Ethics Governance And Corporate Social Responsibility Business Essay

Published:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

According to Hobbes, the natural state of man without a society is spiteful, rough and short. A man who is not part of a society does not acknowledge that other men are superior to him. In the physical sense, people are equal, possessing a right and law of nature. In order for one person to fulfil the right of nature and for individual survival, violence becomes justifiable. To prevent this unstable situation to arise, Hobbes states that a Leviathan i.e. a state in any form should be maintained. The state should be powerful enough to punish and implicit consequences from those who go against it. Aspects like justice, morality, property and liberty should be imposed by the Leviathan (Rosen and Wolff, 1999).

THE MAIN BODY: BI-MORAL SOCIETY ADAPTED FROM THE WORK OF JOHN HENDRY (2004)

Hendry (2004) stated that in contemporary societies two types of moralities co-exist. Traditional morality is obligation to the society. This type of morality stresses on duties to guide people's lives. The principles of this society are connected to the norms of countries and major religions. The other morality is related to individualism and self-interest. This type of morality is gaining legitimacy in the last few years and is based on how actions benefit the individual interests of people. Historically, traditional morality has always had a dominant position whereas individual morality can only exist if there is prior licence given or under limited areas (Hendry, 2004).

In order to understand the development of morality, Hendry (2004) uses anthropologist Mary Douglas' (1992) 'Cultural Theory' as a means to differentiate between societies and how they evolved and changed. She studied social structures and relationships between individuals and groups and arrived with three types of societies - hierarchies, markets and sects. The hierarchies have traditional morality while the markets feature the individualist morality. Hendry (2004) goes on to say that from the types of culture listed by Douglas (1992), it is only the hierarchies that have the ability to develop infrastructures and institutions that are stable.

Traditional morality existence is still relevant as it still has a great influence in governing the lives of individuals, according to Hendry (2004). He explains that in many circumstances the two moralities are not considered to be separate aspects but in many situations they coincide. Which morality is dominant depends on the situation and one cannot tell from before which morality will be preferred. Now people give more emphasis on fulfilling personal interests along with abiding to the law. Hendry (2004) argues that with the advent of globalisation, the moralities of different cultures are all competing with each other for greater control. In this process if self-destruction does not take place then it will eventually lead to a 'single dominant world culture' or a probable global manifestation of traditional morality which is common to all. World politics and impacts of religion are areas that cannot be predicted (Hendry, 2004).

There is an ongoing debate on how stable the bi-moral society is. No one knows where it is going to lead to and how long is it going to last for. Traditional morality could have changed because of new religions being introduced to society, decline of the emphasis on religion, or the development of new moral period (Hendry, 2004).

According to Hendry (2004), bi-moral society still exists and will continue to do so. Or if that is not the case then bi-moral society is going through change - the dominance of one morality being transferred to the other for the future of the society. From a business management point of view the bi-moral society is here to continue for years to come. The business organisations have also transformed just like the bi-moral society. Post-war traditional morality existed and the interests of the business were not visible although it was directed towards self-interest. With the change in the competitive climate, bureaucratic institutions began to cause interruptions and the association between traditional morality and self-interest began to collapse. Companies were not able to give back to their employees the security they deserved and they moved towards the fulfilment of personal gains in order to survive. This led to the formation of new forms of organisations. Contemporary organisations are highly bureaucratic. The vertical hierarchy can display traditional morality as they are relationships between people in a society. In contrast to this, businesses also have characteristics of the market. Employees are encouraged to take care of themselves and their careers. They may be hired on contract basis which does not offer the employees with any sort of security. This way there are no moral attachments to the business and runs according to the forces of demand and supply. Many organisations may appear to be traditional but in reality they can be perfect examples of a classical bureaucracy (Hendry, 2004).

BUSINESS PERSPECTIVE:

Hendry (2004) gives an interesting example that shows how bi-moral society is relevant currently and will be in the future as well. Teams and their performance in organisations are extremely crucial. Teams in order to perform efficiently need to have a level of autonomy so that they can work flexibly. This goes against traditional morality. But at the same time teams also need to possess the characteristics of being loyal and committed which falls under traditional morality, which goes against individual culture. Thus, we see how teams, a vital part of the organisation, need a bi-moral society to flourish in (Hendry, 2004).

