Key Ethical Challenges in the 21st Century - Case Study Example

Name Tutor Course Date Ethic Report Case Study Question 1 According to Quevedo-Puente et al (2007), the corporate reputation of any organization and its performance along with its corporate social performance are concepts that have been developing along parallel lines. The two concepts are linked through a legitimation process where past actions in terms of the corporate social performance are translated into future expectations through the corporate reputation. It is no doubt that the reputation of the organization will affect its performance. This is because the organization’s reputation presents its image to the stakeholders. Stakeholders in an organization play a key role in enhancing the performance of the organization. Hillenbrand and Money (2007) stated that corporate reputation is a concept that is based around multiple stakeholders and it can be reflected in perceptions that the stakeholders have of the organization. More particularly, the reputation of the organization with its employees has an impact on the reputation with the customers and with the community. The Coca Cola Company developed a strong company reputation through a number of efforts. Part of the efforts used included corporate social responsibility. For instance, the company, during World War II decided to sell Coke to armed services’ members. The company also worked to advance its products to every country in the world. While doing this, the company was seeking customer loyalty. The result of these efforts was an establishment of the company’s strong reputation. It is with this customer loyalty and its widespread market that the company has been well established, making it the company with the world’s most admirable brand. For nearly a decade, the company was ranked among the most admired companies in America. When the reputation of an organization is tainted, there is bound to be low performance of the organization. When the Coca Cola Company started having ethical issues, the economic performance of the company also declined. Among the 100 Best Corporate Citizens, the company could not make the list on the category of business ethics. Having experienced a number of ethical issues, the company was faced by tough times in its performance. Despite this, the company was still determined to come out of the challenge. The company would depend on its strong market orientation to reestablish its image in the market and to increase its market share. It would also indulge in more social responsibility initiatives that would be aimed at enhancing the trademarks of the company. The recognition that social responsibilities would reestablish the reputation of the company indicates that there is a clear relation between the reputation of the company and its social responsibility. In fact, a positive relationship would enhance the performance of the organization. Stakeholders in a company use various factors in assessing the corporate reputation of their organization. The building blocks for an organization’s corporate reputation include the social responsibility, the leadership and vision of the organization, workplace environment, emotional appeal, quality of services and products offered and the financial performance of the organization. The factors used by stakeholders in assessing the performance of the organization include: Trust, Recognition, Employee recruitment and retention, Stock price, Financial performance, (Burke et al, 2010, pp. 11) These factors are consistent across all stakeholders. However, what differs is the value that the stakeholders require and this is based on the type of business they run. The business of the organization will determine what the stakeholders value the most; although trust is said to be the most consistent and important factor across all organizations (Burke et al, 2010). Question 2 The key concerns that are emanating from the various stakeholders are assumed to be the ethical issues that have been facing the company in recent times. This calls for the need to restore the reputation of the company by addressing these issues. To restore it reputation, leadership strategies that are meant to handle the problems faced have to be enhanced. It is the leadership of the company that can turn matters around and help the company in restoring its reputation. Strategies on employment have to be implemented so as to enhance an equal opportunity during employment. This will address the issue of racial discrimination during employment. In addition, the company will establish rules and regulations that will enable all employees to act in a manner that brings integrity to the company. These include guarding against any internal malpractices. It will require that the culture of total professionalism is adhered to in the company. More to this, the company will respect the rights of workers and along with this; it will allow its employees to be free to join any union. This move will enable the company to be considered as a company that values the rights of the stakeholders. Company management will establish an ethical competitive strategy that will ensure the company strives to have the best ethical standards. A compliance committee shall be established so as to ensure there is total compliance with the ethical standards. Further, to enhance the social corporate performance, the company will participate in more charitable events through donations and fulfillment of its corporate social responsibility. This will portray a different picture of the company to the society and to the stakeholders. It will also help in enhancing the company’s trademark. To effectively achieve this, the company will embark on a three step guiding program. This will be followed in the following manner: It has to be done: this will call for a sense of urgency in handling the issues that the company faces. It will draw the attention of all the staff towards handling of the issues that the company faces. This will start by analysis of the failures that have been noted in the company together with the perspective of costs. Having obtained the report of the analysis, the employees will have an indicator of the flaws that the company has had and the effects of the flaws. It is possible: this move shall draw upon the leadership of the company to influence the workers to make sound ethical choices. The employees will be gradually influenced through the leadership of the company to make choices that will favor selection of sound business ethics. It is sustainable: for the company to be restored to its status, the