Role of Ethics and Social Responsibility in Strategic Plan - Essay Example

The need to make strategies in accordance with business ethics and taking care of stakeholders’ financial investment in a responsible manner is a must for any corporation (Kotler and Lee, 2004).

The company’s top management ensures social responsibility by contributing toward social causes and charity and spends a portion of revenues on helping society work effectively. Also, the management takes charge of those who could not find work or are permanently unemployed by offering job opportunities and providing a secure work package in their firm (Werther and Chandler, 2010). Therefore, a corporation goes a long way in acting in a responsible manner for the betterment of society by ending unemployment and the general poverty level. It is also the duty of the company’s top management to allocate the funds appropriately to be used for social betterment. Furthermore, the ethical issues also include taking care of the environment by refraining from spreading pollution through industrial waste. Ethics also lies in providing such goods and services to stakeholders that are beneficial for them and not harmful in any way (Werther and Chandler, 2010).

One of the most important agendas to be taken care of for the social responsibility ensuring is the accuracy of financial statements of the firm. The case of Enron represents the worst example of the crossing of ethical boundaries by its ever-famous accounting scandal. Enron was found guilty of fraud by producing fake financial reports for external users. It resulted in a big loss on the part of owners, stakeholders, and employees of the firm when it got bankrupt. It happened because of the top management of the firm who was responsible for creating falsified accounting records of the company’s business transactions. They presented a bright picture of the firm through creating reports in which they showed the firm in profits when actually it was in big losses. It lost the trust of stakeholders badly and made a history where unethical business activities are associated with Enron (Baron, 2009).

In order to prevent such unethical happenings in the world of business again, it is important to first take care of the financial reports that reach potential customers or stakeholders. It is because these reports are a way to demonstrate the company’s financial position and investors use these reports as a guide to making decisions about their preferences of companies in the market. It can be made possible by communicating the financial condition of a company in an accurate manner without leaving room for errors. Not only in preparing accounting records the management also needs to take care of other matters that make a company sensitive to ethical issues. The main thing is the way to communicate the social effects of the firm to stakeholders as different people have different opinions about various products and services a company offers (Baron, 2009).

In the case of British American Tobacco, some people would not consider the goal of the firm as of being socially responsible because of the product it is offering, that is, cigarette, however, the company has other policies such as protecting the environment to show that it is ethical and socially responsible firm (Hollender, et. al., 2010). Therefore, taking care of the needs and preferences o stakeholders is very important and another thing is to communicate the goals of a company in an effective manner. It requires a lot of training on part of the management of the firm so that it could work in a better way toward the betterment of stakeholders and the public in general. It also needs an effective leader who could manage the company keeping in view ethical considerations. Various regulations are imposed on companies by law to analyze the company in terms of its following code of ethics which should be properly monitored to avoid the case of Enron repeating in history again (Kotler and Lee, 2004).