When Corporations Abdicate on Corporate Social Responsibility - Essay Example

PROFIT VERSUS MORALITY: WHEN CORPORATIONS ABDICATE ON CORPORATE SOCIAL RESPONSIBILITY. The major reason why people go into business is to turn a profit. The bigger the profit made, the better it is for the individual as it is seen as a measure of success. However there are universal ethical principles that have to be observed in the running of a business because there is a balance that has to be maintained between the pursuit of profit and the responsibility that the business owner has towards his consumers and his environment as well. There are instances when the quest for profit overcomes the ethical and moral principles of business. It shall be examined how the trouncing of basic business ethics comes about and what its repercussions are to the corporation as well as to the consumers of its products by looking at what happened in the case of Peanut Corporation of America shipping of salmonella tainted peanut products. Introduction Every time consumers walk into a supermarket or retail store they rarely pose to contemplate whether the products they are about to put into their shopping baskets are health hazards. There is an implicit trust that consumers have in the producers putting these products on the shelves, especially those who deal in food products. After all there are bodies such as the Food and Drug Administration (FDA) that are meant to ensure that food products are safe. A corporation is not a thinking, feeling being, hence the corporation in and of itself cannot be termed as having a conscience. However the corporation is made up of individuals who are held responsible for the actions that the corporation takes part in. these individuals are the ones who act as the corporation's conscience because they are the decision makers (Maclagan , 1998). Building a good corporate culture entails in part ensuring that the individuals within a corporation who are responsible for the corporation's actions are morally upright in that they can factor in the human component into the making their decisions (May, cheney & Roper,2007) . Though corporations are out to make profit, it should never be at the expense of their own consumers or the society within which they are based. There are repercussions that come with not observing the fundamental principles of business ethics and corporate social responsibility as will be seen with the case of Peanut Corporation of America. Salmonella in peanut butter; a modern day tale of greed and tragedy There have been eight deaths and now almost six hundred cases of infection related to the salmonella bacteria that has been found in peanut butter as well as other peanut products ranging from roasted peanuts, peanut granules, and dog food. It has become apparent that the contaminated peanut can be traced back to Peanut Corporation of America (PCA). These cases have been reported through forty five American states and across the border in Canada (Steenhuysen, 2009). According to a report complied by the Food and Drug Administration, there were tests run by the Peanut Corporation of America (PCA) that found traces of salmonella while conducting tests in its own labs in Blakely, Georgia. This did not happen once or twice, but an incredible twelve times between 2007 and 2008. Which means that PCA was presented with multiple opportunities to take action on the tainted peanut such as avoid shipping it all together. However, PCA did not opt to take what should have been the most natural and approvable cause of action, they opted to 'lab shop', that is, look for an outside laboratory that would be willing to state that the results for salmonella had come back negative. When the second results came back negative, PCA went ahead and shipped their products, an action which goes against standard protocol that demands that the first tests saying positive are the ones upon which further action is supposed to be decided (Steenhuysen, 2009). Another action that the company should have taken upon discovery of contamination was a thorough cleaning and sterilization of the plant as a cautionary measure. However, this was not done and at the time that the team from the FDA visited the plant in Blakely there was not only salmonella contamination but there was also general unhygienic conditions as well. There were cockroaches found around the areas used for production and packaging (Rabin, 2009). But that is not the worst of it; when the FDA visited the plant in January this year, the investigating team found that there were still traces of salmonella contamination. This means little effort had been made to rectify the situation as it was (Rabin, 2009). Despite all this evidence, Peanut Corporation of America denied the claims that it had purposely done the testing with a lab that would give them negative results and thus the green light to go ahead with the shipping of contaminated peanut products. The corporation claimed that they had in no way tried to manipulate the tests done on the peanut and had believed the product to be completely harmless and safe for human consumption at the time of shipping (Dean, 2009). Does Peanut Corporation of America have a conscience Knowing full well the health implications that shipping the contaminated would have, the Peanut