Businesses around the globe are continuously developing to respond to the needs of their customers. It is very vital for them to develop creative ways that will maintain their competitiveness. The global business market is embodied by supreme controls, high demands and outlook on efficiency, and too much rivalry where managing associates require the expertise and significance of business ethics and social responsibility.
According to Robbins & Judge (2007), many employees are confronted with instances where they need to define and decide right and wrong conduct. The characteristics of good ethical behaviours have never been clearly projected in the recent management literatures where the line that differentiates right against wrong conduct has become even more blurry. Managers and leaders respond to ethical behaviour issues (De Mesa Graziano 2002).
It is provided that when analysing the role and meaning of ethics and social responsibility from the internal and external perspective of a company, Kline (2005) states that, "There is a potential problem ...with attaching the duty of managers to the specific desires of shareholders. If anything, moral constrains are meant to constrain desires. Desires are fickle and not always moral" (p. 19). Kline's statement holds veracity and openness provided that business ethics and social responsibility is concerned. With respect to this, this paper will evaluate and discuss the concept and role of business ethics and social responsibility in application to today's businesses.
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In a globalised economy, in both local and international arena where harsh antagonisms happen among industries, business organisation are considering the advantages of ethical, moral and broader social issues in business development.
To clearly understand the ethical, moral and broader social issues in business development, let us define first the base concept, "ethics". Defining ethics is an academic and contextual issue by itself. There have been numerous scholars who encapsulate ethics in a single description. To Kant and the Greek meaning of the term, it is a science of customs or morals that attempts to comprehend the nature of morality. Normally, ethics is defined as the foundation of morally acceptable behaviours and practices (Michalos, 1995). It is also referred to as the moral philosophy or the process of deliberating about a particularly compelling kind of obligation that is moral in nature (Cotton, R. 1998). Ethics belongs to the practical sciences. It functions to show how human life must be fashioned to realise its purpose or end. Ethics stand up at the top of the practical sciences, taking up them all in a definite gauge and foundation (Walle, 1995). In which the reason were arts finally dish up a universal function, which is the flawlessness and responsibility (Suderman, 1999). Thus, the ethical, moral and broader social issues in business development may not be considered as an applied ethics. In business, the principles of ethics are incorporated on the idea of corporate social responsibility. It is associated with and influential to the value system of every person in business. Ethics influences the value system of every organisation and employee by serving as a moral guide or "base" (Sweet 2001) to the application of acceptable practices and principles that are needed to become moral organisation and/or employee. Consequently, there is no clear moral compass to guide managers and leaders through complex ethical dilemmas requiring the judgment about what is right or wrong. Attention to ethics in the workplace sensitises managers, leaders and employees on how should their responses are (Cotton, 1998). Perhaps, this helps ensure managers and leaders on times when they are struggling on moral crises and confusion to keep hold of a strong moral compass. Still, attention to business ethics provides other benefits.
In the case of British Petroleum which one of the leading oil and petroleum distributors around the globe, the ethical issues has been observed. Basically, oil and petroleum are considered to be one of the most important means in majority of the parts of the global market. However, with the advent of business environment of globalisation and the competition in this industry has become fierce, oil and petroleum industries' organisational performance and their competitive advantage.
From the presentation of Proff (2002), he identifies that globalisation has lowered trade barriers in different economies making it easier for investments to flow across markets. Through benefiting from involvement in other economies the flow of capital from one economy to another intensified. In the issue of ethical, moral and social responsibilities, British Petroleum are facing numerous arguments pertaining to environmental responsibility. Having been able to realize their corporate social responsibilities, the British petroleum has been able to solve the issue and attempt to have an enormous reinvention in 2000. The main goal of this reinvention is to alter the perception the people regarding BP in terms of its business operation and its role in the society. This reinvention is also a part of the adherence of the company to their social responsibilities and which costs $200 million. British petroleum was the first oil industry which started to address the issue of global climate change. It can be said that the corporate social responsibility challenge for the British petroleum has been threefold. The first one is to the challenge of translating the social responsibility commitment into an efficient and consistent approach in the global market. The next is to be able to meld the BP its subsidiaries like Arco and Amoco to social investments and the last is to satisfy and meet the external expectations from the society. These CSR commitment has been strengthened through the changes or reinvention mentioned above which include their advertisement of the "Beyond Petroleum".