management will enhance integrity programs that will build corporate cultures and confirm them to the workers and to the organizational stakeholders. Under these programs, the predominant factors will be principled actions as well as ethical norms. The suggested guidelines to restoration of the company’s reputation will provide a basis for which the company management will instill its strategies while pursuing sound ethical behaviors in business. One of the elements of social responsibility that will be drawn from the response to the stakeholder issues is the impact of corporate social responsibility on business ethics. Social responsibility is not voluntary since there are institutional pressures that require organizations to fulfill social responsibilities. This element is the mandated social responsibility. Under this element, the company will participate in activities like donations to childcare and promote equal representation of minority groups in the organization. This will address some of the issues concerning discrimination in the workplace. The company will also communicate the code of conduct and ensure its review so as to enhance compliance. Another element that will be addressed is the voluntary social programs that will be conducted by the company. Under this element, the company will set incentives concerning responsible behavior of people in the organization. The company will also introduce disincentives for any immoral behavior in the company. It will also be appropriate for the company to install an ethics hotline in the organization along with hiring an ethics representative. The last element that will be considered by the company is the element of market forces. This will enable the company to expand more into the market share. This can be done by introduction of new products. The new products will consider elements of eco-friendliness and health issues in the society. This is because product loyalty can only be enhanced through products that can be trusted by the customers. Therefore, the company will capitalize on the already strong brand to enhance its reputation further through its new products. As the chief executive officer of coca cola Company, strategies have to be put in place with regard to the social responsibility for the purpose of dealing with the concerns of the stakeholders. The benefits of the social responsibility are important in terms of dealing with the stakeholders. The social responsibility of the company is beneficial to the stakeholders as well as the members of the public. This is because the social responsibilities of the company have positive impacts on the environment. The environmental sustainability plays an important role in terms of ensuring that the future generations have a safer environment. This is one of the benefits that the policies of the company have on the members of the community. The benefits of the social responsibilities o the company is also important for the purpose of ensuring that the company is popular with the members of the public. This is not only beneficial to the community but also to the company in terms of building its brand image. The criticism which is also an element of the social responsibility will be addressed by ensuring that the company participates in the social responsibility while at the same time focus on the core elements of the business. The social responsibilities can be used to build the brand of the company while at the same time building the brand of the company (McWilliams, 5). Question 3 The Coca Cola Company has recognized its responsibility on a worldwide scale and among the efforts it has taken in upholding this responsibility, it has taken steps that will not harm the environment as it acquires goods and sets up facilities. The initiatives include commitment to sustainable packaging, stewardship in water, climate protection and management of energy. The company recognizes that nature is irreplaceable and has therefore strived to reduce the environmental impact in every aspect of its operations. The company has also paid attention to environmental education and to raise awareness on the environment through a variety of activities to the young people. This is meant to enhance the development of the next generation. The move by the company is noble because the environment is key to the sustainability of any business. The company is sincere in its efforts because it has taken various steps that will enhance the sustainability of the environment. The packaging done by the company has been changing over time and the main focus by the company is on the environment. In addition, the move to provide education to the next generation indicates that the company is genuinely committed to the conservation of the environment. The environmental initiatives of coca cola are not window dressing measures but are sincere. The environmental initiatives of the company have greatly contributed to the conservation of the environment. This has positive impacts on the lives of the people as well as the sustainability of the environment. On the other hand, the company has invested a huge sum of money to the initiative and hence an indication of the commitment of the company towards the environmental protection. The company has also been increasing the funds for the environmental conservation efforts every year. This is an indication that the company is aware of the importance of the environmental conservation efforts. New projects are also initiated by the company every year for the purpose of conserving the environment. The initiatives of the company are thus for the purpose of ensuring that the communities are able to achieve the goals of sustainability and hence the positive impacts in the future. The company also recognizes the importance of environmental conservation as most of the raw materials used by the company are directly related to a good environment. The mineral water is one of the products of the company and it is directly dependant on the good environment. The social responsibilities are thus important to an organization as well as the community (Henderson, 171). The key ethical challenges facing businesses in the 21st century In the 21st Century, the global business environment has become complex. Companies of every size have been faced by a number of ethical issues. It is the responsibility of these businesses to create codes of ethics and conduct so that everyone in the organization can abide by the codes and put the codes into action. The common issues that are faced by the organizations include issues on integrity and trust. However, there