A position for the development of a moral corporate culture - Essay Example

Moral Corporation Introduction Moral Corporation’s objective is to maintain the environment from any contamination and provide appropriate services to the community. An ethical corporation’s goal should develop and secure our future and also help enterprises to achieve their objective. Unfortunately, there are some corporations that do not act ethically because they only focus on how to increase profits instead of brining developments to the community. When corporations fail to make profits and lose to the competition, they will try to find solutions to restructure their business. When corporations do this, they should be more concerned about providing services that are ethical and will provide better customer service. Corporations get their revenue from consumers otherwise they will not make money. In fact, successful corporations should collect data on most of the issues the world is facing today and make the best strategy on how they can eliminate such issues. There are some particular directions that would achieve “Moral Corporation,” which are providing equal employment, eliminating discrimination, and preserving the environment. Having a moral corporation is good because it gives back to the community. How this can be done is by putting into place protective measures for the environment, organizing and writing a code of ethics, and choosing to provide help in world issues staff are interested in. This paper seeks to study why Moral Corporation and the relevance of corporate culture and ethics to Moral Corporation. It is found that moral culture and ethical behaviors are necessary for sustainability of the corporations as well as environmental protection and development for sustainable development of society. A. Why will you plan moral organization? 1. Corporate social responsibility Corporations are made up of persons. A corporation can be as responsible as a citizen. Responsibility goes hand in hand with rights and duties. Living a life with morals is a personal responsibility of an individual. If the corporations can enjoy legal rights of the citizens, for example to sue and to be sued, responsibility automatically devolves on them. The negative externalities refer to environmental consequences of business decisions. When a company manufactures a product, environmental pollution arising out of such activity is borne by the society. This effect on society or cost relating to it is not factored into pricing of the products. Therefore, the producers should be made responsible for these costs associated with negative externalities and their customers should bear this cost. To put it other words, the producers have the responsibility of compensating society for the hardships suffered by the people. The purpose of a company’s existence is not just making profit for the shareholders. There are various other stakeholders like employees, suppliers, customers, local bodies, government as well as the society. Law of the country enables formation of companies. If the corporations are indifferent to their implied responsibilities in protecting the environment of the communities where they exist, making laws to enforce compliance becomes necessary. It is very important to reinvent the concept of capitalist ideology in line with the expectations of society embracing CSR for its survival following the fate of communist and socialist ideologies. There is a great need for achieving equilibrium by creating positive externalities by companies for compensating the damages caused or loss incurred by the people who are not consumers of their products. It also covers various other responsibilities which include welfare of the employees, human rights, community and public health and safety. At the organizational level, a moral corporation needs to focus on providing equal employment opportunities by eliminating discrimination of all sorts, and preserving the environment with protective measures. Organizing and writing a code of ethics and choosing to provide help in world issues staff are interested in are important in this respect. Equal employment should be provided for eliminating discrimination against employees based on caste, race, religion, sex or origin. This is the fundamental moral principle a company is expected to uphold for instilling confidence and trust on management of the corporations. Therefore, the company needs to follow a policy which is non-discriminative, fair and transparent. Only then the principles of non-discrimination, fairness and transparency will reflect in all the transactions involving various stakeholders of the corporation including communities where the corporations do businesses. Codification of ethics should take into account the professional ethics, organizational ethics without conflicting professional ethics and ethical concepts in relation to their transactions with the stakeholders. Codification shall also specify the bases for making strategies for inspiring employees to enhance their participation in world issues they are interested in including protective measures for the environment. 2. Corporate culture The corporate responsibilities are not limited to compliance with the legal requirements. There should be spirit in words and deeds. There are several types of companies such as family owned and professional. But, fairness and understanding responsibility towards all the stakeholders should form the basis of corporate governance for growth and development in the long run. Moral corporate culture is a prerequisite for Moral Corporation. According to modified thesis Stone (2004), ‘rather than have corporation managers decide how to resolve competing social claims, they follow the dictates of the markets within the constraints of the law.’ The healthy growth of an organization in turn depends upon the healthy growth of the society which provides all facilities for it to do business and survive. Vision of the management in nurturing corporate culture by taking CSR initiatives for environmental protection and development, embarking on programs for the development of the communities and conservation of natural resources will have positive impact on the communities where it operates and enhance the brand value of the company. Enron is a case in point which made mockery of CSR. Corporate social responsibility news and resources (2007) stated, ‘Following the companys collapse, Enron has become a by-word for corporate irresponsibility … Enron was doing the whole "social responsibility thing" with its CSR reporting, environmental and community programmes.’ 3. Business ethics Greed is the root cause for all evils. It is important to assess CSR policies of the companies from its moral framework. Corporate ethics has several dimensions that include statutory compliance, philanthropy, human rights, community development, workers’ rights and welfare, corruption and restrictive trade practices. Unethical behaviors of the employees including managers include misuse of resources, over or under invoicing, diversion of company funds to personal accounts, insider trading and falsification of accounts. In professional-client relationship scope of relationship, understanding of clients’ instructions and expectations, contracts in writing and avoiding contradictory terms in agreement are very important from ethical perspective as it involves risks in profession. Perhaps, acting against the client’s instructions or expectations without understanding them properly is more risky in relation to legal matters. But, standards of policies of a company will be broader and code of ethics can be organized based on values and principles, areas of responsibilities and external relationships for various departments. Here, compatibility of professional relationship to the policies of the company should be ensured to avoid conflicts in discharge of duties and responsibilities. B. How will you plan Moral Corporation? 