Erickson consultants,
Po box 4353,
New York.
Dickson manufacturing company,
Po Box, 1283,
New York.
15th. march .2013.
Dear Sir.
REF; REPORT
I hereby humbly submit to you a report of a research program entitled “corporate social responsibilities and ethics). The research covers the following topics and sub-topics.
- Corporate social responsibilities to the society, environment
- Economic social responsibilities
- Benefits of corporate social responsibilities
- Reasons why it is difficult to apply ethics in the business organizations.
- Discussion on findings
- Recommendations.
I therefore humbly request to have a look at my the report and to consider certain changes within the organization in order to enable us to be in line with the requirements of the code of conduct so as to avoid being thrown out of the business market. In case of anything, do not hesitate to contact me, I will always be available. Your consideration of this paper will be highly appreciated.
.
Almost every corporation across the globe is struggling with the new role which aims at meeting the needs of the present generation without necessarily compromising the ability of the next generation to meet their own needs. Today, organizations are required to take responsibilities for the ways their operations might impact, the society, their employees, government and the stakeholders of the business and the environment. The organizations have also been requested to apply the principle of sustainability in ways through which they carry their business. Sustainability in this context can be defined as the activities of the organization which are typically considered to be voluntary. These activities should include their social and environmental concerns in the operation of the business and in their interaction with the stakeholders.
Currently, it is not acceptable for the organization for the organization to experience economic prosperity while on the other hand isolating the agents impacted by its actions. The organizations are nowadays required to focus its attention in increasing its bottom line as well as being a good corporate citizen. The fact that organizations are expected to keep abreast of the global trends and at the same time remain committed to the financial obligations so as to deliver both public and private benefits has forced different organizations to rethink and reshape their framework, rules and the business models. In order to remain relevant in the current market, the most socially responsible organization is called upon to incorporate ethics in order to succeed in whatever they are doing.
Research shows that organizations that always tend to go against the code of ethics are likely to be eliminated outside the business market while those organizations that adopt ethical practices are likely to remain relevant and even stay longer and compete favorably in the market. This paper therefore examines why companies ought to adopt ethical practices in their business. In a nutshell, the report shall unfold some of the benefits that always accrue to the companies that apply ethical practices in their organization. The report shall examine this in connection with the social responsibilities of the business to the environment, society, government. Customers and even the shareholders.
Scope of the report.
This report mainly revolves around the corporate social responsibility of the organization. The report examines the importance of practicing ethics in business organization.
Introduction
The fundamental purpose of this report is twofold: to analyze the social responsibility of the business and also to investigate the benefits which accrue to the companies or the organizations which adopt ethical practices. Social responsibility is the responsibility or the obligation of the business organization for the impacts of the decision that it makes on the society and the environment through transparent and ethical behavior which can contribute to sustainable development. Van de Loo (2006).
Ethical corporate social responsibilities take into account the expectations of the stakeholders and it is in compliance with applicable laws which is in consistent with the international norms of behavior and which is integrated throughout the organization. In the next paragraphs, the paper shall examine the social responsibilities of the organization to the society, environment and the financial responsibilities.
CORPORATE SOCIAL RESPONSIBILITIES (SOCIETY).
Entails the ethical business responsibilities to the society. It is crucial to note that the business organization have myriad responsibilities which they owe the society. Business organizations should ensure that they provide employment opportunities to the societies in which they operate. It is also the responsibility of the organization to ensure that pollution is maintained at its minimum rate, this is because excessive pollution of the environment may cause diseases to those living around the business organization. It is also true that organizations or corporations have contributed to the development of the society by participating in development or nation building. Certain business organizations may help in financing the construction of schools, libraries and universities. This is ethically right because it contributes to the development of the society. Van de Loo (2006).
CORPORATE ENVIRONMENTAL RESPONSIBILITIES.
Business organization has the sole responsibilities to ensure that the environment is fully protected. It is therefore ethically justifiable that the business protect the environment by ensuring that waste products are properly disposed. This is because failure to do that might destroy the environment and cause harm both to citizens and the animals both in the terrestrial and the aquatic environment.
ECONOMICALLY RESPONSIBLE.
It is prudent to note that firms that engage in socially responsible activities have the capacity to increase both their profits and capital formation hence contributing immensely to economic development. For instance, the firm can enhance its reputation by ensuring sustainable business by adhere ring to the ethical demands of the society and the environment in order to ensure sustainable development.
Benefits of Corporate Social Responsibilities
Improved reputation management; is on record that organizations which performs ethically well with regards to corporate social responsibilities has the ability to build their reputation. Good reputation is a prerequisite for success of the business organization because such business attract customers as well as avoiding being kicked out by the government for failing to adhere to the rules and regulations of the business.
Good corporate responsibilities enable the organization to have enhanced ability to recruit and retain employees. For instance by doing what is ethically right to the society and the environment, the organization may have the ability to attract qualified work force from the society which in turn may greatly boost the performance of the business organization.
