Ethics refer to the underlying principles of an individual, group or a company. They are a framework of measures providing a sense of direction. Ethics ensure that an individual, group or company achieves a mission, vision or goals. They bind people teams together by governing behavior and actions, as well as avoidance from deviation of a desired strategic path (Rendtorff, 2009).
Social responsibility, on the other hand, implies means of business performance in meeting societal expectations or obligations. Such means may involve avoidance of activities that may be harmful to society such as dumping or environmental conservation measures, which ensure sustainability. Most activities related to CSR are linked to financial performances of a company (Rendtorff, 2009). In most cases, increase in profits lead to increased expenditure on CSR activities, and vice versa. However, the extent to which a company gets involved in CSR demonstrates considerations to social and environmental impacts of any planned activity.
Strategic planning is a vital preliminary step in the corporate world as it defines direction, decision making process, and organizational strategy in meeting its objectives (Werther and Chandler, 2011). A successful strategic plan is that which includes a social responsibility and ethical criterion before profit decisions rather than after profit decisions. This ensures focus towards the success of the plan, which boosts capability in achieving maximum corporate profits. Social responsibility and ethical values, therefore, play a critical role in strategic planning process.
Ethics ensure that a strategic plan is prepared in consideration to the interests of stakeholders, be it employees, customers, or society where the organization operates. Ethics ensure transparency and honesty in debates and discussions aimed at reaching decisions in strategic planning (Werther and Chandler, 2011). They provide behavioral and performance expectations, which enable stakeholders in identifying, monitoring, and assessing any potential risk which may arise while implementing a strategy, and create a platform of discussing alternative solutions. Social responsibility, on the other hand, enhances transparency, which boosts a company’s credibility towards its internal and external stakeholders.
Adhering to the highest possible ethical standards, and integrating social responsibilities in strategic planning builds excellent corporate image to stakeholders (Rendtorff, 2009). For this to be successful, the integration and planning must go further to compliance issues, and other reactive or disciplinary policies in safeguarding integrity. The problem arises when a company’s laid down ethical standards do not meet the expectations of stakeholders, or the stakeholders feel that their opinions do not count while planning (Werther and Chandler, 2011).
The most recent of such a limitation occurred in McDonald, in its quest to meet ethical standards, promoting environmental sustainability, as well as maintaining its corporate image. McDonald’s is one of the global companies that have been faced by the challenge, when it comes to strategic planning and balancing between ethics and social responsibility. Being amongst the largest producers of garbage, the management has come up with excellent plans aimed at reducing environmental impacts, which is part of social responsibility. The company’s plan involves construction of onsite incinerators so that trash can be burned into ash, and later the ash deposited in landfills.
The management feels that it is ethical to conserve the environment, and assessing other alternatives such as the use of plastic disposal containers may increase on environmental degradation. Most stakeholders, some of them being societal members, however, feel that as much as this plan may play part in environmental sustainability by easing the landfill, it will do nothing to reduce flow of materials disposed from other industries. The stakeholders advocate for a plan that is compatible with other industries surrounding the company in reducing generation of pollution. The management, however, feels that it is part of their social responsibility and ethical standards to participate in environmental protection but cannot be initiating measures intended to develop responsibility in its neighboring industries.
The challenge faced by McDonald is getting the different systems to work together so that the dynamics and priorities of the company and its stakeholders are integrated in a common plan. What the company requires at the moment is an extended management system, which will work to enhance internal ethical and social responsibilities, as well as external and stakeholders expectations. An extended management system in this case may involve working collaboratively with stakeholders, customers, society, and other waste producing industries (Rendtorff, 2009). The plan should be inclusive of ethical considerations, extent of social responsibility and involvement, and stakeholders proposals. An example of such a plan may involve the use of cardboard containers, which can be adapted by the neighboring paper mills and chemical plants. However, this may compromise the standards of the company’s packaging, which may lead to loss of customers and profit reduction.
The McDonald’s case is just among many where ethical standards and social responsibilities challenge strategic planning and implementation. The solutions underlying such conflicts of interest lie on open discussions between companies and stakeholders in ensuring integration of decisions, accountability, and objectives of a company. This can be achieved through establishment of explicit ethical goals, demonstration of commitment to these goals, communication to workforce as well as stakeholders, and maintaining a proactive integrity and continuity management system (Rendtorff, 2009).
Reference.
Rendtorff, J. D. (2009). Responsibility, ethics, and legitimacy of corporations. Frederiksberg, Denmark: Copenhagen Business School Press.
Werther, W. B., & Chandler, D. (2011). Strategic corporate social responsibility: Stakeholders in a global environment. Los Angeles: SAGE.
