How Corporate Social Responsibility Effects Ethics in Todays Modern Consumer Society - Research Paper Example

How CSR Effects Ethics in Today’s Modern Consumer Society Table of Contents Page 0 Introduction ............................................................................................ 3 2.0 Aims ............................................................................................ 3 3.0 Objectives ............................................................................................ 4 4.0 Justification ............................................................................................ 5 5.0 Methodology ............................................................................................ 6 6.0 Literature Review .................................................................... 7 6.1 History of CSR .................................................................... 7 6.2 Business Ethics and Social Responsibility ................................. 10 7.0 Analysis of Data ................................................................................. 11 8.0 Recommendations ................................................................................ 15 9.0 Conclusion ............................................................................................ 17 10.0 List of References ...................................................................................... 18 1.0 Introduction Corporate social responsibility (CSR) programs are important aspects in the development of an organizations brand image. In addition corporate social responsibility is a key marketing incentive in the modern world of business. One of the main aims that an organization should have in its CSR functions should be the enhancement of business ethics. CSR is one of the ways through which a company can return back to the society since its profits are derived from the facilities availed by that same society. Recently, CSR programs have been used more as marketing tools instead of being applied as ways of enhancement of the companys ethical responsibilities. This kind of operation has been likened with green washing which occurs when organizations pretend to be dealing in environmental friendly ways while that is indeed far from the fact (Bowyer 2013, p. 1). Corporate social responsibility is an important part of business which, if well practised, is of great benefit to the society. CSR may take various forms including but not limited to donations made to the less fortunate in the society, enhancement of environmental conservation, saving of energy among other philanthropic acts. It is important for the various managers in the diverse business organizations in the economy to engage in CSR so as to act as good examples for their peers all over the world. It would utterly inappropriate for an organization engage in CSR activities and then go ahead to use for marketing or other activities aimed at enhancing business gains. This is totally unethical; this dissertation is aimed at looking into corporate social responsibility and its effect on the society that we live in. 2.0 Aims This dissertation aims at analysing CSR and its role particularly in the modern business world. Various comparisons may be emerge in this paper looking at CSR today as compared to CSR as it were several years back. The paper aims at explaining how CSR effects ethics in the business world and how this functionality may have evolved over the years. CSR may have fallen to the winds of globalization which push many organizations into various modes of operation which may have occasioned loss of track on the intended purpose of CSR. Business operations have a profound impact on the developments in the world that we live in (Dimitriades 2007, par. 1). Therefore, it follows that CSR also has a great impact on the continuity of business in the world that we live in. This has its impact on the situation of the society. Proper CSR practices have immense impact on the society. The more ethical the CSR is, the better its effects on the societal values. Customers have a stake in the various businesses in the world (Dimitriades 2007, par. 1). This makes CSR quite influential in the fate of the business in terms of prosperity or the lack of it. It therefore follows that businesses and organizations, in general, put immense concentration on CSR. While at it, some organization may lose track of the fact that CSR may be synonymous with ethics. Some business make their CSR activities look like marketing avenues which is quite unethical. This dissertation aims at elucidating on the various effects that CSR has on ethics in the world of business. Companies operating in the 21st century may fall prey to the intense competition in the globalized economy and forget that there is need for ethical operations as far as CSR initiatives are concerned. 