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Business ethics and law
Business ethics and law
Business ethics and law
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In a recent time companies are giving more attention to develop a CSR (Corporate Social Responsibility) and mainly their core values. Core values are used in marketing strategies (Berry, 1999) also in customer-retention management in order to create distinctive, long-lasting relationships with customers (Prahald and Ramaswamy, 2004; Normann, 2001) and stakeholders (Pruzan, 1998; Post et a, 2002). The interaction with a stakeholder and concerns a business operation use to understood CSR as the voluntary integration of environmental and social, but it has failed to discuss and analyse CSR explicitly from the perspective of stakeholders (Andriof et al,2002; Post et al,2002). Drawing on freeman (1984, 1994), the adoption of CSR regards we have two strategies: the shareholder strategy and the social-harmony strategy. As former explain in neo-classical economic theory (Friedman, 1970), early social responsibility for company’s in to increase profits but after ethics is impossible to disconnect business and it is also necessary to take all stakeholders into account (Freeman, 1994; Andriof et al, 2002). The stakeholder theory has emerged as a primary organizing framework undergirding all of business ethics over the fifteen year. Recently it is gaining ground as a viable framework in the field of strategy. The ‘theory’ is not so much a formal unified as a broad research tradition that encompasses philosophy, ethics, political theory, economics, law and organizational social science. In its applied form we therefore refer to a ‘stakeholder approach’. The various Social Scientist & Philosophers have converged on stakeholder theory from different points, and for different reasons. The former see a stakeholder focus as a way to foreground the... ... middle of paper ... ...ld thus seem that CSR was initially a shareholder strategy (Roberts, 2001), but that a socially responsive CSR approach will encompass a broader spectrum of issues (Andriof et al. , 2002), including ethical considerations (Roberts, 2003). In “the path to Corporate Responsibility” Zadek (2004) refers to two dimensions of learning regarding CSR – organizational and societal. He argues that organizations’ learning pathway is complex and iterative and follows a learning pathway where the two last stages of five in the learning curve are: “It gives us competitive edge” and “We need to make sure everybody does it” (Zadek, 2004). Zadek (2004) argues that it is easy to start “but making business of a deeper sense of corporate responsibility requires courageous leadership – in particular, civil leadership – in learning, and a grounded process for organizational innovation”.
Evan, William M. and Edward R. Freeman. “A Stakeholder Theory of The Modern Corporation: Kantian Capitalism.” Advanced College Essay: Business and Its Publics. Ed. Pat C. Hoy II and Denice Martone. New York: McGraw-Hill, 2002. 329-38.
It was after 1980, the stakeholder theory emerge and interpret as a challenge and debates either to be injected into company operation and responsible to meet the demands of both shareholders and society (Carroll, 1999). The debates continue but after 2008 financial crisis, the stakeholder theory evolve as a core concern to every firm and it discipline are known as Corporate Social Responsibility (CSR) (Leeson, 2015).
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
Hence, the stakeholders which are described as those who are affected by the organisation performance ,actions and duties and those actions includes employees, clients, local community and investors as well. The theory of stakeholders also suggests that it is the responsibility of firm to make sure no rights of stakeholders are dishonoured and make decisions in the interest of stakeholders which is also the purpose of stakeholder theory to make more profit and balancing it while considering its stakeholders (Freeman 2008 pp. 162-165). In the other words organisation must also operates in a more socially accountable approach by carrying out corporate social responsibility as (CSR) activities.
Stakeholders are those groups or individual in society that have a direct interest in the performance and activities of business. The main stakeholders are employees, shareholders, customers, suppliers, financiers and the local community. Stakeholders may not hold any formal authority over the organization, but theorists such as Professor Charles Handy believe that a firm’s best long-term interests are served by paying close attention to the needs of each of these stakeholders. The modern view is that a firm has responsibilities to all its stakeholders i.e. everyone with a legitimate interest in the company. These include shareholders, competitors, government, employees, directors, distributors, customers, sub-contractors, pressure groups and local community. Although a company’s directors owes a legal duty to the shareholders, they also have moral responsibilities to other stakeholder group’s objectives in their entirely. As a firm can’t meet all stakeholders’ objectives in their entirety, they have to compromise. A company should try to serve the needs of these groups or individuals, but whilst some needs are common, other needs conflict. By the development of this second runway, the public and stakeholders are affected in one or other way and it can be positive and negative.
I appreciated the Stakeholder identification and Salience Theory article most of all. Too often our definition of stakeholder is either too broad or narrow to fit in our analysis for change. The broad definition of stake or stakeholders limits an analysts scope to the individual or group who can and are affected by the achievement of an organization (Mitchell, Agle, Wood, 1997). However, on the narrow side of the definition, a stakeholder analyst can “pigeon hole” their scope to those who are voluntary, those who have invested some form of capital, or involuntary, those who are placed at risk by the organizations activities (Mitchell, Agel, Wood, 1997). Yet, this analysis only scratches the surface of stakeholder identification. This information is enlightening to me as this aids in identifying change agents, champions, and those who would on the guiding coalition or core change team, depending on which change model one uses. Kotter (2007) states that 15 to 50 individual are needed in to for successful transformation to see fruition. This could be a daunting number and without some form of analysis, the selected individuals may not provide a strength enough team for successful transformation. Through the application of Stakeholder Salience Theory, that 15 to 50 individuals across the organization becomes a lot easily to identify in terms of their stake to change. In addition, if Stakeholder Salience Theory were coupled with Kotter’s Eight Step Model, establishing a sense of urgency those who are definitive, dependent, dominate, or dangerous stakeholders will be self-identified in the process (Mitchell, Agel, Wood, 1997).