are more complex issues that these organizations are faced by. These include compliance and governance, decision making and the ability to accommodate diversity (Oster, 2013). It is necessary that organizations get an elementary understanding of integrity, this includes conducting businesses with commitment and honesty and treating customers with fairness. Through integrity and trust, the company can establish a high level of trust from its stakeholders. The challenge faced is for the organizations to adhere to the integrity even at the expense of the current business performance. The bigger picture that should be considered by the company is the importance of winning the trust of its stakeholders. The world is full of many cultures and many people. All these people should be treated with respect and with equality. The organization has to address the issues by recruiting a workforce that is diverse and to enhance equal opportunities to all people in training programs. This will create a workplace environment that will value the contribution of every member. It will therefore maximize the contribution made by every member. Ethical decision-making procedures involve recognition of the ethical issues, getting the facts right, evaluating alternative solutions and making a decision that will reflect on the expected outcome. The decision should protect the rights of employees and customers. Further, business should comply fully with the laws on the environment, the federal safety regulations and to adhere with all civil rights laws. In addition, there are business conduct policies that the organizations have to comply with. Ethical issues are important t for the purposes of ensuring that the company is able to prosper. The need to make profits by most of the organizations is among the ethical challenges that face the organizations (Saether, 15). The focus on profit making impacts negatively on the ethical issues as it has led to lack of transparency in most of the organizations. On the other hand, the employees of the organization play an important role in terms of ensuring that the ethical principles are maintained within the organization. However, some of the employees are not ethical and it is also difficult for organizations to find the ethical employees. This has a negative impact on the issues of ethics in most of the organizations. The increase in competition in most of the sectors forces some of the organizations to engage in unorthodox means of conducting business for the purpose of out doing the competitors. The lack of transparency by some of the regulators is also an ethical issue that affects most of the companies. This is a challenge that requires institutional change. The lack of transparency by regulators in different sectors makes it difficult for the companies to maintain ethical practices. The issues of ethics are thus dependant on both the internal and external factors (Global Corruption Report, 18). Recommendations Companies should establish a compliance committee that will be used in monitoring the companies’ operations to ensure that they operate in tandem with the ethical requirements. The companies should also enhance their participation in corporate social responsibility so as to have a strong reputation among their stakeholders. Leaders in the companies should be on the forefront in handling the ethical issues and pushing for adherence to moral standards in the corporate sector. The management should be fast in handling any issues that arise before they get out of hand. Further, organizations should seek more neutral bodies like the courts in handling their matters. The decision reached at by the courts will be seen to be legitimate and will make the company be more careful in handling its ethical matters. In order for the companies to ensure that the ethical concepts are maintained, it is important for the companies to ensure that the organizational structures are enhanced. This is for the purpose of ensuring that the ethical concepts are incorporated in the organizational culture of the companies. Training of the employees on the ethical issues is also important for the purpose of enlightening the employees on the importance of maintaining the ethical issues. The maintenance of ethics by the employees plays an important role in terms of ensuring that the image of the company is built. It is also recommended that the organizations should ensure that action is taken against the employees who are not ethical. The action should be stern so as to ensure that unethical practices are eliminated within the company. The maintenance of ethical practices is beneficial to the companies as well as the employees (Moon, 121). Ethical standards should also be set by the companies and they should adhere to the set standards. In addition, the organizations should diversify their corporate social responsibilities. While there are some responsibilities that are mandatory, such as environmental conservation, the organization should develop more voluntary responsibilities. This will help in establishing the organization’s reputation in the society. Works cited Burke, Ronald, Martin, Graeme & Cooper, Cary, 2010, Corporate Reputations: Development, Maintenance and Repair, Gower Publishing, UK. Ferrell, Odies, Fraedrich, John & Linda Ferrell, 2012, Business Ethics: Ethical Decision Making & Cases, Cengage Learning, Canada. Hillenbrand, Carola & Money, Kevin, 2007, Corporate Responsibility and Corporate Reputation: Two Separate Concepts or Two Sides of the Same Coin? Corporate Reputation Review, 10, 261–277. Oster, Kenneth, 2013, List of Ethical Issues in Business, Retrieved on May 29, 2013 from: http://smallbusiness.chron.com/list-ethical-issues-business-55223.html Quevedo-Puente, E. Fuente-Sabaté, J.M. & Bautista, J. 2007, Corporate Social Performance and Corporate Reputation: Two Interwoven Perspectives, Corporate Reputation Review, 10, 60–72. McWilliams, Abagail. Corporate Social Responsibility: International Perspectives. Troy, New York: Department of Economics, Rensselaer Polytechnic Institute.  2006. Henderson, David. Misguided Virtue: False Notions of Corporate Social Responsibility. Institute of Economic Affairs. p. 171. 2001. Saether, Kim, "Corporate Social Responsibility in a Comparative Perspective" The Oxford Handbook of Corporate Social Responsibility. Oxford: Oxford University Press. 2008 Moon, Chris. et al. Business Ethics. London: The Economist: 119–132: 2001. Global Corruption Report 2009: Corruption and Private Sector. A Report by Transparency International. Cambridge: Cambridge University Press. (2009). Read More

