Contemporary Management Issues - Report Example

Contemporary Management Issues Contemporary Management Issues Introduction Corporate social responsibility incorporates and promotes ethical activities in business oriented organizations. CSR has been adopted by 90% of the most prosperous firms across the world. The incorporation of ethics in business ventures brings about challenges as a result of the intangible state of ethics. Ethics is also bound to bring a lot of controversy in matters of applying ethical behaviors due to the varying degree of the whole aspect and the society’s cultural values. Corporate social responsibility is also an American concept established on American ethical assumptions and cultural values. The paper will deal with CSR theories of corporate social, which include instrumental theories, political theories, integrative theories and ethical theories, with the T mobile car manufacturing company being an example of company that has embraced CSR. The theories are mainly related to social demands, political performance, profits and ethical values (Freeman, 2011). This new discovery has motivated economists who are now thinking of establishing a new theory that can incorporate the four dimensions. The paper will also deal with business ethics. Theories of the Corporate Four - Parts Model of CSR The theories can be classified into four main groups: ethical, legal, economic and philanthropic. The Venn diagram developed by Caroll’s model displays the overlapping of the four theories in the application of CSR. The T mobile company for instance, implements programs, which are economically responsible and beneficial such as transparency in accounting. The corporate social responsibility program does not only develop the company economically but, also assists it to abide to the legal principles of the society where the company operates (Rawls, 2009). A company may also choose to adopt a program, which is made up of economic and ethical dimensions. In CSR programs, the economic and legal dimensions are usually given the phrase “good ethics is good business”. Philanthropy is another theory which incorporates both economic and ethical dimensions of corporate social responsibility. Philanthropy Philanthropy refers to the contribution a company makes to a society, which can either be in a form of in-kind or a financial donation. Acts of philanthropy have become the greatest forms of advertisement in the contemporary world. Philanthropy can be practiced by foundations, individual people and corporations in a society. Some scholars classify philanthropy as an ethical form of utilitarianism. Utilitarianism implies doing the greatest good for the greatest number of people. This implies that when various persons, either corporate or sole, engage in philanthropy, they are doing the greatest good for the greatest number of people. Works of philanthropy such as donating funds to charities or training disadvantaged youths in the society improve the general welfare of the society and reflect the main goal of utilitarianism (Frederickson, 2010). The T mobile company, however, realized that there were some problems with this theory. First, there is no clear guideline on whether the theory is a rule or a responsibility which must adhered to, as a result of its discretionary perception. Secondly, the theory had a lot of theoretical underpinnings. The company applies this principle and has instituted. Theories of the Corporate Four - Parts Model of CSR Instrumental theories In this theory CSR is seen as a tactical tool that can be used to attain economic goals and wealth creation. These theories have been around for a long time and have earned a worldwide acceptance in many business enterprises. The concept of managerial responsibility is kept alive by the goal of achieving wealth creation in a progressive manner. The theory also includes the interests of stakeholders in the profit making process. Research done indicated that to a certain extent the satisfaction of shareholders interest can maximize the profits and the general value of the shareholder. Proper investment in the field of social activities and philanthropy can also improve the profits (Gjerris, 2013). This approach seems to emphasize on the importance of maximizing on the share-holders value. Political theories This approach focuses on the CSR approaches and theories, their connections or interactions with the society and business. It also concentrates on the relationship that exists between the positions of the business, its power and the inherent responsibility. The inherent responsibilities are political analysis and political considerations in the CSR debate. The main approaches characterizing the theories are corporate citizenship and corporate constitutionalism. Corporate constitutionalism concentrates mainly on the powers businesses possess in the society and the impact the powers have on social issues. This now introduces the concept of business powers as a debatable element in CSR. Corporate citizenship is the second aspect that has mainly become famous as result of the crisis of the globalization phenomenon and the welfare state (Mikkelsen, 2008). Technological improvements have reduced costs and the deregulation process has also played a role in situations where certain multinational firms have been noted to have more social and economic power than the government. Integrative theories These theories major on the concept of how businesses integrate social demands. They also urge that, for the business to be successful it must depend on the society for its growth, existence and continuity. Social demands give businesses a form of prestige and legitimacy when the society intermingles with businesses. In this case corporate management should consider integrating social demands such that the firm operates under the social values. In simple terms, the management is not responsible for all the actions done in the industry and all the time (Steib, 2009). Generally, the theories in this group focus on responding, scanning