Similarly, managers in the business context also need a bi-moral society to exist in. They need to be sensitive towards their employees and provide them with support which is the facets of traditional morality. But at the same time once they have finished dealing with their responsibilities, they are actually quite separate and have the fulfilment of individual desires like developing their careers, etc which represent the individualist morality. Hence, once again the performance of the managers also depends on a bi-moral society (Hendry, 2004). Hendry (2004) goes on to say that managers need to have a work-life balance. A bi-moral society gives women also the same opportunity to manage organisations as long as they are fully devoted to their work just like the male-managers. They can decide what they want to do as long as they give equal commitment to both aspects.

Hendry (2004) also puts light on how work-life balance needs to be maintained in teams as well. If one team member is going through something at home, it influences the performance of the entire team. The members of teams are both competitors and colleagues. As competitors, they concentrate on their self-interest as they wish to get promoted and as colleagues they would be help their team mate. When a work by a team is not finished then in traditional morality would make the team members admit their fault while individualist morality would encourage one team member to go ahead doing his bit of the work, leaving the other team members behind. For managers, it is easier in a market setup to manage teams as they do not have to worry about future commitment. But at the same time, they expect the teams under them to be loyal while they themselves cannot give the team back what they deserve (Hendry, 2004).

Soreze (2008) testifies that the business environment and the forms of organisations are continuously changing which demands for the creation of a new model of corporate governance, although the agency theory still plays a relevant role. Jenson and Meckling (1976) have explained agency theory to be a relationship based on exchange with the motive to achieve higher profits. The agent aims to increase his/her self-interest by reaching the economic goals. It depends on the level of commitment by the agent for the fulfilment of the economic goal of the principal that will lead to him/her receiving rewards.

Leadership in contemporary organisations not only need to foster change but are required to maintain stability in the organisation. Leadership becomes a challenge when leaders have to manage the employees who move in their own direction in pursuit of their personal desires and employees who have multiple focuses due to the fulfilment of the moral obligation as well. Hence, the nature of the business is influenced by the kind of leadership style the leader adopts In fact management in organisations is now based on morality (Hendry, 2004).

From a business point of view, some of the main drivers of CSR in the bi-moral society are globalisation, global firms taking over activities that were under the initially under the government, social activists insisting and pressurizing, change in the environment, and the request of capital markets to penalize firms that do not stick of the ethical standards (Kim and Nofsinger, 2007).

The evolution of corporations is another way of analysing the future of the bi-moral society from a business point of view. Friedman (2004) said that managers are agents of the stakeholders and it is the stakeholder's that are permitted to have all the profits. This was when corporations belonged to the capitalist society. Freeman (1993) spoke about the next change corporations went through which was by defining stakeholders as people who had an interest in the corporation. This could be the customers, management, community, employees, suppliers, etc. this also depicts how society has evolved and that morality is working in the societies. Freeman (1993) also explains how morality was converted into social guidelines backed by law. This in return shows how morality again starts to decline in society. Freeman (1993) also has another opinion that those organisations that behave ethically and adopt corporate social responsibility are the ones are capable of recovering the society. The evolution of corporations led to the transformation of capitalist organisations into social institutions. He states that if organisations follow the social path then morality can exist (Freeman, 1993).

SOCIOLOGICAL PERSPECTIVE:

Hendry (2004) explains the future of bi-moral society from a sociological perspective as well. He says that some critical sociologists have stated that managers have been transformed in a bureaucratic set up to appear as if they are only after economic effectiveness and hindered their ethical sense. Issues of morals have been transformed into economic designations or oppressed totally. In the business culture, self interest is highly encouraged which makes traditional morality difficult to exist. Nonetheless, in contemporary societies, managers are retained to a great extent because they uphold traditional moral principles (Hendry, 2004).

Also from a sociological point of view, Hendry (2004) explains how societies have managed to survive over centuries. They have been characterized by problems, but societies have been able to see themselves through and survive. Those on top of the hierarchical structure have always been lured to exploit their position by doing things that are in favour of their personal gains. This shows that although hierarchies are considered by moralities of obligation, still corruption, violence and threats tend to creep in. A moral leadership is what enables the society to survive (Hendry, 2004).

Just as bi-moral society has its implications on the businesses, similarly the implication it has on society is higher. One of the challenges that the society faces is in the educational front. Very few business schools are able to provide organisational learning and skills along with human circumstances. Corporate governance is a method to see that the needs of the society are fulfilled and that emphasis is not given only to the fulfilment of personal gains and interests. A lot of consideration is given to corporate governance in recent years but the consequences have not been effective. Instead of the bureaucratically norms declining, the rules are still thriving. In order to prevent itself from losing its supremacy bureaucracy is trying to gain its power by implementing more rules and regulations. It focuses more on 'impression management' and lowers moral commitments. This causes mistrust between society and business (Hendry, 2004). Trust is the biggest factor that needs to be achieved in corporate governance and surroundings that favour the achievement of trust have to be created. With globalisation taking place and post-traditional societal forms, such a surrounding can be created with a 'dialogic democracy' and not by enforcing power and authority. This will take time to pick up but the businesses are following the correct trend. Businesses need to be less discrete and reveal their activities more in the eye of the public. If this happens, then a productive dialogue between the interests of the organisations and the society at large can be encouraged (Hendry, 2004).