3.0 Objectives The objectives of this dissertation are primarily anchored on the notion of ethics in relation to CSR and how CSR effects ethics and ethical operations in various organizations. Some of the objectives are: To define corporate social responsibility; To relate ethics and corporate social responsibility; To examine the effect of corporate social behavior on customer behaviours in the various areas of business; To examine the effect of cause-related marketing and its place in corporate social responsibility; To examine the aspect of over exploitation of CSR by companies that over emphasize their social responsibility; To examine the role of CSR in the modern world of business and its relevance in light of improper CSR practices. Various practices have been highlighted in various forums whereby it has been noted that the CSR concept is prone to abuse and misuse. It therefore raise the question as to the purpose of CSR in effecting ethics in todays modern consumer society. In 2008, Walmart was running a campaign dubbed Love, Earth in which it would only sell items with diamonds, silver or gold from mines that had attained standards of sustainability established by Walmart itself (Kaur 2013, 13). It may beg the question as to how it may be ascertained that the gold, silver or diamonds sold were actually from the said mines. This may further be fuelled by the curiosity arising from the fact that the sustainability test was set by Walmart, in the first place. It is therefore important to take note of the practices being embarked upon by various organization in the pretext of CSR. 4.0 Justification The realm of corporate social responsibility keeps growing as the society keeps evolving in terms of expectations. Various organizations have been able to enhance the notion of corporate responsibility in the various ways that they interact with the communities which they deal with. There are some that have continued giving genuine contributions through their social responsibility programs. However, it could not escape the authors attention that various companies have continued engaging in CSR as a matter of requirement. Some organizations are committed to giving back to the society in a half hearted way. These are the organizations that have continually contributed to the erosion of the ethical purpose of corporate social responsibility. Various institutions have been praised for their immense contribution to enhancement of social welfare. Some of these organizations include Hewlett-Packard, Fuji Xerox and Pfizer Pharmaceutical which have received the Corporate Conscience Award at different times (Schwartz and Gibb 1999, p. 67). There has been development of the global Social Accountability 8000 standard to encourage more and more organizations to take part in activities that enhance the welfare of the communities in which in they operate (Dimitriades 2007, par. 18). These standards may be of considerable help in the enhancement of CSR. However, it should not be forgotten that social responsibility is supposed to be a voluntary act. The SA-8000 standard is use to evaluate various organizations on their commitment to social responsibility. Various aspects are considered including but not limited to health and safety, child labour, human rights (including the right to association and collective bargaining), disciplinary proceedings and practices as well as compensation and non-discrimination (Dimitriades 2007, par. 20). 5.0 Methodology This dissertation applies the quantitative as well as the qualitative mode of collection of data. Primary research work was conducted by way of interviewing industry professionals who were quite helpful through their insight and opinions on corporate social responsibility and the pertinent ethical issues. The quantitative methods applied included the collection of opinions from various stakeholders in organizations that run CSR campaigns. The use of quantitative research was deemed important due to its capability of availing quality first hand information (Saunders, et al. 2009, p. 45). Quantitative research methods are first-rate due the way in which they enhance reaching out to viable sources of information. In the formulation of this dissertation several interviews were conducted; some of the responses obtained were quality opinion shapers which The qualitative methodologies applied include reference from electronically obtained resources. The internet was quite resourceful in the acquisition of relevant information. A variety of resourceful peer reviewed journals, business websites, business reports and books were checked out. These secondary data sources revealed information that had gathered in previous studies on corporate social responsibility. This dissertation samples some of the ideas from secondary sources since they were quite relevant in the discussions on CSR which were held during the various interviews conducted by the author. Environmental matters came up in most of the oral interviews conducted. Ecological matters form much of the corporate social debates going on in the world of business today. It could not escape the attention of the author to note down CSR concepts mentioned during the oral interviews which were later on found in various secondary sources. 