10. Essay business ethics
Business ethics
Business ethics can be interpreted in various ways. Therefore, it comes as no surprise that there are many different definitions of business ethics. The most generally acknowledged definition states that business ethics “is a set of corporate values and codes of principles, which may be written or unwritten, by which a company evaluates its actions and business-related decisions.” It should be mentioned here that business ethics is not only relevant to the conduct of the company as a whole, but also to the conduct of individuals within that company. Besides, it applies to all aspects of business conduct.
All decisions made by individuals and companies may be judged as being right or wrong, good
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Stakeholders want to be associated with socially responsible companies, and as such expect them to adhere to a certain standard of behaviour in order to gain their trust. Companies are under strong pressure to behave ethically. They have to earn a ‘license to operate’.
Now that many people start to realise that companies do not operate isolated from the rest of the world, but are a very important and central part of society, they are of the opinion that companies should no longer focus on making profits only, but also consider and take into account the negative impacts of their business-related decisions and activities on the environment. According to a global research conducted by Ipsos MORI in April 2013, 84 percent of the interviewees are of the opinion that companies should do more to contribute to society.
This insight has led to Corporate Social Responsibility becoming increasingly important in our society nowadays. It has more or less become part of business ethics. A socially responsible company should be an ethical company. And an ethical company should be a socially responsible company. Companies that manage to apply business ethics to all aspects of their business conduct can be regarded as well-run businesses, that are strongly committed to good corporate
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“Planet” represents a proactive approach with regard to the natural environment. Companies have to contribute to solving environmental problems on which they have or may have influence. Finally, “Profit” is about creating economic value by producing goods and providing services.
It is very important to keep the Triple Bottom Line in balance. When the focus is on one element only, the other two elements will suffer. For example, when making profit gets too much priority, human beings and the environment will suffer, for instance due to poor working conditions or destruction of nature. However, one should also not forget that profit is an essential part of development, which should not be neglected.
In addition to pursuing optimal balance between the three P’s, companies have a duty to ensure that the current quality of life can be guaranteed for future generations as well. This is emphasized by the fact that sustainability is at the core of Corporate Social
Corporate social responsibility is globally defined as operating a business in a way that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. The concern of CSR has drastically increased over the last two decades. It has enhanced interactions between governments, businesses, society and internationally. In the past, businesses primarily focus themselves with the economic results of their decisions. Now, businesses must also reflect on the legal, ethical, moral and social consequences of their decisions. Corporate Social Responsibility is no longer defined by how much money a company contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives.
Enterprises lay high emphasis on corporate social responsibility instead of being profitable tools. It is essential for all the enterprises to focus on corporate social responsibility which can help the organization creates long-term sustainability for corporate success. More specifically, corporate social responsibility can be referred as a process which is aim to embrace responsibility for the organization’s actions. Moreover, it can have a benefit to the people who are regarded as stakeholders, like employees, consumers and communities, which is based on its activities. Also, Tai (2014) states that corporate social responsibility is considered as corporate citizenship which tends to be an obligation that can protect, foster, and enhance
Within the past few decades, there has a growing focus by firms on examining their social responsibilities. But what the term “social responsibility” means is the subject of wide debate. What are they responsible for, to whom are they being held accountable, and who is calling for them to be responsible? Discussion in various academic studies and literature has centered on the call for companies to carry out actions that might be regarded as socially responsible, all of which have attempted to set some sort of a definition and boundaries to the extent of corporate social responsibility. Because of the nature of business and society, they have become interwoven entities, and with this comes the call for business to make a positive impact on
It will be advantageous for the company if they can project themselves as responsible corporate citizen and an environment friendly company. Social enrichment schemes, recycling schemes and educational funds can be initiated to cater to this cause and long term goal.
An increasing large number of firms are developing mission statements that also attempt to define the social and ethical boundaries of their strategic domain. Some firms are actively pursuing social programs they believe to be intertwined with their economic objectives, while others simply seek to manage their businesses according to the principles of sustainability – meeting humanity’s needs without harming future generations. For example, Unilever has launched a variety of programs to help developing nations wrestle with poverty, water scarcity, and the effects of climate change. The firm’s motives are at least as much economic as moral. As environmental regulations grow stricter around the world, the firm must invest in green technologies or its leadership
Corporate social responsibility and being ethically correct has been becoming a major place and focus for many corporations. They highlight their push to engage responsibly and participate in sustainable business practices to not only put value into their product, but to include the customers in it as well. Companies, unfortunately, do not always hold up to the corporate social responsibility. When a company is at fault of this, it is followed by swift attention by the media and damages the public 's trust and view of the company. Once this happens, the negative impact includes the loss of trust, reputation, satisfaction, and customer loyalty. Once lost, these attributes are extremely difficult to regain.
Obviously, the term business ethics is abstracted from the general word ethics. The term ethics origins from an ancient Greek word—ethikos—that refers to the authority of tradition (Grace, 1998; HARTMANN, 1980). While some defined ethics as a systematic framework to guide ways in which acts are conducted and kinds of favored values (De George, 1999), some viewed it as the tool to examine the moral standards of an individual or the society and determine whether it is reasonable (Velasquez & Velazquez, 2002). Business ethics, apparently, targets at ethics applying to activities in the field of business operation, which is relatively more micro and practical (Gendler, Siegel & Cahn, 2007).
