The Main Theoretical and Practical Issues - Essay Example

THE MAIN THEORETICAL AND PRACTICAL ISSUES AND THEIR IMPACT ON THE WORKING PLACE OF BUSINESS, GOVERNMENT OR CIVIL 18TH SEPTEMBER, 2008 Corporate social responsibility defines the impact of the company’s action on society. A responsible individual, generally the manager is supposed to consider his acts in terms of a whole social system, and re system. From the 1950’s till the current date CSR has gained significant acceptance and has widened up its horizon including additional components apart from responsibility, responsiveness and performance. Almost a decade ago most of the companies viewed business ethics only in terms of internal rules and regulations with proper implications of legal standards however the current issue revolves around the customer whose confidence and commitment towards the companies differentiates the firm from its competitors. The current demands of the market compel the corporations to improvise their business practices focusing more on the legal and ethical behaviour. The demand for corporate social responsibility is on the rise; hence firms and individuals both are accountable for their actions. Criticism of business on grounds of increased concern for social environment has led to a change in the social contract. Corporate social responsibility aims to build up a more satisfied society However to pursue CSR in firms is a big challenge in itself as firstly the companies need to take CSR and its sustainability as a core component of their business practices. Secondly the consumers and the financial institutions have a deep impact on the business, restricting market towards a more sustainable direction and thirdly the government intervention that has a significant role to play in the kinds of decisions that businesses make. It is regarded by many people that the political framework is imperfect, which in turn gives rise to emerging concerns like issues of production conditions in the developing countries including child labor, violation of human rights, financial scandals, violation and deprivement of employment rights, environmental destruction etc. such apprehensions have been related to the different areas of business ethics like Corporate Social Responsibility (CSR), Corporate Citizenship (CC) or Corporate Governance (CG) . The main issues that one comes across while studying the concept of CSR are protection and conservation of ecology and environment, health and well-being, diversity and human rights, and communities. It is been observed that the advancement in the information technology and privatization are augmenting the production scales but at the same time they are also widening the gap between the rich and the poor, a shift and prevalence of a different of values and culture has resulted in a decline of trust in government and business, and an increase of faith in nongovernmental organizations (NGOs). High-profile scandals, corruption, red tapism, bureaucracy and an apparent lack of accountability are some of the issues which have raised multiple questions in regard to the authority vested in organizations (Valor C, 2005). As per the survey conducted in the Western Nations , it was found that NGO’s are trusted two to one to “do the right thing” in comparison to the government, media or such enterprises. NGO’s scored more in trust, confidence and welfare subjects to government corporations. Such alterations in the values and thoughts of the people have made the issues of social responsibility less trivial (Grayson D, Hodges A, 2002) Corporate citizenship and social responsibility reflect the actual problems faced by the businesses due to the emphasis laid on moral legitimation. The corporate issues awaken the ultimate consumers about all sorts of immoral behaviour encountered in the businesses. Ethical values and monetary gains are contradictory in nature. From an ethical point of view social values result in no harm situation but corporate profit does not concur with the statement The social obligation of companies includes a perfect blend of ethical, ecological and social values. The civil commitment of companies is the demand of the day. Economic welfare is supposed to be taken as a prime consideration rather than secondary to corporate profits. In fact the corporate citizenship inculcates a civil tradition of liberal civil duties and republican civil rights. (Beschorner T, 2008). The contemporary world links the corporate citizenship to the concept of globalization which has opened the barriers to success and gains in the form of liberalization of world trade, privatization, advancement in information technology, reduction in costs, emergence of a number of MNC’ etc but on the other hand are also responsible for the deterioration and detrimentation of the economy (Baue,B, 2007). One side of the coin displays stimulated economic, social and environmental growth in developing countries through increased employment opportunities, industrial development whereas other side of the coin shows exploitation of natural resources and, weak regulatory interventions (Pederson R, Huniche M, 2006). There are ten main principles of corporate citizenship laid down by David Birch, 2008 which can certainly facilitate in dealing with the emerging issues of corporate citizenship and social responsibility. These principle comprise of Extending Corporate Responsibilities Beyond Core Business help to tackle the issue of integrity in corporate activities, harmony with the environment, respect for human beings and harmony with society because this principle if followed helps in development of a culture where each and every individual in a particular business, irrespective of role and status makes it a personal responsibility to exert beyond their restricted specific job profile. For instance, a role model company which exhibits such kind of extended voluntary responsibility if Pfizer’s company whose