6.0 Literature Review 6.1 History of CSR Corporate social responsibility (CSR), in its strict sense, has a key aim of taking responsibility for the activities of an organization (Kaur 2013, p. 13). The firms actions are deemed to have caused depletion of the societys resources; this requires the organization to engage in reparation for its actions so as to compensate the community. The organization is supposed to ensure that it makes a positive contribution to the society, the surroundings, the consumers, the workers and to all other stakeholders. It is a notion whereby organizations voluntarily incorporate societal and ecological concerns into their commercial processes as well as in their relations with stakeholders (Weinstein 2013, p. 3). The CSR idea has been applied to a number of news with many companies encouraging CSR initiatives all over the world. In the 1950s CSR was primarily a way through which organizations took responsibility and did philanthropic acts for the benefit of the society at large (Thapar 2013, p. 3). The CSR concept became more relevant to businesses in the 1980s whereby organizations felt the need to be more responsive to societal problems (Moura-Leite and Padgett 2011, p. 536). The CSR movement was then geared to emancipating the society from the many struggles that it would go through. The concept grew into a more pronounced cultural undertaking in many companies in the 1990s (Moura-Leite and Padgett 2011, p. 536).. In the 1st decade of the 21st century, CSR had evolved from what it used to be earlier on into a strategic issue (Ibid). Businesses would employ CSR to enhance their various strategic operations. Many businesses have been engaged in causes in which they have managed to advertise themselves in various ways; this has eroded the original CSR concept. Today, CSR has become a commercially motivated exercise begging the question as to the ethical nature of commercial CSR. Aspect such as cause related marketing may be viewed as illegitimate CSR concerns since they are contributions to worthy causes; though fettered with the strings attached. The organizations that embark on cause related marketing may come across as non genuine organizations since they give with one hand and take back whatever they give with the other hand. Other organizations put a lot of their assets into CSR aimed at enhancing their competitive edge over their customers. It is almost sacrilege for a company to set up a website and fail to mention the CSR initiatives that it has in place. A firm that omits such details may suffer untold losses for failing to show how it has contributed to the societys well being. Corporate organizations, societies, consumer groups and governmental departments alike are now at the forefront in ensuring that their CSR initiatives are made known using any available communication channel (Kaur 2013, p. 13). An informal conversation with an employee at HSBC, a banking institution, led to my information that HSBC had instituted a carbon neutral program that was aimed at indicating the banks commitment to environmental conservation and sustainable growth. Many other corporate entities, including McDonalds and Hilton, have put in place measure to market their CSR initiatives. This dissertation is sceptical of such practices; they are actions that reduce the ethical standing that CSR has, thus reducing CSR to the stature of any other marketing formula. The drift of CSR from the pure form of philanthropy it had in the 1950s and 1980s into its commercial nature has its effect on ethics. However, there may be genuine reasons as to why CSR has changed. In the 21st century, environmental degradation has been rife (Thapar 2013, p. 6). This has resulted into organizations being put under pressure to change their way of operations and adopt better production processes so as to reduce environmental degradation. There has also been widespread campaigns on the need to stop depletion of the environment. This may have contributed to the high level of efforts embarked upon by various organizations seeking to ensure that everyone sees their dedication to environmental conservation. In the same breath, there has been increased pressure to show humane behaviour and concern for the less fortunate in the society. This brought the need to have various welfare incentives aimed at helping the disadvantaged members of the society. All these developments have led to the reshaping of the CSR concept such that it has now been incorporated into the day to day operations of various organizations. Managers have also become very aggressive in terms of enhancing the competitive edge of their departments which has resulted in the use of CSR initiatives as bait for customers. Philanthropy has become very rare in the economically challenging modern times. Therefore, the slightest opportunity of engaging in charity is publicised in as many ways as possible. This kind of CSR operation is now eroding the ethical values associated with CSR since aspects of dishonesty may be rife. This has resulted in the reduction of the effect of CSR in effecting ethics in the global society that we live in. 6.2 Business Ethics and Social Responsibility The two concepts are used interchangeably on many occasions despite their separate meanings. Various organizational setups are designed in such a way that interaction with the outside world is always possible. Businesses have the sole aim of making revenues and profits for the benefit of their owners. This truth is undeniable; therefore it may be an uphill task trying to convince an intelligent man about the possibility of a business-minded person engaging in CSR for the sole purpose of philanthropy and giving back to the society. This is particularly so in the contemporary globalized world in which business competition is very stiff. Businesses will exploit all possible channels in abid to enhance their profitability. This has made it more and more difficult for CSR to effect ethics in the business