Topic 6: Business Ethics and Social Responsibility
1. Business Ethics
Business ethics are the moral principles and standards that guide the behaviour of a business and its people in dealing with customers, employees, suppliers, competitors and society.
Ethical Practices
- Honesty in advertising and dealings.
- Fair prices and quality goods.
- Fair treatment and pay for employees.
- Paying taxes and obeying laws.
- Respect for the environment.
- Confidentiality and integrity.
Unethical Practices
- Bribery and corruption.
- False or misleading advertising.
- Selling expired, harmful or counterfeit goods.
- Hoarding goods to push prices up.
- Exploiting workers (low pay, child labour).
- Tax evasion.
- Pollution and dumping waste.
Importance of Ethics
- Builds trust and a good reputation.
- Attracts and retains customers and staff.
- Avoids legal penalties.
- Promotes long-term success and fair competition.
2. Corporate Social Responsibility (CSR)
CSR is the duty of a business to contribute positively to society and the environment, beyond making profit.
Responsibility to Different Groups
| Group |
Responsibilities |
| Consumers |
Safe, quality goods; honest information; fair prices |
| Employees |
Fair pay, safe conditions, training, respect |
| Community |
Jobs, donations, support for schools and health |
| Government |
Pay taxes; obey laws |
| Environment |
Reduce pollution; manage waste; conserve resources |
| Suppliers |
Prompt payment; honest dealing |
Benefits of CSR to the Business
- Positive image and customer loyalty
- Better relations with the community
- Easier to attract investors and skilled staff
3. Consumer Protection
Consumer Rights
- Safety.
- Information.
- Choice.
- To be heard.
- Redress (compensation).
- Consumer education.
Institutions and Laws in Kenya
- Kenya Bureau of Standards (KEBS): sets and enforces quality standards.
- Competition Authority of Kenya: promotes fair competition and protects consumers.
- Consumer Federation of Kenya (COFEK): consumer advocacy.
- Consumer Protection Act and other laws on weights, measures and sale of goods.
Ways Consumers Can Protect Themselves
- Check quality marks, expiry dates and prices.
- Keep receipts.
- Report poor service or goods.
- Join consumer associations.
4. Environmental Responsibility
- Treat waste before disposal; recycle.
- Control air, water and noise pollution.
- Use renewable energy where possible.
- Plant trees and conserve resources.
- Comply with environmental impact assessment rules (NEMA).