The Business Industry Has the Responsibility to Transform a Given Society - Essay Example

?Running head: CORPORATE RESPONSIBILITY Corporate Responsibility Insert Insert Insert 15 April Corporate Responsibility Introduction The roles that businesses play in the current world are far much more than what was anticipated earlier. The business industry has the responsibility to transform a given society by extending its services beyond the needs of the stakeholders of the organization. The businesses are not only required to provide the goods and services but to research on better ways of conducting their businesses towards a common objective of economic growth (Blowfield, Blowfield and Murray, 2008, p.11). The society plays a very important role towards the success of a given business. The goods and services provided by a given business organization will be of value to the organization if they can be marketed within the society. The economic status of the society will determine the types of businesses that are likely to prosper in the area. The extent to which a given society reflects what is observed in the international market will influence how a given organization can adopt the international standards. Origin of corporate responsibility The market is characterized by high level of competition with the needs of customers constantly changing. Successful organizations are those that continuously monitor the changing market trends and making the adjustments as they are observed (Zadek, 2004, p.1). As a way of gaining competitive advantage, a business organization would be prompted to develop its reputation within a given society by giving back to the society (Warburton, 2004, P.2). The organization can decide to initiate charity programs aimed at social development like providing some free education scholarships or providing healthcare services to some vulnerable community (Metaxas & Tsavdaridou, 2010, p1). The views of every stakeholder in the organization need to be sought in developing these adjustment mechanisms. These are then applied towards the general development in the society. The contributions that a business organization has towards the improvement of the society have been a point of concern for the scholars, politicians and the common person in the recent years. Over a long period, ideas had been developed by businesses that suggest a need for them to contribute to the development of the society. Various organizations had opted to use their assets to improve the living standards of their employees (Blowfield, Blowfield, and Murray, 2008, p.12). These initiatives generated a mixture of views relating business to the society. It was acceptable that the businesses operated to generate profits by meeting the customer demand. However, it was noted that there would be lack of control over the amount of profit to be gained and the quality of the products given by the businesses (Blowfield, Blowfield, and Murray, 2008, p.12). Issues arose concerning the prices of goods and even the wages for the employees of an organization as to who should be responsible for setting the standards. There has also been a question as to whether the business should actually give back to the society. An attempt to derive a solution to these conflicting issues called for what we term as corporate responsibility. This involves the participation of various parties in ensuring that business activities are carried out in a manner that does not violate the rights of the individuals in the society and that it contributes to the general wellbeing of the members of the society (Taming the Corporation, 1998). The government is one such party that intervenes to enact legislations that govern procedures like wage and price establishment by the companies (Tuccille & Stone, 2003, p.6). The kind of management and leadership in the organization and specifically the roles of the leaders in the business are then important issues to be addressed. The overall responsibility of the company/organization is also considered in examining what constitutes corporate responsibility. The effects of the activities of an organization on the environment, as well as what it does to improve environmental conditions constitute an important part of corporate responsibility (United Nations, 2008, p.2). Various other definitions and descriptions have been developed over the years that attempts to point out what corporate responsibility entails with the focus shifting from the traditional view of the responsibilities of the leaders in the organization to a consideration of a business organization as a single entity that should behave responsibly in the society. This is still not sufficient consideration as it has been noted that it is the individual human beings that constitute the companies and not the physical amenities in the organization (Tuccille & Stone, 2003, p.3). The debate on the most appropriate description of what is meant by corporate responsibility is still on and the controversies arise due to the differences exhibited by different companies. What seems to be common among all the views is the need to observe ethical standards in handling the human resource in the organizations and fostering on the development of the society other than mere profit maximization (Warburton, 2004, P.4). The companies have different challenges and they have developed different cultures thereby posing a challenge on pointing out the exact standards and norms that constitute corporate responsibility (Leipziger, 2003, p.19). The standards and norms that are appropriate in one region for a given company may not be appropriate in another region for the company. The organizations are therefore faced with the hard