The term ethics refers to the fundamental principles taken in by an individual or group. On the other hand, social responsibility refers to the way businesses perform their activities so as to satisfy their duties towards the society and the environment. This includes avoiding such activities that may be harmful to the organization. Ethical values and social responsibility are crucial in the strategic planning process.
When corporations or rather organizations are making difficult decisions, they need to keep in mind that the decisions not only affect the organization or the employees that work for it but also the stakeholders and the community at large. The decisions made within the organization or the corporations are required to take into consideration the best interest of all stakeholders without losing more of the organization’s interests. The role of ethics and social responsibility is that organizations have a huge responsibility to their stakeholders in terms of making the best decisions on their behalf. The ethical responsibilities of an organization’s management need to follow the general beliefs about the behavior in the society. The courtesy of informing the community and stakeholders about the layoffs and any other act involved or rather directly affects the stakeholders is not a requirement but a necessity of the society based thoughts. This allows the people to adjust to the upcoming activities gradually, as opposed to the sudden events, which also prevent anger and hostility towards the corporation. This is part of social responsibility that the corporations uphold to the community where the effects of the dramatic change impact the communities associated with the business. These needs give more priority than the aspect of making profits (Idowu, 2009).
The social responsibility to the stakeholders requires that the management should ensure that strategic decisions are reached after considering impacts on the stakeholders. The stakeholders in this field are the customers, suppliers and the society at large.. For a socially responsible company, all the stakeholders must be treated equally. This allows room for wider perspectives that need to be considered based on environmental and social impact of planned activities. The various aspects that need to be considered during the social and ethical analysis include: transparency, independence, respect and fairness or rather truthfulness. Transparency involves the process providing information honestly to help all the involved parties to discuss and debate or even reach a better decision. This in the long run enables the team to identify and monitor any potential risks which may arise and find an alternative solution. Transparency enhances the company’s credibility towards external stakeholders (Maltz 2011).
The aspect of independence requires that any meeting held by the management must provide an opportunity for the management team members to raise their concerns and develop new ideas. It should also be conducted in a professional and amicable way which does not harm the other members’ feelings..
When it comes to fairness and truthfulness, the team ought to consider the possible effects of the decision. The consideration is crucial in maintaining the well-being of stakeholders. Members should be truthful and frank in providing ideas and comments. This is important in the planning process. Companies must consider ethics and social responsibility as critical parts inherent components of the strategic plan. Ethical and social responsibility criteria must be included as part of the strategic process in before-profit decisions rather than after-profit decisions in order to receive the maximum benefit company spends billions of dollars on product perception. Setting the ethical standards for the way of doing business incorporation is primarily the task of management.
The ethical discussion requirements are rather three integral parts which include: awareness, articulation and application. Awareness requires making good decisions from an ethical point of view while articulation is the ability to express the emphasis point of view. Application on the other hand requires the daily input on the good decision making point of view. Strategic planning is important in controlling various parts of an organization, but mainly services and product being produced how they will be reflected. Corporate social responsibility is a very important element of the organization (Simmons 2003).
One example of a company exceeding ethical restrictions for stakeholder agenddas is the Enron scandal which involved the impact of the actions of the Corporate America Top Executives who were in form of off balance sheet partnerships used to hide the company’s deteriorating finances, revenue from long term contracts being recorded over the years.
References
Idowu, S. O., & Leal, F. W. (2009). Global practices of corporate social responsibility. New York: Springer.
Jamali, D; Safieddine, A M.; and Rabat, M (2008). Corporate Governance and Corporate Social Responsibility Synergies and Interrelationships. Corporate Governance: An International Review, 16 (5), 443-459.
Maltz, E; Thompson, F., and Ringold, F.J. (2011). Assessing and maximizing corporate social initiatives: a strategic view of corporate social responsibility. Journal of Public Affairs, 11 (4), 344-352.
Simmons, J. (2003). Balancing performance, accountability and equity in stakeholder relationships: towards more socially responsible HR practice. Corporate Social Responsibility & Environmental Management., 10(3), 129-140.