world in as much as most CSR initiatives are designed to save face and lure unsuspecting customers to buy from the perceived generous business organization. In the past businesses used to operate in such a way that giving back to the society was a fulfilling act for the business manager. In the world we live in today, it is the opposite since most businesses are hell bent on exploiting all possible avenues including corporate social responsibility platforms. Ethics as a standard of morality is therefore getting more and more depleted in light of emerging business practices that aim at enhancing profits at all costs. Corporate social responsibility is the way in which firms are expected to maximize on the good impact that they make on the society while minimizing on the bad impacts that their businesses may have on the society (Ferrell and Fraedrich 1997). Social responsibility and business ethics require various organizations to respond effectively to the heightening consumer empowerment. Modern day customers have continued to yield lots of power in terms of their capability to boycott various businesses which may not be well inclined to the demands of social responsibility. There is a paradigm shift from what used to the traditional way of doing business, the making and selling of assorted products (Dimitriades 2007, par. 17). Businesses have to respond effectively to the increasing demands for social responsibility. These demands are unique in that they can no longer be satisfied by the old notion of philanthropy which used to be viewed as the ultimate act of CSR. Modern times require businesses to always be on the lookout so as to sense and respond to the various calls for social responsibility. The folks in the sense-and respond surroundings have the power to ask for accountability. Businesses now have the duty to spend their resources, especially time, so as to produce tailored results in line with the adaptive industry design. Businesses are now becoming more and more sense and response based. This has been necessitated by the constant need to be service-oriented, ethical and process-focused (Tapscott, Lowy and Ticoll 1998, p. 37). There has been increased emphasis on the value of services offered to customers and the society in general. It is assumed that the asociety is the base upon which customers are found. Therefore it is increasingly necessary to appease the society so as to safegurad the customer base (Daft 2001, p. 320). 7.0 Analysis of Data This dissertation is based on data obtained from interviews in which CSR was investigated with the aim of arriving at a reliable source of information of CSR and its connection to ethics in different organizations. One of the interviews was with Lisa Wade from Burger King who was of the opinion that CSR has evolved in various ways. It has now become necessary to be as innovative as possible in the facilitation of CSR. Lisa was of the opinion that CSR has now evolved from the old notion of mere philanthropy. It has now grown into a fully-fledged business concept with some organizations now having staff dedicated to CSR activities. Lisa took note of the innovativeness that Burger King has employed in some of its branches in management of CSR. According to Lisa, the concept has now evolved from the traditional notion of contributing to non-profit humanitarian organizations. It had also bypassed the traditional practice of supporting various causes. CSR had now taken on some new vistas including the better treatment of employees and conservation of resources. Compliance with laws advocating for more ethical business practices was also a new form of CSR. Lisa was in agreement with the notion that various businesses were quite unethical leading to the need for laws to govern their commitment to CSR and ethical business practices, for instance reduction of pollution. Lisa noted that profit making and improvement of various companies share value would be enough distractions from ethical business practices. This erosion of business ethics had resulted in government interference to facilitate adherence to ethical corporate behaviour (Carroll 1989, p. 23). This in itself was an indicator that CSR has evolved in leaps in bounds from what it used to be in the 1950s. An interview with Davis Blake, a self-employed businessman from Ohio, on the various business development pitting CSR brought the author to the realization that CSR has now grown to new levels. With it having legal undertones as well as economic and ethical bearings, CSR has now grown into an area that was more than just social philanthropy. Mr. Davis pointed out the issue of pollution which is a major headache in most developed countries cities as well as in other places all around the world. Businesses have the role of producing the goods that the economy required to continues sustenance. It was also true that businesses have their obligations towards the investors who put their money into the various business activities that organizations engage in for profit purposes. In as much as businesses have the social responsibility towards the entire community, their responsibility in terms of enhancement of the investors assets is also real. The requirement of legal compliance is only but the bare minimum responsibility required. Therefore, Blakes sentiments were in agreement with Lisas in that modern day businesses have