In recent years, companies are becoming socially responsible and now stakeholders almost expect a company to have CSR policies. Therefore, in twentieth century, corporate social responsibility (CSR) became an important development in public life (Barnett, ND).Corporate social responsibility is defined as “the ways in which an organisation exceeds the minimum obligations to stakeholders specified through regulation and corporate governance” (Johnson, Schools and Whittington, N.D cited in March, 2012). Stakeholders can be defined as “those individuals or groups who depend on the organisation to fulfil their own goals and on whom, in turn, the organisation depends” (Johnson, Schools and Whittington, N.D cited in March, 2012). There are many purposes for this essay, the first purpose is to descried the key principles of corporate social responsibility and explain their importance for stakeholders. Secondly, is to show how far this company follows those principles in order to be accountable to at least three of its stakeholders. In this essay, three stakeholders, environment, customers and employees will be evaluated respectively and the key principles of the stakeholders will be examined.
Evan, W. M., & Freeman, R. E. (1988). A stakeholder theory of the modern corporation: Kantian
I begin this essay by defining CSR, there are many definitions for this term by various different theorists, and EU says that CSR is "A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis." On the other hand, Sloman et al. define it as "The concept in which a firm takes into account is the interests and concerns of a community rather than just its shareholder". Davis and Blomstrom (1966), say it "Refers to a person’s obligation to consider the effects of his decisions and actions on the whole social system". These definitions differ from one another in many ways but they agree that CSR involves taking the environment into account and therefore, one must look take social responsibility.
Stakeholders are individuals, groups, and organisations with the power to influence the delivery of an organisation’s strategy and thus the organisation’s performance and/or a significant interest in an organisation’s strategy and thus the organisation’s performance (Wisniewski, 2001; Ackermann & Eden, 2011). In the context of the draft BSC to be developed, however, the analysis shall focus on relatively aggregated stakeholder groups. Firstly, the aim of this stakeholder analysis is not to pinpoint individual persons as stakeholders who may then be managed more easily than large organisations, but to identify rather broad stakeholder groups interested in Zara’s performance. Secondly, addressing
Business organizations regularly run into demands from various stakeholders groups when conducting day-to-day business. These demands are generated from employees, customers, suppliers, community groups, governments, and shareholders. Thus, according to Goodpaster, any person or group of people that can shape or can be shaped by attainment of the objectives by an organization is considered a stakeholder. Most business organizations recognize and understand their responsibilities to these groups and endeavor to honor and fulfill them. These responsibilities are often communicated to the public by a statement of principles or beliefs. For many business organizations, corporate social responsibility (CSR) has become an essential and integral part of their business. Thus, this paper discusses the two CSR views: the classical view and the stakeholder view. Furthermore, I believe that the stakeholder view has brought ethical concerns to the forefront of businesses, and an argument shall be made that businesses would improve both socially and economically if CSR, guided by God’s love, was integrated into their strategic planning.
Corporate Social Responsibility (CSR) has become a widespread topic in business issues and critical sector. In the fast fast companies are facing fast change and consumers always on the topic of traceability of food chain. Consumers and governmental organizations are increasingly focusing their attention on corporate social responsibility (CSR) practices. CSR research has evolved over the last 50 years (Carroll, 1999). CSR is divided as a four parts pyramid (Carroll, 1991). Firstly, the meaning of economic responsibility, organization should be profitable. Secondly, the legal responsibility is very important for the company to obey the laws of the society. Thirdly, the ethical responsibility of the company to do what is right and philanthropic responsibility of the company is related to social, educational, recreational or cultural. Each factor is very important and there are lively relationship between all and when understanding the meaning it reflected to corporation.(Carroll, 1991).As a foundation, Carroll (1979, 1991) integrated various streams of CSR research to define a model that extended corporate performance beyond traditional economic and legal considerations to include ethical and discretionary responsibilities.
A company has an economic obligation. It must earn a favorable return for its stockholders in the restrictions of the law. But, corporate social responsibility means that organizations have also ethical and societal responsibilities that go past their economic responsibilities. CSR needs organizations to develop their documentations of their responsibilities to include other stakeholders such as workers, customers, suppliers, local societies, state governments, international organizations, etc. Ethics could be seen as a fundamental component of individual and group activities at the heart of organizations’ errands.
If the stakeholder’s voice is ignored, this can lead to disruptive behaviors, which will have a negative effect on the organization. In a for-profit organization, bargaining power is the guiding force at determining how and if a stakeholder’s interest, opinions, and concerns will be addressed. A for-profit organization will base its level of involvement with its stakeholder based on the degree of their salience (Bundy, Shrosphire, and Buchholtz, 2013). The organization will break each stakeholder down into eight categories (Dormant, Discretionary, Demanding, Dominant, Dangerous, Dependent, Definitive, and Non-Stakeholder) and based on the category they fall in, allocate their time (Mitchell, Agle, and Wood, 1999). Based on the categories the stakeholder falls in, the organization will determine what they deem is the appropriate level of engagement to address the stakeholder’s interest, opinions, and
Examples of Stakeholder’s could be: managers, directors, employees etc. It is based upon a conceptual framework approach in which it provides moral and ethical values to a business organisation. When in practice, majority of organisations are mainly going to focus on corporate social responsibility. The reason for this is because CSR is seen to have a big impact on the firm as many people are recognising that there is a increasing number of businesses that are both socially and environmentally friendly. On the other hand, if the government doesn’t intervene with companies in terms of both regulation and legislation, this means that firms will only be concentrating on the accounting figures. If companies are primarily focusing on the accounting figures, this indicates that businesses are not taking in the social and environmental impact of the activities within the organisation. In (Liu, Fellows and Tuuli, 2011), it refers to corporate citizenship values in which it considers and identifies the different demands of the stakeholder groups to see where the overall value of the company comes from taking into thought the environment and