core business is pharmaceuticals but simultaneously believes in practicing the ethical norms also. Interactive and not just ‘Transactive’ Communication with Community principles helps to combat the issue of ability to define and articulate the communities and the interaction with the identified communities. Understanding the diversity of the communities is well exhibited by the Fuji Films Corporation. The Importance of Local Knowledge helps to deal with the issue of corporate citizenship – driven, and managed - by business interaction with its local communities beyond traditional business and customer roles. Reducing the Divide between Private and Public Cultures delves deeply into the culture engrossing wider perspectives of social and environmental consequences of the firm’s actions. Going Beyond Compliance aids in handling the issues of customer and clients awareness, dissatisfactions and discernments. It helps in enhancing the business values of a firm. Empowerment helps to keep pace with the increasing business awareness to encourage dignity and develop self respect among co-workers, staff and management irrespective of their designation, status and position in the business. Issues of equity, non discrimination and diversified workforce could be better handled by empowering the people involved in the business. Change through Education is the only weapon to develop creative and innovative thinking process in the business. This principle helps to deal with the issue of corporate encouragement healthy employee and customer relationship. Think ethically is another tool to justify corporate citizenship. Business ethics is generally related to the ethics of business practices but consideration to intangibles objects would also be taken care off. Hence apart from thinking ethically, one needs to operate ethically as well. Ownership can be created for new developments in education, policies, practices that will encourage soaring corporate citizenship and finally creating new values ensures that each and every individual contributes in the success and growth of the business. Ulrich Beck highlights the important issues in work relations and business culture relating to the creation of rules for implementing diversity. He talks about the heart of CSR current debates that is incorporating a caring business to be a part of caring society. To be a part of caring society the focus has to shift from financial performance to people economics. Values such as trust, honesty, integrity, compassion, and sharing have to be imbibed in the work culture, stressing on the emotional aspect of the employees also. No business can expand until unless a person is self committed to his work, and self dedication, ethics moral can be inflicted only when attributes of trust, faith and belongingness are extended by the organization for the development of a social responsibility among the employees. In the 21st century, the companies are increasing their operations on a global scale undertaking the dimensions of sustainability including social, environmental and economic sustainability derived from corporate social responsibility, the concept of corporate citizenship has emerged as a major issue having great impact on the society and the environment. The people and organizations on the forefront of the discussions include NGO’s, voluntary organizations, and ethicists etc who are calling on businesses to be good citizens. A responsible corporate citizenship impresses an ethical behavior upon companies to succeed in future from a long term perspective (Toma G S, 2008). It is of utmost importance of a company to find better environmental and social performance data for effective internal management. Initiatives taken by companies to implement the ISO 14031 guidelines on environmental performance help in realizing sustainability that makes easier for more companies to mark a significant progress (Bennett M, James P, 1999). Endearment issue deals with the vesting of power that lies between the NGO, businesses and the political authorities (Henderson C, 2000, Bendell, Jem (2000). The corporate citizenship and social responsibility becomes a challenge when the advancement of technology, growth of cyberspace makes the control of information difficult. When accountability is not certain, then even the responsibility slackens (Baumgartner, M, 2000) New conflicts are drawn in regard to risk avoidance when corporate citizenship is in debate. Capitalist organizations are more exposed to risk. Beck focuses on how the work society is turning into a risk society? He further incorporates a “Vision of a World Citizen Society which can only be accomplished when a post national civil society is formulated (Beck U, 2000). There is very important role of the citizen CEO’s and other eminent leaders to develop a redefined and reformed business environment which breaks through both the values and value barriers (Elkington, John (2001). New forms of capitalization are requiring dominating the global economy. As stakeholder relationships and business in society have become significant, new approach including the stakeholder’s viewpoint needs to be incorporated (Andriof, J, Waddock, S, Husted B and R, Sutherland S, 2003). Understanding and integrating stakeholder needs are key issues of corporate citizenship (Bannerjee S B, 2005) Bovens has highlighted on fraud, malpractices, pollution and other illegal and wrong doings that occur in the businesses (Waddock S). To resolve such issues interdisciplinary approach needs to be undertaken comprising of fields such as law, organizational behavior, ethics, corporate governance, philosophy, psychology and other areas of management. It is seen that complexities in businesses makes it difficult to attribute responsibility to the organization as a whole and even if attributions to individuals are made, obstacles to accepting full responsibility proliferate (Boven M, 1998). Resolving conflicts