Ethics and Corporate Social Responsibility in an Organization
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Abstract
Ethics and corporate social responsibility in an organization entail being aware of the values of society. Corporate social responsibility is reflected in an organization through their management. Organizations look at ethical aspects of their operations and incorporate social concerns into business strategies. Ethical codes responsible for corporate organizational growth are a set of rules concerning the responsibility an organization has to its shareholders as well as society. Corporate social responsibility is defined as an organization conducting business operations in a sustainable and ethical way. There are differences, however, when it comes to a sincere application of corporate social responsibility and its application of a public relations tool. Corporate social responsibility benefits an organization because it boosts its public image. Ethics and corporate social responsibility in an organization are important in the world we live in because it is good for the environment. Overall, corporate social responsibility has a growing importance in today’s world.
4.0 Analysis and Discussion. 5
1.0 Introduction
Ethics and corporate social responsibility for the backbone of any given organization. The company’s level of adherence to these aspects determines the levels of success that the company will enjoy. Several aspects of corporate social responsibility that organizations need to adhere to facilitate the smooth flow of operations. This paper aims to define ethics and corporate social responsibility and determine their role in the success of an organization. It also analyzes the different aspects of corporate social responsibility as well as how these aspects need integration to bring out an overall positive outcome.
The study utilized secondary data from articles and journals. The use of secondary data helps save time, and researchers can look for specific information. The research question is as follows. What are the different aspects of ethics and corporate social responsibility to an organization, and how do they determine the levels of success that a given organization will enjoy?
2.0 Literature Review
Schooley (2019) notes that ethics and corporate social responsibility involve recognizing and embracing societal values. Companies can achieve this feat by putting the well-being of their employees first. Schooley (2019) says that companies have a degree of responsibility towards their employees to provide a safe working environment for them to work in and ensure that they receive a decent salary. Any organization with employees has to adhere to the labour laws in place and cut off any organizations that do not adhere to these regulations (Keeping, 2012). An example of this act is the refusal to purchase products from companies that utilize child labor to run their operations. Schooley (2019) identifies an example of corporate social responsibility as the act of an organization to practice proper waste disposal to prevent environmental pollution.
Addah et al. (2016) identify the impact of corporate social responsibility on a company’s employees. Adherence to corporate social responsibility attracts potential employees because they know that the company can guarantee their well-being. On the other hand, companies that do not adhere to the code of ethics are more likely to lose their top employees because of their unfavorable practices. Singh and Singh (2013), point out the downsides of not adhering to corporate social responsibility. They indicate that some of these negative outcomes include reduced productivity of the company’s employees, negative perception of the company by the surrounding community, and, eventually, collapsing of the company due to a combination of these negative outcomes.
The University of Washington (2020), notes that more than 90% of top companies all over the world release corporate social responsibility reports annually. These reports are essential because they inform consumers of the efforts made by companies in adhering to the code of ethics. Indeed, corporate social responsibility is beneficial to customers, employees, and the environment (Keeping, 2012).
4.0 Analysis and Discussion
Corporate social responsibility is a vital concept adopted by any business that aims at achieving success, either long-term or short-term. This concept aims at assimilating different aspects of the work environment, namely, economic, social, and environmental considerations. At the same time, the concept needs the incorporation of human rights into the operations of the business or organization. Any company that strictly adheres to all these recommendations will enjoy extended periods of success. The company’s success depends on adherence to these aspects. Otherwise, neglecting any of the aspects will result in adverse consequences for the company.
The economic aspect of corporate social responsibility involves the willing participation of a company in fulfilling its obligations to the country. For example, any given company conducting business activities in a particular country has to pay taxes to the government. By lawfully paying the taxes, the company fulfills its obligation in contributing to the country’s revenue. The taxes add to the country’s revenue, allowing the country to embark on projects that would be beneficial to all members of society. Such projects include infrastructure projects such as building roads and railway lines.
Any efforts made towards evading taxes are unethical, and such activities may destroy the image of the company. Tax evasion is a serious crime in any country, and the penalty for such actions is usually massive. The people involved in the scandal could find themselves behind bars, effectively making them unable to run the company’s operations. Consequently, the company will collapse due to lack of proper management. Alternatively, the justice system may require that the company pay compensation for all the cumulative tax returns they evaded. The figure involved in such cases is usually massive. Paying such a huge sum of money in a single setting could be detrimental to the company. Also, the company would have to pay fines for their crime, taking the figure even higher. Such a huge blow is difficult to recover from, often ending in the closure of the company.
