Professional Ethics and Social Responsibility - Research Paper Example

Corporate Social Responsibility Credit Union Australia Prof. i. Purpose The purpose of this paper is to show to the board how we can bestserve shareholders by pursuing a strategy of corporate Social Responsibility. We need to spend more time investing in charities and people and organizations that inspire goodwill. This will improve our standing in the market and in the long term increase our profit. ii. Background Many companies these days are pursuing strategies involving Corporate Social Responsibility. Indeed, for several years now Corporate Social Responsibility (CSR) has been in high fashion. Its proponents use this concept—which suggests that corporations have a duty to society to act in ways that benefit everyone and promotes social justice—to try to neuter the capitalist impulses that allow companies to be competitive and make profits. Nevertheless, many companies have done it to try to burnish their reputations in crowded marketplaces. This may well be a good path for us to go down as it will differentiate our brand and let us appeal to urban, educated customers who more and more insist on being ethical consumers. The truth is that there are many ways to go about instilling this kind of thinking within the company. Part of it can be external, with us investing in causes that we think are appropriate. Another way to do it is through values and codes of ethics. Some say that spending money on CSR is a waste and that we should focus on improving profitability and returning money to our shareholders. That idea may be short-sighted. As one leading researcher recently wrote: Opinion and research has been divided regarding the relationship between CSR and financial performance. On the one had, conventional wisdom would assume that CSR has been considered as a zero-sum tradeoff with profitability: more money spent on CSR means less spent on increasing market share, or re-investment. Conversely, academic thought has also suggested that those companies, who appear to be more responsible in the areas of environment and societal behavior, would more attractive for investors, and therefore perform better financially (Cavett-Goodwin 2007). All of these are important considerations as we look at the pluses and minuses of this possible strategy in the next section. We must be mindful that CSR is not zero-sum, but that everyone can benefit from using it. It can do a lot of good for a great many people. iii. Discussion A question that has troubled many people since the dawn of time is how should a person lead a good, ethical life? Furthermore, how should a business behave in an ethical manner? There are as many theories as there are grains of sand on the beach, but a few ideas over the years have been more popular than others. Some people are born into religions where these questions are answered for them. They are able to know from an young age what their god tells them is the right thing to do and what is the wrong thing. Others question their faith and try to revise their morality, bringing in parts of other religions or philosophies. Still others have no real faith and try to build a moral foundation out of their personal experience adding rules and content to it as the years go by. In the world of today we see a new strain of thinking: the professional code of conduct. This is the form of CSR that may be most cost effective to our company. It is easy to impose, sounds good to the public, and costs us little. Plus, in the end it will pay dividends. This code would set out what members can and cannot do. But not all codes are created equal. Some are exhaustive, others merely illustrative. Some make suggests, other state explicitly. We need a code that will show the world that we are very serious about ethics and strive to be the most ethical bank in Australia. In every code of ethics some duties are expressly stated and some are implied. The latter are considered to be more value-laden than simple provisions in a code. This is important to remember. But different sources have different values. One source of professional values and ethics is a code of conduct. Another is the organic behaviour of those who work around you—this is a difficult source to define. This can be good and bad. If you work in a police station where people are corrupt, being ethically pure might not help you if you rely on your corrupt boss to promote you. A third source is what you bring to the table, how you yourself have been raised. You contribute your own ethics and values to the group with which you work. Perhaps at the police station you can set a very high standard as a role model and encourage people to follow your example. The same goes for a bank like ours. Good behaviour will rub off on others. If our customer know we are the most honest bankers in town, they will come to us and trust us with their money. That would be an important advantage. The sad truth is that we need such codes of ethics. Without them each of these organizations would have trouble with their members. Codes of ethics bind together members. They let the cream rise to the top. In todays world