Corporation of America still went ahead and put these products on the market. It was exposing its consumers to great risk with the full knowledge of what the possible consequences would be. But who exactly is to blame Peanut Corporation of America is a titular umbrella under which many people stand; there are people employed at all levels of management, the workers who do the packaging and shipping. Then there are the actual owners of the company. If fingers are to be pointed, who can be singularly held responsible Corporate culture and work ethics Each company or corporation develops a corporate culture which it then instills in its employees. A corporate culture is meant to be used as the guideline for company practices and the response expected of employees in certain contexts. A strong corporate culture builds a sense of cohesion within a company; it means that there is a singularity of purpose. Good corporate culture entails discipline not only in employee to employee relations, but also in the delivery of services and in acting in the interest of the corporation's clients or consumers. Corporate culture can only be effective if it is practiced by all the members of the corporation, be they management or basic employees (Levy, 1993). In the case of a corporation like PCA, one individual having an ethical conscience might not have a major impact in the face of majority opposition. Suppose that even one manager was completely against the shipping of the contaminated peanut products. He strongly voiced his views that the right thing to be done was to go with the first batch of tests and destroy the peanut products. On the other hand, there is a group of his fellow colleagues who feel that the shipments should still be made. Maybe he is threatened with the loss of his job if he keeps opposing other members of the management team. The manager becomes one isolated voice that is drowned out and standing by himself as he is, he loses out. This is why it is important to instill strong values and good work ethics from the top down. Having a good corporate culture does not translate to there being homogenous thought within a company. A corporation should encourage individuality and individual response to situations. Corporate culture means that members within a company share similar fundamental values upon which decision making is based. If fundamental ethical values are shared, it will mean that thinking is streamlined towards achieving the same goal even if different approaches are used (Levy, 1993). When a corporation lays emphasis on its ethical stand, then the chances of it abusing its consumers are lowered because there is this inert sense of what is right and wrong. If the people concerned at Peanut Corporation of America had had such a mindset, then the possible human costs would have simply been too great to even contemplate the action that they took. Making the contaminated shipments would not even have been considered as being an option. Good corporate culture, more so for a corporation that deals in products meant for human consumption such as PCA should also lay emphasis on basics such as hygienic working conditions. Human food should be handled in a very delicate manner that calls for sanitation and the highest level of cleanliness. This is another area in which the PCA plant in Blakely, Georgia because it was in a deplorable state. It is not enough that a company have a set of rules and regulations that define what its policies on ethics are. These ethics have to be put into action before they can count. All employees and management alike have to walk the talk. Having sound ethical practices makes it easier when it comes to making decisions with a moral twist such as the one that faced PCA. A corporation should not be seen as purely being a kind of mechanical structure that churns goods or services. It is important to 'humanize' corporations so that the actions that are undertaken are not so far removed from the human aspect that they do not come to be seen as being inconsequential (Weuste, 1994). It can then be said that PCA had a poor corporate culture. If this were not the case then the contaminated peanut products would never have found their way onto supermarket shelves, nursing homes, schools and to the other places that they supplied. Corporate social responsibility Corporate Social Responsibility (CSR) has also been termed as business virtue and is the newest buzzword on the business scene. CSR involves a company or corporation adopting behaviors and practices which are beneficial to they themselves and to the society around them which they could opt not to do. CSR can take many forms and s usually aligned to see to the needs of the society within which the company is based. For example, if the company is an industrial one, it can be actively involved in environmental activism and conservation. It can help create environmental awareness and push for green living that involves activities such as recycling (Kotler & Lee, 2005). But CSR does not only involve a company participating in community oriented activities that will help build the confidence their clients have in them as well as the company image. Charity has to begin at home; this means that a company can only prove its ethical fiber still having high standards even behind closed