BUSINESS ETHICS
General overview of the topic
Social responsibility is a term that has been introduced to organization management, and it indicates that people and their respective organizations are made to behave in an ethical manner that requires them to be sensitive to social, cultural, economic and environmental needs. Therefore, the practice ensures that different groups have a positive influence on development on businesses that they are involved in and the society in general (Martínez-Ferrero et al. 310).
Primarily, social responsibility indicates that people should be motivated to have a positive influence on others and the environmental setting where we reside. While it is important to appreciate that meeting the consumer needs is a responsibility of individuals, it is also imperative to acknowledge that people are cautiously becoming responsible to society. However, with the wake of globalization, people are concerned with the different production technique that companies use, an aspect that significantly influences their decisions, based on the various ethical concerns that are upheld. Therefore, responsible individuals demand that business organizations should incorporate strategies through which corporate responsibility will be embraced. People become socially responsible by engaging themselves in the different operations that are carried out in the community and in finding possible solutions to the existing challenges. However, people can either contribute positively to a community hence referred to as proactive or otherwise have an adverse impact on the community.
Corporate responsibility, on the other hand, refers to the art through which an organization is led for profit motif in a way that it experiences more benefits beyond the company investors' expectations. Some of the aspects that are considered in the case of corporate responsibility include causing no harm to others, the different direct benefits that community benefit from the organization and any other stakeholders concerned other than the owners. Some of the groups that benefit from corporate responsibility include employees, business partners, customers of the organization merchandise, community, and even the surrounding environment (Rashid et al. 707).
Fiduciaries are the principal actors that drive the different aspects concerned with corporate responsibility and not owners as they will be more inclined towards making more profits. It is imperative therefore to appreciate that corporate responsibility ensures that the organization offers non-financial gain to other parties that are affected, or influence the organizational business in one way or another other than the owners and shareholders. The principal benefit of corporate responsibility is that if well developed, it leads to enhancement of the shareholder value among other significant advantages in the long-term. The task of corporate responsibility is typically assigned to the low-level employees who are not committed to organization commitment of increasing the shareholders’ wealth.
Benefits of CSR to a company
Corporate social responsibility (CSR) is an important element of any organization, especially in the current age of globalization when profit alone is not the only motive behind businesses. Although consumers rely on organizations to supply them with merchandise, it is important also to recognize that they play significant roles even outside the workplace, an aspect that indicates their positive impact on the community. One of the benefits that are realized from practicing CSR is the creation of a better public image which is based on the extent to which consumers are aware of the different CSR programs. Research indicates that consumers would refrain from doing business with organizations that have no social responsibilities, for example, through regular donation program or upholding environmental safety issues. Apparently, consumers are motivated to do business with every corporate that is willing to assist the community, an aspect that builds the reputation of the organization.
Another significant benefit derived from CSR is gaining access to more media coverage, which is healthy for the prosperity of any single business. Once a company involves itself in contributing well to the local communities, it is worth noting that the media will tend to cover it. Practicing of the CSR concept helps enhance brand recognition as the media significantly changes the reputation of an organizational product in the public. It is evident that CSR embracement goes hand in hand with the satisfaction of consumer expectations, as consumers are refraining from doing business with companies that do not uphold CSR. The concept has a significant benefit to an organization as it impacts to more sales and the general revenue that is experienced by the business. Employees working in a company that upholds CSR concept are also motivated to keep working at the firm, an aspect that enhances employee retention and simplifies the recruitment process that often has a significant influence on the choice of brands amid consumers (Perera et al. 250).
Potential ethical problems / moral dilemma
Apparently, the sole reason business organizations are formed is to maximize the returns that are realized, an aspect that helps in enhancing the level of wealth and income that is experienced. However, it is evident that some organizations in the global market are not observing the different ethical requirements and social concerns for various reasons as will be indicated, an aspect that remains a dilemma. According to research conclusion conducted by Friedman, who was a noted economist, the central role of corporations was to generate more profit for the shareholders and had less concern as far as society is concerned (Corporate Social n.p). However, CSR is gaining popularity at a fast rate due to the global setting and holds that business should operate according to corporate responsibility. It is required that business should be accountable for the various impacts in the society and the environment in general.
China and the U.S are among the top contributors to the global economy as they control a large share of the economy as compared to any other country in the world. The two countries happen to share much in common, but with the current trend of globalization, there is a concern that most corporations in China do not emprise the issue of CSR. Moreover, consumers are worried of the products from China, which are found in almost different parts of the world bringing more tension as to whether people should purchase them. Some of the ethical concerns faced by China include employee relation issues, consumer product issues, among other significant factors. Although China and the U.S have the largest mutual trading understanding, it is important to appreciate that due to the various issues concerning corporate responsibility, the relations is slowly fading.
Most of the Chinese companies lack the necessary measures required for embracing CSR, an aspect that leads to unethical behavior of the companies and this is linked to different economic and political disputes between the two countries. Most of the Chinese factories do not uphold the different human right policies or the environmental protection measures for example; different corporations where Apple products are assembled. However, the primary reason for the above ignorance of CSR by the Chinese companies is that production costs are reduced significantly, an aspect that creates more jobs for people and more revenue to the shareholders.
