Business Ethics and Corporate Social Responsibility - Assignment Example

?Business Ethics and Corporate Social Responsibility Business Ethics and Corporate Social Responsibility Every company in one way or another has to show unwavering concern for its customers and the society in which it operates in. From concern for the environment to caring about the safety of its customers, businesses invest considerably a lot of resources in these activities. The activities do not necessarily have to bear any substantial benefits in terms of revenue, or increasing sales, or either growing its customer base, but rather, it is a way in which the business gives back to the community. These do not necessarily have to be the areas that the company enjoys high revenues. There is no limit as to the scope of a business’ corporate social responsibility and investment. What is of great debate is the involvement of the business in the corporate social responsibility. Shaw (2011) defines corporate social responsibility as an inbuilt, self-regulation mechanism that allows a business to monitor and ensure and it actively complies with the laws of the country, ethical standards, and the international norms. It stresses the importance of the company taking responsibility for its actions, encouraging the need for positive impact through involvement in the environment, consumers, employees of the business, communities surrounding the business, stakeholders of the company, and the public in general (Schwartz, 2011). Business ethics indicates how businesses examine the ethical problems that arise in the business environment, applying in the aspects of business conduct. Corporate social investment is allocation of a part of a business’ budget into corporate social responsibility activities, which are not necessarily supposed to bring any revenue to the company (Arnold 2002). 2. Wal-mart Stores Company was founded in 1962 by Sam Walton. As of 2012, it is the world’s third largest public corporation, operating chains of department stores and warehouses across the globe. The company owns 8500 stores around the globe in 15 countries that are registered under 15 different names. It has over two million employees, making it the world’s biggest private employer, and it is the world’s most valuable company (Halepete et al., 2006). Although Wal-Mart has been severally accuse of paying its employees’ salaries below the wage rate, taking customers from neighbourhood stores and hurting its neighbouring communities, and its predatory pricing, in the recent past, it has undergone a major transformation and focused to commit itself on progressive policies aimed towards corporate social responsibility. Recently, as a way of showing its corporate responsibility and concern to its customers, decided to reduce unhealthy salt levels, fats and sugars in most of its packaged food. To encourage healthy living through eating and feeding, the company lowered prices on healthy products such as fruits and vegetables (Halepete et al., 2006). Concern for community does not have to take the form of capital investment or resource allocation, it can do this by the product and services it offers to the masses. Secure products that are of high quality and of correct amount indicates a company’s dedication to corporate social responsibility through care and concern for the people (Werther & Chandler, 2011). The company does not only focus on promoting healthy living among its customers, but also has concern for the environment, a plan evident from its energy minimization plan. Its environmental concern measures include efficient use of energy by reducing greenhouse gas emission. This, the company is not shy of spending $500 million a year to increase its fuel efficiency. The pledge by the company’s management is to decrease greenhouse gasses emission by 20% in a period of seven years. It also pledged to reduce its energy use in the stores, by 30% in the same period, cutting its solid waste emission by 25% from the U.S. stores and clubs in a span of three years. It does not only gain good publicity by this move, the company also makes high profits from the project (Halepete et al., 2006). Somers (2001), points out that ethical code of a company is the critical structured examination of how people and institutions ought to behave in the world of business, particularly showing more concern in the examination of the appropriate constrains in pursuing self-interest or profits. A properly formulated code of ethics is in effect a form of legislation binds the company binds the employees with specific consequences in case of violation. Wal-Mart, to strengthen its formal ethical code in its way of doing business has done quite a lot. The company, being a number one private employer company, also targets at being the best service provider to its customers, concerned more on their satisfaction. As a way to show how dedicated the company to the energy regulation in the country, its philanthropic agency donates $2 million to food banks that aim at funding energy-efficiency programs. The formal ethical code requires employees to act and lead always with integrity. The employees should follow the law at all times, and show honesty and fairness in their work at all times. Any information reported by the employees should be truthful, without any manipulation and should not be misrepresented. Workers are required to avoid any conflict of interest with the company outside their working positions. Respect and diversity are encouraged to be upheld by the employees, with the urge of serving all equally without any discrimination. Report of suspected violations on the code of conduct should be done, while in case any violation has been done, the employees should cooperate and allow a private investigation to take place. Any employee who is involved in an ethical investigation is obliged to reveal and report all the required information truthfully. 3. The Company has a tried to balance its internal and external activities. It creates charitable programs and allocates a budget portion to charitable activities and corporate responsibility. By its efforts of trying to reduce the amount of energy it uses in its stores, and seeking a reduction of the healthy foods prices, the company shows its dedication to social corporate responsibility. However, in comparison to the internal activities and its general performance in its internal operations, it has invested minimal on corporate responsibility. It is inactive in social involvement, especially its presence on the ground, just like its market presence. The company could however strategize to invest more in its corporate responsibility as a way of giving back to the community (Halepete et al., 2006). The company is family owned business, with the family of its founder owning 48% of the company. To be successful, the company has incorporated various stakeholders. It values its customers, who are the source of its revenue and a reason for its growth. The company also is involved with the non-governmental organizations NGOs of the countries it operates in. Understanding that the government plays a significant role in its business’ success, Wal-Mart partners with the local governments in its activities. The government passes laws and regulations and the company needs to follow them. It is also involved with faith groups and civic organizations. All these organization are involved in its success. 4. The company currently is running a program that ensures its employees receive high motivation at work. Proper remuneration and good payment packages have made the company’s workforce more productive. It seeks to offer healthy products to its customers and encouraging healthy living through reducing the prices of healthy foods, while still reducing the amount of money spent in purchase of drugs by reducing the prices of its generic medicine. The company is still focused in paying loyalties to the local governments and payment of tax to the authorities. Conclusion A company does not have to undertake corporate social investment for the purpose of generating profits or increasing its revenue, neither to attract customers. The choice of investing in people and the amount to invest largely depends on the company’s policy. No single organization is forced into involvement in corporate social responsibility. However, the benefits accrued from this investment, both direct and indirect cannot be overlooked. Corporate social responsibility, incorporated with strong business ethics gives a company a good public image. People love to be associated with a friendly company that cares about both its customers and non-customers. It is a tool for indirect marketing and promotion, that wins a business extra customers and revenue without having to carry out a marketing and advertising campaign. In other words, it is a costless form of advertising. Incorporating ethics and good corporate responsibility by a company in its business is of great advantage to a company since its output is likely to grow at a huge margin. References Arnold, J. S. (2002). Lessons learned from the world’s best retailers, International Journal of Retail & Distribution Management, 30. Halepete, J., Seschadri., I., & Park, S. (2006). Wal-Mart in India: a success or failure? International Journal of Retail & Distribution Management. Emeraldinsight. Schwartz, M. S. (2011). Corporate social responsibility: An ethical approach, Peterborough, Ont: Broadview Press. Shaw, W. H. (2011). Business Ethics. Boston, MA: Wadsworth/Cengage Learning. Somers, M. J. (2001). Ethical Codes of Conduct and Organizational Context: A Study of the Relationship between Codes of Conduct, Employee Behaviour and Organizational Values, Journal of Business Ethics. Netherlands. Werther, W. B., & Chandler, D. (2011). Strategic corporate social responsibility: Stakeholders in a global environment, Los Angeles: SAGE. Read More