Definition of Social Responsibility in Business - Coursework Example

? Task Word count (2052) Table of Contents Introduction 3 Responsible Business 3 Ethical Business 4 Example of Ethical Business 5 Government Influence on Responsible Business 6 Conclusion 6 References 7 Responsible Business Introduction Responsible business is one of the most important principles in the business world. This essay aims to explain responsible business by analysing the concepts related to the term. This will be done by building on a range of views and different explanations for the term. Other terms related to the concept of responsible business are also explained in the essay. The concept of ethical business will be explained using a real-life example from a business that shows the perfect application of ethical business practices. This will help in developing the theme of how organizations create and implement ethical practices in the workplace. Additionally, the effect of ethical behaviour affects the behaviour of organizations and the society in general. This will be followed by an analysis of the role of the government in approaching responsible business. Responsible Business From definition, a responsible business performs actions that are strategic, comprehensive and connect with all the players in the industry. This model describes a way of acting on decisions and problems in a systematic and connected way. This approach also enlightens the leaders of the organization, including the board of directors, the team that deals with the customers, the government and non-for profits organizations (Pohl & Tolhurst, 2010). According to the tenets of responsible business, apart from making profits, an organization should also encourage practices that reflect ethical, social and environmental goals. This can be done by the employing business practices considered responsible by the society. For example, the provision of safe and healthy working environments for employees, being an equal opportunity employer, avoiding inequality and injustice in the organization, and avoiding bullying, harassment or discrimination in the workplace (Sanford, 2011). This can be done by setting organizational policies and cultures that reflect the factors mentioned above and ensuring that the employees and management follow these policies. Additionally, societal and environmental concerns are applied when the policies that guide the organization are made, which is mainly done to influence other stakeholders in a business. Reducing risks faced in the working environment also makes up part of the responsible business model, for example, by reducing the environmental and health risks faced by employees in the organization. Additionally, the organization should also work to ensure that risks that its operations pose to the society and community are reduced through the use of responsible work technologies and procedures (Smith, 2010). The term responsible business covers a wide range of factors, and some of the concepts that it encompasses are CSR, ethics, business sustainability and social considerations. The application of these factors ensures that a business’s operations are considered responsible. Responsible businesses adhere to these practices in order to ensure that it continues with profitable ventures in the community and follows the ethical codes dictated by the society. Another concept that is similar to responsible business is corporate social responsibility (CSR), which refers to the analysis of an organization’s duties and how its actions degrades or uplifts the community in which it operates (Kotler & Lee, 2011). Another factor that relates to responsible business is ethical business. A distinction between a sustainable and ethical business is that a business that places emphasis on a specific code of conduct is referred to as an ethical business, while a sustainable business is one that is able to continue operations through sustainable trading. Ethical Business Ethics is one of the issues make up an individual’s personality, makes the basis for behaviour, morals and determines the values that form the basis of society. However, with the difference in origins and backgrounds of all individuals, the definition of ethics is complicated. From every individual’s background, the environment, education and rules imposed ensure that the definitions of ethics differ across cultures and individuals (Ferrell, Ferrell, & Fraedrich, 2012). From definition, an ethical business is one that has specific and applicable codes of conduct and ethics that govern operations and the relation with the external environment. The practice of ethical business is done to ensure that the organization achieves admirable results from normal business practices. For example, an understanding of the problems face an organization with regard to ethical practices, and the solutions to these problems reduces mistakes and improves the decision making process in the organization. This is why ethical business practices are used to effectively manage many successful organizations (Kerzner, 2010). Business ethics refer to the use of societal moral standards as benchmarks when gauging the organization’s objectives and performance. This means that business ethics is a tool that can be used to analyse and solve problematic issues that face the organization. When this tool is applied, the factors achieved include the rules that govern the behaviour of the stakeholders in an organization and the ways in which these rules are controlled from the organization (Carroll & Buchholtz, 2009). This means that business ethics are simply laws derived from common values and used to define or govern businesses. In the society, the term value refers to the qualities upon which the society makes its judgement about the appropriateness of choice. This term is differentiated between societal and business values, where the society places emphasis on values like conscience, respect and justice, while business tries to ensure that the quality of products provided and customer satisfaction are aligned with product rules and safety. This means that business ethics are based on both achievement of company purposes and respect for outside stakeholders in the business, including the competition (Carroll & Buchholtz, 2009). Competition is healthy for the business to continue, so management should accept the different market players and participants in order to succeed. Business ethics are concepts derived from the common cultures and traditions the society from which the population is born. This means that social ethics are the foundation for business ethics, and the concepts used for business ethics cannot be separated from the concepts used for business ethics. Business ethics can be subdivided into three main levels of operation, with the first level being world-class business ethics (Ferrell, Ferrell, & Fraedrich, 2012). World class business ethics refer to the actions that make up business ethics and are applied universally to determine the operation of any business. Basically, world-class business ethics encompass the tenets of social responsibility, where the company works to improve the lives of the different stakeholders, both internal and external. Examples of this include the creation o employment for the society, increasing trust between the stakeholders in the business, encouraging