QUALITY AND ETHICS
Corporate Social Responsibility
by Denis Leonard and Rodney McAdam
usiness scandals involving high profile organizations such as Enron and WorldCom have rocked the corporate world and be-come front-page news. This has shaken consumer confidence in both business leaders and the economy, creating concern about
In 50 Words Or Less
• Recent scandals may be awakening corporate America to its social responsibilities. • Quality has a foundation in ethics through the teachings of Crosby, Deming, Juran and Ishikawa. • Corporate social responsibility can be advanced more rapidly if it is incorporated into established quality management models and methodologies.
business ethics and governance. As a result, corporate social responsibility (CSR) has become increasingly important. CSR, which includes such elements as environmental protection, social equity and economic growth, has a strong affinity with the founding principles of quality management. With CSR being adopted by many as the means of assuring values based corporate governance, the quality community now has the opportunity and responsibility to take leadership in promoting ethical business practices and driving CSR to regain consumer confidence.
What Is CSR?
The International Organization for Standardization, known as ISO, strategic advisory group on CSR describes it as “a balanced approach for organizations to address economic, social and environmental issues in a way that aims to benefit people, communities and society.”1 CSR includes consideration of such issues as: • Human rights. • Workplace and employee issues, including occupational health and safety. • Unfair business practices. • Organizational governance. • Environmental aspects.
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QUALITY AND ETHICS
• Marketplace and consumer issues. • Community involvement. • Social development. Ethics and values are essentials on which businesses are founded and through which success can be achieved and communities developed. CSR has always been a major influence in the business world and is growing in importance as it is increasingly supported by business models and standards. In the aftermath of the scandals, the public,
just good business sense, that they are rewarded with an enhanced reputation that often leads to greater financial value for the enterprise”4
Ethical Foundations of Quality
CSR and quality are strongly linked through such principles as ethics and respect for people. Some key examples of these principles include the philosophies of Philip Crosby, W. Edwards Deming, Joseph M. Juran and Kaoru Ishikawa. Crosby talked of integrity, saying “The chief executive officer is dedicated to having the customer receive what was promised, believes that the company will prosper only when all employees feel the same way and is determined that neither customers nor employees will be hassled.”5 Deming’s 14 points highlighted the “driving out of fear” to release the ability to ask questions and express ideas, break down barriers between staff, encourage pride in workmanship and establish self-improvement for everyone. Deming supported an organizational climate where dealings between managers, employees and customers were conducted on an ethical basis.6 Based on Deming's teachings, the organizational structure—and, importantly, the reward and recognition system—must promote organizational values and not create contradictions. This results in a culture of trust and openness both inside and outside the organization, ultimately improving corporate reputation. Juran spoke of a system of values, beliefs and behaviors that are necessary for organizational success. He espoused the view that quality is recognized for its focus on people through work life and employee satisfaction.7 Ishikawa made a particularly strong statement on behalf of CSR when he said, “The first concern of a company is the happiness of the people connected to it. If the...
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