They should also participate in initiatives that benefit the society (Fallon, 2015). The company should manage their business and conduct their efforts to create a positive impact in the society. This business practice is called corporate social responsibility (CSR) (Popa & Salanta, 2014). "Sustainability isn 't just important for people and the planet, but also is vital for business success," said Maw, consumers are more aware about global social issues today. With that being said, the importance of corporate social responsibility in business has more value than before (Fallon, 2015). Human beings are social animal and we cannot live in isolation. We are expected to behave in a manner that is socially and morally acceptable to others. This also applies to in business; corporates are expected to conduct its operation in a manner that fulfills its obligations to the society (Olivia, 2011). Being socially responsible is not only respecting the legal system, but also going beyond them through environmental management, investing in human capital and having a relationship with all stakeholders (Popa & Salanta, 2014). According to Gond and Moon CSR is associated with business responsibility for society not for the wrong reasons such as compensating for a negative outcome, which is using CSR irresponsible by covering up the “doing good” to “doing bad”. Second, business responsibility to
The concept of business ethics refers to a set of guiding principles that encourage individuals in an organization to make decisions based on the company’s stated beliefs and attitudes toward business practices within its industry(Lisa McQuerrey., 2016) . Ethical and Unethical business decisions have long been a predicament encountered by organisations, these practices are concerned with how the companies interact with the global business world, and to their one-on-one dealings with individuals(Garry Crystal,. 2016.) The concept of ethics and social responsibility emerged into the business world in the early 1970s after the end of World War I saw these organisations become more profit driven resulting in negative impacts on society at large.
Since it is a rising issue in worldwide businesses nowadays, the concept of social responsibility (sometimes called corporate social responsibility, abbreviated as CSR, or corporate citizenship, triple-bottom line, social enterprise, and corporate governance, etc.) should be defined precisely. Griffin & Pustay (2013, p. 121) suggested that CSR is “a set of obligations an organization undertakes to protect and enhance the society in which it functions.” In other words, CSR is perceived as a social role that an organization is expected to play or an evaluation standard on how well a company manages their economic, social, and environmental influences. Hence, companies are facing rising demands to exercise their social responsibility toward their stakeholders such as employees, consume...
It is paramount that social and environmental sustainability are achieved as without it not only will businesses develop a poor brand image and reputation with consumers but their profits and bottom line will too suffer. The successful and proficient implementation of the triple bottom line or some other method to manage sustainability is crucial in ensuring complete business success. Being environmentally and socially sustainable can lead to many benefits such as greater profits, positive reputation and brand image, a competitive advantage, increased efficiency and economic sustainability.’ increased awareness of sustainability in various industries and businesses has helped expand the notion of business excellence and has drawn attention to the need to use resources in a socially and environmentally responsible manner.’ (Asif and Searcy 2011). However, it is important to note that it has been argued by some that societies sudden fixation with sustainability has resulted in many serious ethical and practical concerns and issues go unnoticed. (DesJardins 2016). Regardless of how a business goes about achieving sustainability it is crucial that they are simply as sustainable as possible. Since the culmination of their people, profit and planet triple bottom line approach in 2010, Adidas has seen continued success through operations. All this success can be traced back to the importance of sustainability and having a suitable approach to sustainability. Sustainability embodies not only protecting the social and environmental resources on which your business relies but also managing the economic bottom line, thus it is crucial for any business to be sustainable as it guarantees
While the concept of an individual having responsibility is commonly recognized, modern views have lead to the emerging issue of corporate responsibility. Business Directory.com defines corporate social responsibility as, “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.” But such a concept has been much disputed since at least the 1970’s.
Corporate social responsibility, which is an important part of corporate ethic, is expected to be exercised by companies. This concept focuses on the company’s relationship with its stakeholders. There are debates on whether companies should take the responsibilities beyond the target of maximising shareholders ' interests. Some experts argue that businesses do not have responsibilities for stakeholders other than stockholders; they believe “a corporation’s responsibility is to make as much money for the stockholders as possible” .However, some researchers find that companies which take their responsibilities can earn more profits than other companies. The views of companies in the eyes of stakeholders, especially customers, can be strong motivations for the companies to fulfil their social roles. The theory of corporate social responsibility is a constrain...
Carroll, A. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, 34(4), 39-48.
While there is no universal definition of corporate social responsibility (CSR) due to differences in values and understanding, it is agreed upon that firms implementing CSR must meet the economic, legal and ethical expectations that any society has of the firm at a given point in time (Saeidi et al., 2015, p. 342). In simple terms, corporate social responsibility refers to the efforts of a firm to conform to business practices that result in a long-term economic, societal, and environmental well-being (Du, Bhattacharya & Sen, 2011, p. 1528). It emphasizes on the notion of ‘doing well by doing good’ by stressing upon the idea that profit is only a byproduct of business and not the end goal and that the purpose of business organizations go beyond