Business Ethics and Social Responsibility and Its Impact on Efficiency - Research Paper Example

Business Ethics and Social Responsibility and Its Impact on Efficiency Executive summary The current report is a research report made by the ABC consultation firm that supports the claim on being more ethical and socially responsible in business, that is, it increases efficiency in the workplace. The report describes how business ethics and social responsibility can be used to increase efficiency, its effect on the reputation of the company and the company's relationships with employees, investors, and customers (Callahan, 2009). As a consultant for this firm, the report made by the ABC consultations will also discusses the basic features that are the most prominent for the organizations, the social responsibility,and how these actually shape the overall strategic planning to eventually achievevalue creation as well as increased profit. The SR is a solid framework to discover and examine the relationships that reside in the business-society, which can be achieved through examining the corporations and their social impact (Carroll, 1991; Wood, 1991).There have been many researches that have encouraged open attitude directly related to the efforts that can generate a new way of thinking for the corporations as well as thebusinessesthat compete in the global society. The first part of thereporthighlights an introduction of the topicthatspecifies the subject as well as the basic purpose of the report. Then stated, are the research findings from the investigation, along with the analysis of the gathered information to finally end with recommendations. The paper therefore examines the features and tactics required by the XYZ Company on how these can be mixed in the practices of the organizations. The report will also highlight how business ethics helps in developing the social capital,as well as the practices that help the organizations sustain in the competitive environment of the global environments. The report ends with the eight basic characteristicsneeded to attain efficiency that is the responsibility of the owners as well as the managers of the XYZ organization. Introduction A good business that is involved in social responsibility and ethical business practices knows how to achieve a winning business of the new century. The practices of these businesses not only work towards providing value to the owners but also add value to the society as a whole. These businesses therefore not only condemn the unethical practices, but also aim to adopt those kinds of behaviors that that provides a positive impact on the stakeholders (The European Commission, Employment and Social Affairs Directorate; Clarson). As a consultant I will therefore identify the ethical practices thatthe XYZ Company must possess in order to examine the affects that ethical business and social responsibility have on the organization and its processes. As a consultation service I carried out a research for the XYZ Company to point out factors that the company must consider, and the kind of changes needed for its processes. It has been established that if an organization wants to adopt a prosperous future, it must agree to consider business ethics that revolve around high standards of conduct,as well as moral values,in order to administerproceedings and choices made in the processes of the business. When organizations follow this approach, they make sure that thesocial issues,which are much apparent and need immediate attention,are catered to along with maintaining a stark view on how the decision making activities affect the surrounding employees, as well as customers. This is so, because most of the successful organizations are now well aware of the fact that the social issues, thus catered to, are at the heart of their responsibility. In this way, their basic responsibility is about ensuring the welfare of the society with the help of philosophies, strategies, processes, and dealings. Therefore, the current report is for the XYZ organization made by the ABC consultations which will establish guidelines to maintain a balance between the art of making profit and the fight towards supporting what is right (Callahan, 2009) as well as identifying the affects that ethical business and social responsibility have on the organization and its processes. The report is for the CEO of the firm so that the firm can realize greater profits. Research findings Business ethics and social responsibility (SR) is one of the most important tools for a company to achieve success. Many researches have claimed that the previously mentioned tools can fabricate advantageous sale levels and talented workforce, enhance the innovation and increase trust levels, along with managing a sound reputation of the company. The current research has also considered SR as well as businessethics, and how they affect the company and its operations. Social responsibility and business ethics are elements that donot function in isolation from the processes of the company; they must be inculcated deep within the company and its operations. From extensive research, using a variety of relevant and credible resources, it was found out that there are three issues that should be considered for the XYZ organization: Efficiency, Reputation and credibility, and Shareholder value; they attract customers and the Human and intellectual capital (Collins, n.d.). 1) Efficiency The company for which the consultation services have been provided is a manufacturing firm of FMCG goods. Therefore, the first and foremost issue that needs to be considered on whom business ethics and social responsibility directly affects is the efficiency of the XYZ organization. The extensive research conducted has been able to identify that efficiency is basically the overall health of the company whereinputs are effectively converted into outputs that is produced, keeping the costs in check, while maintaining quality. In order to achieve efficiency, this objective can be attained through two ways; one is either decreasing the capital or operational costs, and the other is by increasing the productivity of resources so that a greater output is attained in comparison to the inputs made per unit in the operations (Carroll, 1991).In such circumstances, the XYZ company social responsibility to increases efficiency can be maintained in the following ways: Business ethics and social responsibility can be ensured in the XYZ organization through maintaining an atmosphere in the workplace that maintains the positivity and therefore aids the productivity of the employees (Ethics and Social Responsibility). In such a way, the SR and ethics directly affect the operating costs, and therefore reduces it. Other than that, the company can also ensure eco-efficiency so that a balance of social responsibility and efficiency is attained. In such a way, the company can effectively ensure that the environmental concerns are met on one hand, and recycling and energy efficiency that highlight the rethinking resources can be used on the other hand to make sure that efficiency is maintained. 