Business Ethics and Sustainability - Literature review Example

Business ethics and Sustainability Introduction The discussion of this essay is based on different aspects of business ethics and sustainability. Theapproach of business ethics is focused on different moral principles that guide the behaviour of any organisation towards its stakeholders. The implementation of business ethics ascertains that organisations are maintaining a required level of trust within different section of stakeholders while focusing on organisational sustainability (Velasquez and Velazquez, 2002). The sustainability of business emphasizes on the coordination and management of different financial, environmental and social demand to ensure long-term and ethical success of organisations (Azapagic, 2003). The first section of the discussion will elaborate different attributes and mechanism to ensure ethical approach of any industry or company. It will also communicate a number of challenges and dilemmas as well as international variations confronted by any organisations in terms of business ethics. The second section of the essay will illustrate the role of media and its limitations on the ethical approaches of any business. This section will also evaluate moral and cultural aspects of ethics such as moral panic, development and gray areas, relativism and absolutism approach of morality and culture. The third section is based on the discussion about the stakeholder’s view towards organisation and its corporate social responsibility. It will detail the political and social role of any organisation as well as its corporate and democratic accountability. The last section will discuss sustainability theory. It will further detail the difference of organisational growth and development factors. Section 1: Ethical Norms, Challenges and International variation of organisations There are a number of norms and characteristics that ensures the ethical approach of any organisation or its industry. Various researchers have evaluated the importance of effective leadership to establish the ethical values within the workforce of any organisation (Ardichvili, Mitchell and Jondle, 2009). Burns, et al., (2006) has explained that different leadership approaches, such as transactional and transformational leadership, assist the management of any organisation to direct their followers to achieve higher ethical standard in different conflicting situations. To build an ethical organisation, management needs to follow the top-down approach of leadership. This approach provides a strong hold of management on the organisational policies (Ardichvili, Mitchell and Jondle, 2009). The effective leadership also establish integrity within organisational factions. The process integrity defines the all-encompassing characteristic of any ethical organisation. The fair and honest execution and integration of different organisational processes indicates the ethical approach of any business. The absolute adherence of the local, state and federal laws and regulations also demonstrate the ethical characteristic of any business (Crane and Matten, 2010). The approach of business ethics demonstrates respect towards its employees by providing proper value to their opinion and treating them as an equal part of the organisation. The communitarian perspective of organisation ensures the activities of providing equal opportunities for self-fulfilment and material for well-being for all the internal and external stakeholders (Ardichvili, Mitchell and Jondle, 2009). According to Trevino et al., (1999), core value statement, ethical code of conduct and properly described vision and mission statement are important attribute of an ethical business. The author has also mentioned that the ethical approach of organisations provides adequate importance to the corporate mission and ethical codes of conduct over their profits. An ethical organisation not only creates codes of conduct and value statement but also communicates them within the stakeholders as well as ensures their proper implementation (Trevino et al., 1999). Brown et al., (2006) have stated that these mission statement and core values assist organisations to concentrate on long-term perspectives in terms of employee and consumer loyalty. Organisations those have adopted long-term strategies are often considered as ethical (Brown et al., 2006). Analysis of past ethical dilemmas and challenges are the procedure to design future strategies of any organisation. According to Kidder (1995), the reason behind the common ethical dilemma is the ambiguity regarding the right and wrong action of any operation. Overlapping personal and organisational work during office hours is one of the major ethical dilemmas. Most of the employees generally spent a huge portion of their time on official works. This situation generally provokes them to utilize organisational resources to conduct personal work during business hour such as setting up doctor’s appointment and reservation of holidays (Elliot, 1995). Employees generally works in a teams that entitles each of them to take credit of the team work. In this situation the equal distribution of rewards within the team may generate ethical dilemma within the hard working workforce (Webley and Werner, 2008). Application of technologies has created ethical dilemmas in organisation. Technologies are assisting employers to track the work culture and employee behaviour. On the other hand, it is s hampering the privacy of the workforce and creating anxiety within the workers (Velasquez