Corporate Social Responsibility: Socially Responsible and Ethical in Doing Business - Research Paper Example

 Introduction / Abstract Corporate social responsibility (CSR for short; will be used interchangeably in this paper) is the need for a corporation to be socially responsible and ethical in doing business. Specifically, when making executive decisions, those in charge of corporations must take into account the environment, their workers, and the community at large – not just the profit involved. Not only do they keep from adding more problems to the community, they also show that their corporation has a conscience – which, in the long run, will attract customers and business partners. For instance, an entrepreneur wishing to have a mall constructed must consider the people who could be displaced by his endeavor (especially true if the construction site happens to be on a known squatter’s area), or the effect on the environment, and be willing to compromise or make provisions when necessary. Thus, this paper’s objective would be to enumerate some examples of ethical and social obligations, what needs to be done to meet them, and how best to achieve them. Obligations – What to Remember Social responsibility is discussed in the South Carolina Business Journal (2001), which explains that corporations today make more effort than ever to reconcile their needs with those of the people. As it is a fact that market shifts happen regularly, the corporate competition becomes fiercer as each struggles to address the consumers’ needs. Thus, social responsibility becomes a goal along with profit. It goes on to confirm that a corporation’s increased social responsibility will in fact benefit the corporation itself in the long run. Of course, as it is their goal to be of service to the general public, they cater to the public’s whim – even more now that the public commands more and more social responsibility. In return, working with the government and nonprofit organizations alike gives them more exposure, and more opportunity to prove their goodwill. A recent example of this is the immediate aftermath of tropical storm Ondoy’s rampage in the Philippines. Establishments all over Metro Manila solicited donations and relief goods for those affected by the storm, with some even contributing their facilities for use as shelters. Nor is this the first time this has happened there. Rebecca Tonn (2009) adds to this by citing the 2007 Grant Thornton survey of US Business Leaders, wherein 77% of business executives attested that corporate responsibility enhances their profitability. Exactly how corporate responsibility is demonstrated varies. Some corporations do not have programs dedicated to it, but they do engage in acts such as charity, recycling, reducing energy consumption, and even outreach programs. Others explicitly state what is and is not allowed with regard to working conditions and such – Manpower Professional, for example, has a definite stance against child labor and unsafe working conditions. As a matter of fact, Toni Fleming, one of its business development managers, attributes a good part of their success – to be exact, 62% of their business leads and 34% of their clients - to their sense of corporate social responsibility and volunteer work. Jim Burton of Grant Thornton’s Denver branch further adds that companies need to understand their consumers and their needs, as these consumers judge companies based on their social responsibility. According to Lynn Sharp Paine in her interview with Stephen Bernhut (2003), as companies have become more pervasive and powerful, the public in turn has a right to expect much from them in the form of heightened social responsibility. She notes how corporations were once seen as amoral, but that such a notion has largely been discredited. In our various dealings with their employees, she says, we routinely discern the morality of various corporations – whether they are greedy or philanthropic, honest or dishonest, among other things. And since we will naturally not want to deal with greedy, dishonest business tycoons, they then need to factor in ethics and morality in their daily business decisions. That same article goes on to quote Thomas Hobbes, who describes just how grim life in an amoral society would be. Not only would we be lacking in art and commerce, we would also be living in fear and insecurity. Society, therefore, needs to have ethical, moral norms for its members to follow; otherwise, it would not last long. This can then be applied to corporations and business in general, as well. Appropriate Actions to be Taken – What Needs to be Done? Professor Tima Bansal (2006) admits the difficulty of measuring something as intangible as social responsibility. As a rule, she says, managers will decide with focus on the financial and competitive aspect of things; it then becomes a challenge to factor in social criteria, as well. However, she notes that, in the course of her research, there were corporations that had common practices that worked very well. On the whole, she says, the main strong point of these corporations and organizations was that social issues were factored into their day-to-day business instead of being tackled separately. Specifically, they sought and took into account the input of people of all backgrounds, both in their organization and out. And from there, they planned and coordinated all activities accordingly. This, she says, resulted in an overall more profitable outcome. She adds that socially responsible organizations devote more time to decision-making than normal. This is presumably because such organizations try and view the matter at hand from different perspectives, in the process covering risks and gaining new insights that help them improve and innovate their products and services. Moreover, they are capable of seeing the long-term effects and outcomes of their decisions. As social and environmental benefits coincide with profit in the long run, they are able to resist cutting corners in order to make more instantaneous profit. Furthermore, James Hood and Barbara Bedard (2008) add that suppliers have a certain standard which they expect their business partners to adhere to, and that socially responsible companies are more likely to attract customers and employees. CSR has become much more specific than just sticking to statutory obligations and entails making a positive impact in the lives of their employees and the community they operate in. In this sense, CSR becomes a company’s business opportunity rather than its cost; just as important as the marketability and