Business Organizations and the Society - Literature review Example

Business Organizations and the Society The current trends in the market economy create a challenge for several business organizations that strive to increase their profits. Business enterprises may compromise the wellbeing of the general population in order to maximize their profits. Business organizations strive to protect the capital base as a business principle without extending this notion to the natural and human resources. Businesses have to integrate the wellbeing of the general population into the planning process. This involves protecting both the natural and human resources affected by business activities of the organization. Responsible business enterprises strive to improve business performance, make profits, and contribute to the economic progress in the community. However, several business leaders are only interested in community activities that increase their profits. Social responsibilities of businesses are not restricted to profitable ventures. The organization can participate in activities that improve the conditions of the general population without direct or indirect profits. The big question is whether a business can remain profitable while caring for the wellbeing of the general population. Hill, R.P., Ainscough, T., Shank, T., and Manullang, D. 2007. Corporate social responsibility and socially responsible investing: A global perspective. Journal of Business Ethics, 70, 165-174. The current economies face issues of responsible business conduct such as product quality, health and safety, environmental protection, and compliance with laws and industry standards. These responsibilities originate from the desire to make profits, which is determined by the relationship between the business and the society. Businesses rely on customer satisfaction to improve their profits margins. Customer satisfaction is caused by the attractive business activities such as services offered, environmental conservation, and product quality. These activities portray responsibility on the side of the business. The wellbeing of the general population is determined by responsible activities by the business. The standards of responsible business conduct go beyond the traditional expectations of maintaining morality. Business enterprises are members of the community, and they must enrich the economic and social conditions of the community. Improving the social and economic conditions of the community improves the wellbeing of the population (Porter and Kramer, 2006). Pursuing profits and economic superiority does not license ignorance or break of community norms, values, integrity, and respect. The business must engage in activities that uphold the morals and values of the society. Some activities such as advertisements may compromise the norms and beliefs of the society. Communities such the Chinese are conservative and are affected advertisements that involve body exposure and romance. Violent and immoral advertisements destroy the moral values of the community. Violence and immorality affect the wellbeing of the community and businesses participating in such activities may experience disapproval by the community. The general population provides market for products and businesses that overlook community norms and values are likely to make losses. Global business organizations have to uphold and respect different societal values and norms depending on the traditions of the community they operate. This determines the amount of profits acquired by business units across the globe (Gege, 2004). The objective of social responsibility of businesses is to generate the capital required for operations. Success for any business is measured in terms of profits and losses incurred. Businesses must cover the cost of capital, cover risks and uncertainties, and the needs of workers and pensioners. Businesses may be forced to compromise the quality of their products in order to maximize their revenues. This involves altering the material quality of products or participating in contraband products. These products rarely meet the quality standards set by industry regulators. Consumers of such products face physical injuries or health risks. Businesses dealing with contraband products risk the wellbeing of consumers in order to increase their profits. An organization can increase profits by dealing in certified and original products that have been proven safe for consumption. These businesses maintain the wellbeing of the general population while generating profits (Hill, Ainscough, Shank and Manullang, 2007). Globalization of businesses creates opportunities for millions of people especially in the developing world. Several residents of the developing world strive to secure a decent life by participating in all kinds of work. The organizations face a challenge in balancing the emerging global norms, values and the local cultures and community needs. Low subsistence-level pay encourages expediting fees or bribes among the low class workers. This violates the local cultures and business ethics according to the industrial standards. The business can improve the wellbeing of the local people by providing good working conditions and providing reasonable payment to the people involved in the business activities. Improving the working conditions of the people involved in business activities improves their living conditions and those of their children. This in turn improves the wellbeing of both the current and future generations. Businesses providing good pay to workers and suppliers attract the loyalty of the business partners