and Velazquez, 2002). Implementing cross-cultural ethics is one of the major challenges as workplaces are witnessing increased number of harassment due to cultural diversity of employees (Elliot, 1995). The morality and ethical values of organisations differ due to the dissimilarities in communities and cultures across the globe. Various substantial, local and regional factors in international market create variation in the attitude and behaviour of the population. Cultural and religion differences in terms of goals, practices and attitude within the global populations generally create variations in business ethics and values (Bernardi and Long, 2011). The theory of ethical relativism has detailed the relation between moralities with the norms of ones culture. According to this theory, the fair and unfair activities depend on various moral norms of different societies. Any activity can be explained as morally right in a specific society while it can be wrong in another (Singer, 2002). The differences in governmental policies and regulations within various global locations have also modified the ethical beliefs of the population. The globalization of organisations has influenced the management to expand their businesses in different location. This situation has also enabled them to accumulate workforce from multiple cultural backgrounds. Therefore, restructuring of the ethical values as per cultural differences of workforce is one of the major challenges of any global organisation. Proper understanding of political and regulatory standards of the global market is also essential for international business ethics (Singer, 2002). Section 2: Role of media in business ethics and concept of moral panic The usage of different forms of media is increasing day by day in organisations. According to a study of Ethics Resource Centre (ERC), social media can be utilized to provide numerous business opportunities to organisations. ERC has conducted a survey within 2098 US workers to understand their usage of social media within workplace. Almost 60% of the respondents have mentioned that they utilize the media to share information about work projects (Webley and Werner, 2008). The usage of media has assisted the management to develop communication within all the level of stakeholders of the organisation. Therefore, the simplified message delivery procedure has assisted the organisation to properly impart information about organisational ethics, values and core objectives across the stakeholders. The managers and leaders can utilize the social media to promote and strengthen the workplace culture. The proper interaction through media and management of messages allow organisations to build workforce cohesion and loyalty (Driver, 2013). On the other hand, inadequate social media training has provoked unethical behaviour within workplaces. According to a survey of Institute of Business Ethics (IBE), the irresponsible and improper usage of social media can increase the integrity risk of any organisation projects (Webley and Werner, 2008). For instance, during 2011, the offensive response of the employees of Nestle in exchange of the negative comment of consumers in the Facebook fan page had violated the organisation’s principle of integrity (Driver, 2013). The usage of social media to investigate about the personal and social life of employees and candidates can be considered as another unethical practice of organisations. A survey of 800 human resource personnel has detailed that near about 64% of the respondents regularly check the social media sites before recruiting employees (Silverstone, 2007). The frequent personal media search is hindering the privacy of employees within different organisations. Cyber-bullying of workers through personal or organisational social media sites during the office time has also affected the ethical codes of conduct of any organisation. Recent surveys have demonstrated that over one tenths of employees in the UK have confronted different cyber-bulling activities. This situation is enhancing the workforce conflict and anxiety (Silverstone, 2007). According to theorist Cohen (2002), moral panic can occur when any episode, condition, individual or group of persons emerge to be threat to social values as well as interest. In other words, moral panic can be described as the intense feeling of workforce or management towards different issues that appears to be threat to the organisational cultural and ethical condition (Cohen, 2002). Social media plays an important role in the enforcement of moral panic within different organisations. Cyber bullying or internet trolling is one of the major factors that have generated the moral panic within workforces of different organisation. These misuses of media in workplaces have created anxiety within workforce. This situation has also hampered the employee-employer relationship (Goode and Ben-Yehuda, 2010). The ethical or moral gray areas can be defined as different practices of management and workforce that influence the misuse of professional media that are mainly considered for the benefits of organisation. The practices of internet trolling, cyber- bullying, negative comments over different media and hampering privacy through different social media have demonstrated the gray areas of organisational ethics (Silverstone, 2007). Moral imagination is the process that allows management to reduce and handle the moral panic within organisation. Moral imagination can be defined as the ability to imaginatively detect a number of possibilities to handle