Corporate Social Responsibility and Business Ethics - Term Paper Example

 Title: Corporate Social Responsibility and Business Ethics Corporate social responsibility refers to a corporation’s way to achieve a balance between its economic, social, and environmental responsibilities in its operations in order to address the expectations of shareholders and other stakeholders. It includes corporate responsibility, corporate accountability, corporate ethics, corporate citizenship, sustainability, stewardship, and triple-E bottom line, economical, ethical, and environmental obligations. Corporate social responsibility is important to all aspects of a business thus has been a general management concern. It should be integrated into a corporation’s operations through its values, culture, decision-making, strategy, and reporting mechanisms. It also provides a framework for corporations’ self-regulation integrated into business models. This makes it functions as a self-regulatory mechanism in which businesses monitor themselves and ensure that they actively adhere to the rules and regulations, the ethical standards and international norms needed for businesses. A corporation’s actual implementation of corporate social responsibility should go beyond compliance into engaging in activities that should appear to propagate some social good, beyond the usual interests of the firm and that which the law requires. It should focus on embracing the responsibility for the actions of a corporate and encourage a positive impact on the environment and all its stakeholders. The stakeholders include the employees, investors, consumers, and the communities’ at large (GRISERI, P., & SEPPALA 2010, pg20). Some of the key elements of corporate social responsibility in the business markets have included the facts; Corporations should maintain responsibilities that proceed beyond the production of goods and services with the aim of profit making. These responsibilities should involve helping to solve essential social problems more so those they have created when carrying out their operations. Corporations should have impacts going beyond simple marketplace transactions. They should also serve a wide range of human values than can be viewed as a sole focus on economic values. They should have a broader constituency extending beyond their stockholders The key drivers and concepts of corporate social responsibility that have integrated economic responsibilities of corporations in the business world have included: Corporate Sustainability; this refers to those corporate activities carried out in order to demonstrate the inclusion of social, environmental and economic responsibilities in business operations as these impact on all the stakeholders. Its components involve, following government regulations and responding to charity and stewardship considerations considered appropriate by society, giving consideration to the social, ethical, and environmental aspects of the operations of businesses. The components will function effectively provided they contribute to the financial obligations of the corporations, balancing the economic, social and environmental welfare of businesses going beyond legal compliance and profit maximizations strategies. In addition, the components should help in creating a fully integrated and holistic business environment to encourage the continuity of the lives of the different stakeholders (Rendtorff, 2009, p.38). Reputation management; refers to any effort by the management to enhance the corporation’s image and real name, and this is extended to relations with all stakeholders. This as a CSR concept that should be done through the identification of the desired perception of the corporations. It involves, the recognition of the significance of its image with stakeholders, creation of an awareness of the influence of interactions with stakeholders on the corporation’s reputation and through a continued effort of maintaining the desired relationships with the stakeholders (Rendtorff, 2009, p.40). Social Impact Management; this concept focuses on the interdependency between the business needs of corporations and their societal concerns. Companies should recognize and understand this interdependency if their needs to thrive in the societies within which they operate (Rendtorff 2009, p.41). The triple bottom line (TBL); this concept evaluates a corporation’s performance based on a summary of the economic, social, and environmental values it creates or destroys (Rendtorff 2009, p.44). It is believed that business should operate in such a way as to fulfill the society’s needs and expectations, and this should be carried out for pragmatic reasons. Mainly, companies function by the consent of society and thus should be sure to satisfy its needs. Businesses have to be receptive to what is happening in the society and respond to it accordingly and efficiently to prevent criticisms or mutinous behavior. In addition, businesses have to realize that societies represent systems that they form a part and that these are interdependent. Thus, if business institutions interact with others in the society, the need for social involvement along with increasing interdependence should come with the need to participate in the complex system that is present in the societies. There are numerous relationships among individuals, groups, and organizations in the society. In addition, some subsectors existing in society and businesses are vulnerable to the actions or events that occur in all these subsectors (Mullerat & Brennan, 2011, p.74). Social responsibility of a corporation increases profitability in the long term, and this is usually in the shareholder’s interest. Corporate virtues are good for profits. In several circumstances, a poor social responsibility role on the part of corporations always points to poor management strategies. In most cases, there exist most investors who view failure to perform in society’s interest for the organizations are similar because they view the corporation’s failure to perform in financial issues. Consumers too are showing an increasing interest in corporations with supports for ethical and responsible business practices (Mullerat & Brennan, 2011, p.86). Businesses should realize that social problems can, in most circumstances become opportunities and can even lead to profits. Expenditures on pollution abatement, as an example, could lead to recycling of waste materials or may allow for efficient operations of the thus generating more profits on future operations. Businesses should, therefore, regard social responsibility matters and accruals in the long-run rather than the short term (Griseri & Seppala, 2010, P.51). Types of corporate social responsibility Corporate social responsibility practiced by businesses usually involves a wide variety of tactics, a couple of which can be grouped into broader categories including: The environment: This forms the primary focus of corporate social responsibility by corporations. Businesses have large carbon footprints and any steps they take to reduce these are considered both good for the companies and the society in general (Hancock, 2005, p.49). Philanthropy: Businesses also practice social responsibility by donating to both national and local charities. These could involve giving out of money or time. Most businesses usually have a lot of resources that can benefit charities and local