improving their business operations (Collins and Porras, 2004). The value of incorporating the wellbeing of the public in business activities leads to responsibilities such as environmental conservation. Manufacturing companies have the highest contribution to environmental pollution on land, water, and air. Effluents released in point sources of water are responsible for extensive pollution of water masses. The general population requires safe water from these sources and a responsible enterprise must preserve water sources. This includes treating effluents before releasing them into water sources and purifying gaseous emissions before releasing into the atmosphere. The current trends in global warming have a significant contribution from industrial emissions. Global warming affects the community as well as the business organization. According to industrial standards, business organizations have to treat their waste products to reduce their negative effects on the public. Solid wastes disposed on open land masses destroy the land and `can harbor disease causing organisms. Conserving the environment is an important role of businesses as per the industrial standards (Zadek, 2004). Business enterprises have exerted pressure on the natural resources. Sustainable management of natural resources and controlled manufacturing is necessary for the conservation of natural resources. The general population relies on most of the resources under pressure due to exploitation by business organizations. For example, 5 percent of the world’s land will be barren by 2025 due to the current use of intensive agriculture. Water shortages currently affect 20 percent of the world’s population in 30 countries. By 2025, the water shortage will have risen to 30 percent in 50 countries. Protecting the natural resources and controlling the manufacturing process will reduce pressure on water and land. The population depends on land for food production, and water is essential for sustaining human, animal, and plant lives. Responsible business organizations have set up measures for preserving the natural resources to protect the community as well as preserve the sources of raw materials for their operations (Dyllick and Hockerts, 2002). Business organizations have stewardship responsibilities of the natural resources on which they rely. Maintaining the natural resources is a legitimate aspect of the business leaders, which does not conflict with growth or profitability. This involves partnering with the local authorities and organizations conserving the natural resources. For instance, Unilever is one of the largest buyers of white fish in the world. The company has partnered with the World Wide Fund for Nature to set up the marine stewardship council. The council aims at conserving the natural sources of white fish for sustainable supply of fish and protracted investment. The local communities rely on fishing as the source of their livelihood and preserving the natural resources prolongs their business activities. The community relies on the natural resources and protecting them extends their income generating activities. The stewardship programs may involve the community, which gives them an avenue of giving their improvement suggestions (Malini, 2006). Business ethics programs introduce management policies, standards, and procedures that govern the enterprise in its operations. The ethics program outlines acceptable means of conducting business operations and respecting the social welfare of the community. An enterprise outsourcing business activities or seeking for suppliers conducts the tendering process openly and fairly. This gives the local business organizations a level playing field. The recruitment process of employees is conducted in a fair manner that gives all applicants equal opportunities. Business ethics introduces a compensation scheme for those affected by its activities. The local population may be affected by business enterprises such as manufacturing plants. The affected population requires compensation for their losses and injured workers require compensations to meet the hospital bills. The ethics programs also guards against discriminatory activities such as giving bribes to secure licenses for the local market. Licenses provide revenue for local authorities (Marshall, 2007). Fitzgerald, N and Cormack, M. 2006. The Role of Business in Society: An Agenda for Action. Conference Board, CSR, and IBLF report. The society has several expectations from businesses operating within the community. These expectations originate from preferences held by the society. Chinese consumers consider safe and high quality products as social responsibility. German consumers prefer secure employment opportunities. South African consumers prefer company contribution to social needs such as education and healthcare. Businesses can sponsor education and healthcare facilities especially in the third world countries. Large corporations such as Microsoft and Virgin Atlantic participate in educational foundations in developing countries. Other corporations fund and provide equipment and medicine to healthcare facilities. Providing educational opportunities to the local communities eliminates illiteracy and promotes future development. Healthcare facilities improve the wellbeing of the local community. Participating in these activities improves the reputation of the enterprise and the public builds trust in its business activities. Consumer trust and a good reputation help an organization extend its business operations. The general population provides market for the organization and attracting their trust