and detecting social demands for the purpose of achieving prestige, social legitimacy and social acceptance. Carroll is the brilliant philosopher believed to have come up with these theories. Ethical theories These theories focus on the ethical requirements and approaches used to build the relationship between the society and the business. They are built on the principles of morality that often seek to investigate the right deeds needed in building an upright society. They can be defined as sophisticated, self –consistent, cogent and theoretical answers to the question of “what is morally right” which is also applicable to a range of other issues. The main theories are contractualism, utilitarianism, and ethical rights. Utilitarianism refers to the ideology that morality is all about doing well and trying as much as possible to prevent bad from happening. Ethical rights on the other had proofs that morality is not just about promoting goodness (Sacconi, 2010). Contractualism which is the last theory is a representation of a full-blooded substituteto both ethical rights and utilitarianism. Evaluation of the four parts model of CSR to the T mobile cars manufacturing company The four part models of CSR are philanthropic, ethical, legal and economic. Economic The model mainly deals with responsibilities bestowed upon the company in providing the society with economic growth. The main purpose of economic CSR is to improve share value or profits, All CSR procedures in the economic model have the responsibility of ensuring profits are maximized for the companies sake. CSR programs in this group have only self –interests. Though, there is no experimental data suggesting prosperous business have an incentive with an economical base to invest in CSR (Rawls, 2009). The value is intangible and non –measurable in nature. Some of the advantages of economical CSR that the T mobile company has been able to enjoy are new market ventures in continents such as Asia and Africa. The company has also had improved reputation and recognition, the company had made a name for itself. Through economical CSR the T mobile company was able to earn a respectableand an increased competitiveness and was once ranked as one of the top performing companies in the USA’s blog magazine. Legal This deals with the responses given by businesses on matters of adhering to legal expectations or mandatory laws especially within the society where it is based. Companies that implement legate CSR processes usually have various motives. They include: decisions to embrace open accounting and transparent practices in order to comply with government regulations, anticipate future laws and evade litigation. The T mobile companyhas a policy which advocates for a zero–tolerance on corruption in task execution is a clear indication of the legitimate domain of CSR (Freeman, 2011).Using legal routes in corporate strategies is not the most advisable approach in CSR as the classical economic theory urges that there should be little government intervention, stipulations and regulations for businesses. Classical economists urge that government regulation interferes with enterprises competitiveness in the global market and the free market itself. Ethical The ethical activities of a firm are those that are beyond legal compliance and profit making. The T mobile company for instance produces cars with the vision that they are going to serve every individual buying it. Within the ethical domain there are three ethical standards namely; deontological, conventional and consequentialist. The conventional ethical standard mainly deals with the moral relativism philosophy. The societal norms are what really determine what the business requires. The only limitation about this standard is that huge differences might arise between societal groups and the societies. The second standard is the consequentialist that focuses on the significance of ethical practices. Consequentialist activities when implemented usually increase the common good and the public welfare (Singer, 2009). The last oneis the deontological standard hitchwhich focuses on the rights, justice and innate morality of ethical activities. The three terms indicate the complexity of ethical dimensions revolving around CSR. Philanthropic The general manager at T Mobiles Company was sure that embracing philanthropy would also lead to integration of economic and ethical dimensions. It is difficult for many people to differentiate between ethical and philanthropic activities both in practice and in theory. At times philanthropy may have economic motives. The terms strategic philanthropy and strategic giving indicate that there is a huge economic motivation that is behind philanthropic activities.In 2009, T mobile established the corporate philanthropy which automatically blurred the mark differentiating economic CSR from ethical CSR (Stieb, 2009). This move was to ensure cost effectiveness in improving the company’s competitive advantage. Philanthropic activities in this company written in the annual reports are analyzed as ethical incentives of CSR. Theories of business ethics They are include, utilitarianism ,contractualism, and ethics of rights. Utilitarianism Utilitarianism is about doing good deeds and preventing bad from happening. Moral agents like companies should enhance the general well-being. The general human well- being should also be taken into account. The concern of distant strangers is as vital as that of an individual’s interest. Many critics agree that this theory is very morally demanding as it rejects the notion that agents can at times act in ways that do not maximize on the well –being. This approach seems to be rather absurd as it seems to accommodate forced labor and discrimination on race and gender bases (Dworkin, 2011). The constraints and limits on good maximization. The theory also does not differentiate between harmful omissions and harmful actions meaning that assisting a needy person might be a bad thing. Contractualism The main concept is that