Companies that are guilty of evading the payment of taxes do not do justice to the image of their brand. Such actions indicate that the company in question does not uphold high moral standards. Consequently, customers will lose faith in the company because of the untrustworthy deeds they portray. From their point of view, a company that can evade taxes in the name of getting richer could easily produce counterfeit goods or offer sub-standard services. At this point, the main aim of the company is making profits, rather than fulfilling their moral obligations to society. When customers stop consuming a company’s goods, the company is bound to collapse. It is a universal fact that any company depends on its consumers for survival.
Also, investors that learn about actions of a company evading the payment of taxes would most likely discourage them from investing further. In some cases, investors are responsible for the growth of companies. If a company were to lose potential investors, it would have lost a great opportunity to develop into something bigger. Also, the investors may decide to pull out of the company altogether. When this happens, the company could immediately become bankrupt due to loss of funding from their major investors.
Companies have a moral obligation to offer employment opportunities to the local citizens around the area. They should prioritize individuals from the locality, followed by citizen of the nations in which they operate from. Foreigners should be considered last and only in cases where they have the qualifications that the locals do not. Companies that prioritize expatriates over the locals lose favor with the local community. These people would prefer to obtain similar services from a rival company rather than associate with a company that does not offer them opportunities. By providing employment opportunities to the locals, they are giving back to society in a good way.
Eventually, the employees would help in the economic growth of the company. This growth comes in the form of employee taxes that they have to pay to the government as they continue performing their jobs. Also, the locals may open savings accounts with local banks. The money they deposit helps in economic growth as the government, through the banks, ensures that the money circulates productively through the country’s economy. In contrast, expatriates are more likely to deposit their money in banks in their home countries. Therefore, the company misses out on an opportunity to earn significant revenue when companies offer employment to expatriates instead of locals.
The environmental aspect of social corporate responsibility mostly revolves around maintaining the integrity of the company’s environment. The company has a responsibility to preserve the environment and keep it safe from pollution. Such measures that promote environmental well-being include coming up with proper waste disposal criteria that do not pose any threat to the well-being of the environment. Many companies, if not all, often have waste products resulting from the company’s operations. Most of these waste products are non-biodegradable and pose serious risks to the environment.
Therefore, the companies have to come up with proper waste management plans that ensure the waste is properly disposed of. If not disposed of properly, the waste products will adversely affect the environment. For example, companies that dispose oil wastes into rivers result in the death of marine life. These forms of life include aquatic plants and fish. Fishing is an important economic activity in many countries. Therefore, when such waste products kill fish, the fishing industry takes a nose dive due to lack of fish to harvest. Other forms of waste disposed into water bodies may contain nutrients that facilitate the excessive growth of aquatic plants. Such plants include water hyacinth. When these plants grow extensively over water bodies, the water transport industry faces significant problems. Water vessels such as boats and ships cannot travel through areas with extensive growth.
Therefore, improper waste disposal affects many other industries including the transport and food industries. When these industries dig deeper into the cause of their problems, they will discover that these companies are responsible. As a result, people in these sectors may start movements against the operations of such companies. Such movements affect the image of the company, resulting in loss of customers.
Also, the companies need to go green and adopt production measures that do not contribute to the greenhouse effect. There are several methods of producing energy required to run these companies. Some of these methods include burning of fossil fuels. Although the methods produce high amounts of energy, they produce gases and fumes that are harmful to the environment. These gases and fumes contribute to the greenhouse effect, resulting in global warming. Global warming is a worldwide concern as its projected effects could lead to the extinction of the human race. Therefore, companies, as part of their social corporate responsibility, have to find alternative sources of energy that do not lead to global warming.
The fumes from companies may result in the formation of acid rain. Acid rain has several harmful effects including killing plants and corroding iron sheets on people’s roof tops. The agricultural sector is very important to the economies of several countries. When acid ran kills crops, the agricultural sector takes a massive hit and starts declining. This is particularly worrying in countries where agriculture is the backbone of the economy. All eyes will towards the company responsible for the decline in agricultural produce. Afterward, the company will receive negative publicity, especially from environmental activists. Once this happens, the company will lose a lot of customers, and with that, much of its revenue. Also, environmentalists may decide to take legal action against the company in question, resulting in unexpected expenses in trying to handle the issue. If the company loses the law suits, the government may decide to shut down the company’s operations, resulting in a Ethics and Corporate Social Responsibility in an Organizationconsiderable loss for all those involved.