of corporate citizenship and social responsibility include training via a systematic and appropriate structure supporting and enforcing people to behave more "morally". Boven suggests that the problems are aggravated by the increase in the organizational size, thus task break up into smaller units should be carried out for effective results (Micelle P M, 1999). Organizational change for corporate sustainability helps to resolve global ethical issues by applying a unified approach (Dunphy, D, Benveniste, Jodie, Griffiths, Andrew & Sutton, Philip (2000) Pharmaceutical companies’ business initiative of corporate citizenship and corporate social responsibility is taken as a strategic method to communicate and demonstrate their commitment to their employees and to their targeted consumer audiences (Sones, Morgan, 2007). Corporate citizenship is also one of the major issues highlighting donor agenda (Pederson R, Huniche M, 2006). Alignment of caring with core life-style decisions, Increased empathy for the troubles of others, Increased information and knowledge are few solutions suggested by Simon Zadek · Niels Hojensgard · Peter Raynard to combat the issues. Another concern is when companies claim to promote CSR and be committed to Sustainable Development but actually engage themselves in illegal and undesired business activities. For instance McDonald's Corporation's association with Ronald McDonald House was taken as a step towards CSR but at the same time many health issues, salary issues, working condition issues were raised against Mc Donald. It can be concluded that there is no single way to measure and evaluate corporate social responsibility; according to Whitehouse L, 2003, corporate citizenship should be viewed, not as a replacement for corporate social responsibility, but as a complement to it. In the last decade, numerous international organizations, bilateral donor agencies and NGOs have been continuously promoting corporate citizenship via a wide range of programmes such as investment support programmes, business-to-business programmes etc. it is stated after analyzing the studies conducted by many researches that Governments, local authorities and civil society also have an important role to play in scaling up value chain innovations BIBLIOGRAPHY Andriof, J, Waddock, S, Husted B and R, Sutherland S (eds) (2003) Unfolding Stake holder Thinking 2- Relationships, Communication, Reporting & Performance, Greenleaf Publishing, UK Andriof, Jorg, Waddock, Sandra, Husted Bryan and Rahman, Sutherland Sandra (eds) (2002) Unfolding Stakeholder Thinking – Theory, Responsibility and Engagement, Greenleaf Publishing, UK Banerjee, Subhabrata Bobby, The Good, the Bad and the Ugly, n: APROS 11: Asia-Pacific Researchers in Organization Studies: 11th International Colloquium, Melbourne, Australia, 4-7 December 2005; pages: 435-449. Melbourne: Asia-Pacific Researchers in Organization Studies, 2006. Beck, Ulrich (2001) The Brave New World of Work, Blackwell Publishers Ltd, UK, The, Oxford: Polity Press, , 202 pp. Birch D, Ten Principles of Corporate Citizenship, Social Responsibility Journal, 4/1-2, 2008, 129-135 Beschorner T, 2008. June 23rd, 2008, On Corporate Social Responsibility, Corporate Citizenship, Corporate Governance and other evocative concepts, http://csr-news.net/main/2008/06/23/on-corporate-social-responsibility-corporate-citizenship-corporate-governance-and-other-evocative-concepts%E2%80%A6/ Bill Baue, February 20, 2007, Business for Social Responsibility Fuses the Theoretical and Practical to Promote Sustainability, Sustainability Investment News, http://www.socialfunds.com/news/article.cgi/2231.html Bendell, Jem, Oct 2000, Terms of Endearment – Business, NGOs and Sustainable Development, Greenleaf Publishing, UK, http://www.greenleaf-publishing.com/productdetail.kmod?productid=23 Bovens, Mark (1998) The Quest for Responsibility – Accountability and Citizenship in Complex Organisations, Cambridge University Press, UK Bennett M, James P, Klinkers l, June 1999, Sustainable Measures: Evaluation and Reporting of Environmental and Social Performance, http://www.duurzaam-ondernemen.nl/greenleaf/susmeas.htm Dunphy, D, Benveniste, Jodie, Griffiths, Andrew & Sutton, Philip (2000) Sustainability – The corporate challenge of the 21st Century, Allen & Unwin, Sydney Elkington, John (2001) The Chrysalis Economy, Capstone, Oxford Grayson, David and Hodges, Adrian (2002) Everybody’s Business – Managing risks and opportunities in today’s global society, DK Publishing Inc., New York Miceli P M, Dec 1999, The Quest for Responsibility: Accountability and Citizenship in Complex Organisations, http://findarticles.com/p/articles/mi_m4035/is_/ai_59359414 Sones, Morgan. Aug 08, 2007, Corporate Citizenship and Social Responsibility: How Effective are Pharmaceutical Companies Communicating These Business Initiatives?,  Paper presented at the annual meeting of the Association for Education in Journalism and Mass Communication, The Renaissance, Washington, DC, http://www.allacademic.com/meta/p203442_index.html Simon Zadek, Niels Hojensgard, Peter Ray, Perspectives on the New Economy of Corporate Citizenship, 1st ed, Published by The Copenhagen Centre, Copenhagen 2001 Toma G S, 2008, SOCIAL RESPONSIBILITY AND CORPORATE CITIZENSHIP IN THE 21th CENTURY, The AMFITEATRU ECONOMIC journal. , Vol 10, Issue 23rd Feb, P 80-85, http://www.biblioteca.ase.ro/downres.php?raf=1233 Whitehouse L, 2003, Corporate Social Responsibility, Corporate Citizenship and the Global Compact, Global Social Policy, Vol. 3, No. 3, 299-318 (2003),, http://www.gaif08.org/content/csr_brief.pdf Waddock S, Parallel Universes:Companies, Academics, and the Progress of Corporate Citizenship , Business and Society Review, Vol. 109, pp. 5-42, March 2004 Valor C, 2005 , Corporate Social Responsibility and Corporate Citizenship: Towards Corporate Accountability, Business and Society Review, Vol. 110, pp. 191-212, June 2005 Read More