normative relevant propositions or normative truths are referred to as agreements or contracts between concerned agents. Contractualism has a procedural nature and it is therefore had to establish effective sets of normative principles. That can uniquely represent contractualism. Contractualism unlike the utilitarian’s principles cannot allow the sacrifice of the welfare of the few for the purpose of increasing the welfare of the many (Rawls, 2009). The answer is quite simple; many people would not wish to be deprived off their own interests for the sake of other people. The theory protects everyone even the weak minority who are in a bargaining position. Ethics of rights This covers a group of theories that are known as deontological theories which revolve around rights. Ethics of rights proves that morality has more to offer apart from the normal promotion of good. Ethics of rights generally urges people to follow their own interests as long as they do not violate the rights of other people. This theory also concentrates on the issue of common sense morality. The T mobile company for instance encapsulates this notion is some of its most crucial legal and regulatory frameworks which are business related (Freeman, 2011). They also involve the legal codes on property rights and the human rights charters found in the United Nations Global Compact. Application of the theories on the challenges facing the T mobile car manufacturing company Utilitarianism Many firms are faced with challenges of corruption, a problem the T mobile company would agree with. Forced labor and discrimination are also other problems that do not maximize the general well-being. Utilitarian approaches are also useful since they consider everyone’s interest, meaning that even the interests of the distant strangers can be considered to be as important as those living within the local community. A perfect example is the issue on CO2 gas emission in the T mobile companies. Developed European nations have agreed to reduce CO2 for the purpose of safe guarding the interests of the poor African countries. These gas emissions might also have short-term and long-term effects on the general welfare of people 50 years to come (Stieb, 2009). Companies should be able to evaluate the benefits of reducing CO2 emotions and the impact it will have in the near future in both developed and under developed nations. The T mobile company has signed the green habitat contract that will ensure it does not produce large volumes of CO2gas. Contractualism A policy developed under contractualism emphasizes on mutual acceptability, reasonability and reciprocity. An example is when the T mobile company opted to upgrade the means of production and had the option of either choosing a cheap method which would pollute the environment or a costly method would be eco-friendly. Employees, shareholders and customers might adopt the first cost-effective method but if the contractualists think the move is in appropriate then they have the veto power of to insist otherwise (Sacconi, 2010). The same applies to the Co2 emitting phenomenon. Industries should think of the futureconsequences brought about by C02 emitting. Ethics of rights A company like T mobile cannot openly say that it flaunts human rights. Firms do not literally kill, lie or stealtherefore the issue of ethics of rights arises when dealing with issues of firing personnel, pollution and outsmarting opponents. A company should fire workers after considering their interests and in a respectful way. This theory lays a lot of emphasis on the issue of respecting rights. The managerial stuff should have the virtue of being rights-bearers. Corporate governance must carefully scrutinize every decision considering the rights of agents. The supporters of ethics of rights believe that human rights should always be put into consideration before any radical measures are put in place (Scanlon, 2010). Top executives are urged to use ethics of rights theories when handling problems which may occur in firms and their resolutions might need extreme measures. Conclusion The role businesses play in a society and the interpretation of CSR currently seems to have evolved since the 20th century. The arguments about CSR also seem not to change with time. The question, which approaches are used in CSR? Seems to have gained a lot of attention in the literature field. However, the issue of why and when firms should embrace CSR and the consequences of adopting this approach seems unanswered. The fact that CSR interpretation is subjective is not enough reason to evade this debate. Indiscriminate adoption of CSR could be the reason as to why CSR is vulnerable to criticism from critics and sympathizers of the ancient firm model. The management must be clear on the CSR’s position in a corporate objectives function. There should clear communication between owners and stakeholders on whether CSR is just a wealth maximize goal or a CSR is an objective which when pursued brings positive impact to its owners. References Freeman, R. 2011.Stakeholder theory.The state of the art. Cambridge: Cambridge University. Singer, P. 2009.Practical ethics(2nd Ed.). New York: Cambridge University. Scanlon, T.2010.What we owe to each other. Cambridge, MA: The Belknap Press of Harvard University. Dworkin, R. 2011. Rights as trumps.Theories of right. Oxford: Oxford University. Frederickson, C. 2010. The relation between policies concerning corporate social responsibility(CSR) and philosophical moral theories—an empirical investigation. Journal of Business Ethics, 93, 357–371. Gjerris, M.2013.The good, the right, and the fair. London: College Publications. Mikkelsen, O. 2008.A European survey on corporate social responsibility. Kolding: Department of Entrepreneurship and Relation Management, University of Southern Denmark. Stieb, J .2009. Assessing Freeman’s stakeholder theory.Journal of Business Ethics, 87, 401–414. SacconiL. 2010. Corporate social responsibility and corporate governance. 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