foster dialogue, and
address shared challenges more effectively.
 Business Innovation and Competitiveness: CSR can drive business innovation and competitiveness
by encouraging companies to adopt sustainable business practices, develop environmentally friendly
products and services, and explore new markets and opportunities. Sustainable development goals can
inspire creativity and innovation in business strategies, leading to long-term value creation and
competitive advantage.
 Long-term Value Creation: CSR initiatives that contribute to sustainable development can generate
long-term value for companies by enhancing brand reputation, building customer loyalty, attracting and
retaining talent, mitigating risks, and improving financial performance. By aligning business objectives
with societal needs and environmental stewardship, companies can create shared value for
stakeholders and contribute to a more sustainable future.