a lot of responsibilities to take care of. Their ethical responsibility ranks high after the legal responsibilities that various jurisdictions impose on organizations operating within their borders. Internationals law has also evolved and businesses are expected to respect various international legal requirements particularly on protection of the environment. Businesses have responsibilities towards their competitors as well especially in the form of competition and anti-trust laws. Protection of human rights is also a high ranking responsibility that organizations must observe mostly in relation to the treatment that they extend to their employees whether contractually or permanently employed. Based on the identified trends in the modern economy it is therefore important to seek answers for the question as to how CSR effects business in the modern days globalized economy. The author of this dissertation managed to interview one business man by the name Davis Blake on how businesses are enhancing their CSR initiatives. Blake cited the heightened need of government regulation for businesses that emit various pollutants. Blake cited several organizations whose operations were of immense pollutant capacity. He was of the opinion that CSR is supposed to be a continuous exercise and not a one-off event of philanthropy accompanied by unnecessary pomp and colour. It emerged that Blakes point was valid taking note of the various massive pollution activities which have taken root in various parts of the world. It was noted that the developed countries were the cause of the larger portion of pollution in the world due to their numerous manufacturing plants. The developed countries owed the developing countries a lot in terms of duty of care in as much as they continued their pollutant industrial operations. Blake was categorical in stating that it would be a fallacy in stating that periodical CSR sessions were enough in alleviating the damage that various business occasion to the rest of humankind as a result of their actions. CSR should be a continuous operation aimed at ensuring that the most responsible members of the business fraternity make up for their actions. This dissertation concurs with Blakes sentiments; CSR and its ethical undertones are supposed to be continuous processes as compared to the events that many businesses hold once in a while in the pretext of corporate social responsibility. CSR in the modern day, therefore, has various characteristics as indicated in the diagram below (Crane, Matten and Spence 2008, p. 3): Corporate social responsibility is now a concept that goes past mere generosity and philanthropy (Crane, Matten and Spence 2008, p. 3). In as much as CSR advocates for voluntary commitment to the well being of the community at large, CSR has the aspect of managing externalities. It also has the orientation towards the consideration of various stakeholders. The concepts social alignment if also key, organizations remained indebted to the societies in which they operate for the space that they are allowed for the running of their day to day operations. Businesses also have economic roles to play within the jurisdictions in which they are situated. Business practices and values remain critical for a business to be considered fit enough to be allowed to continue operating in the jurisdiction in which it is situated. Corporate organizations are liable to cooperate within the various ethical and legal definitions existing in the social contract. The social contract requires various persons to submit themselves to the authority of the legal regime existing within the jurisdiction in which they operate. In as much as law and morality are two distinct concepts in the social contract, the ethical measure of CSR is in itself a calling that is of a great deal significance almost equal to that of the law (Shaw and Barry 1995, p. 36). 8.0 Recommendations The global economies are now advancing from the agriculture based economies to more advanced kinds of economies. The most important type of capital in the globalized world is continually ceasing from being land in its ordinary sense. Businesses are now utilizing technological capital to succeed in their various operations. Information and its dissemination is continually becoming the modern day sort of fixed capital as contrasted to land which has traditionally stood as the main form of capital for utilization by the various businesses (Aldrich 1999). The use of information and information technology is continually separating the best businesses from the rest of the crowd. This may then hold the meaning that modern day CSR should move with the times. Businesses should give CSR incentives that are in tandem with the advancements in the field of technology. Information technology based CSR incentives should be used by the various businesses that use the societys space for their own success. It businesses should give CSR incentives that are in line with the benefits that the businesses gain from the use of the resources that the community has to offer. In as much as IT businesses offer end products of unprecedented quality in the market, they should also avail CSR incentives of high value for the benefit of the community in which they thrive. It would be unethical for such businesses to offer CSR incentives that are of a derisory nature as compared to the benefits