different situations that can potentially harm the organisation and society (Goode and Ben-Yehuda, 2010). The moral imagination assists management to eliminate moral gray areas from the organisation in terms of the usage of different media (Silverstone, 2007). Hence, moral imagination allows management to ensure the ethical and moral development of the organisation and its workforce. Morality mainly demonstrates two different approaches such as moral relativism and absolutism. The absolutism approach describes that morality is dependent on various universal principles such as conscience and natural law (Lijmbach, 2003). Therefore, it emphasises on the uniqueness of morality regardless of the differences in situations. The relativism approach generally contradicts this concept by stating that ethics and morality is dependent on a number of variables such as individual’s feeling, values, culture and situations (Silverstone, 2007). Cultural relativism and imperialism provides different views of ethics and morality. According to cultural relativism, the determination of right and wrong activities is dependent on the specification of different culture (Goode and Ben-Yehuda, 2010). It also defines that ethics and beliefs can vary as per the cultural aspect of an individual. On the other hand, cultural imperialism promotes the view of maintaining unique ethical values for all the individuals from different background to create a strong organisation (Lijmbach, 2003). The news regarding improper use of social media by the employees of BBC can be considered as one of the recent example of moral panic. In 2012, two members of BBC have been dismissed due to unethical usage of official Facebook and Twitter pages. The freedom of information request from Parliament Street has assisted the organisation to highlight the activities of social media abuse within the organisation (Glenday. 2012). This misuse of social networking site by employees has hugely compromises the integrity of public funded organisation. Therefore, this situation has generated moral panic within the employees and employers within the organisation by triggering long-term ethical and reputational damage. As an instant action BBC has suspended two employees while they have taken disciplinary actions against other two workers. Though this action has assisted the organisation to temporarily restrict the misuse of organisational social networking channel, it cannot be accepted as an absolute solution for this kind of activity (Glenday. 2012). Therefore, this immediate and short-term action of the organisation generates moral grey area between the right and wrong action of the organisation. The tendency of moral imagination of the organisation has allowed the employers to identify each employee as a moral agent. Therefore, they tend to issue disciplinary rule books regarding the ethical and acceptable behaviour over the social networking site perceiving that all the employees will equally follow the guidelines. According to the director of Parliament Street moral development is equally important as moral imagination. He explained that due to the differences and changes in morality from person to person only a written guideline will not be enough to streamline the ethical behaviour of all the employees. BBC also needs to provide proper training to the employees to develop their morality in terms of ethical behaviour over the social media sites (Glenday. 2012). Section 3: Stakeholder view of the firm and corporate social responsibility Stakeholder view of the firm has allowed organisations to introduce ethical theories into their strategic management procedure. The stakeholder theory by Freeman (2010) has provided foundation of strategic views regarding corporate social responsibility issues. In other words, the stakeholder view of organisation and its ethics has assisted the management to address the values and morals in terms of managing the organisation (Russo and Perrini, 2010). The traditional considerations of organisation have only highlighted the owner and shareholders as major stakeholders. Various researchers have evaluated that the theory of stakeholders involves various other parties such as customers, investors, suppliers, employees, government bodies, political parties and trade association. Researchers have argued that businesses should consider the interests of each stakeholder as radically valuable. This theory has also emphasized on the recommendations regarding attitudes and practices to provide utmost interest to the legitimate stakeholders (Russo and Perrini, 2010). Theory of stakeholder is the essential frameworks in the study of corporate social responsibility (CSR). The CSR activities can be defined as the initiatives of organisations to take responsibilities regarding the effects of their operations on the social welfare and environment. CSR policies ensure that the business activities are properly following the political regulations, legislation, international morns and ethical standards (Crane and Matten, 2010). The theory of stakeholders by Freeman (2010) provides a mirror image of the corporate CSR. The author has illustrated that CSR policies are aimed to consider all the organisational actions to influence positive impact towards the environment, consumers, communities, employees and the entire members who have been considered as the stakeholder of the organisation. The view of corporate accountability has been established to evaluate more enforceable strategies to influence organisational behaviour. Corporate