Corporate Social Responsibility and Business Ethics in Controversial Sectors: Analysis of Research Results

Abstract

Until recently, in business practice, there was a belief that companies were operating solely for the profit of their owners. Few companies have recognized the need to combine their activities with ethics, and in particular with their obligations toward society or the environment. However, the perception of ethical issues has changed radically in business over the last 20 years. If a company wants to be perceived as a reliable business partner and a respected member of the business sector, it should demonstrate a high level of institutionalization of business ethics principles and practices, and it must practice outstanding ethical behavior. This is exceptionally true in some controversial industries. The purpose of our study is to identify the scale and scope of the use of these principles and practices in two Central European countries, i.e., Poland and Hungary, in three controversial sectors of the economy, i.e., pharmaceutical, tobacco and alcohol. The data were achieved on the basis of data gathered through survey methodology. The target subjects included a group of 48 companies (25 Hungarian and 23 Polish ones). Our survey mainly focused on the degree of institutionalization of business ethics (such as the presence of a code of conduct, an employee appointed to deal with ethical issues, ethical training, and so on), the perceived ethical behavior of the firms, and their relationship with their key stakeholders. Our study confirmed that business ethics is regarded as a significant factor which has an influence on business success and the corporate image of companies from the sectors in question. However, it is necessary to emphasize that the scale of this phenomenon varies, across both sectors and countries. The level of institutionalization is somewhat higher at Hungarian firms while preventing and handling corruption cases are more at the forefront of Polish companies. Although it seems that stakeholders from Polish firms have greater ethical expectations, we did not observe significant differences between perceived ethical behavior in the

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