doors. It is hypocritical for a company to purport that it takes part in CSR while its internal practices are questionable (Kotler & Lee, 2005). Applying this to the case of PCA, the management should have acted responsibly by maintaining the required standards of hygiene within its factories as well as refraining from shipping peanut butter that it was very well aware had traces of salmonella. What Peanut Corporation of America should have done. It can be firmly said that Peanut Corporation of America were instrumental at digging their own grave. They were presented with multiple opportunities to revert the mess they are in now and in each case chose not to redeem themselves. First and foremost, they knew that a batch of their products was tainted with the salmonella bacteria from the tests conducted within their own labs. This is the stage where they should have exhibited a certain level of moral responsibility and destroying the contaminated product. It is shocking that despite testing positive for salmonella a full dozen times; PCA went 'lab shopping' and finally put the peanut on the market. This move was downright uncouth. Another way in which PCA could have salvaged its reputation would have been by admitting that they were on the wrong; that they were fully responsible for paying heed to the second testing which led to the placing of hazardous products within the reach of their consumers so as to gain public sympathy. It seems PCA were intent on digging a deep grave because in the face of all the evidence present, they still denied that they were a guilty party in the resulting crisis. PCA has been able to undo in a few months the work that has been put into building its public image over the years. The incident has earned the corporation tons of negative publicity. There have been numerous press releases that have recounted the dupe that the company carried out at the expense of its consumers, as well as further investigations that have revealed the negligence that there was towards hygiene at the corporation's plants. PCA has also been at the receiving end of heavy social sanctions. The Food and Drug Administration has classified the recall of PCA's product that date back to July 2007 as being a class one recall which by the standard's of the FDA is the most serious recall. A class one recall is only resorted to when there is a serious hazard to human health. There have been eight deaths and nearly six hundred cases of illness ever since the salmonella alert was raised. Since the recall is still in place and the number of product placed under the recall keep increasing, it means that there may be hundreds more people affected before the situation is fully under control. What makes the situation especially tricky is that peanut paste is used to make other products that a consumer might perceive as having nothing at all to do with peanut such as ice-cream and pet treats (FDA, 2009). PCA now faces possible lawsuits from the families of the affected. Though monetary compensation cannot be adequate for the damage done. The negative long term effects of their actions will cause more damage than the loss of not shipping the tainted products would have in the first place (Young, 2009). Conclusion What happens when a consumer has to second guess whether the products offered on the market are safe or not The consumer trust is utterly destroyed and the faith that they have in the makers of these products is shattered. It is a fragile thread to begin with; an occurrence such as the one with Peanut Corporation of America completely severs this trust. For PCA to rebuild the confidence in their consumers again, it will call for a great deal of humility and time before the stigma that is now blanketing the company fades away. It does not help that the company seems to be completely unapologetic for the deaths and illnesses that can be attributed to its malpractice. The trust that consumers put into the hands of companies such as PCA is one that should be treated with the respect that it deserves. Breeching this trust had negative consequences as Peanut Corporation of America can tell first hand. It puts lives at risks and may even lead to the loss of lives, it results in there being bad press for the affected company and there are severe social sanctions imposed. Companies do not stand alone, they benefit society but they need society as well to flourish. It is a major mistake for a company to think that it can abscond on the ethical responsibilities that it owes society and get away with it- it has to pay the price and the price is high. Bibliography Kotler, Philip & Nancy Lee. Corporate Social Responsibility: Doing the Most Good for your Company and your Cause Milton, Australia: John Wiley and Sons, 2005 Levy, Charles S. Social Work Ethics on the Line New York: Haworth Press, 1993 Maclagan, Patrick. Management and Morality: A Developmental Perspective California: Sage Publications Ltd, 1998 May, Steve K, George Cheney & Juliet Roper. 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January 12, 2009. http://www.cbsnews.com/stories/2009/01/12/health/main4717556.shtmlsource=RSSattr=Health_4717556 Young, Saundra. Food safety progress 'has Plateaued,' CDC Says. April 9, 2009 http://edition.cnn.com/2009/HEALTH/04/09/food.safety.cdc.report/index.html Read More