Responsible Management - Essay Example

Responsible Management Why has ‘doing the right thing’ – socially, economically and environmentally – become a complex personal and corporate business decision in the twenty first century? In the last few years, there has been a growing trend of conducting ethical practices within and outside organizations which are beneficial to the community and its people. In order to demonstrate that corporations are engaged in proper and ethical business activities, the concept of Corporate Social Responsibility (CST) was introduced. This concept provided guidance on ensuring compliance with the ethical code of conduct and to fulfill their role as a responsible body on a national level (Cragg, 2005). According to Hahn (2009), the management of an organization is entrusted with the power to responsibly manage the economic resources of the society which includes both human and natural resources. It is important for every organization to consider the social, economic and environmental systems in which it is operating. In the long-run it is the corporations that develop a long-term vision for their business along with fulfilling their responsibilities towards the society which are able to sustain their development in the economy (Albareda, 2008; Crane et al., 2008). Due consideration of the environment in which the organization is operating will help to ensure that all the functions of the organization are conducted in the right perspective and in an ethical manner. When an organization accepts its involvement in controlling the economic resources of the society, the management will automatically be accountable to the society about the assets used. This level of accountability needs to be conducted on fair grounds and in a sincere manner by the organization. Even in cases where the organization faces losses, it should still maintain its accountability and not indulge in any false practices or excuses. In order to help managements fulfill their social responsibilities several models have been proposed and one such concept is the ‘Triple Bottom Line’ (TBL) (Park & Stoel, 2005). The introduction of this concept acted as a vehicle for proper and clear reporting of the corporation’s environmental, economic and social performance (Ketola, 2009). Performances related to the environment and social concerns can be monitored with the help of this concept. TBL has grown in popularity as it assists an organization in determining the extent to which it is successfully meeting its responsibilities towards the community. The concept of TBL has given a direction to the management in developing the goals and objectives of the organization according to its business environment. By following the guidelines specified in the TBL, many organizations have been successful in “doing the right things” in today’s competitive and tough business environment (Buchanan, 2008). Once the organizations begin to follow a certain set of guidelines, the goals and objectives of the organization can be easily achieved. The decision making process is one of the vital aspects for each organization and for individuals and there are several factors that influence this imperative process. Decisions are made by considering all viable options and deciding which option is best for a given situation. The top management needs to review the resources at hand, the financial stability of the firm, and future strategic initiatives of the organization before making a decision. Out of the above factors, the financial stability of the firm is the most concerning factor for an organization which has be given due consideration prior to the decision making process (Crane et al., 2008). In order to execute its objectives in a proper manner an organization has to ensure that all the resources are utilized effectively without causing any harm to the environment and also provide a supportive and conducive working environment to its employees (Berenbeim, 2006; Colney & Williams, 2005). The organization should be concerned about the environment in which it is operating as it could have an impact on the image of the organization among its shareholders, stakeholders and valuable customers. In addition to the management, the employees of an organization also have to incorporate ethical behavior both within and outside the organization as they are accountable to comply with the company’s code of conduct. Outside the company’s premises, they also have a moral duty of being a sensible and responsible citizen. When an individual demonstrates such ethical behavior both within and outside the organization it reflects the professional attitude in their personality (Crane et al., 2008). Employees who possess such an ethical behavior help organizations to build a loyal and dedicated workforce which in turn would contribute to the overall performance of the workforce. Ethics is often referred to as doing the right thing as it allows the organization to differentiate between what is right and wrong and undertake activities through which they can make an acceptable contribution to the society. Organizations that are built on ethical principles and values will create a healthy image in the minds of their consumers and this will add towards the success and profitability of the firm (Berenbeim, 2006). With time and like how corporations have learnt their responsibilities, individuals too have realized that they also have certain obligations towards the society that they live in, their environment and the economy. They are constantly working to ensure compliance with the ethical code of conduct at their workplace and in the society as well. According to Shaw (2009) ethics is a set of moral values that are developed by corporations and individuals on the basis of their experiences, virtues and principles. Whenever a decision is made, it is greatly influenced by a certain set of perceptions that are either self-created or influenced by external factors such as media (Schwartz, 2012). When organizations decide to fulfill their societal responsibilities, there are some areas of concern which tend to impact their