accountability illustrates the performance of any organisation to the non-financial areas such as organisational sustainability, environmental performance and social responsibility (Crane and Matten, 2010). Corporate accountability describes that organisational behaviour is influenced by different pressures provided by governmental and social stakeholders. Such stakeholders can adopt different strategies which may include legal mechanisms to influence social standards. Along with the financial reports, a number of organisations tend to issue corporate accountability report to fulfil the demands of different stakeholders (Unerman and Bennett, 2004). Democratic accountability of organisations can be considered as another aspect of corporate social responsibility. Internationalization of organisations and public policy-making process have provided more effective global governance and improvised policy outcomes (Crane and Matten, 2010). The democratic accountability evaluates different ways by which political parties, parliament, citizens and many other democratic participants’ offers feedbacks, sanctions and rewards to the organisations regarding their adherence towards different public policies (Behn, 2001). The accountability of democracy influences organisation to enhance their transparency. It also allows to include a wide range of stakeholders in the domestic as well as international market to contribute in the decision making process of organisation. This facility therefore, reduces the tendency of management to abuse their powers (Behn, 2001). Various state governments have shown incapability to address the global public good issues to serve different public interests. A number of global governmental organisations have also demonstrated insufficient activities to fill up the governance gaps (Lomborg, 2003). On the other hand, a number of international organisations are taking responsibilities of different social and environmental issues to serve different public concerns. Various organisations are proactively indulging in corporate social responsibility to effectively contribute on the production of public goods. These firms are fulfilling various political responsibilities through their contribution towards public health care, protection of human rights, social security to stakeholders and public educations (DesJardins, 2007). Women empowerment programs of different multinational organisations such as Walmart, Disney and Coca-Cola can be considered as their contribution to the political activities of their operated countries (Dresner, 2008). Organisations play different roles to provide multiple benefits to the society. These activities of organisations not only assist them to increase their profit generation capacity, it also entitles them to create a strong position within the local as well as global market. The major role of organisation in the society is to create source of employment and financial gain for a huge number of population such as employees, suppliers and distributors (Bernardi and Long, 2011). Proper corporate policies and ethical codes and conducts allow these populations to lead a healthy and safe life. It also provides work satisfaction as well as sense of achievement to the population. Continuous development of products and services allow the society to lead a convenient and easy life (Dresner, 2008). The development of technologies in workplaces also assists their stakeholders to improve their skills to effortlessly conduct different challenging job. The corporate social activities of organisation enable the society to spread good practices in terms of workplace safety and environmental betterment (Crane and Matten, 2010). Apple Inc. possesses a huge supply chain across almost all part of the globe. The multinational business venture has caused a number of environmental issues for the organisation. A number of suppliers of Apple in China have been convicted due to the environmental pollution. During 2011, The Supplier Responsibility Progress Report on Apple has described that 80 out of the 127 suppliers of Apple in China are not properly following the Environmental Law (Kaiser, 2013). Ma Jun and few other non-profit organisations have explained that the suppliers are polluting nearby rivers with factory chemicals. This situation is affecting their market reputation within the China as well as global market. The organisation has gathered negative feedbacks from the parliament and political parties of China (Kaiser, 2013). Therefore, it has affected the democratic accountability of the organisation. During 2013, the current environmental chief of Apple in Beijing, Lisa Jackson, has organised a meeting with environment protection minister Zhou Shengxian to exchange views regarding the organisational responsibility to protect the environment of China (Kaiser, 2013). This meeting has allowed the organisation to improve their commitment towards the environment protection policies of China. According to the revised corporate social responsibility the organisation has committed to deepen air pollution prevention and control by giving priority to prevention and control of PM2.5. They have also assured to strengthen the water pollution control policy in river basins and groundwater system to ensure drinking water safety. There SR activity has ensured using advance ecological protection through addressing soil pollution (Kaiser, 2013). Section 4: Sustainability and difference between organisational growth and development Organizational Sustainability can be described as the capability