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In this essay, I am going to argue about the importance of business ethics and corporate social responsibility and its impact on the benefits of the society. I will search for the scholarly articles and journals which will help in developing a strong argument in support of ethics and corporate social responsibility which proves to be beneficial for the entire society. In this essay, I will start with clear definition of business ethics and corporate social responsibility. These are the issues which needs to be taken care by every organization and thus every manager should be aware of the importance of these priorities. I will put theories and experiences of various authors from different articles present on internet and thus these research articles will help in strengthening of the argument. Business ethics and corporate social responsibility are not only beneficial for the companies but it has direct impact on the society and also advancement of the natives of society suffering from the problems (Penslar, 1995). There are many examples around us and mentioned in the articles as well as scholarly journals which can be easily related to the benefits to the society because of the increases culture of conducting corporate social responsibilities as well as motivating ethical practices in company (Marye, 2007). I will utilize several recent examples about the ethical and unethical behaviors demonstrated by companies practiced by them for business motive only as well as examples of corporate social responsibilities which helped many companies in improving their brand image as well as working for the benefits of the society. In fact now all the companies are compelled to do their part for the society and thus the condition of society is uplifting because of these practices. Thus in this essay we will concluded that management of the businesses are done and have to be done in a way which is beneficial for the whole society. Facts, experiences and analysis shared in this essay helps in developing the understanding of basic of the ethical practices as well as in-depth knowledge of corporate social responsibilities (Orend, 2000).
The businesses have a clear motive of increasing the shareholderâ€™s value and increasing the revenue as well as profits of the company. Thus it can be clearly understood that all the businesses are for profit earning except non-profit organizations. They have monetary, financially and economic impact on the society but there are many social as well as ethical and environmental issues which needs to be taken care. Thus many organizations have started displaying ethical and environmentally responsible behavior which is not only beneficial for the company but also for the entire society. Ethical behavior is demonstrated in the business functions as well as operations of the company and social responsibilities are demonstrated in the ways of external or internal activities which is being conducted for some social cause (Miller, 2009). Corporate social responsibility is now a much known term in the society and it is being conducted by various companies and big corporate. Corporate social responsibility is an additional responsibility which is demonstrated by the companies for the uplifting of the society by addressing social as well as environmental issues. The issues which are undertaken by these companies have some serious issues to the society human as well as non-human resources. The corporate social responsibilities are also conducted in order to increase the brand awareness of the corporate by creating an image of socially responsible corporate among the target audience. According to many researches, it has become a known fact that customers are willing to even spend higher amount of money for the products from the corporate socially responsible companies because customers have an opinion that they are doing something indirectly for the society. The changing buying behavior of the target audience has compelled many companies to shift from profit focused company to society benefit oriented companies. Thus the corporate social responsibilities have become a new marketing tool by the companies which help in engaging the customers actively and entice them to do something for the society and also environmental concerns. Corporate social responsibilities are in fact made compulsory in many countries for the organizations crossing a threshold of revenue. Thus every organization has been compelled to work for the society (Lindgreen, Swaen and Maon, 2009).
The companies which are involved in the corporate social responsibility have social benefit as focus but they have also marketing motive running in parallel. There are many companies which are doing corporate social responsibility for the sake of improving their corporate image which may be tarnished for any reason (Roy, 2009). Corporate social responsibilities are now being conducted by many organizations for the sake of improving their brand image among the target audience. For example: PepsiCo which is one of the largest beverage companies in the world has faced serious issue in India. There are many bottling plants of PepsiCo in India which are being utilized by the company for preparation of soft drinks across India. These bottling plants are located at many places in India. The major concern when these bottling plants were established was depletion of ground water level on the vicinity of the bottling plants. The villagers started facing issue of water shortage for irrigation as well as general purposes but the company never paid any attention to the growing problem of water shortage. Media is highly active in India and media recognized this issue as of prime importance. Soon this issue was a national issue and the brand image of PepsiCo was completely tarnished. Thus PepsiCo understood the importance of some corporate social responsibility activity which has to be conducted to gain the same image of Pepsi as it was earlier. They started water harvesting in the areas affected because of the bling consumption of ground water in the bottling plants. Soon the water harvest mission was proved to be successful (Khurana, 2009). But this was not the end of the mission as this company wanted to spread awareness about the corporate social responsibility conducted by the company. Thus PepsiCo advertised heavily about this activity and majorly through public relations and also they spread this information through packaging of bottles. Thus in this way PepsiCo maintained its brand image and corporate social responsibility acted an effective and efficient marketing tool. Thus it can be concluded that corporate social responsibility should definitely be utilized by the companies as it helps in growing the business as well as it helps in upgrading the situation of society. Corporate social responsibility can be used in multiple ways from addressing social issues to addressing environmental concerns which is highly prevalent in the society (Cook, 2006).