The social aspect dictates that the company has a responsibility to customers, employees, and the community at large. Since time immemorial, businesses have had a philosophy that indicates that the customer is always right. This philosophy dictates that customer satisfaction is key for the successful operations of any business. After all, the company would not exist without customers to serve. Therefore, companies have a responsibility to meet the consumers’ requirements to keep them satisfied. They may achieve this satisfaction by offering good services to the consumers or providing quality goods. These actions will also increase the consumers’ trust in the company, allowing the company to grow further. Dissatisfied customers are likely to stop using the goods and services of a particular company and start searching for alternatives. Also, customers play a huge role in advertising different companies. A happy consumer is very likely to refer friends and family to the company. However, a dissatisfied one will discourage other members of society from using the company’s services.
The social aspect also incorporates good customer relations. Positive customer relations boost the productivity of any company because the company depends on consumers to thrive. Good relations with customers ensure that the customers communicate freely with them. Communication is key in helping companies know areas that need improvement. Improving these areas will allow the companies make more revenue from various customers.
A company’s responsibility towards its employees is to ensure that they treat their employees with the dignity and respect that human beings deserve. Companies should not overwork their employees because they need to rest after productive days. Overworking employees would leave them tired and unable to concentrate on their work. Such employees would not offer full productivity to the company. Also, the employees may decide to quit because of the harsh working conditions that do not afford them enough rest. Loss of employees negatively affects companies as their positions are left vacant. The company should create a suitable working environment for the employees, allowing them to enjoy their work. The company could motivate its employees to be more productive by offering bonuses, raises, and promotions for meeting targets regularly.
Also, the company needs to respect the boundary between work life and personal life and should limit assigning duties to employees after work hours (Addah et al., 2016). Such companies should respect holidays as periods for employees to spend more time with their families. Therefore, the companies should not assign tasks to employees during the holidays. These boundaries are important in ensuring that the employees feel appreciated by the company.
Most importantly, a company should treat all its employees equally regardless of their age, sex, race, and so on. Discrimination in the workplace is highly unethical. Cases of discrimination are likely to create rifts between employees that feel others receive favor over them, effectively damaging the company’s operations. This scenario would prevent the company from growing further in terms of revenue, since employees that feel inferior are likely to quit.
The responsibility of such companies to the community involves active participation in community development projects. The success of any given company depends on the perspective that the community has on them. Therefore, by offering support to the community, companies create a good image that is essential in delivering their success (Schooley, 2019). Such actions help companies stay ahead of the competition because the community develops a liking for the company and will always associate with the company in one way or the other. If companies isolate themselves from the community, the locals would do the same and refrain from using their products and services. These actions would not bode well for the company because immediate customers are essential for the growth of any company.
5.0 Conclusion
Corporate social responsibility is a vital aspect of the development and survival of any given company in the modern world. Companies that adhere to corporate social responsibility enjoy numerous benefits, while at the same time-sharing the benefits with consumers, employees, the community, and the environment. There are no downsides to adhering to corporate social responsibility and maintaining acceptable ethical conduct. Therefore, companies should make giant strides to ensure that they fully adhere to ethics and corporate social responsibility. This move will benefit not only the company but also those around them.
On the other hand, companies that disregard social corporate responsibility are likely to run into a lot of challenges in fulfilling their operations. These challenges include legal problems, loss of a viable consumer market, loss of investors, loss of employees, and closure due to unlawful activities. Therefore, it is advisable that companies devise and stick to a moral code of ethics that will not only enhance their survival in the industry, but also give them a competitive advantage over their rivals in the same market.
6.0 References
Adda, G., Azigwe, J., Awuni, A. (2016). Business ethics and corporate social responsibility for business success and growth. European Journal of Business and Innovation Research, 4(6), 26-42. https://academicjournals.org/journal/AJBM/article-references/163958462712
Keeping, J. (1 July 2012). The Ethics of Corporate Social Responsibility. https://www.lawnow.org/the-ethics-of-corporate-social-responsibility/
Schooley, S. (22 April 2019). What is Corporate Social Responsibility? https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html
Singh, K. & Singh, M. (2013). Ethics in corporate social responsibility. Journal of Business and Management, 9(2), 16-21. http://www.academia.edu/download/32138047/B0921621.pdf
The University of Washington. (2020). What is Corporate Social Responsibility? http://www.corporatesocialresponsibility.com/