Enhanced operational efficiencies and cost saving; operating a responsible business has a direct effect of enhancing operational efficiencies and cost saving. For instance, assessing the environmental and energy aspects of an operation can reveal opportunities for turning waste streams into useful by product. Roome and Bergin (2006).
Despite the fact that businesses that practices ethics in their organization have high chances of excelling in their operation, research shows that some of the business organizations have found it extremely difficult to apply ethics in their business. The following paragraphs shall explore some of the reasons why practicing ethics within business organizations have become a complex decision making activity.
REASONS WHY DOING THE RIGHT THING HAS BECOME A COMPLEX PERSONAL AND CORPORATE DECISION MAKING ACTIVITY.
Different organizations have different strategies to ensure that societal needs, the natural environment needs and corresponding economical needs are ethically taken care of. However, integrating ethical business and also ensuring that the aim of the business organization which is to maximize profit is extremely difficult. This is because doing what is ethically right at times might not necessarily amount to maximization of the profit in the 21st century. For this reason doing what is right has actually becomes a complex personal and corporate responsibilities.
Despite the fact that research suggest that formal ethics and the legal compliance programs can have a positive impact socially, environmentally and economically, it has been noticed that by creating a formal program by itself does not necessarily guarantee effective ethics management. This is because of the complex nature of ethics decision making. The 21st century business are concerned mainly with making profit, so according to them profit come first and others such as corporate responsibilities to the environment and society comes second. So no matter how they may be destructive to the environment provided they make profit they won’t care.
Another reason why making ethical decision socially, environmentally and economically have become complex is because of inclusion of carbon tax or tradable permits in the market. We understand that polluting the environment is ethically wrong because environment protection is a prerequisite for sustainable development, however, with the emergence of laws such as carbon tax and the tradable permits, it has becomes extremely difficult to make ethical decision as whether to pay tax and pollute the environment or not. Most managers when faced with such situation base their decision on the cost and the benefits of polluting the environment and the relative carbon cost. If in case polluting is more beneficial or will enable the organization to make high profit, then the organization simply pay the carbon tax and end up polluting the environment. However, ethically this may not be right because pollution is likely to cause harm to the society. For instance, excessive carbon IV oxide in the atmosphere might cause global warming or even cause diseases to the society. Such negative externalities are very dangerous to the society while the organization’s profit may not be affected.
It is crucial to note that the twenty first century has brought corporate ethics scandals which has greatly affected million of employees and also investors and sent shock waves throughout the business world. It has been noted that the shockwaves brought about by the twenty first century has caused regulatory backlash. Many managers and academicians are worried of the increased corporate wrongdoing. It has been observed that ethical decisions have become complex phenomena to make in the 21st century. Despite of the fact that various approaches have been put in place to ensure that doing the right thing prevails, it is important to note that where there is a challenging ethical dilemma situations, the solutions that are always offered by this approaches do end up conflicting with one another. Tebo, (2005).
For example, a multinational manufacturing business may struggle with employment practices issues. Most Americans believe that it is ethically harmful and against the law to employ children. However, it is also true that such children may contribute to family income. It therefore means that refusing to employ them may make them to engage in dangerous activities such as prostitution or even become thieves. Such children and their families may also risk starvation. This therefore means that respecting the rights of the children shall only contribute to greater harm. Under such conditions, deciding on the most ethical action becomes very complex. Kim Ruth and Aguilera (2008).
Consequently, doing what is right is a complex, multi staged process which may not be very easy to arrive at. For instance, it moves from moral awareness to moral judgment where one decides that a specific action is morally justifiable to moral motivation and then finally to moral character. Because of the fact that the twenty first centuries is characterized by several uncertainties, it therefore becomes extremely difficult to make moral judgment or to do what is right.
It is prudent to note that the organizational context creates additional pressure and complexity. As we all understand, most of the time, moral judgment will focus on deciding what is right. However, it is not guaranteed that an individual who focuses on deciding what is right will necessarily do the right thing. It is not strange to find an individual making the right decision and failing to follow and do the right thing. This may be because of pressure in the work environment. For instance, in the 21st century that is characterized by industrialization, we realize that it is ethically wrong to pollute the environment by poorly disposing off the waste products. However, most of the time managers will always find themselves disposing of waste materials in a manner that is ethically wrong because he/she may have no option. Tebo, (2005).
Another important reason why doing what is right socially, economically and environmentally has become a complex personal and corporate decision making is because most organizations are nowadays mainly concerned in making profit irrespective of the negative externalities they may infringe to the society. For instance, it is prudent to note that despite the apparent acceptance of the corporate social responsibilities by business, many economists have argued otherwise going with the demands of the 21st century. For instance, economists such as Milton Fried-man doubted the notion that corporate social responsibilities are desirable especially in a competitive world of the 21st century. Fried-Man stressed and maintained that the only social responsibility of a business was to maximize profits irrespective of the negative externalities that it is infringing to the citizens. However, he emphasized that there are certain circumstances when a firm’s manager may engage in actions that may serve the interest of the society such as investments and contributions to charitable organizations to take advantage of the tax deduction. Turner (2007).