of workforce to handle different internal as well as external pressures of a culture. Sustainability of organisation indicates the stability of various processes and systems with the changing external environment. Sustainable development is the ability to fulfil the needs of changing environment in terms of politics, economics, culture and ecology without affecting the basic fundamentals of any organisation (DesJardins, 2007). Natural capitalism theory of sustainability has introduced a model of four capitals for organisational sustainability. Prior to that manufacturing capital, land and labour had been considered as the important capitals for organisational sustainability. The model of four capitals emphasises on investment on natural capitals, flow as well as services of economy, biomimicry and resource productivity (Porritt, 2007). During the early nineties, various academicians had introduced the concept of sustainable development of external environment from an economic point of view. This theory was focused on assigning price to the environment through fiscal control framework. Dresner (2008) has explained this greening of economy as the unique way to protect the environment by assigning economic value to it. This theory is aimed to internationalize all the external environmental costs in terms of resource depletion, health care and pollution control (Nattrass, B., 2013). The theory of sustainability by Harris, (2002), has suggested three different dimensions of sustainability such as economical, social and environmental. The author has explained that the economical sustainable system needs to produce goods or services to manage different external and governmental debt. The theory also describes that the economical sustainable system also need to avoid organisational imbalance that may damage industrial production. The author has further illustrated that the environmental sustainability system needs to focus on the maintenance of atmospheric stability, various ecosystem functions and biodiversity (Harris, 2002). According to the sustainability theory of Harris (2002), the cultural dimension of sustainable development must concentrate on the achievement of distributional equity and political accountability through different social services such as healthcare, education and gender quality program. Though development and growth indicates different processes and practices of any organisation most of their aspects are interrelated. Growth can be considered as a part of overall organisational development. It is the quantitative approach of any organisation, while development demonstrates qualitative nature. Organisational growth is based on the increase of the economical condition and profit margin. The growth factor of any organisation also indicates their international expansion and employment ratio (Figge et al., 2002). On the contrary, the development of business process is concentrated on different aspects such as human resources welfare, product and service quality development, social welfare and technological development (Butcher, 2013). The growth perspective assist organisation to gain a competitive position within the market. The process of continuous development enables organisations to sustain their position within the frequently changing competitive market. Growth of any organisation can be measured in a quantitative form (Lalonde, 2011). On the other hand, development of organisation is a subject of interpretation. The sustainable economy may stop the overall organisational growth rate while the development of any organisation never stops (Butcher, 2013). The constant changes in consumer preferences, technological advancement and globalization has indicated the requirement of organisational development. Different developmental procedure also allows organisations to enhance their growth factors (Navarro, et al., 2012). Merger and acquisition, product diversification and introduction of electronic commerce can be considered as organisational growth strategies (Navarro, et al., 2012). Alternatively, customer relationship, corporate citizenship and online optimization are the strategies of business development (Butcher, 2013). Conclusion The discussion has evaluated various characteristics that indicate ethical values of any organisation. These characteristics include integrity, respect and effective leadership. The study has also illustrated different challenges and dilemmas any organisation face during the implementation of ethical values and norms. Due to globalization, the ethical standards and work culture is changing for various organisation. This variation of organisational ethics and culture due to internationalization is also affecting the ethical values of organisations. The study has indicated the immoral and unethical usage of media as one of the major challenges of organisations nowadays. Different concept of morality has been evaluated to describe various aspects of moral and ethical situations of any organisation and its workforce. The further elaboration of the discussion has highlighted various theories of organisational sustainability and the importance of economical, social and environmental dimension of sustainable development. Therefore, it has emphasised on developing the social responsibility activities for different stakeholders group to enhance the overall sustainability of any organisation. Reference List Ardichvili, A., Mitchell, J. A. and Jondle, D., 2009. Characteristics of ethical business cultures. 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