Following ethical business standards implies compliance with relevant norms and principles of interaction with customers and other market participants. Corporate social responsibility (CSR) approaches, in turn, are practices aimed at making efforts to address social issues at the initiative of business owners. According to Ferrell et al. (2018), researchers often do not differentiate between ethics and CSR and view the concepts as almost identical. However, the key difference is that ethical activities have well-defined conditions that are accepted globally and reflect the existing norms of business communication. CSR practices, in turn, are more flexible since their implementation is initiated by organizations themselves. At the same time, there are similarities lying in the observance of business communication and financial standards, which are generally accepted principles of social interaction.
Conducting an ethical business implies meeting basic social values, such as human freedom and the right to life. As an example of an ethical conflict, one can consider the situation in the Russian Federation, where, due to the country’s attack on neighboring Ukraine, hundreds of businesses have completely withdrawn or temporarily suspended their activities. Sonnenfeld and Tian (2022) state that such major global brands as McDonald’s, Reebok, Shell, Uber, and many other companies have refused to continue operating in the country due to the Kremlin’s aggressive foreign policy. This attitude of these corporations will unequivocally affect their performance bottom line; however, their response to Russia’s military aggression is a direct consequence of the social responsibility that companies promote. The process of leaving businesses can be fraught with challenges, for instance, deterrents associated with advertising contracts or copyright claims. However, given the current situation, as Sonnenfeld and Tian (2022) note, the global community is serious about encouraging Russia’s economic isolation. Therefore, in case large corporation had not abandoned their activities in the aggressor country, they would have been boycotted by the Western market.
An example of real restrictions is the course of the fashion company Channel to stop selling its products to Russians. Teh (2022) describes the difficulties that citizens of the Russian Federation faced when buying branded items, including abroad. A Russian passport is a reason for sellers either to require written consent that the buyer will not use the purchased products in their home country or to refuse to sell (Teh, 2022). Such a position may seem too harsh, but in light of the general socio-political situation, this measure is the least that the brand can do to protect the interests of Ukrainian citizens. Moreover, some celebrities from Russia pointedly spoiled Channel products in response to the sanctions, which was an additional reason for the company to stop selling (Teh, 2022). Other companies may also use Channel’s example as a business model when interacting with the Russian market and limit the sale of popular goods.
The current ethical conflict may last until the Russian government begins to take steps to improve the situation and recognize its own wrong regarding aggression against Ukraine. Until then, the list of companies leaving the local market is likely to increase. Their position is due to the unwillingness to put up with the country’s foreign policy and be a market participant that sponsors military operations against the neighboring state. Potential re-dress measures may concern a temporary suspension of investments rather than a complete exit, but in general, the conflict is an example of the ethical position of a wide range of businesses and their unequivocal view on social responsibility.
References
Ferrell, O. C., Harrison, D. E., Ferrell, L., & Hair, J. F. (2018). Business ethics, corporate social responsibility, and brand attitudes: An exploratory study. Journal of Business Research, 95, 491-501. Web.
Sonnenfeld, J. A., & Tian, S. (2022). Some of the biggest brands are leaving Russia. Others just can’t quit Putin. Yale Insights. Web.
Teh, S. (2022). ‘Russophobia in action’: Russian socialites and influencers irate after being barred from purchasing Chanel goods. Insider. Web.