Ethics and Corporate Social Responsibility - Essay Example

Ethics and Corporate Social Responsibility Introduction One of a corporation's primary objectives is to operate in a socially responsible manner. Our society gives considerable freedom to organizations, both public and private. In return, organizations are expected to function in a manner consistent with society's interests. Social responsibility refers to the expectation that business firms should act in the public's interest. As a matter of fact, businesses have always been presumed to provide employment for individuals and to offer goods and services for clients. But social responsibility suggests more than that. The case of Levi Strauss shows that corporate social responsibility and ethics help the company to create positive social image and maintain moral and ethical environment which appeals to customers, porters and the society in general. Company Overview and its Codes of Conduct Levi Strauss is a leading apparel manufacturer operating on the market since 1853. Levi Strauss establishes a strict code of ethics which is a statement of corporate values and priorities, system guide for employees and management team. A Code of Ethics is very important in manufacturing industry because it is closely connected with quality of goods, moral and honest decisions (Sajhau 2000). The code of ethics accepted by Levi Strauss consists of two main parts: the Business Partners Terms of Engagement determining relations with partners and potential subcontractors, and Country Assessment Guidelines stipulating the selection of supplier countries. Taking into account the main articles of the Code, it is possible to say that ethics becomes a crucial part guarding and controlling decision-making process in Levi Strauss (Sajhau 2000). This Code shows that ethical principles applied by the company are concerned with truth and justice and include aspects which society expects, e.g. social responsibilities and corporate behavior. Following Frederick (2002) to deal with areas that may be considered technically legal but, in the eyes of American Management, improper or unethical, companies must develop and disseminate explicit policies that are rigidly and expeditiously enforced if broken. They fall into this category, as do areas such as proprietary information, product misrepresentation, disparagement, premature disclosures, acquiring or divulging confidential information, certain gifts and entertainment, and conflicts of interest. Levi Strauss pays a special attention to its public image and the company's reputation (Kolk & Tulder, 2001). Application of Ethical Theories Virtue Ethics According to McIntyre, virtue ethics is based on the idea that a business should follow human virtue principles to behave morally. The case of Levi Strauss shows that the comapny values are core beliefs about what is intrinsically desirable. They undelines the choices made in work decisions just as they underlie the choices made in one's private life. They give rise to ideals that are called ethics or morals. In simple terms it basically mandates employees to treat customers and partners as they themselves would like to be treated: tell the truth, treat others fairly, etc. "We will favor business partners who share our commitment to contribute to improving community conditions" (Levi Strauss & Co n.d.). Following Gillian, virtue ethics ensures stable position of business and its compliance with moral norms and principles. Ethical inquiry requires the decision maker to consider facts in light of important values. The conclusions reached are often stated as judgments, such as "he is a good person"; "bribery is wrong, even though it may be profitable"; "caring about others is the essence of virtue". Levi Strauss follows these guidelines and develop its code of ethics and partnership according to these simple rules and principles. Because many people perceive right and wrong from different angles, the objective of Levi Strauss in the area of ethical and moral standards is to establish what 'is right' (Zablow, 2006). Deontological Ethics Kant believed that in itself there was nothing good except a good will, and only when a person acted from duty did the person's actions have moral worth. He also believed that every rational creature has inherent worth; therefore, a rational person will always act to treat himself and other individuals as ends in himself (Beauchamp & Bowie, 2003). Taking into account the ethical rules and SCR principles it is possible to say that intentionally injuring others would always be wrong because a rational person would never intentionally injure himself. The code stipulates that: "business partners must provide good health and safety conditions, including in residential facilities when provided by the enterprise" (Sajhau 2000). Levi Strauss applies a humanistic dimension to making business decisions and implies the moral obligation to act from a respect for rights and a recognition of responsibility. Thus, this theory does not show any clear way in which to resolve conflicts of duties, and they do not present any overwhelming reason why the prohibition against certain actions should hold without exception (Sethi, 2002). According to Rawls, ethics is based on the notion 'justice as fairness'. In this case, the company's main concerns are: child labor and forced labor, health and safety and non-discrimination, working conditions and general ethical values. They suppose that it is unfair to use childe and prison labor, save operational costs on working conditions and poor health -conditions (Fisher & Lovell 2002). Ethical Learning and Growth Following Covey and Senge, a company is responsible for personal development and training of its employees. Levi Strauss introduces training programs and coaching