Ethically and Socially Responsible Activity in Business - Example

Ethically and Socially Responsible Activity in Business Student’s Name: Course Code: Lecture’s Name: Date of Submission: Ethically and Socially Responsible Activity in Business 1.0 Introduction Farrell, Fraedrich & Farrell (2011, p.128) indicates that the concept of business ethics and social responsibility is anchored on the belief on ethical moral standards while pursuing commercial interests. The discourse of ethically and socially responsible business has grown out of the debate of whether businesses exist to purely serve the shareholders interest of profit maximisation & adherence to legal stipulations or out of the fact that do they have responsibility to other stakeholders (ASX Corporate Governance Council, 2007, p.21). Kabir and Akinnusi, (2012, p.159); Donaldson & Dunfee, (1994, p.254) posits that the whole discussion is rooted out of the view that as moral agents, business organisations have the obligation whether as written or unspoken promise to operate within the limits of societal expectations. For instance, under ethical consumerism, Boulstridge & Carrigan (2000, p.355), observes that public or consumers have greater concern on the behaviour of firms as it greatly impacts on their consumption patterns. Using case example of Studio 7 Design, the report outlines how business undertake ethically and socially responsible activities in business. 2.0 Ethically and Socially Responsible Activity in Business 2.1 Conceptualising Business Ethics & Social Responsibility The issue of ethical behaviour and socially responsible activity in business falls within the larger domain of corporate governance and institutional accountability. Gillan (2006) conceptualises corporate governance from system approach where he sees it as entailing sets of rules & laws that regulates operations of a firm. This if well managed leads to attainment of institutional accountability. As per Kearns (1994, p.187), accountability coalesces around management of varying expectations both internal and external by the firm and her associated agents & employees. Subsequently, it is this management of expectations that gives rise to corporate social responsibility (CSR) that refers to “the responsibility of enterprises for their impacts on society” (European Commission, 2011, p.6). The hallmark of CSR is rooted on social or ethical reporting which refers to” the establishment of appropriateness of an organisation’s business practice”. This is not limited to financial aspects, but also to health, environment and social issues (Adams, 2004, p.731 & 732). According to Caroll (1991, p.40) themes within CSR encompasses sustainable development, occupational health & safety, consumer safety and equal employment opportunities, philanthropy during disaster, community empowerment through scholarships in education and capacity development. However, the report appreciates the fact that the whole discourse of social responsibility is anchored on morality and moral ethics principles. This constitutes the nexus between business ethics or ethics in business activities and corporate social responsibility. The two principles constructs within the sphere of morals and morality is the consequentialism/ teleology and non-consequentialism approach. The former entails belief such egoism and utilitarianism that focus on gains at expense of the overall good while the later which entails Kantian ethics calls for deontological approach in doing business where the focus is doing what is good for the larger society (Farrell, Fraedrich & Farrell, 2011, p.162). 2.2 Challenges The subject of ethics is highly informed by morals. However, morals are highly informed by moral philosophies which are likely to differ depending on one cultural background. For instance there are around five moral philosophies and each one of them is justifiable. These include teleology, deontology, relativist, virtue ethics and justice perspective (Farrell, Fraedrich & Farrell, 2011, p.162). The same is identifiable within the global standards. For instance, Werhane (2010, p. 696) while analysing the Global Economic Ethic (GEE) and the United Nations Global Compact (UNCG) observed that article 3 of GEE cajoles to engage in good and avoid evil therefore leaving the statement free for interpretation. The same document in article 6 calls for sustainable approaches. These contradict principle 7, 8 7 9 of UNCG that calls for precautionary steps in tackling environmental issues. 3.0 Case Example: Studio 7 Designs Inc 3.1 Undertakings by Studio 7 Designs Inc on Ethically and Socially Responsible Activity Studio 7 Design, Inc. is a design and development firm that founded 7 years ago in Victoria, British Columbia working range of businesses by offering consultancy services across the globe on issues on web, logo and packaging design. Apart from focusing on mere side of business, the firm is staunch believer in ethical business practices and within their website; they have the theme labelled ‘our environmental and social focus’. Within the issue of environmental and social focus, the principal rooting is on two fronts. The first regards working with firms that are environmentally friendly in regard to their operations. The second area of focus is on the internal operations where they seek to attain sustainability in regard to waste management and energy utilisation (Studio 7 Design, 2014a). This stands out as one of the principal activities within the domain of ethically and socially responsible activity in business being articulated by Studio 7 Designs. As already seen, the firm has a two pronged approach to addressing environmental issues in regard to sustainability of their business operation. The first relates to the internal activities and the second relates to the external