Because of growing importance of the corporate social responsibility, many organizations have started forming dedicated teams which takes care of the corporate social responsibilities and monitor the progress of these activities. Thus dedicated teams have the key responsibility areas (KRA) of formulating and implementing of the corporate social responsibilities as well as monitor the progress of these activities being conducted by the company. The complete organizational culture should be dedicated for implementation of corporate social responsibility and thus the employees should also have the motivation to initiate these activities. There is no hard and fast rule that the organizations can conduct only external corporate social responsibility activities (Pitt, 2007). In fact companies should get involved into enabling these corporate social responsibilities within the organizations as well. This will help in benefitting of the society because these activities will be conducted every day and response can also be monitored very easily. Example of this corporate social responsibility within the organization includes increased usage of green technologies as well as reducing the usage of papers as official documents. Managers in the companies should motivate all the employees to use e-papers irrespective of using papers for any communication of information (Kelly, 2006). This small step can highly decrease the usage of papers and indirectly it will reduce the cutting of trees thus saving the environment. Thus this is an example of corporate social responsibility which can be concluded within the organizations. The managers should be held responsible for initiating these types of activities in the organization. Such behavior of managers will definitely motivate all the employees to indulge into corporate social responsibility within the organizations. This activity will create a big change for the society just by implementing small regular changes.
Ethical behavior is known as conducts according to set norms, values and beliefs which are acceptable by the entire society. Whichever activities unacceptable by the society are against the values of the individuals is known as unethical behavior. This behavior is not only displayed by any company or the organization but it is displayed by every individual in the society. Ethical behavior is fruitful and beneficial for the society whereas unethical behavior is highly dangerous for the society as it brings cause of concerns with it (Ridley, 1998). The ethical behavior shown by a company has direct impact on the society as well as on its employees also. Ethical behavior should be demonstrated at each and every step of the business operation thus the entire value chain of that organization is considered to be ethical. The range of business function varies from accounting to supply chain management, from procurement of raw materials to selling of these raw materials to end customer, from marketing and generating awareness through realistic benefits to selling of products through acceptable means (Loewe and Edward, 1999). Ethical values, morals and beliefs hold prime importance in every of the above discussed business functions. If the ethical value is missing, then there can be chaos all around the society which can lead to harms to the society. Ethically responsible companies have huge customer appreciation as well as affection and thus they gain amazing brand power.
In order to pervade the culture of ethics in the companies, government has also introduced several laws which are highly strict and makes all the business processes of the company as transparent and lucid as well. This increased transparency helps in motivating all the companies to strictly adhere to the ethics and values which are acceptable to the societies. But the major motive of companies to deviate from ethical behavior and follow unethical behavior is to increase business profits and reducing overall of cost of functioning (Van Norden, 2011). There are several scenarios which motivate the companies to follow the unethical behavior for example: there are many examples in which companies fudged with the balance sheets of the company to report growth and high profits in every quarter. This fudging of balance sheets and accounting books are completely unacceptable behavior which results into unethical practices in the company. These malpractices are done for business motives and showcasing to the world about the growth and prosperity of company. This malpractice in the form of fudging accounting books results into increase in value of shares and stocks of the companies thus the valuation of company is increased several folds but on the fake terms. Thus investor believes that they will earn huge dividend later by investing in the company but the fact is that company is already loosing hence total loss for investors. This is very prevalent form of unethical behavior which is being practiced by many companies and the most recent news about fudging of accounting books was Reebok in which comes under Adidas in India. All the stores of reebok in India come under the ownership of Reebok. Reebok CEO in order to show profits in the company falsified the balance sheets and showcased huge profits in the company. Later when this malpractice was discovered, Reebok CEO was suspended off his duty and many reebok stores are now being closed in India. This is a perfect example of unethical behavior which not only brought bad reputation for the brand but it also it also sets an example of unacceptable activities being carried out by businesses to increase their revenue. Apart from the accounting books fudging there are several other activities which are unethical in nature but are carried by the organizations. Some these activities are related to the environmental concerns as all the manufacturing companies needs to process their operational waste according to set government standards for reducing environmental concerns and pollutions. But not all the companies comply with these standards and thus they donâ€™t process their wastes accordingly. This is a complete unethical behavior displayed by the companies which causes serious environmental concerns and therefore it is hazardous to the society as well.