decision making process. As a result of globalization, organizations have become more conscious about their decisions as they have to demonstrate that they conduct their business activities within the framework of ethical corporate principles such as Fair Trade, ISO 9001, UN Global Compact Principles, MSU policy and etc. (Bhattacharya, Korshun & Sen, 2005). Organizations in a way are compelled by certain international bodies and policies which also tend to have a major influence in their decision making process. When conducting CSR activities, the corporate values emphasized in them should be part of the business operations so that it becomes evident to the employees that the management is fostering integrity and fairness (Ketola, 2009). When employees come to terms with the fact that the organization is operating strictly under an ethical code of conduct they would in turn be more careful in demonstrating an ethical behavior at their workplace. One of the crucial decisions that organizations have to make is about maintaining the environmental sustainability which should be made a part of the business strategy. When organizations work upon developing their long term strategies, they need to consider the environmental well-being and design their strategies accordingly. For instance, decisions such as whether a company should open a new plant near the city or at a distant place; should it use diesel or petrol to run vehicles for transportation and should it ensure compliance with laws related to employees’ rights or allow some leverage in leaving some laws aside and many more (Crane et al., 2008; Shaw, 2009). In case an organizations plant facility would release pollutants the company should ensure that the plant is located far away from residential areas and when similar plants are to be built in future they should look for land which is away from the residential areas so that the residents do not have to suffer any type of pollution. As most of the organizations decisions are driven by economic factors such as culture, profit making, competitive advantage, and compliance issues, a corporation has to ensure that it makes its final decision within the ethical boundaries that seem to be best for the sustainability of its business operations (Carrasco & Yakvolev, 2007). In some cases competition and the need to raise their profits may create a compulsion to ignore the basic rights and responsibilities of the company towards their community or employees. However, organizations should avoid such forces for the best interest of all concerned. Taking unethical decisions may seem attractive in the initial stages, but in the long run it may result in serious consequences for the organization especially in terms of its reputation and image in the society. Thus no matter how attractive the profits are, firms should not resort to any unethical actions. CSR should be properly implemented within the organization so that everything is done in right way. However, it has been argued that many organizations are using CSR activities to make money and that there are hidden benefits associated with these activities (Shank, Manullang & Hill, 2005). While it is a fact that all organizations are working for monetary benefits these financial gains should not be obtained by violating the rights of anyone within the organization or in the community. From an individual’s point of view, the decision making process is highly impacted by the management’s viewpoint about the importance of ethical and personal values, perception towards environmental issues and extent of understanding about ethics and how it can help in the development of moral framework (Schwartz, 2012). The decision making process is influenced by various factors that may differ from one individual to another. For instance, how a person responds to a religious problem is based on his or her own perception which tends to influence his/her opinion about the people involved and in their decisions (Hahn, 2009). Similarly, people who are more environmentally friendly would prefer to buy brands such as The Body Shop, Shell, Colgate-Palmolive etc. as these companies have demonstrated from their CSR activities that they attach high values to their ethical responsibilities and are eco-friendly (McMannus, 2008). Now-a-days, every individual ensures that he/she makes his final decision in accordance with the ethical practices in order to ensure that they are doing the right thing. Every organization has to ensure the same by allocating the resources in a highly efficient manner that would help to conserve the environment and also ensure that valuable contribution is made towards the society as a whole. Organizations operating at a global level also need to ensure that the community is benefitted through their business activities by offering more jobs to people and thereby improving the employment rate and the economy of the country. As corporations and individuals are an integral part of the society, it is mandatory for them to engage in activities that will make worthwhile additions and will prove to be beneficial for everyone. Prior to making a decision the organization or an individual should analyze the various factors that are likely to influence their final decision as they have a responsibility to strike a balance between the economic, environmental and social aspects of the TBL. References Albareda L., 2008. Corporate responsibility, governance and accountability: from self-regulation to co-regulation. Corporate Governance, 8(4), pp. 430-439. Berenbeim, R.E., 2006. Business Ethics and Corporate Social Responsibility. Vital Speeches of the Day, 72(16/17), pp. 501-504. Bhattacharya, C., Korshun, D. and Sen, S., 2009. Strengthening Stakeholder–Company relationships through mutually beneficial Corporate Social Responsibility initiatives. Journal of Business Ethics, 85(2), pp. 257-272. Buchanan, M., 2008. Triple Bottom Line. [Online] Available at: [Accessed November 29, 2012] Carrasco, I. and Yakvoleva, N., 2007. Corporate Social Responsibility, Values, and Cooperation. 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