networks in regard to the client they work with and how they help them attain sustainability. Now let examine the first option. Within this theme, the firm aims at being environmentally-friendly organisation as triple bottom agency. In this regard, they have six sub-activities the aim at addressing. These are eco-web hosting, environmentally conscious design, recycling programmes, wind-powered support, paperless and carbonless office and donating 1% of profits to myclimate.org. In relation to the second aspect of partnering, the firm aims at serving environmentally conscious organisations and partner with other firms that aim at addressing ethical and environmental issues such as Apple Computers and Kiva.org (Studio 7 Design, 2014b). The emerging observation out of the endeavours by Studio 7 Design, Inc. is on Corporate Environmentalism. The concept urges corporate and business organisations to be proactive in the agenda of addressing environmental issues such as climate change and environmental damage resulting from their activities (OECD, 2008). This is anchored on the realisations of natural capitalism that cajoles business organisations not only to place strengths on the value derived from earthly resources, but also value the eco-system services that they provide to the society and other organisms which corporations should strive to compensate for (Aras and Crowther, 2008, p.281). 3.2 Assessing the Communication Materials In statement, the above identified communication materials (eco-web hosting, environmentally conscious design, recycling programmes, wind-powered support, paperless and carbonless office, donating 1% of profits to myclimate.org, partnering with Apple Computers and Kiva. org) are important. However, for a critical eye the concern is on how they Address outcomes aimed at by Studio 7 Design in terms of ethical focus which is “environmentally-friendly Triple Bottom Line agency”. In analysing the intent of these aspirations, ethical decision occupies an integral position. Guy (1990, cited in Dellaportas et al., 2005, p.94) indicates that ‘ethical decision making is the process of generating alternatives, and choosing among them so that alternatives selected maximise the most important ethical values while achieving the intended goal’. These should be informed by law, professional code of conduct, moral values and reasoning (Dellaportas et al., 2005). 3.2.1 Eco-web hosting and wind-powered support The two are lumped together because they address issue of energy consumption. Material on eco-webhosting is an effective one in addressing the issue of energy consumption since it is one of the areas that contribute to sustainability issues. The firm is deliberate on their choice of aiming at utilising renewable energy. This is a positive indicator since it has been realised that over reliance on non-renewable energy significantly contributes to global warming, climate change and ozone layer depletion as result of emission of green house gases (Moore, 1995, p. 2, 3, 4 and 5). This is indeed an ethical approach by the business in addressing sustainable development in relation to energy use. This if combined with their desire to move to suitable location for wind power is a real intent in addressing energy consumption that is anchored on deontological aspirations and societal aspirations for good environment that goes beyond adhering to economic and legal regulations (Iamandi, 2007, p.5). The urge to adopt eco-web hosting and wind power support shows how the firm values the ecosystem service as rooted in natural capitalism. Valuation of ecosystem is critical in iforming a firm on how to address two critical issues that are affecting sustainability. In this regad, the two issues are extraction of natural resource and emission of waste (Lovins, Lovins & Hawken, 1999, p.148). For instance, with a view of switching to wind power the compay appreciates that other sources such as fossil fuel are unsustainable and contribute to environmental degradation. The only shortcoming within this communication is the failure to delve in an in-depth manner on how they intend to attain the said approach practically. The information offered just offers an overview as opposed to a substantive communication. For instance, if compared to green house gas emission sustainability reporting by McDonalds Australia, this is a pale statement. McDonalds Australia in their pursuit to account for their carbon emissions ratified Green House Challenge Cooperative Agreement; participates in Energy Efficiency Opportunities that confines them to initiate energy efficiency measures and stick to Greenhouse Gas Emission Reporting Act (McDonald Australia, 2010, p.21). 3.2.2 Recycling programmes, paperless and carbonless office The two have been lumped together because they address the issue of waste emission and waste management through design, reduction, re-use and recycling. For recycling, they aim to reduce the waste at office level so as to contain those ending in landfills. For paperless and carbonless operation, the firm has adopted the use of paperless operations and if need be most are from recycled processes. Indeed these areas, the Studio 7 Design shows high level of proficiency and creativity. The single out what they are doing and how they are doing it. For instance, by going paperless through electronic/ digital transactions, they have managed to reduce waste ending up in landfills. Secondly, they have invested in organic compost box, engage local firms in recycling and re-use in materials such as office papers, newspapers, cans, plastic bottles, cartridges, batteries and so on (Studio 7 Design, 2014b). The whole of this approach is anchored on the RRR concept that dictates that firms should engage in Reduction, Re-use and Recycling strategy so as to limit the amount of