increases profitability (Mackey, Mackey and Barney, 2007). The business provides values such as the philanthropic activities started in response to the changing social environment. Several organizations have made voluntary contributions to the society in the fields of supporting HIV/AIDS victims, emergency response, and disaster relief. This improves the wellbeing of the victims of the AIDS pandemic and natural calamities. These contributions establish intervention programs and help NGOs attending to the victims run their operations smoothly. Some of these pandemics and calamities affect the business environment for these enterprises. The people require empowerment in order to improve their purchasing power. The business also requires labor and raw materials from the population affected by these calamities. Improving their conditions helps the organization restore a sustainable environment while helping the community overcome the hurdles of disease and calamities. Participating in philanthropic activities helps improve the business image among the local population that helps secure customer trust (Kotler and Lee, 2005). An enterprise can help improve the social conditions of the local community as well as provide social amenities. For example, Nestle Milk Company in India opened a dairy in northern India, a region without electricity, telephone, medical care, transportation, and clean water. The people lived in extreme poverty levels, and farmers had problems raising livestock due to lack of veterinary services. Farmers had infertile land and 67 percent of the calves born died shortly after birth. The company depended on local milk supply from the farmers. The company had to establish collection points in every town, which led to the improvement of transport networks. The dairy required energy and water sources, which led to the establishment of electric and water lines. The company helped the local community improve their animal production practices to increase the milk supply. The ready market for milk helped eradicate poverty conditions in the region. A business organization can improve the living conditions of the community by providing social amenities. Large corporations help small and medium enterprises improve their business operation by issuing contracts for production or supply. This helps SMEs improve their image and reputation by providing services to large organizations. The SMEs improve the social responsibility and product quality in order to acquire contracts for their services. Some of these products from SMEs are consumed by the general population. Improving quality in order to achieve contracts is also advantageous the consumers who acquire the products. Empowering SMEs increases the job opportunities for the community due to expanded business opportunities. This helps the general population improve their living conditions by securing employment. The SMEs also participate in activities such as environmental conservation and funding community projects (Kerr, 2006.). In conclusion, the business and society are intertwined, and influence by on each other for their success. Businesses can care for the interests of the population in general and make proceeds in similar instances. This involves providing high quality and safe products for consumers. Businesses participate in environmental conservation activities by limiting dangerous emissions to the environment. The natural resources are depleted at a very high rate. Resources such as land and water sources are depended upon by the general population and businesses must control their production to reduce pressure on these resources. Business organizations can also participate in community activities such as funding education and establishing healthcare facilities. Social amenities such as transport and communication facilities, water, and electricity can be established by business organizations. This helps improve the living conditions of the community. References Collins, J., and Porras, J. I. 2004. Built to Last: Successful Habits of Visionary Companies. New York, Harper Collins Publishers. Dyllick, T., and Hockerts, K. 2002. Beyond the business case for corporate sustainability. Business Strategy and the Environment, 11, 130-141. Fitzgerald, N and Cormack, M. 2006. The Role of Business in Society: An Agenda for Action. Conference Board, CSR, and IBLF report. Gege, M. 2004. Reducing Costs through Environmental Management. Hamburg: German Environmental Management Association (BAUM). Hill, R.P., Ainscough, T., Shank, T., and Manullang, D. 2007. Corporate social responsibility and socially responsible investing: A global perspective. Journal of Business Ethics, 70, 165-174. Kerr, I. R. 2006. Leadership strategies for sustainable SME operation. Business Strategy and the Environment, 15(1), 30–39. Kotler, P., & Lee, N. 2005. Corporate social responsibility: Doing the most good for your company and your cause. Hoboken, NJ: John Wiley & Sons. Mackey, A., Mackey, T. B., and Barney, J. B. 2007. Corporate social responsibility and firm performance: Investor preferences and corporate strategies. Academy of Management Review, 32(3), 817-835. Malini, M. 2006. Corporate social responsibility in emerging economies. Journal of Corporate Citizenship, 24, 20–22. Marshall, J. 2007. The gendering of leadership in corporate social responsibility. Journal of Organizational Change Management, 20(2), 165-181. Porter, M., and Kramer, M. R. 2006. Strategy & Society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84, 1-15. Zadek, S. 2004. The path to corporate responsibility. Harvard Business Review, 82(12), 125-132. Read More