The corporate issues awaken the ultimate consumers about all sorts of immoral behaviour encountered in the businesses. Ethical values and monetary gains are contradictory in nature. From an ethical point of view social values result in no harm situation but corporate profit does not concur with the statement The social obligation of companies includes a perfect blend of ethical, ecological and social values. The civil commitment of companies is the demand of the day. Economic welfare is supposed to be taken as a prime consideration rather than secondary to corporate profits.

In fact the corporate citizenship inculcates a civil tradition of liberal civil duties and republican civil rights. (Beschorner T, 2008). The contemporary world links the corporate citizenship to the concept of globalization which has opened the barriers to success and gains in the form of liberalization of world trade, privatization, advancement in information technology, reduction in costs, emergence of a number of MNC’ etc but on the other hand are also responsible for the deterioration and detrimentation of the economy (Baue,B, 2007).

One side of the coin displays stimulated economic, social and environmental growth in developing countries through increased employment opportunities, industrial development whereas other side of the coin shows exploitation of natural resources and, weak regulatory interventions (Pederson R, Huniche M, 2006). There are ten main principles of corporate citizenship laid down by David Birch, 2008 which can certainly facilitate in dealing with the emerging issues of corporate citizenship and social responsibility.

These principle comprise of Extending Corporate Responsibilities Beyond Core Business help to tackle the issue of integrity in corporate activities, harmony with the environment, respect for human beings and harmony with society because this principle if followed helps in development of a culture where each and every individual in a particular business, irrespective of role and status makes it a personal responsibility to exert beyond their restricted specific job profile. For instance, a role model company which exhibits such kind of extended voluntary responsibility if Pfizer’s company whose core business is pharmaceuticals but simultaneously believes in practicing the ethical norms also.

Interactive and not just ‘Transactive’ Communication with Community principles helps to combat the issue of ability to define and articulate the communities and the interaction with the identified communities. Understanding the diversity of the communities is well exhibited by the Fuji Films Corporation. The Importance of Local Knowledge helps to deal with the issue of corporate citizenship – driven, and managed - by business interaction with its local communities beyond traditional business and customer roles.

Reducing the Divide between Private and Public Cultures delves deeply into the culture engrossing wider perspectives of social and environmental consequences of the firm’s actions. Going Beyond Compliance aids in handling the issues of customer and clients awareness, dissatisfactions and discernments. It helps in enhancing the business values of a firm. Empowerment helps to keep pace with the increasing business awareness to encourage dignity and develop self respect among co-workers, staff and management irrespective of their designation, status and position in the business.

Issues of equity, non discrimination and diversified workforce could be better handled by empowering the people involved in the business. Change through Education is the only weapon to develop creative and innovative thinking process in the business. This principle helps to deal with the issue of corporate encouragement healthy employee and customer relationship. Think ethically is another tool to justify corporate citizenship. Business ethics is generally related to the ethics of business practices but consideration to intangibles objects would also be taken care off.

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