ethical relativism dominates so it is important to have codes that are carefully written down and that are exhaustive and detailed. What is ethical relativism? This is a position believes that no universal standard exists to assess the truth of the world around us. Relativists often see morals as applying only within certain cultures. They believe there is no standard on which to base your opinion and they live their life under the precept: To each his own. But that is not a very effective way to operate in a marketplace. If we just let everyone do what they want our civilization would collapse pretty quickly. That is not what we want as a trusted bank (Carroll 2006). Some relativists plainly believe that there is no such thing as truth and that almost anything is permitted by anyone anywhere. In moral relativism there are no absolute, concrete rights and wrongs—there are just things people do and a whole bunch of different opinions about ethics. It is pretty easy to win arguments against ethical relativists by talking about things like the Holocaust—since no one believes this was anything but a terrible event. However, a relativist might just say that the event was bad or immoral in relation to their own moral framework, and not claim objectively wrongness. Coming up with a code of conduct for our bank is a positive idea. As one researcher recently, however, there may be a drawback: A main advantage for a firm developing its own code of conduct is that the code can be tailored to reflect the firm’s circumstances. On the other hand, developing a code of conduct can be a lengthy and expensive process, and the end product may not have the credibility of a third-party code, especially those that are derived from existing international norms. In one sense, firms that agree to comply with third-party codes and standards can “piggy back” on the extensive consultation and development process such initiatives require, and their higher profile (Hohnen 2007, p. 43). We should keep this in mind if we decide to go further. We may want to sign onto an international code of conduct that is well known. In a globalizing world many such codes have more power than mere local ones. As our business expands into Asia, customers may be reassured to know we belong to credible international ethical regimes. This could be useful for drumming up business. However, it is important to be aware of the counterargument that exists to all CSR strategies. There are many unintended consequences for those who push the Corporate Social Responsibility agenda. It does not always lead to the results that we might expect. Let businesses be businesses and let charities be charities. It is simply too confusing and leads to too many unintended consequences for things to be set up in any other manner. The bottom of a company sometimes falls out there: there are no sure things in life. Also, these are dark economic times and it is important for our bank to have as much flexibility as possible as it restructures its debt. Imposing a series of unreasonable burdens and responsibilities on the company goes against capitalist ethos and will deeply harm shareholders and stakeholders in the company. iv. Recommendation(s) It is in our best interests to make the first moves towards CSR. We should not go full steam ahead, but we should start the ball rolling. Our competitors may well be considering similar steps. There is a growing segment of the market that is seeking an ethical dimension to their consumer choices. There is money to be made and customers to be reassured. By beginning the process now, and differentiating our brand, we will be able to secure a larger part of the market and guarantee value for our shareholders. v. Appendices Please see www.iisd.org/pdf/2007/csr_guide.pdf vii. Works consulted Bok, Sissela 1980, Whistleblowing and professional responsibilities. In Ethics teaching in higher education, ed. Daniel Callahan and Sissela Bok, 277-95. New York: Plenum Press. Callahan, Joan C 1994, Professions, institutions, and moral risk. In Professional ethics and social responsibility, ed. Daniel E. Wueste, ch. 12, 243-70. Carroll, A 2006, Business and Society: Ethics and Stakeholder Management, 6th ed. Mason, OH: Thomson/South-Western. Cavett-Goodwin, David 2007, Making the Case for Corporate Social Responsibility. Cultural Shift. December 4,.http://culturalshifts.com/archives/181 De Finance, Joseph 1991, An Ethical Inquiry, Rome, Editrice Pontificia Università Gregoriana. Fombrun, C 2000, "The value to be found in corporate reputation". Financial Times, December 4. Hohnen, Paul 2007, Corporate Social Responsibility: An Implementation Guide for Business International. Institute for Sustainable Development. www.iisd.org/pdf/2007/csr_guide.pdf Matten, D 2003, "Behind the mask: Revealing the true face of corporate citizenship". Journal Business Ethics, Vol.45, No.1, Waddell, S 2000, "New institutions for the practice of corporate citizenship: Historical Intersectoral, and Developmental Perspectives". Business and Society Review, Vol.105. Vendemiati, Aldo 2004, In the First Person, An Outline of General Ethics, Rome, Urbaniana University Press. Read More