Corporate Social Responsibility and Conflict of Interest - Book Report/Review Example

Corporate Social Responsibility and Conflict of Interest Corporate Social Responsibility can be defined as the responsibility that a Corporation has, beyond economic and legal obligations, to act ethically and to contribute in a positive way to the good of the society. This in essence means that, although one of the major objectives of any business is to make profit, business organisations, nevertheless, have the responsibility to conduct their businesses in ethical manner and to ensure that the societies in which they operate benefit in one way or another from the proceeds of the businesses. There are three reasons why Businesses should adhere to the demands of social responsibility. The first reason is on pragmatic grounds; by observing corporate social responsibility, the business organisation is able to maintain legitimacy and protect its reputation in the society in which it operates. The second reason is on ethical basis: as part of the larger society, every business organisation has the responsibility to behave ethically and to contribute to the overall good of the whole society. Lastly, business organisations observe social responsibilities for strategic reasons, i.e. being socially responsible creates shared values between the society and the business organisation and this will lead to good relations between the society and the business organisation. Also, when a business corporation helps a society to prosper, the business organisation will also prosper because the members of the society will be financially stable and able to buy the corporation’s products/services. There are four types of corporate social responsibilities. The first type of corporate responsibility is the philanthropic responsibility. As members of the societies in which they operate, business organisations have the responsibility to allocate a portion of their business profits to help the less privileged and the neediest members of the society. The second responsibility is to conduct their business in ethical manner, minding the interests of the whole society. The third responsibility is the legal responsibility, whereby, business corporations are required to observe all the operative societal laws regarding running business. And lastly, business corporations have the responsibility of uplifting the economic well being of the members of the societies in which they operate. They can achieve this through providing jobs to the local places where they operate, and giving fair remunerations to their employees. Chapter 10 Case 1 Study Summary: Conflict of Interest In this case study, Little Company, a company with good reputation for providing objective health advice to its customers has been purchased by another company called, Big Insurance. Big Insurance deals with provision of health services. Due to this fact, Little Company clients have started expressing doubts that due to conflict of interests, Little Company will no longer be able to offer objective advice to their clients because it has been purchased by one of the companies that offer health services. How would you respond to these genuine claims? In this case, I would respond to the clients by assuring them that despite the merger, Little Company would be as objective as it was before the merger. And in supporting my claim, I would inform the clients that one of the core values of both Big Company and Little Company is upholding honesty and integrity in all business dealings. For that reason, I would assure the clients that the Little Company will continue being honest and objective in their services of giving objective advice to their clients on health services. Case 2 Study Summary In this case study, you work for investment bank that provides advice to corporate clients. In your team you work with Pat, a marketing manager, and Joe, a credit manager. You work with other professionals as well. Just before presenting the details of a new deal to the management, Pat suggests that you should withhold some information about the deal so that the deal would be easily approved. And the information that Pat suggests for withholding would not jeopardize the interests of any of the parties involved in any big way. Since you have vehemently objected to withholding some information about the deal, the other members decide to vote and after voting, they all agree with Pat’s decision but you hold on to your ground that it is wrong to withhold some pertinent information about the deal. What would you so in such a case, would you succumb to the pressure of your colleagues or not? In this case, I would stand my ground and refuse to withhold some of the pertinent information about the deal. My refusal to agree with my colleagues on this issue would be informed by the business core values of honesty and transparency. Chapter 11 Although codes of Ethics differ from one business organisation to the nother, there are some universal internationally recognised codes of conduct which should form the basis of any business organisation’s code of conduct. These codes of conduct address eight principles. These principles are: Fiduciary, Property, Reliability, and Transparency; Dignity, Fairness, Citizenship, and Responsiveness. Case Study Summary Case: The Gift In this case study, you work for a multinational financial firm and you have developed friendship with one of your customers. The customer decides to give your wife a gift, and they send her a gold bracelet. Returning the bracelet would make the customer feel unappreciated and scorned. While retaining the gift would be against the company’s core values. What would you do in such a dilemma? In this case, I would not return the gift to the customer because doing that would be tantamount to insulting them. Guided by the organisation’s core values of transparency, honest, and accountability, I would inform my colleagues in the business about the gift, especially the managers and the directors of the company and I would leave the gift to their disposal, to do with it as they wish. By taking this action, I would have appreciated the customer’s gift, and also, acted in accordance with the Company’s code of conduct. Work Cited Trevino, L.K, & Nelson, K. Managing Business Ethics. USA: John Wiley &Sons, 2011. Read More