1. Organizing and writing a code of ethics Organizing codification in an organization involves several important aspects. Company’s mission: Clearly specifying company’s missions by aligning CSR vision of the management is the first step in establishing code of ethics. Plan of action: This needs time frame for the goal to be achieved. The company has to estimate financial resources and human resources needed for achieving its objectives. Cause for inspiration: There are limitations for the company in terms of financial resources, legal constraints and regulatory issues. Therefore, a company needs to choose a particular cause based on its relevance to its business, corporate structure, benefits that might accrue and its impact on business in the future. It is also important to ensure that the plan for choosing to provide help is capable of inspiring employees and enhance their participation in world issues they are interested in. Spirit of partnership: ‘The ideal outcome is to create positive social change, help clients better understand opportunity spaces and provide an engaging outlet for employees to develop new skills’ (Kornau, 2012). The shared values will be useful for sustainability of the business in the long run. The corporation is exposed to the people more positively and understands their needs and aspirations that provide opportunity for the company to reassess its business plans as well. Codification: International Standards Organization has evolved a framework for codification by issuing guidance documents. ISO 26000 is an internationally recognized CSR standard that provides standards relating to corporate social responsibility to organizations for healthy development and welfare. It is applicable to all organizations, providing guidance and principles relating to CSR. Similarly OECD issued guidelines for multinational companies for voluntary adoption. Codification is essential for institutionalization of CSR. However, procedures and methods adopted for codification depend upon and vary with the size of the organization and outlay for CSR programs. Codification should take into account guidelines for evaluation of the plans, the level of employee participation, procedure for approvals, management control over execution, statutory obligations involved and interactions with communities, local authority and government. Codification in the company’s context will be more meaningful if it is in line with international standards. 2. Environmental protection and development Planting trees or small plants, walking for smaller distances instead of using vehicles, using public transport for travel to the extent possible, using green label products as far as practicable and not using too much chemical products for cleaning and other purposes are some of the environment friendly aspects of ethical life style. Similarly, a company can avoid releasing water into earth without treatment. Installing solar panels for renewable energy, laying rain water harvesting system, avoiding pollution of water ways, adopting emission norms in manufacturing processes will have positive impact on environmental protection. Unrestricted industrial development has damaged our environment significantly over the period of time after industrial revolution. Air pollution due to emission of greenhouse gases and water pollution due to discharge of effluents without treatment into water resources have been the major problems associated with industrialization. Depletion of ground water table, pollution of water resources and deforestation caused imbalances in ecosystem. Conservation of natural resources such as oil and coal should be given priority. Water being the most important need for human survival, use of bottled water should be discouraged as its production involves environmental unfriendly issues. Kingston (2007) stated, ‘the pollution generated and energy expended in its production and shipping, the recyclable plastic bottles that rarely get recycled’ are the important causes for concern. Moreover, quality is not very superior compared to tap water in many cases. The bottling plants suck groundwater in large quantities on a continuous basis and this has created ecological problems to the communities in many countries.  Krstovi, Baki, & Kostic (n.d.) stated, ‘The corporate need to reorient their strategies towards social benefits of business operations, all the way to harmonizing economic, legal, ethical and social responsibility’ for sustainable growth and development. There is close relationship existing between business ethics and CSR. Social responsibility without ethical behavior is not possible. Environmental ethics is embedded in social, business and professional ethics. Corporate citizenship calls for responsibility towards community and environment. 3. Sustainable development We have responsibility towards future generations to preserve the environment for better living conditions. This calls for corporate social responsibility to ensure that the process of development is sustainable so that we can meet our needs without compromising the welfare of future generations. The industrial growth at this level cannot sustain without serious impact on humanity and future generations. Renewable energy and recycling of resources along with efficiency in utilization of natural resources and conservation of natural resources should be incorporated into the corporate planning process. Researches relating to development of eco-friendly industrial processes and renewable energy are important for environmental protection and development. Social audit as a concept in addition to statutory financial audits can stimulate ethical corporate behavior. However, unlike financial audit, quantifying the results in social audit would be difficult. The benefits arising out of such audits cannot be measured meaningfully. Nevertheless, comparison of performance is possible under social audit and that will promote sustainability in growth and development. Conclusion Developing moral culture in companies and society is a challenging process that requires cooperation on the part of corporate companies, NGOs, government and people. Stone (1975) stated, ‘Public criticism of corporate behavior certainly should be maintained. But it should be informed enough, and even sympathetic enough, that it does not induce so extreme and inflexible a defensiveness.’ The growing need for morale in society can be achieved through efforts on the part of moral corporations since the society is interdependent on corporations’ survival and success. The corporations’ approach to organizational culture and morals will have impact on communities and stimulate them to follow the corporate leaders of our society. This change in the social system is important for sustainable growth and development of corporations as well as communities. References Corporate social responsibility news and resources (2007). Corporate Social Responsibility - Companies in the News. Retrieved December 9, 2013, from http://www.mallenbaker.net/csr/CSRfiles/enron.html Kingston, A. (2007) Green Report: Its so not cool. MACLEANS. 14 May 2007. Retrieved December 9, 2013, from http://www.macleans.ca/article.jsp?content=20070514_105163_105163 Kornau, M. (2012) Empowering Global Change. Smart Business Cincinnati, Kentucky. Krstovi, J., Baki, T. V. & Kostic, S. C. (n.d.) The Role of Business in the Society. Management. UDC: 005.35 ; 658.012.2 Stone, C. D. (2001). Law and the Culture of Corporation. Adapted from Where the Law Ends: The Social Control of Corporate Behavior. Harper & Row. 1975. Stone, C. D. (2004) Corporate Responsibility: Law and Ethics. Washington: Beard Books Publishers. Read More