task of developing international standards, as the stakeholders are likely to evaluate the organizations on an international scale (Leipziger, 2003, p.19). Moreover, despite the challenging issues, various organizations have managed to develop initiatives that demonstrate the accepted codes of conducts. These outline ‘the commitments and behavioral guidelines in such areas as labor relations, environment, consumer protection, and fighting bribery’ (Organization for Economic and Cooperation Development (OECD), 2001, p.11). Purpose of corporate responsibility It is then important to try to understand why an organization needs to develop good relations with the society that surrounds it. The customers and other stakeholders to a given business organization are valued assets as they will dictate the performance of the organization in the market (Warburton, 2004, P.2). The level of satisfaction that they receive from the products of an organization will determine whether they will be glued to this organization or they will look for alternative supplier of the same products. Their interests should be considered most in strategic planning (Scherer & Palazzo, 2007, p.20). Giving back to the society therefore helps the organization in capturing the market by improving its reputations among these customers apart from contributing to the economic and social developments in these regions (United Nations, 2008, p.2). Considering the diverse needs of the customers and satisfaction of these needs is fundamental in gaining a competitive advantage in the market. The Similarly, the employees of a given organization are among the key stakeholders in the organization (Warburton, 2004, P.2). The working conditions under which the employees operate will influence the overall performance of the organization. The kind of relationship that occurs between the employees and the management of an organization will affect the level of job satisfaction and subsequent motivation of the employees. This further influences the performance of the organization (Metaxas & Tsavdaridou, 2010, p.4). Most managers have been seen to exert excess pressure on the employees to maximize the shareholders’ profit. It is required that there should be a widespread agreement among the stakeholders in the organization on how the operations of the organizations should be carried out (OECD, 2001, p.15). The diverse needs of the labor force need to be considered in the decision-making processes by the management of the organization (Taming the Corporation, 1998). Every stakeholder in an organization should be made to feel as important component of the organization. Conclusion It is, therefore, important to point out that the various views that have been provided as to what corporate responsibility entails all point out a common objective. Corporate responsibility has been seen to require the management of organizations to listen to the opinions of the stakeholders and include their satisfaction as one of the company goals. It is seen as a requirement that the organizational leaders exhibit high level of social responsibility in relating to the community that surrounds the organization, the employees, the customers, and the other individuals in the society in which they operate. Corporate responsibility requires that the company be committed not only to making profits but also to promote social and economic growth in the society that they serve. The business organizations ought to promote human rights and democracy as well as other development programs locally and internationally. Environmental effects are also to be considered in the operations of an organization. All these that necessitate corporate responsibility require an ethical interaction between the organization and the community that surrounds it. It is therefore justifiable to conquer with this definition by Blowfield, Blowfield and Murray (2008) that corporate responsibility is “an umbrella term embracing theories and practices relating to how business manages its relationship with the society.” References Blowfield, M., Blowfield, M. and Murray, A., 2008. Corporate responsibility: a critical introduction. Oxford: Oxford University Press Leipziger, D., 2003. The corporate responsibility code book. Sheffield: Greenleaf Publishing. Metaxas, T. & Tsavdaridou, M., 2010. Corporate Social Responsibility in Europe: Denmark, Hungary and Greece. Journal of Contemporary European Studies, Vol. 18, No. 1, 25–46. (Online). Available from: http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=4&hid=7&sid=7725ad5b-3924-4f99-bff1-21e8945dc600%40sessionmgr10 [Accessed April 15, 2011].  Organization for Economic and Cooperation Development. 2001. Corporate responsibility: private initiatives and public goals. Paris: OECD Publications. Scherer, A. and Palazzo, G., 2007. Toward A Political Conception of Corporate Responsibility –Business and Society Seen From a Habermasian Perspective Academy of Management Review, Vol. 32. Tame the Corporation. 1998. Wilson Quarterly, Vol. 22 Iss.3, 125-126 Tuccille, J. and Stone, C., 2003. Corporate Responsibility: Law and Ethics. Washington D.C: Beard Books United Nations. 2008. Guidance on corporate responsibility indicators in annual reports. NY: United Nations Publications. Warburton, J. et al. 2004. A nice thing to do but is it critical for business? Corporate responsibility and Australian business Australian. Journal of Social Issues, Vol.39 No.2, 117-127. Zadek, S., 2004. The Path to Corporate Responsibility. (Online). Available from: http://faculty.cox.smu.edu/~rasberry/web/mno6218/MNO%206218%20%20Fall%202005/Week%206%20-%20THE%20PATH%20OF%20CORPORATE%20RESPONSIBILITY.pdf [Accessed April 15, 2011]. Read More