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In doing and meeting their organisational goal of being committed to social responsibilities, the company had been able to conduct rigorous planning with more than 130 fully functions Business Units. In this regard, each of the each of the Business Units has largely autonomous business operations with its own identity, history, imperatives and relationships.
The corporate social responsibility strategy in response to ethical, moral, and social issues of BP has also been able to give importance to three performance measures which include the social, environmental and financial which are known as the triple bottom line. The commitment of the BP with their social responsibility ensures that wherever they operation, their activities should be able to establish economic benefits and opportunities by enhancing the quality of life of individually, specifically those who are directly influenced by the company. The CSR commitment of the British Petroleum focuses on five aspects which include the employee relationships, ethical conducts, health safety and environmental performance, financial aspect and control (About BP, 2010). In order to ensure that they are able to get affiliated with different international and global organisations for Human rights such as the United Nations, US-UK Voluntary Principles and others, for the labour relationships they follow the standards of the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy and for environmental accountabilities they are linked with the GHG emissions reduction, ISO14000 and Clean Fuels Programs (About BP, 2010).
Just like British Petroleum, other organisations are also able to adhere to the concept of being socially responsible and THE CO-OP is never an exemption (Background Information on EU-Russia relations', 2002). The corporate social responsibility of this company works in various stakeholders such as individual members, employees, customers, corporate members, suppliers, the wider community, and the cooperative members. In doing so, the company has provide community investment of £7.3m, which is equal to 3.2% pre-tax profit, up from 2.5% in year 2003 ('BP: A Legacy of Apartheid, Pollution and Exploitation' 2006).
For some business, access to raw materials and resources, cost savings from lowering labour and operating costs, and expansion to other markets prove the benefit for investors when engaging in foreign investments. Basically, globalisation and trade reform are credited with improved income growth and poverty reduction in much of developing world. Empirical evidence also points to the growth-inducing effects of changing balance of world economic power over the next two decades, where long term growth is like the rising tide, lifting all the boats, including those of the poor. Reality, however, is often more complicated. For instance, British Petroleum have not reaped the perceived benefits of rapid growth of recently emerged (or re-emerged) national economies in their business strategy but instead considering the advantage of their current business strategy ('About BP', 2010).
With regards to ethical issues, British Petroleum recognises that sustainability is a major force linking corporate social responsibility with the creation of shareholder value ('About BP', 2010). Providing additional force have been legislative requirements this company to disclose environmental and sustainability performance. Management practices of the company had helped them throughout the years. Through direct corporate intervention or centralisation that the company had used its ability to capture the attention of the market had been going strong. As a result, British Petroleum have implemented their corporate social duties and responsibilities very well to ensure that they are managing the needs of various internal and external stakeholders of their oil and petroleum products, and they also balance their actual and perceived corporate social duties and responsibilities within their performance through the use of appropriate external reporting within the company ('About BP', 2010). Having a strong authentically trusting relationship with investors has helped the company weather its own downturns. The company had also established an ongoing personal relationship with the individual decision-maker so as to assure that they probably meet the needs of their stakeholders.
Apparently, from the evaluation of advantage of the resulting opportunities and/or to avoid potential dangers of changing balance of world economic power, any efforts of British Petroleum concerning business strategies tend to be more motivated and often more long-term undertakings (Assadourian, 2004). In accordance to this, British Petroleum must consider the advantage of global mergers and acquisitions arrangement or business alliances. Furthermore, business effort towards equity-investment alliances more often than not had an explicit intention or aim in mind for the joint venture or alliances. The global mergers and acquisitions arrangement may also include other forms of agreement, particularly the trade off of products and providing or buying of other's stuff. As indicated in the paper of Jenster & Hussey, (2001), in comparison to the establishment of wholly owned enterprises, such global mergers and acquisitions may engage more unpretentious investments even though considerably in excess of those for such other approaches like licensing or exporting. Their added distinctiveness also plunge in between these two options, as does the quantity/level of risk, the profit potential, and the extent of control over the ensuing products and their manufacturing process and profit.