community programs (Hancock, 2005, p.55). Ethical labor practices: Corporations can also demonstrate their corporate social responsibility by treating employees fairly and ethically. This is true, more specifically, for those businesses that operate in international locations with labor laws differing from those in the United States (YÜKSEL & IDOWU, 2013, P.37). The CSR hierarchy The CSR hierarchy as brought forward by Carroll in 1991 presents four kinds of social responsibility concepts including the economic, legal, ethical and philanthropic responsibilities accepted by an average of business persons. This is represented thus: Philanthropic Responsibilities Involving being a good corporate citizen; Contributing resources to the community and improving quality of life Ethical responsibilities Involves being ethical; obligation to do what is right, just and fair And avoiding harm Legal responsibilities Involve obeying of the law and Playing by the rules of the game Economic responsibilities Financial responsibilities form the basis of the hierarchy and relate to business’s provision of goods and services of value to the society. Profits result from the activities and are necessary for any other responsibilities to be carried out by the corporations. These represent the responsibilities the corporations must do in order to obtain its objectives (Okpara, & Idowu, 2013, p.59). The legal responsibilities expect the corporations to pursue profits within the legal framework created by laws which establish what is considered fair operations. Society expects businesses to conform to the laws and regulations formulated by governments under which they must operate (Okpara & Idowu, 2013, p.65). Ethical responsibilities represent the standards, norms and expectations set by organizations to reflect concern for a select shareholder in keeping with their moral rights. They represent those practices corporations should do in the course of their operations. They involve the fundamental ethical principles of moral philosophy, such as justice, human rights, and utilitarianism (Habisch, 2005, p.94). Philanthropic responsibilities are characterized by good corporate citizenship where the corporations actively participate in activities or programs meant to promote human welfare and goodwill (YüKsel & Idowu, 2013, p.88). In workplaces, CRS plays a vital role both to the employers, the employees and all the other stakeholders. One of a corporation’s biggest positive impacts on society would be the jobs it provides, and the wealth it puts into the community via the wages paid (Hancock, 2005, p.66). Corporate social responsibility and appropriate business ethics in most of these workplaces can be encouraged and upheld through the following practices; Remuneration; by paying a fair wage for a fair day’s work. Diversity and equal opportunities; by treating all staff will with dignity and respect regardless of their origin or background. Diversity should be embraced, and this should be viewed as strength within the businesses. Recruitment. By fairly assessing applicants for employment within the business regardless of race, gender, age, disability, marital status, sexual orientation and religious belief. CSR expects the applicants to be treated with honesty and respect at every stage of the recruitment process. Training and development; by according appropriate training to all employees in order to assist and empower them within their daily work Anti-discrimination; by having robust anti-discrimination policies within the organization and taking seriously allegation of any discrimination that should be dealt with accordingly Friendly working policies; by recognizing the importance of all our employees and upholding their rights within the existing legislations. Talent management; by harnessing the potential of all the employees and actively encouraging and supporting all those who demonstrate positive talent and are very flexible to growth within the organization. Programs including those of management training and other training courses that are specifically aimed to enhance their professional skills and a robust succession plan should be encouraged and carried out in the organizations. Employee consultation and internal communications; by prioritizing communication with the employees and actively seeking opportunities to engage with the organizations staff. The organizations should encourage feedbacks from its employees and listen carefully to their suggestions. Health & Safety in the workplace; by making the Health & Safety of the employees a vital component in the operations of the business and allocating the appropriate investment in equipment and training to ensure that accidents and injuries are avoided. A safe and pleasant working environment should be provided to all the employees. Latest studies have revealed an emerging business issue the ability of companies to recruit and hold on to key talents for their businesses. However with adequate corporate social responsibility and business ethics, businesses can gain a lot including; Gaining of strength through diversity Maximum utilization of the company’s resources Managing of risks in the company. CSR has however come under some criticism regarding the purposes of some businesses and the motives for engaging in it. Some critics have ascertain that the ultimate goal of any corporation is to maximize the shareholder's returns. In this regard, obeying the rules and regulations of the corporate world constitutes socially responsible behaviors. Others have also pointed out that CSR in most companies, especially in the developing nations, engage and promote external values on local communities that in some extent might result in unpredictable outcomes. With regard to the motives, some critics have believed that CSR programs are often implemented by companies to limit the public from ethical obligations posed by their core operations that make the reputational gains they receive from such processes demonstrate the hypocrisy of the approach. In addition, the critics have also believed too that these CSR practices can be exploited by companies to direct the attention of the public away from other harmful business practices (Jeurissen & Rijst, 2007, p.61). Reference GRISERI, P., & SEPPALA, N. (2010). Business ethics and corporate social responsibility. Australia, South-Western Cengage Learning. HABISCH, A. (2005). Corporate social responsibility across Europe. Berlin [u.a.], Springer. HANCOCK, J. (2005). Investing in corporate social responsibility: a guide to best practice, business planning & the UK's leading companies. London [u.a.], Kogan Page. JEURISSEN, R., & RIJST, M. W. V. D. (2007). Ethics in business. Assen, The Netherlands, Van Gorcum. MULLERAT, R., & BRENNAN, D. (2011). Corporate social responsibility: the corporate governance of the 21st century. Alphen aan den Rijn, Kluwer Law International. OKPARA, J. O., & IDOWU, S. O. (2013). Corporate Social Responsibility Challenges, Opportunities and Strategies for 21st Century Leaders. Corporate Social Responsibility. Berlin, Heidelberg, Imprint: Springer. RENDTORFF, J. D. (2009). Responsibility, ethics, and legitimacy of corporations. [Frederiksberg, Denmark], Copenhagen Business School Press. YÜKSEL MERMOD, A., & IDOWU, S. O. (2013). Corporate social responsibility in the global business world. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=636929. Read More