All the scenarios mentioned above relate to the unethical behavior of companies but these are completely intolerable by the society. The company or organizations should have a top management which is completely supportive of the ethical standards follow. The top managements have to showcase their effectiveness and efficiency in implementing ethical practices in their company. Every manager has to be proactive in applying the principles of ethics and morals in their work so that every employee under them are also motivated enough to be ethical while on business. These managers can set example for conducting the ethical behaviors in the companies and thus the employees under then will also start contributing towards the benefits of the society.
Ethics should run in parallel with all the business functions and should be always kept in mind. Ethics should not be taught or learned by heart but it is something which has to be imbibed in the nature of the employees. This will ensure that the employees will work harder to implement the ethical practices in their daily routine tasks as well (Bertini, 2006). Organization culture plays a very vital role in identifying a company as an ethically responsible company. Thus organization culture has to be defined in such a way that they inculcate the ethical values in the employees. The ethically responsible behavior is not only beneficial for the company but it also improves the condition of society. In this way, it can be said that every company should be highly active in employing ethics in their company. But only implementing the ethical practices in the company is not sufficient as all the practices should be monitored by the management to check prevalence of any unethical activity in the company. Thus companies should strive to have a dedicated team which will have monitoring responsibilities as additional responsibilities for conducting surprise audits for ethical checkup of the organizational operations (Yin, 2006).
Corporate social responsibility as well as ethical behavior has high importance in the corporate world because it helps in increasing the social value of corporate among the target audience and the stakeholders. Both the types of behaviors are considered to be born of the organization culture prevalent in the organization (Luca, 2011). Culture in any organization flows from top to bottom and thus the interference of top management should be present to successfully implement these practices in the organization. The top management should be able to walk the talk and thus the communication of all the information about corporate social responsibility and ethical practices will be clear to the employees of that company. In order to create effective channel of communication, top management has to grab the knowledge and values of both the practices by heart and even start implementing in their routine tasks (Hauser, 2008). This will help in creating success stories of the leaders and these success stories are considered to be highly effective strategy for motivating employees. These success stories will also make it much more transparent communication which can easily help in making employees understand about the essence of corporate social responsibility and ethics in organizations. It should be properly communicated that these activities will not only help in increasing the business values but it will also help in improving the living condition of society as well as addressing ecological concerns. Hence the organizations have to strive hard in order to make these activities as core competencies of the company thus achieving long term sustainable competitive advantage. These long term sustainable advantages help companies in order to fight competition and even maintain supremacy over their competitors. The companies involved in implementing ethical practices and also actively conducted many corporate social responsibilities (Chopra, 2009). These companies who actively participate in all these activities have strong customer affection because the buying behavior of the customer is changing. The customers are attracted more towards those companies which are considered to be ethical as well as socially responsible. Customers want to adopt product of these companies at a higher price because this ensures that customers are indirectly contributing towards the cause of the society. Thus the client base of these companies also increases several folds which are the prime objective of the companies. In these cases the companies not only gain high revenues but they are also enhancing the brand image of the corporate among the prospects. An effective managed business showcasing responsible behavior is an advantage whose benefits can be reaped for long time (Ellis, 2007). In fact government should have some form of punishments for the companies conducting unethical practices all over. These punishments sets example for others and thus it will not only motivate but compel the companies to neglect any unethical practice in their company which is highly hazardous to the society. For corporate social responsibilities, government should provide some incentives like tax exemption or subsidies in implementing green technologies adoption etc which will motivate companies to actively participate in corporate social responsibilities (Dalton, 2008).
This essay described the importance of the corporate social responsibilities and ethical behaviors which is demonstrated in majority of companies and it is beneficial for the companies as well as they are highly beneficial for the society. Companies should readily adopt the ethical practices in every business function even a single unethical practice in any part of the value chain will make the company as unethical. In fact company should also involve in the corporate social responsibilities as these activities are very beneficial for the society and for the company itself. Thus it can be successfully concluded with the help of evidences and articles by scholarly authors that the business has to be managed in a way which is not only profit making but it should also contribute to the society through ethical practices and corporate social responsibilities.