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In addition, Jenster & Hussey, (2001) added that there are some alliances that involve simple cross-border joint ventures whereas the firm or business contributes in the foreign market with a local firm. Aside from this, there are other alliances that are considered genuine global ventures whereas the multinational corporations cooperate with other global business at different levels of the business and in numerous areas. Basically, as for advantage British Petroleum's objective may also consider expanding the operations of both businesses on a wide-reaching level. With respect to the current business environment, the so-called global mergers and acquisitions are known to be global phenomenon since it possesses significant effect to involved businesses (Jenster & Hussey, 2001).
Actually, not only British Petroleum may consider this effort but also other companies around the globe may also become like mobiles in a storm being blown about by incessantly changing breezes of wind. The mobiles' balances have gone skewed and the mobiles quiver for a period of time before they can patch up into their original poses. When a breeze of wind rips off one of the balances, the mobile again quivers and then patches up into a new spot. In this tumultuous twister all of the units that have been stunned about have not yet settled into their latest arrangements. According to Hitt, Ireland, & Hoskisson (2003), people are not certain what things will look like or if they will mend down in their current stance. What people do know or what we know is that innovative strengths are at work. In business or even in normal work environment, employers and employees need to be attentive in order not to be swept away by the wind breeze. There are different types of wind breeze, crossing and blending, making the mobiles be unstable and send-off employees looking for employment. These wind breezes comprise the business trends that state the new careerism. Actually, the rapid growth of recently emerged (or re-emerged) national economies and the likelihood of a changing balance of world economic power has resulted in a twister of competition, causing firms to try paring behind and invigorate their swollen operations to be more rapidly on their feet. From this and in relation to business context, changes in the world tend an individual or a business unit collaborates to the needs of the changing environment. Firms may add and omit business efforts in order to survive. For instance, the importance on financial concerns in the business world particularly the issues of debt and risk of bankruptcy is the reason of important exclusions (Assadourian, 2004). The evaluation of strategic decisions has occasionally suffered from this inadequacy, when definite financial criteria imposed instinctively have forced decisions to be considered from a merely financial standpoint (Kaplan, & Norton, 2001).
In British Petroleum, the purpose of maximising business wealth also differs from the well-known idea of maximising profit. The principal aim for most businesses is profits (Suderman, 1999). Though, within the firm, managers and executives will have to cope with a changing business environment and balance the differing interests and needs of their key stakeholders by paying attention on accomplishment in the two element areas of fringe and exploitation, with explicit targets applicable to their part of accountability. The extremely aggressive nature of many industries and the likely outlook of sustained economic instability as countrywide and global economic fortunes fluctuate, requires that business managers keep on looking for chances to perk up feat. This will principally be attained by enhancing efficiency in the ranges of /retaining clientele, increasing business capability and fiscal management (Kaplan, & Norton, 2001).
In British Petroleum, the significant features engage the organisation style, attention on core business, costs and resources control, assessment of product and service effectiveness, potential for product synergies, working capital management, safeguarding of sensible stock values, and cash forecasting and projections (Gilpin, 2000). As stressed out by Kaplan, & Norton (2001), the management style must be appropriate to the viable necessities of the market and the condition of the company. A diverse style will be required dependent relative on the rumble or recessionary environment of the market segment and the general market (Kaplan, & Norton, 2001). There should be no concern in diversification unless this is evidently associated to the company and defers direct cost or viable advantage. Firms need to constantly practice cost reduction/efficiency schemes and ought to cease from the holdup of taking action. Furthermore, businesses need to have a lucid and precise perceptive of the definite earnings produced by diverse products/services. In order to practice this, a certain business must have suitable systems that will identify actual costs. Apparently, rigorous management of stocks is also recommended and made sure that work in advancement and debtors are tied up. Aside from this, there must be valuation of all stocks at the accurate value. Lastly a firm should have systematic cash forecasting and excellent cash flow management (Neely, 1998).