Kim and Nofsinger (2007) say that the concept of Corporate Social Responsibility (CSR) is fairly recent and is gaining the attention of organisations who want to implement it. A bright future for CSR exists from both business and societal point of views. Companies have a social obligation to fulfil. The existence of CSR and its positive future also suggest that bi-moral society does have a future. From a managerial perspective, CSR can be classified into four by Archie Carroll. The first level is economic i.e. the organisation must aim to produce goods and services at a profit. The second level is legal which expects the organisation to work within the legal structure. The third level is ethical. The responsibilities should be above the law and within the customs and norms of the society. The last level is philanthropy which states that it is flexible (Kim and Nofsinger, 2007).

Therefore, Hendry (2004) concludes by saying that for the purpose of economic growth, the morality of the market was approved. But this did become a matter of concern as the traditional morality was declining and morality of self-interest was given social authenticity. The existence of traditional society is still vital for both businesses and society. Although in several conditions both the moralities are no longer binding (Hendry, 2004).

Solomon (2004) states corporate culture is social in nature. It is based on the establishment of a community and does not support individualism.

FUTURE OF THE BI-MORAL SOCIETY:

Whether bi-moral society has a future can be looked by applying the 'Prisoner's Dilemma' model formulated by Merril Flood and Melvin Dresher (Poundstone, 1992). Axelrod (1987) explains the prisoner's dilemma to be a situation which eventually results in the selfish choice to have a better recompense than co-operation will have. In a situation like this, explaining how co-operation surface and continue is difficult. If both parties decide to admit to the crime, then the consequences will be worse than neither parties admitting to the crime. If one person thinks about their self interest, then they can get away at the cost of the other person. If none of the parties confess, then they will have have to face some sort of punishment but without giving the police a chance of having any evidence. Therefore, the best option does seem to be co-operation. But it is difficult for co-operation to take place as the parties can have no form of interaction before the decision needs to take place. (Axelrod, 1987).

To analyse the future of the bi-moral society, co-operation is what plays a vital role. If co-operation between the two moralities exist than bi-moral society probably has a future. In businesses, co-operation needs to exist in leadership and fostering trust among team members (Hendry, 2004). Corporate responsibility is another aspect that has emerged. Kinderman (2006) views corporate responsibility has become a means to justify capitalism in the contemporary organisations. Coe and Palmer (2010) explain how traditional societies are different from contemporary societies. Traditional societies are characterized by traditional morality which bestow justice protect the people. Non-traditional societies are in which moral codes are replaced by other codes that favour the fulfilment of self-interest. They say that Hobbes (1651) kinships were based on moral systems.

In order to give a fair light on the future of bi-moral society, Corporate Social Responsibility needs to be critiqued as well. An article in the Citizen News Service (2010) gives us a fairly recent example. The POSCO Steel Project in Orissa, India, are apparently doing a lot for the society. Cancer hospitals are being set up and colonies for the people to live in. The project is causing thousands of people being displaces from over five thousand acres of land. So what is the point of making colonies when people displaced in previous projects have not been rehabilitated? So then where will the newly displaced people go? Another article says the POSCO project may be hazardous to the environment of Orissa. The pollutants from the activities could be cancerous. But at the same time, they are building well equipped cancer hospitals. Hence, the question arises if corporate social responsibility is actually justifiable? The first world nations are also destroying the mantel of society after indulging in maximising profits. For example, carving out minerals like iron and bauxite for the purpose of development on these nations. This result in the poor becoming even more poor (http://orissakhabar.in/tag/posco/).