The present era is characterized by globalization and aspects of consumer awareness as societies are becoming more concerned with the different operations of an organization. Unethical behaviors such as poor working conditions or environmental issues bring a lot of conflicts, an aspect that reduces the competitive ability of any group. However, to remain relevant in the market, firms have considered embracing the different strategies and policy issues that meet the diverse demands of the society. Managers are therefore making the various ethical behaviors aware to many people and encourage their use due to the several benefits that are realized from the same.
Specific contextual influences that will affect the behavior of managers and employees
Some of the issues that will influence the conduct of managers as well as those of employees include the different practices and policies that are upheld to help enhance business responsibility in the wider society. The above policies and practices are further classified into various categories based on their significant and impacts to the corporation.
Economic responsibility includes the various practices that are embraced to encourage production of merchandise at an acceptable price in the market that meets the needs of both the consumers as well as those of the investors. Therefore, the economic responsibility ensures that businesses experience sustainability to grow in the long-term and the needs of the society members are also met. Managers have to incorporate the above considerations while releasing their products to the market so as to gain brand acceptance. Legal responsibility includes adherence to the different organizational, state and global policy requirements that are put in place to manage worker safety standards among other issues.
Ethical responsibility includes the various practices that are considered to be moral in society or meet the societal expectations. The different ethical concerns that are put in place by the management help in enhancing the public image of the business significantly. With globalization, consumers are moving away from consuming products that are produced in an unethical manner; hence, the concept offers a corporate a competitive advantage in the market (Samkin et al. 40).
Philanthropic responsibilities include the range of practices that a business identifies to be desirable and has significant value to the company premises or the community. An example of such responsibility includes the different programs that are organized to assist the local communities or even giving donations, helping build goodwill.
Firms that have encountered the problem
As mentioned earlier, China has the largest number of companies that faced the challenge of observing corporate and social responsibility and lacked different aspects regarding CSR. Apparently, the firms were found to focus mainly on generating more profits for the stakeholders with little to concern at all for the society (Cunningham & Lawrence n.p.). Significant reduction in cost was found to be the core reason as to why companies ignore the different practices of CSR as they reduce the revenue that is generated from the business. However, the various factories involved in the assembling of Apple Inc products found in China are renowned for ignoring the different ethical practices stipulated. One of the approaches that were used by Apple in reversing the trend is by cutting the relation with the assembling firms that failed to honor the different CSR requirements such as Foxconn. The approach saw most of the business firms in China to embrace the various practices set in place to allow corporate and social responsibilities to be enforced and appreciated by the various companies, an aspect that significantly contributed to the development of their public image.
Opinion/stand on this issue
It is evident from this study that different benefits are associated with embracing CSR concept and making a profit should not be the sole goal of organizations. With the diversification of international trade, the global market is characterized by stiff competition and thus requires having effective strategies for it to remain relevant in the market. If organizations uphold the social responsibility, they will tend to attract more demand due to the quick establishment of their image. Therefore, stakeholders of an organization should focus beyond revenue generation and invest more in different programs that impact positively on the community and environment in general. Organizational employees and staff have the mandate of ensuring that the various social concerns are met more efficiently and in agreement with the societal expectation.
How to deal with the ethical dilemma
It is evident that the primary aspect that hinders development in different countries is the fact that consumers and producers of the global market are not aware of the various CSR issues existing in organizations. However, to reach an effective solution that will harmonize the ethical concerns that are experienced in societies, it is imperative that corporate should consider adhering to the various ethical concerns. It should be noted that consumers are cutting their ties with the different organizations that fail to uphold their responsibility to community and environment; hence, they will lose their relevance in the international market. However, adhering to the various policy issues and regulations will significantly contribute to the success of the organization. As a manager, it will be important to focus more on the extra benefits that are realized from CSR other than the motivation to make more profit as for the case of the Chinese factories. Any form of unethical behavior in an organization should be discouraged and instead, develop a culture of ethical behavior that will help the team to gain consumer loyalty (Goyal et al. 30).
Works Cited
“Corporate Social Responsibilty: Friedman’s View.” 2016. Web. 5 Mar. 2016.
Cunningham, Lawrence. “Transcript - Corporate Social Responsibility: Paradigm or Paradox?” The Cornell Club New York 84.5 (1999): 1283-1385. Print
Goyal, Swati, Amarjit Saini, and Inderpal Singh. “An empirical study of corporate social responsibilty and profitability.” 28.3 (2010). Print
Martínez-Ferrero, Jennifer, Shantanu Banerjee, and Isabel María García-Sánchez. “Corporate Social Responsibility as a Strategic Shield against Costs of Earnings Management Practices.” Journal of Business Ethics 133.2 (2014): 305–324. Print
Perera, Liyanage Chamila Roshani, and Jayawickrama Withanage Dushan Chaminda. “Corporate Social Responsibility and Product Evaluation: The Moderating Role of Brand Familiarity.” Corporate Social Responsibility and Environmental Management 20.4 (10 July 2012): 245–256. Web.
Samkin, Grant, et al. “Corporate Social Responsibility Disclosures during the Global Financial Crisis: New Zealand Evidence (New Zealand Collection).” New Zealand Journal of Applied Business Research. Manukau Institute of Technology 12.2 (2014): 33-49. Print
Rashid, Nik Ramli Nik Abdul, Shaiful Annuar Khalid, and Nor Irwani Abdul Rahman. “Environmental Corporate Social Responsibility (ECSR): Exploring Its Influence on Customer Loyalty.” Procedia Economics and Finance 31. (2015): 705–713. Web.