that they reap from the resources availed by the communities of the world. CSR is no longer what is used to be in the 1950s, which is an undeniable fact. There is also need for innovativeness as much as CSR is concerned. It is no longer enough to donate to charities and claim that that is adequate execution of due CSR. For instance, organizations may apply new tactics to enhance social benefits both for themselves and the global community at large. Businesses that save energy benefit by way of cutting of costs as well as reduction of costs related to power use. In extension, such businesses benefit the society even though in an indirect way. The businesses enhance sustainable development which is as vital as any other form of CSR, for instance donations to charities. This dissertation is of the opinion that CSR initiatives can also be innovative. A discussion with one member of staff at Burger King, namely Lisa Wade, brought to the attention of the author that Burger King had opened an energy efficient restaurant in Germany. The restaurant were reduced by 45% per annum; this is one innovative way through which businesses may give back to the society. Other innovative ways may include the purchase of inventory from the local producers. The purchase of raw materials from the local communities is a great way of enhancing CSR (Lelic 2006, par. 4). It is quite helpful since it assists the local industries, for instance agriculture. In as much as the innovative way of enhancing CSR does not fool the society, it is advisable and ethical as any other form of CSR. Innovativeness in CSR is a laudable act due to its effect in the society. It enhances productivity which helps the society grow. It also enhances sustainability as is the case at the Crown Plaza London where an environmental policy is in place to enhance innovative CSR (Kaur 2013, 14). 9.0 Conclusion This dissertation elucidates on the various aspects of corporate social responsibility with emphasis on the importance of this concept in its contribution to the welfare of the society. It has been noted how CSR effects ethics in the operations within the corporate world. It would be important that business behaviour has a huge impact on the development of the society in which we live. It should not escape the minds of business managers that any profits that may be derived from business operations are attributable to the society. With this realization it would not be necessary to feel forced into acting in ethical ways for the benefit of the society. CSR is one way of ensuring that business growth occurs in a sustainable way. Depletion of the same resources that guarantee business profits is a way through which businesses shoot themselves in the foot. Failure by business people and other organizations to give back to the society would only be a case of cutting your nose to spite your face. Governments must also endeavour to give back to the society since it is this same society that guarantees government revenues through the various taxation policies. Therefore, having said all that has been said in this dissertation, it is highly essential for all sorts of organizations to ensure that they give back to the society without expecting any paybacks. Expectation of favourable results out of CSR activities is one thing that ails the global community. Businesses must come to the realization that CSR is their way of showing gratitude for the many amenities that mother nature and father time have to offer. 10.0 List of References Bowyer, Michael. "How important is Corporate Social Responsibility for brand image?" Dissertation, 2013: 1-32. Crane, A., D. Matten, and L. J. Spence. Corporate Social Responsibility: Reading and Cases in Global Context. London: Routledge, 2008. Daft, R. Organization Theory and Design. Cincinnati, Ohio: South Western, 2001. Dimitriades, Zoe S. Business Ethics and Corporate Social Responsibility in the e-Economy: A Commentary. November 12, 2007. http://ejbo.jyu.fi/articles/0701_1.html (accessed April 26, 2014). Kaur, Parminder. "Corporate Social Responsibility’s Effect On Consumer Buying In The Restaurant Industry Of India." International Journal of Business and Management Invention, www.ijbmi.org Volume 2, Issue 12ǁ, 2013: 13-21. Lelic, Sarah. CSR: What does it mean for hospitality? . 2006. http://www.caterersearch.com/Articles/13/10/2011/308213/CSR-What-does-it-mean- for hospitality.htm> (accessed April 27, 2014). Moura-Leite, Rosamaria C., and Robert C. Padgett. "Historical background of corporate social responsibility." Social Responsibility, 7 (4), 2011: 528-539. Saunders, Mark, Philip Adrian, Thornhill Adrian, and Lewis Adrian. Research Methods for Business Students. Essex: Pearson Education Limited, 2009. Schwartz, P., and B Gibb. When Good Companies Do Bad Things: Responsibility and Risk in an Age of Globalization. N.Y.: John Wiley & Sons., 1999. Shaw, W. H., and V. B. Barry. Moral Issues in Business. Belmond, California: Wadsworth Publishing Company, 1995. Tapscott, D., A. Lowy, and D. Ticoll. Blueprint to the Digital Economy. N.Y.: John Wiley & Sons, 1998. Thapar, Ann. "How important is Corporate Social Responsibility for brand image?" Current Themes in Business: Dissertation, 2013: 1-32. Weinstein, Ariel. "How does CSR affect consumer perceptions towards business ethics in modern society?" Current Themes In Business, 2013: 1-21. Read More