Managing ethical standards: When rhetoric meets reality

Abstract

In the last two decades, the private sector has been placed under intensifying pressure to ensure it operates in an environmentally and socially responsible manner. Companies have moved through various phases of response, starting with a ‘deny and defend’ position, moving to ‘paying penance’ through donations and philanthropy, and currently settling on risk management through mitigating the negative impacts of their business operations. Drawing on research undertaken by Oxfam International mainly in the retail sector, as well as in the coffee and pharmaceutical sector, this article argues that the current approach is, as yet, inadequate. Simply mitigating negative impacts through castigating intermediaries or suppliers does not contribute to sustainable solutions. For the private sector to meet corporate social responsibility pledges, companies need to pursue alternative business models that forge connectivity, coherence, and interdependence between their core business operations and their ethical and environmental commitments.

Acknowledgements

This article is based upon a paper presented by the author on 1 October 2004 at the 2004 Transatlantic Business Ethics Conference organised by ESADE in Barcelona, Spain. The author wishes to thank Kate Raworth (case study on the retail sector), Henk Campher (coffee), Mohga Smith, and Ruth Mayne (pharmaceuticals) at OGB for their help with this article.

Notes

1 This section draws heavily on Raworth (2004a) and Oxfam GB et al. (2004).

2 Patients in developing countries account for 59 per cent of the 56.5 million annual deaths worldwide from non-communicable diseases, including cardiovascular diseases, cancers, diabetes, and respiratory diseases.

3 This was followed by a decision by the WTO on 30 August 2003 to lift TRIPS restrictions on compulsory licensing for export of generic medicines to countries that lack the capacity to manufacture them themselves.

4 Lord Browne speaking at the Stanford Graduate School of Business Conference on Global Business and Global Poverty, Stanford University, 19 May 2003.

Additional information

Notes on contributors

Sumi Dhanarajan

Sumi Dhanarajan is a Policy Adviser on the private sector for Oxfam GB. She holds a LLB from the University of Durham and an MA in Understanding and Securing Human Rights from the Institute of Commonwealth Studies at the University of London. Trained as a barrister, she has previously served as Human Rights Officer to the Malaysian Bar Council and as Legal Adviser to the Secretariat of Legislative Councillors of the Hong Kong Democratic Party.