Economic downtown that was experienced and which is still being experienced in some economies has also contributed to the complexity in deciding what is wrong. The economic downtown has led to restructuring and downsizing, the organization have been forced to lay off some of its employees. Despite the fact that this act is ethically wrong, the organizations face complex corporate decision. This is because organization aims at maximizing profit while economic downtown scales down the level of operation meaning that if it does not layoff some workers, then it is likely to record losses. At this stage, deciding on what is wrong and good depends with the circumstances under which the condition is prevailing. This further makes decision making very complex.
Methods
It attempt to carry out this research and to ensure that it is critically and comprehensively analyzed, the research employed the use of secondary materials such as text books in order to acquire relevant information related to the topic. The research also employed the use of relevant already written literatures concerning the topic so as to source for proper and accurate information to be included in this research so as to make it relevant and straight to the point.
Discussion and findings
Before the author discusses the research findings, it is crucial that he outlines the main topic of study in this research. Actually, this research aimed at finding out the importance of practicing ethics in business organizations. From the research done, the following were the findings:
Findings relating to importance of corporate social responsibilities.
Improved reputation management; is on record that organizations which performs ethically well with regards to corporate social responsibilities has the ability to build their reputation. Good reputation is a prerequisite for success of the business organization because such business attract customers as well as avoiding being kicked out by the government for failing to adhere to the rules and regulations of the business.
Good corporate responsibilities enable the organization to have enhanced ability to recruit and retain employees. For instance by doing what is ethically right to the society and the environment, the organization may have the ability to attract qualified work force from the society which in turn may greatly boost the performance of the business organization.
Enhanced operational efficiencies and cost saving; operating a responsible business has a direct effect of enhancing operational efficiencies and cost saving. For instance, assessing the environmental and energy aspects of an operation can reveal opportunities for turning waste streams into useful by product.
However, the research also found out that despite the importance of corporate social responsibilities, there are certain fundamental factors which make it extremely difficult for ethical decision making. Some of the reasons that the author found out include:
Inclusion of carbon tax or tradable permits in the market: We understand that polluting the environment is ethically wrong because environment protection is a prerequisite for sustainable development, however, with the emergence of laws such as carbon tax and the tradable permits, it has becomes extremely difficult to make ethical decision as whether to pay tax and pollute the environment or not. Most managers when faced with such situation base their decision on the cost and the benefits of polluting the environment and the relative carbon cost. Kalinda (2001).
Nowadays most businesses mainly concerned in making profit irrespective of the negative externalities they may infringe to the society. For instance, it is prudent to note that despite the apparent acceptance of the corporate social responsibilities by business, many economists have argued otherwise going with the demands of the 21st century. For instance, economists such as Milton Fried-man doubted the notion that corporate social responsibilities are desirable especially in a competitive world of the 21st century. Fried-Man stressed and maintained that the only social responsibility of a business was to maximize profits irrespective of the negative externalities that it is infringing to the citizens. However, he emphasized that there are certain circumstances when a firm’s manager may engage in actions that may serve the interest of the society such as investments and contributions to charitable organizations to take advantage of the tax deduction. Turner (2007).
Recommendations
Because of the importance that accrues to organizations as a result of being ethically responsible to the environment, shareholders, employees and the government, I therefore fully recommend that business should follow strictly the code of conduct that governs the operations of the business organizations if they are dreaming of being successful.
Conclusion.
In conclusion, it is prudent to note that ethics has something to do with the human conduct or any other activity which is done knowingly or consciously. Ethics have applicability within and outside the business organization life. It is therefore important that individuals who make decisions on behalf of the organizations understand the consequences of their actions in business decisions not only to the organization but also to the environment and the society.
References
Turner, M. (2007). Society must be protected: Polanyi’s “double movement” and the regulation of conflict goods. Journal of Corporate Citizenship, 26, 85–99.
Roome, N. J., & Bergin, R. (2006). Sustainable development in an industrial enterprise: The case of Ontario Hydro. Business Process Management, 12(6), 696–721.
Tebo, P. V. (2005). Building business value through sustainable growth. Research Technology Management, 48(5), 28–32.
Van de Loo, E. (2006). Responsible leadership at ABN AMRO Real. In T. Maak & N. M. Pless (Eds.), Responsible leadership (pp. 68–92), Abingdon, Oxon: Routledge
Martina Wegner, (2005). Corporate Social Responsibility across the Europe. Heidelberg: Springer.
. Kalinda, B. (Ed.) (2001). Social Responsibility and Organizational Ethics. Encyclopedia of Business and Finance. New York: Macmillan.
William M (2008). Business, Boston, MA: Hough-ton McFarland Company.
Dirk Matten, (2007). The A to Z of Corporate Social Responsibility. New York, NY: Wiley.
Kim T.; Ruth V. Aguilera (2008). "Corporate Social Responsibility in a Comparative Perspective". Oxford: Oxford University Press.