waste in the environment as result of the closed loop production system. in this regard, they have redisgned their production system so as to fit within the principles of biological models that are less harmfull to the environment (Lovins, Lovins & Hawken, 1999, p.152). For instance, by going paperless and carbonless, the firm has highly reduced the amount of waste in terms of pollution going to the ecosystem. The only weakest link in the presentation as already seen witgh the first strategy is inability to engage in in-depth reporting o how they intend to conduct the whole process in terms of systems involved, technologies and procedures. Moreover, they fail to disclosure the timelines, amount of waste they project they will reduce by adopting such trends and the current progress. This then depict them as people engaging in the whole process as means of publ;ic relations rather than an obligation for ensuring sustainability. 3.2.3 Conscious Design and Partnership There is nothing as important as developing relationship within the supply network. This allows waste to be treated from a systems approach right from the origin to the ultimate consumer. Regulation of waste in this format is an effective way of attaining sustainability not only within the organisation, but, also within its network. In relation to design they state that they lay focus on utilising practices that positively influences the world. In terms of partnership, they are already working with Apple Computers as a result of their conscious designs. They are equally donating to Kiva.org so as to contribute to management of global warming and under the principle of polluter pay principle (Studio 7 Design, 2014b). Indeed, this stement shows a stronger intention of streamlining internal and external operations through a collaborative frameworks and streamlining of internal operations. the only weakness observable in this decree is the possibility of it passing as an aspiration and not action intended programme as they do not stipulate the framework for attaining the whole process. For instance, they have not indicated the kind of oncious design they are switchting to and how much it will help them save in terms of waste emission, energy consumption and water utilisation. 3.3 Could the Business do more? After assessing how the business has engaged in ethically and socially responsible activity, the question that follows is that, is it enough or could it do more and if it could do more, how can it do it? The answer is that indeed it can do more. Caroll (1991, p.40) notes that CSR is large and entails issues such as sustainable development, occupational health & safety, consumer safety and equal employment opportunities. This indicates that the organisation could do more since at present, their focus is on sustainability reporting yet there are diverse areas that they can engage in. on the other hand, ethical and morality domain addresses issues such as unethical marketing/ misleading product advertisement, product dumping, sustainability issues, earnings management, price fixation, disregard to diversity issues, human rights abuse and equal opportunities (Groucutt, Leadley & Forsyth, 2004, p.64). Farrell, Fraedrich & Farrell (2011) notes that ethical issues afflicting firms relates to trust, truthfulness, civility, empathy and fairness in the behaviour of employees. This equally shows that the firm could do more. For instance, within the domain of sustainability reporting, the firm should indulge deeper and engage in what is called as life cycle assessment where they examine the impact of most of the materials they utilise from cradle to grave. This would offer a more comprehensive plan on how to manage sustainability issues within the firm. Potential effects analysed might include but not limited to water use, fossil fuel depletion, global warming, and ozone depletion (Carmody and Trusty, 2005, p. 1 &2). LCA process is anchored on quantitative assessment on the inputs and outputs of material, energy and waste flows related to the product over its whole life cycle so as to indicate the possible side effects of the product (Horne, Grant and Verghese, 2009, p.2 and 3). 3.4 Rationale for Undertaking the Activity There varying reasons why the Studio 7 Design has engaged in the ethical and social responsibility of sustainability reporting. One rationale is the societal and deontological aspirations that the firm desires to attain so as to address the expectations of their customers and the whole humanity for a sustainable environment (Iamandi, 2007, p.7). Secondly the rationale for engaging in such activity relates to the marketing aspect whereby it contributes to positive reputation of the company. This helps in addressing issues such as brand equity and brand awareness. Finally the firm has engaged in the ethical and social responsibility activities so as to prevent possibility of economic and legal fines especially in issues relating to pollution (Williams and Adams, 2013, p.456; Yoo, Donthu, & Lee 2000, p.195). 4.0 Conclusion The aim of the report was to establish how businesses undertake ethically and socially responsible activity in business. Using the case example of Studio 7 Design the report established that there numerous ways that businesses depict ethically and socially responsible activity. However, Studio 7 Design ethical and social responsibility heavily leans towards environmental sustainability. References Adam, C. A. (2004). The ethical, social and environmental reporting-performance portrayal gap. Accounting, Auditing & Accountability Journal, 17 (5): 731-757. Available at: http://web.calstatela.edu/faculty/rhayes/524b/Asignments/Other%20Sample%20Cases/so cialEnvironmentalReportingResearch.pdf. Aras, G. and Crowther, D. (2009). 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