popularity of their products and services is how much they care for their consumers. As Hood states in a separate article (2005), it says only good things when a company decides to give more care than is required with regard to the effect of its business on the environment, or the welfare of its employees. Among other things, it is absolutely essential that CSR becomes integrated into a company. That is, there should be a dedicated coordinator for it whenever planning and strategizing is conducted. If the company has not already adopted CSR as part of its aims, it is recommended to start small – for instance, dedicating a day of the week to charitable endeavors – before going on to the bigger stuff. Last on the list, but no less important, is to involve employees in the decision-making and actively encourage them to come up with their own ideas and suggestions. Terry Stuller (2002) also attests to this, observing that employees have a clearer, more accurate picture of what goes on everyday compared to their bosses. Thus, getting their input helps immensely. Both sources stress CSR’s importance in running a business. Indeed, both agree that being socially responsible cannot possibly be anything but beneficial to both the company and its consumers. How to Make the Best Decisions In his article “Making the Best Decisions (2008), Richard Bolduc says that one must ask himself a number of questions before finally deciding. This especially applies to business decisions, whose gravity ensures that one can rarely if ever make them in a snap. In particular, he cites three characteristics of a good business decision: understanding the heart-versus-mind conflict of decision-making, having business self-awareness, and exercising correct timing. First, the heart-versus-mind conflict. Business leaders tend to use their heart when making feel-good decisions – the ‘safe’ decisions that are less likely to be fussed over. Such decisions have lots of immediate benefits and generate lots of immediate results, which is why they continue to be made. In contrast, well-thought out decisions entail honest assessment on both immediate and long-term results, and are a lot harder to make. This, he says, is the kind of decision that proves one has a vision for his company. A second factor to consider in good decision-making is business self-awareness. This means that, when deciding, one must check his company’s priorities and goals, and then decide in line with those goals. One must also remember to take into account the strategies and procedures that worked so well in the past, and stick to them. Not to mention, one must recall what did not work or turn out well. In this way, the company is able to learn from its past mistakes. To bump into a wall once is an accident, but to bump into it twice is stupidity. Finally, it is important to time one’s decisions right. As opposed to luck, timing should be based on one’s performance in the market, and understanding the maturity and risk tolerance of one’s business. Poor timing – whether too soon or too late – often causes the best of decisions to go wrong. And in contrast, even bad decisions can turn out somewhat well when timed right. For instance, when responding to instances of natural calamity, it is hardly helpful to the company’s image if it donates only after everyone else has done. Instead, it must be the first to help out; that way, people will remember it as the first to come to the aid of the less fortunate ones in their hour of need. Applying corporate social responsibility, as stated above, entails foregoing immediate profits in order to yield long-term benefits – putting the mind over the heart. For instance, after a natural calamity, a fastfood chain that is known for its dedication to its consumers’ satisfaction (self-awareness) may choose to either do business as usual or take part in outreach programs – rather than business, it is one of the first to send its employees to reach out to those devastated by the disaster (timing). It may have a short-term loss in the way of potential revenue, but when the employees do volunteer work, they touch the survivors on a personal level. Thus, in the future, these people will be more likely to patronize that particular fastfood chain out of gratitude for their assistance. Recommendation / Conclusion Based on what has been said, this researcher concludes that corporate social responsibility’s importance cannot be overlooked. It is true that a business’s primary goal, whether selling a product or a service, is to achieve profit. But just as, if not more important, is the welfare of the consumers who allow a business to thrive. When making decisions, great emphasis must be placed on the consequences for the consumers and the community at large; when profit and social responsibility come into direct conflict, social responsibility must take precedence – or at least, a compromise must be made. Since the customer is always right, companies must go out of their way to ensure that the customer’s needs are adequately met. While socially responsible decisions may get in the way of profit at first, all the evidence suggests that the two go hand in hand. It helps a company’s image if they are known to care for their consumers themselves rather than just the money that lines their pockets. All successful businessmen – Bill Gates, among others – are successful in part because of their care for their consumers. After all, these are the people who are the reason they are in business at all. And since, as someone said, the customer is always right, their opinions are generally worth listening to and taking into account. And that, this researcher can say, is what corporate social responsibility is all about. References Bernhut, S. (2003). Lynn Sharp Paine on the morally and ethically responsible corporation, Ivey Business Journal, 67, 1-6 Hood, J.C. (2005). Social responsibility and corporate citizenship, New Hampshire Business Review, 27, 21 Bansal, T. (2006). Best practices in corporate social responsibility, Ivey Business Journal, 70, 1-3 Business, government, nonprofits face challenge of social responsibility (2001, October). South Carolina Business Journal, 20, 4 Hood, J. C. & Bedard, B. A. (2008). Don’t ignore corporate social responsibility, New Hampshire Business Review, 30, 24 Stuller, T. (2002). Bring employees in on the decision making process, Wenatchee Business Journal, 16, C6 Bolduc, R. A. (2008). Making the best decision, Business NH Magazine, 25, 11 Tonn, R. (2008). Corporate social responsibility: conscionable and profitable, Long Island Business News, 55, 15B Read More