In recent years we’ve heard about corporate scandals involving big companies such as Firestone Tire and Rubber Company for the use of child labor, Southwest Airline’s violation of safety regulations, Fannie Mae’s underreporting of profit, Parmalat’s accounting scandal & mutual fund fraud, among others; but what do all these companies have in common? They failed to adhere to the basic ethical principles that should prevail in business activities.
Business ethics dictates a set of standard principles and values that should be taken into account in a company’s everyday activities. It is composed of both written and unwritten codes of moral standards that are crucial to the current and future activities of a business organization. It addresses issues within a company such as the misuse of company resources, accounting fraud, defective products, bribery, conflicts of interests, etc.
There’s a direct relationship between business ethics, corporate social responsibility and sustainability. Corporate Social Responsibility (CSR) is an important component of business’s ethics and it refers to the company’s ethical behavior and its contribution to the economic development, the improvement in the quality of life of its workforce, the local community and the society.
Corporate Social Responsibility addresses the economic, social, and environmental impacts that business activities have and the relation of the company with its employees, customers, environment and society. CRS has assumed an important role in the last decade: outside stakeholders are more interested in the activities of the companies, for them is important to know if the company’s activities are good or bad, if there is any scandal related to their products or services, if it cares about protecting the environment and if it makes any contribution to the local community. As an outside stakeholder, financial analysts take into account, among other things, CRS as an indicator of likely future performance.
Sustainability is about ensuring that this present generation meets its needs without compromising the ability of future generations to meet their own needs. In order for a company to be sustainable its long-term plans must take into account the economic, environmental and social impacts of their actions. The aspects that a company should evaluate for its sustainable plans are: economic efficiency (innovation, prosperity, productivity), social equity (poverty, community, health and wellness, human rights) and environmental accountability (climate change, land use, biodiversity). * lexicon.ft.com/term.asp?t=business-sustainability
The ethical culture in a company expresses the values and norms that the organization defines as appropriate, it’s composed of two elements: ethical culture and ethical climate. Whereas Ethical Culture is how an organization shows the extent to which it regards it’s values: teaches employees whether doing the right thing matters, makes doing what is right expected and
includes formal ethics program elements; Ethical Climate evaluates the ethical “personality” of the company as a hole, it is concerned with perceptions, decision making processes and ethics related attitudes. Ethical culture’s importance is the impact that it has over the employee’s satisfaction, their perceptions of leadership and the rates of misconduct within the organization.
COLGATE-PALMOLIVE ETHICS REPORT
Ethical Culture must be supported by a resource to help orientate the company’s employees about its defined values and principles, and that is what we know as the company’s Code of Conduct or Code of Ethics. This helpful document addresses various topics such has practices around diversity, harassment, the use of illegal drugs and alcohol, privacy, confidentiality and negotiations policies; it also addresses company’s commitment to the environment and employee health and safety.
In this report we’re going to analyze how Colgate...
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