for different groups of employees to ensure high level of professionalism and personal growth of employees. Some of the major rights areas covered are affirmative action and equal employment, discrimination, sexual harassment, equitable living wages and benefits, equal protection, right to privacy and due process, freedom of speech, job satisfaction, and workplace safety and health (Sims 2003). According to Etzioni and his theory of communitarianism, the society should 'articulate what is good' Levi Strauss does not directly follow these principles, but the company introduces such practices as Sensitization and Labeling campaigns aimed to attract attent6ion of general to poor working conditions. "These campaigns consist of placing a label on TCF articles certifying that they have been manufactured in accordance with acceptable working conditions" (Sajhau 2000). These campaigns appeal to general public who buy products with this label. In part, this is the concept used as a self-donation. On the positive side, communitarianism humanizes business decisions and forces people to accept moral responsibility (Trevio et al 1999). Ethical egoism (Rand) states that a company should do what in its own self-interest. To some extent, Levi Strauss establishes a strong code of ethics for porters and sub-contractors in order to keep its brand image and public loyalty. Also, as a part of ethical egoism, Levi Strauss gives a special attention to employee standards (fare wages, benefits, disciplinary practices) and community involvement. It helps to keep professional employees and sustain a strong corporate image. (Frederick 2002). Utilitarianism and Teleological Ethics Utilitarianism is referred to by some as the consequentialist ethical theory. It is expressed in the form that asserts that people should always act so as to produce the greatest ratio of good to evil for everyone (Beauchamp & Bowie 2003; Trevio et al 1999). Levi Strauss code of conduct reflects utilitarian principles based on the idea that when choosing between two actions, the one that produces the greatest net happiness should be the one chosen. Non-discrimination section states: "each worker should be employed on the basis of their ability to do the job, rather than on the basis of personal characteristics or beliefs" (Sajhau 2000). The main weakness of this concept is that it ignores actions that appear to be wrong in themselves; it espouses the concept that the end justifies the means. In some cases, companies should take into account personal characteristics and beliefs working with diverse target audiences and culturally diverse employees. This principle comes into conflict with that of justice (utilitarianism seems to associate justice with efficiency rather than fair play); and it is extremely difficult to formulate and establish satisfactory rules of application (Karake, 1998; Sethi, 2002). Levi Strauss does not apply teleological approach to its ethics and CSR principles. The only example of this principle is partners agreements and relations. For instance, of partners want to maintain strong relations with Levi Strauss, they should follow its ethical rules and regulations Conclusion Ethical standards and SCR of Levi Strauss is one of the best examples of corporate ethics and CSR which have a positive influence on organizational development and the society. Its Code of Ethics calls explicitly for the maintenance of high standards of 'professionalism'. Avoiding the impairment of one's professional impartiality is the primary issue here. By and large the disclosure of an actual or potential conflict of interest is seen as adequate, rather than an insistence on withdrawal. Strict and clear ethical guidelines help the company to accept ethical decisions and solve complicated problems according to the ethical standards and norms. This is one of the major challenges for professional bodies which want to treat ethics seriously, and especially so in unregulated professions where members' careers are at little threat from such disciplinary processes as exist. Company stakeholders are sure that they are fairly treated and evaluated in terms of generally accepted norms and standards. Without the system of inquiry the Code of Ethics will be inactive and inefficient. Bibliography 1. Beauchamp, T.L., Bowie, N. 2003, Ethical Theory and Business. 7th edition, Upper Saddle River, New Jersy: Pearson Prentice Hall. 2. Frederick, R. (ed.). 2002, A companion to business Ethics. Blackwell Publishers. 3. Fisher, C., Lovell, A. 2002, Business Ethics and Values. FT Prentice Hall. 4. Levi Strauss & Co. Global Sourcing & Operating Guidelines. International Labor Organization. [Online] Available at: http://www.itcilo.it/actrav/actrav-english/telearn/global/ilo/code/levi.htm 5. Karake, Z.A. 1998, An examination of the impact of organizational downsizing and discrimination activities on corporate social responsibility as measured by a company's reputation index. Management Decision. vol. 36, iss. 3, pp. 206 - 216 6. Kolk, A., Tulder, R.V. 2001, Multinationality and Corporate Ethics: Codes of Conduct in the Sporting Goods Industry. Journal of International Business Studies, vol. 32, iss. 2, pp. 267-268. 7. Sims, R.R. 2003, Ethics and Corporate Social Responsibility: Why Giants Fall. Praeger. 8. Trevio, L.K., Weaver, G.R., Gibson, D.G., et al. 1999, Managing ethics and legal compliance: what works and what hurts", California Management Review, vol. 41, iss. 2, pp. 131-151. 9. Sajhau, J.-P. Business ethics in the textile, clothing and footwear (TCF) industries. [Online] Available at: http://www.ilo.org/public/english/dialogue/sector/papers/bzethics/bthics5.htm 10. Sethi, P.S. 2002, Corporate Codes of Conduct and the Success of Globalization. Ethics & International Affairs, vol. 16, iss. 1, p. 89. Read More