Boatright (2000) speaks about ethics in international business. According to him, with the decline in traditional moralities, encourages organisations to move away from social responsibility and ethical behaviour. It gives the organisations more chances for misconduct. A business needs to maintain some standards, and in this aspect traditional morality plays a dominant role. He agrees to the standards suggested by Thomas Donaldson which also demonstrates the existence of a bi-moral society. He says that companies should put up with minimal obligations first. For example, if a company hires a child then it is failing to abide with minimal duties that a company has to apply. Corporations also have to follow fundamental international rights. In an international dealing, companies have to make sure that they are not adding to the suffering of the people. This is known as the negative harm principle. They also need to take the rational empathy test and determine the pros and cons of operating in a less developed nation. Boatright (2000) lists some practical problems that can arise if organisations do not follow an ethical code of conduct. The pharmaceutical industry is criticised for its marketing practices. For example, they indicate different instructions for their products in developing nations, they engage in drug dumping, they have problems with pricing as they have different prices for different or sometimes same products, free samples provided to physicians are sold to make extra money, and bribery is still prevalent (Boatright, 2000).

The evolution of corporations is another way of analysing the future of the bi-moral society from a business point of view. Friedman (2004) said that managers are agents of the stakeholders and it is the stakeholder's that are permitted to have all the profits. This was when corporations belonged to the capitalist society. Freeman (1993) spoke about the next change corporations went through which was by defining stakeholders as people who had an interest in the corporation. This could be the customers, management, community, employees, suppliers, etc. this also depicts how society has evolved and that morality is working in the societies. Freeman (1993) also explains how morality was converted into social guidelines backed by law. This in return shows how morality again starts to decline in society. Freeman (1993) also has another opinion that those organisations that behave ethically and adopt corporate social responsibility are the ones are capable of recovering the society. The evolution of corporations led to the transformation of capitalist organisations into social institutions. He states that if organisations follow the social path then morality can exist (Freeman, 1993).

CONCLUSION:

In my opinion, duality between traditional morality and individualist morality does exist and will continue to exist as both the businesses and societies need both the moralities to co-exist in order to complement each other. Every society has under-gone change and so have corporations evolved. Every society exists in isolation as they differ from each other. From a completely different perspective i.e. not considering the co-existence of the two moralities, but considering what would happen if both the moralities are merged together. Then the future of a bi-moral society would be completely different. This depends on the extent to which Governances are trying to convert national morality into something more personal. For example, in India BJP (a political party) is propagating 'Hindutva'. This becomes part of personal morality as it is part of the ancient scriptures and an innate part of every Hindu. Similarly even corporations are trying to intermesh the two as they are probably aware that handling a bi-moral society is more challenging than an all encompassing one. This can be seen by the way corporations advertise.

As corporations and societies have evolved, the realities of both the moralities could be sense in some aspect or the other. According to me, the duality of both the moralities will continue as corporations and societies enter new eras. Traditionally the human resource department was told what to do by the top management but now what the human management department wants is implemented. This in my opinion is an upcoming area and characterizes both the moralities.

Another way to understand the future of the bi-moral society depends on the debate between public and private. By this I mean, whether individual morality, based on the fulfilment on self-interest is private or not? And if issues are exclusively private, then how do corporations handle those issues. Hendry (2004) also drew light on this area.

Campbell (2007) pointed out that as the corporations are exposed to competition due to the advent of globalisation, corporations need to behave in ways that portray them to be socially responsible. He says that if the level of competition is too high or too low then the behaviour of the corporations is less socially responsible. Hence, a balance has to be maintained for the organisations so that they incorporate the right behaviour. Eventually in my opinion, it depends on the environment to influence the future of the co-existence of a bi-moral society.

Writing Services

Essay Writing
Service

Find out how the very best essay writing service can help you accomplish more and achieve higher marks today.

Assignment Writing Service

From complicated assignments to tricky tasks, our experts can tackle virtually any question thrown at them.

Dissertation Writing Service

A dissertation (also known as a thesis or research project) is probably the most important piece of work for any student! From full dissertations to individual chapters, we’re on hand to support you.

Coursework Writing Service

Our expert qualified writers can help you get your coursework right first time, every time.

Dissertation Proposal Service

The first step to completing a dissertation is to create a proposal that talks about what you wish to do. Our experts can design suitable methodologies - perfect to help you get started with a dissertation.

Report Writing
Service

Reports for any audience. Perfectly structured, professionally written, and tailored to suit your exact requirements.

Essay Skeleton Answer Service

If you’re just looking for some help to get started on an essay, our outline service provides you with a perfect essay plan.

Marking & Proofreading Service

Not sure if your work is hitting the mark? Struggling to get feedback from your lecturer? Our premium marking service was created just for you - get the feedback you deserve now.

Exam Revision
Service

Exams can be one of the most stressful experiences you’ll ever have! Revision is key, and we’re here to help. With custom created revision notes and exam answers, you’ll never feel underprepared again.