2) Reputation and credibility It has been observed that a large company like the XYZ is an organization that has a name in the market. Like any other big organization, the name this organization in the market has a certain image attached to it and therefore must consider its reputation in the market asone of the crucial factors that need to be considered(Callahan, 2009). The company must be able to consider reputation as one of the most important asset of the company so that it can effectively draw customers, employees, and investors for its advantage as the company maintains a good reputation in the market for attaining greater business opportunities. It has also been established by the research conducted by the ABC consultation firm that the company must understand the importance of transparency as this factor, combined with ethical behavior and stakeholder engagement, bundles up to develop trust to foster a good reputation for the company. With that, the company can easily achieve a license to operate. In order to ensure an ethical environment, the XYZ organization must consider the following levels. Source: Biscaccianti, 2003 3) Shareholder value, attracting customers and the Human and intellectual capital Considering the shareholder value first,it has been concluded through the research that if the performance of a company is responsible, then ethical business and SR is one of the biggest factors in attaining a good stock market standing. With the XYZ Company’s performance depending on that, the organization will be protected from instability as well as the fluctuations that arise in its share prices (Wood, 1991). Currently, those companies that invest heavily in the social responsibility are favored more by the investors. As for human and intellectual capital, the XYZ company must treat this area as one of its important assets too; as in a world of knowledge based competition, this kind of capital can be easily determined through the turnover rate, the recruitment ratio, and the level of innovation that is fostered through training and development. The company therefore following SR will not just attract the employees: It will also be able to enhance the knowledge base of the company and individuals, which the company must also follow It provides good conditions of working that manages to continue developing human capital. Considering customer attraction, when a company produces attractive products, the customers are attracted automatically. It is therefore imperative that the company maintains the impression that focusing on customers is one of its core objectives (Hohnen, 2007). It must therefore be understood that: Attracting new customers is based upon the reputation made Research has shown that customers are more inclined towards those products that follow SR and ethical business practices than the ones who don’t. Conclusion and recommendation Therefore,the ABC consultant service has highlighted eight basic factors that instigate the managers as well as the owners to adopt the Social Responsibility approach in the management practices through its current research. The list of factors include the likes of a good reputation, decreased amount of risks and costs, safety from employees and agents that are unethical, increased productivity and competitiveness, enhanced gateway to capital and credit, and growth for the long term as well as respect. The XYZ Company must therefore make contributions to the social capital present in the community. This step should be taken with establishing a solid business conduct as the basis of its operations. The company must therefore generate a market framework that includes the important individuals from the government, civil society, as well as related businesses along with generating a legal institution. It has also been observed over the years that with the increase in rising standards globally, there has been an increase in the preference for ethics and social responsibility. The company must therefore address the same issue mentioned above and form business alliances with institutions that prefer these clauses. Since the XYZ Company will be judged the same way as other companies, it is important that the company maintains a solid interaction with the community. In order to exhibit the social responsibility of the company, it is necessary that the company mentions the work with the charitable contributions as well as the community service in their reports made annually. It can also be highlighted on the Web site of the companies which would communicate to the visitors the amount of money designated from the annual profit for issues, such as hunger reprieve, learning and youth progression, health and social services, and affordable housing. The focus, therefore, must be to ensure vibrant communities. In order to ensure maintenance of ethical standards inside the organization, an ethical compliance program must be followed that would ensure the ethical practices to be inculcated deep within the DNA of the organization. Source: Callahan, 2009 References Amato, A.D, Henderson, S and Florence, S (2009) Corporate Social Responsibility and Sustainable Business, a Guide to Leadership Tasks and Functions, Center for Creative Leadership Biscaccianti, A (2003) Business ethics and profit - The impact of corporate social responsibility programs on corporate strategic planning, 14 – 27 Callahan, D (2009) Business Ethics and Social Responsibility, chapter 2 Carroll, A.B. (1991) “The pyramid of corporate social responsibility: Toward the moral management Of Organizational Stakeholders”, Business Horizons, 34(4): 39-48 Clarson, M. (n.d.) “The Academy of Business Review”, CSR Main Concepts, 20(1): 92-117 Collins, D, (n.d.) Responsible Management and the Responsible Business Enterprise, chapter 2, Business Ethics “Ethics and Social Responsibility” Retrievedon 1st May, 2012 from: Hohnen, P (2007) “Corporate Social Responsibility: An Implementation Guide for Business”, International Institute for Sustainable Development The European Commission, Employment and Social Affairs Directorate, The business Case for Social Responsibility in small and medium-sized enterprises, Retrievedfrom Wood, D. (1991) “Corporate Social Performance Revisited”, Academy of Management Review, 16(4): 691-718 Read More