The recognition that social responsibilities would reestablish the reputation of the company indicates that there is a clear relation between the reputation of the company and its social responsibility. In fact, a positive relationship would enhance the performance of the organization. Stakeholders in a company use various factors in assessing the corporate reputation of their organization. The building blocks for an organization’s corporate reputation include the social responsibility, the leadership and vision of the organization, workplace environment, emotional appeal, quality of services and products offered and the financial performance of the organization.

The factors used by stakeholders in assessing the performance of the organization include: Trust, Recognition, Employee recruitment and retention, Stock price, Financial performance, (Burke et al, 2010, pp. 11) These factors are consistent across all stakeholders. However, what differs is the value that the stakeholders require and this is based on the type of business they run. The business of the organization will determine what the stakeholders value the most; although trust is said to be the most consistent and important factor across all organizations (Burke et al, 2010).

Question 2 The key concerns that are emanating from the various stakeholders are assumed to be the ethical issues that have been facing the company in recent times. This calls for the need to restore the reputation of the company by addressing these issues. To restore it reputation, leadership strategies that are meant to handle the problems faced have to be enhanced. It is the leadership of the company that can turn matters around and help the company in restoring its reputation. Strategies on employment have to be implemented so as to enhance an equal opportunity during employment.

This will address the issue of racial discrimination during employment. In addition, the company will establish rules and regulations that will enable all employees to act in a manner that brings integrity to the company. These include guarding against any internal malpractices. It will require that the culture of total professionalism is adhered to in the company. More to this, the company will respect the rights of workers and along with this; it will allow its employees to be free to join any union.

This move will enable the company to be considered as a company that values the rights of the stakeholders. Company management will establish an ethical competitive strategy that will ensure the company strives to have the best ethical standards. A compliance committee shall be established so as to ensure there is total compliance with the ethical standards. Further, to enhance the social corporate performance, the company will participate in more charitable events through donations and fulfillment of its corporate social responsibility.

This will portray a different picture of the company to the society and to the stakeholders. It will also help in enhancing the company’s trademark. To effectively achieve this, the company will embark on a three step guiding program. This will be followed in the following manner: It has to be done: this will call for a sense of urgency in handling the issues that the company faces. It will draw the attention of all the staff towards handling of the issues that the company faces. This will start by analysis of the failures that have been noted in the company together with the perspective of costs.

Having obtained the report of the analysis, the employees will have an indicator of the flaws that the company has had and the effects of the flaws. It is possible: this move shall draw upon the leadership of the company to influence the workers to make sound ethical choices. The employees will be gradually influenced through the leadership of the company to make choices that will favor selection of sound business ethics. It is sustainable: for the company to be restored to its status, the management will enhance integrity programs that will build corporate cultures and confirm them to the workers and to the organizational stakeholders.

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