positive environmental practices, and other actions that are deemed morally positive in society. For a business to achieve world-class business ethics, it must be prepared to provide high quality products to its customers, prepare advertisements that are true to their products and ensure that all customers are treated fairly and with dignity. For employees, a business must provide decent wages, consider the needs of disabled employees, be an equal opportunity employer and provide opportunities for career advancement for the different employees. The business should also ensure that the owners and investors earn a fair return on the original input to the business, have access to required information and operate by the law. Suppliers should be treated fairly in terms of pricing and licensing of their products, engaging in fair competition in the selection of suppliers, and competitors should be treated with mutual respect (Ferrell, Ferrell, & Fraedrich, 2012). The second level of ethical business is at the macro level, which is presented across the industry or the national level for business. The macro level of business ethics is involved with the respect for private investment and the competition between the players in the market, fair provision of information and fair selection of players in the labour market. Finally, the third hierarchical level of business ethics is at the micro level, which deals with the relationship between the firm and its clients. The main principles that govern this relationship are trust and non-discriminatory practices between the firm and all the primary stakeholders including the customers, suppliers, employees, management and shareholders. Example of Ethical Business A classic example of perfect business ethics is shown in the following example, which demonstrates the choices that a company can make in order to place stakeholder interest and business ethics first before business success. A company, Johnson and Johnson, was faced with a situation in which consumers died after consuming its product, a medicinal drug called Tylenol. In this situation, a different company would consider the interest of shareholders the first priority in this issue, where the company would try to salvage its image and protect investments in the market. This means that the companies would usually try to safeguard their stock, engage in myriad lawsuits that try to absolve them from the guilt, while at the same time waiting to see what happens to the product. However, the management of Johnson & Johnson immediately decided to pull the product off the market in the interest of consumer safety. This decision hacked off a major part of the company’s stock value, creating a problem for management in the long-run. Looking at this instance, it can be seen that the company put the interests and safety of the shareholders first before the interests of management and financial gain (Jennings, 2012). The response by the management of Johnson and Johnson to the near tragedy provides one of the best ways of demonstrating the application of business ethics. The company managed to respond to the tragedy in a way that upheld business ethics and demonstrated skill of operation. In the 18 months after the incident, the company managed to regain the value of its shares that had fallen, a fact that can be attributed to the way the incident was handled (Jennings, 2012). According to the management of the company, the course of action that they took was the only one that was morally viable, meaning that they could not consider any other course of action. Government Influence on Responsible Business Despite the fact that responsible business is mainly the responsibility of the organization itself, the government is also involved in its application. According to OECD (2010), the OECD policy framework for investment (PFI) includes different business practices that government must deal with if it is to increase investments. In this policy, the government is inspired to set the limits to which organizations and regulators develop responsible business policies. One of the main roles of the government in relation to responsible business practices is providing laws that are to be followed by the different companies. The government does this by providing a platform in which discussions are completed on societal expectations on the practices of responsible business. This is mainky done by the UK government to ensure that an environment that encourages responsible business practices is created. This will ensure that the contribution of business organizations to the society is maximized (Grande-Bretagne, 2005). Many organizations apply the policies of responsible business to ensure smooth and effective operations. With the use of business ethics, the activities and actions of the different players in a business is carefully monitored and corrected as needed. The government and regulatory agencies help in developing and enforcing business ethics in the organization by forming and defining different substantive and normative ethics for the business to follow. Normative business ethics are usually created to regularize the distribution, sales and management of a company’s stock, and are decided by the Securities and Exchange Commission. Conclusion From the above analysis, it is evident that responsible business is an issue that encompasses different stakeholders in the business. The business and its management should ensure that the practices that it engages in reflect the moral and ethical standards of the society in which they operate. The analysis has also differentiated ethics from sustainability and indicated that, for sustainability to be achieved, a business must first ensure that it engages in ethical business. The two terms, ethical and sustainable business, both combine to give responsible business, which determines the operations of a business to make profits and act responsibly to the society and other stakeholders in its operation. From the example given above, ethical business practices sometimes overrule the practices that a business performs in order to remain sustainable. In this case, it is sometimes necessary to engage in actions that might harm the company but uphold societal values. References Carroll, A. B., & Buchholtz, A. K. (2009). Business & society: ethics and stakeholder management. Mason, OH, South-Western Cengage Learning. Ferrell, O. C., Ferrell, L., & Fraedrich, J. (2012). Business ethics: ethical decision making and cases. Australia, Houghton Mifflin. Grande-Bretagne. (2005). The UK government sustainable development strategy. London, The Stationery Office. Jennings, M. (2012). Business ethics: case studies and selected readings. Australia, South-Western, Cengage Learning. Kerzner, H. (2010). Project Management Case Studies. Chichester, John Wiley & Sons, Inc.  Kotler, P. and Lee, N. (2011). Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. John Wiley & Sons. OECD, (2010). OECD economic surveys: China. Paris, OECD. Pohl, M., & Tolhurst, N. (2010). Responsible business how to manage a CSR strategy successfully. Chichester, U.K., John Wiley & Sons. Sanford, C. (2011). The responsible business reimagining sustainability and success. San Francisco, Jossey-Bass. Smith, N. C. (2010). Global challenges in responsible business. Cambridge, Cambridge University Press. Read More