Aside from returns, business companies must also be aware that there are other issues that produce a vast blow to their progress. This comprises the inventory cost, competitions and distribution of products issues. The cost of inventory and expenses in keeping materials has a significant blow to a business since too much cost doesn't help in the business development and attainment of goals. High level rivalry can generate huge impact to businesses for the reason that the level of competition may compel a business to use a lot of resources.
As stated, all emerging business themes suggest that managers will have to cope with a changing business environment and balance the differing interests and needs of their key stakeholders. One of the model that must be considered in British Petroleum was strategic alliances model which can help managers to better understand the competing demands of key stakeholders and how they might be best resolved. Actually, the troubles in distribution of products can produce huge bang to the business because lower allocation of products may mean lower income, loss of patrons, and a stained image. But with strategic alliances, the results of key impacts to businesses will be lessened. Through strategic alliances, primary problems of the key impacts will be given solution.
There are a lot of motivating reasons behind the formation of joint ventures or strategic alliances and other cooperative strategies. As stated previous, businesses go into joint ventures because of the need for resources, particularly, skill money, and manpower. As indicated in the paper of Galbraith, (2001), there are three basic motivations for the development of strategic alliance. One of which is it embodies the lowest business deal cost alternative; it also permits an enhanced strategic situation to be achieved, and it gives a prospect for business learning. These motives may be substitutes, even though in some cases all three motivations may be relevant. An exacting motive for considering a cooperative strategy and entering into alliances is offered by the challenge of entering latest international market arena (Galbraith, 2001). The option is one between exporting, entry by means of joint contracting such as franchising, licensing, counter-trade, and contract manufacture, and venture in the target market by setting up strategic alliance with local associates (Galbraith, 2001).
Even though the alliances and joint ventures formation is offered as characteristically the product of unitary decisions in the existence of adequate data to make them, it is typically the result of a union of views in both businesses pointing to the probable reward of such venture, when the definite benefits and costs cannot be known until the coalition has been started. Thus, as much political as economic resolutions depending greatly on the inner corporate political influence of the champions, and placed at danger if those champions must lose power in their home organisations strategic alliances are generally created for the reason that each organisations feels insufficient in a certain area of its activities and needs to be taught from the other partner. Obviously this effort also engages risk if total truthfulness is not present, as one partner may acquire and not give fully in return. From an economic standpoint, the main argument for joint venture is that they are usually created as a result of an external motivation or change in business conditions to which business react with a feeling of internal business necessitate that they feel is finest met by in search of a relationship with a new business (Hitt, Ireland, & Hoskisson, 2003). An additional issue advancing alliance formation as contrasting to the alternatives of joint venture is the requirement to limit risk. The scattering of financial risk is often cited as a primary motivation for the creation of strategic alliances. Another motive behind the consideration of strategic alliances/joint ventures is the need for velocity in attainment the market. Alliances are the greatest means of attaining market presence to meet an opportunity. Finally, the motivation to collaborate remains lofty even when the alliance has uncovered the partners to the attraction to steal each others' secret (Hitt, Ireland, & Hoskisson, 2003). Strategic alliances are desired by business for the reason of changing business prospects. In the case of Honda Motors, they engage in strategic alliances not only because of the need for resources. But their alliances also created different opportunities that lessen transaction cost, improvement of strategic position, an opportunity for organisational learning, establishment in the international markets, the need to set up for a change in environmental circumstances, the need to limit business dangers, the need for quicker market entry, and the opportunity to increase and share business secrets.