Ethics and Corporate Social Responsibility in Business
Ethics is commonly defined as a set of morals that influence an individual’s behaviour depending on a beings ideological belief. There is no right or wrong understanding to the word as the term is subjective to each person and to every separate situation.
The evolution of business ethics originated in the 1960s where issues such as that of civil rights, work ethics and the environment played an influential role in the implementation of ethics in the internal and external development of a business.
Business ethics came to light in the 1970’s when the world was hit by the economic recession. During these times unemployment levels escalated to extreme heights, those left in jobs were subjected to inadequate working conditions and many businesses were riddled with scandals.
The Ethics Resource Centre was founded in Washington DC USA during the year 1977. The ERC is a non-profit organization with one aim to educate businesses on how to act ethically by offering services such as research facilities.
How a company is functioning ethically is now a major determining factor of whether or not a business is deemed successful. Businesses in 2013 have the ability to transform an individual’s life through multiple ways from introducing higher wages or non-financial rewards such as courtesy car, paying for child’s education or even doctors’ bills. These are all incentives company’s offer to their employees in order to get the best out of them.
In the words of Sir Thomas Woodrow Wilson a businessman must have a conscience which is mirrored in all associated departments.
Examine the key ethical issues in business and explain how and why ethical behaviour has become a key measure of business success.
Business ethics is the search for and commitment to meet appropriate standards of moral conduct in business situations. Fry et al/2004
Ethical business practice has become an important factor in today’s economy for multiple reasons, but most significantly in relation to organisations operating on a much more efficient level. For instance companies have a duty of care to their customers as well as potential consumers.
The term corporate social responsibility commonly referred to as CSR relates to the policies integrated into a business’s code of conduct, its initiative is to ensure that a business is taking into account both the internal and external impact it has on the environment as well as social welfare. The distinction between business ethics and CSR is that ethics is mainly concerned with a company recognising the difference of acting in a right or wrong manner. Whereas CSR conveys the need of an organisation to take into account its responsibility of that to its stakeholders by having a positive influence on the environment, through its employees and other contributing factors.
A company’s ethical principles are displayed through marketing, production and the actual product itself. Businesses are faced with ethical issues daily ranging from different levels of importance and affect a variety of individuals ranging from company owners to employees, consumers or just ordinary beings. The way a company focuses on marketing a product is a representation of its beliefs and values and must be done in a way which meets current expectation of what is ethically wrong and right. A main marketing issue is that of how a company decides on its trade policies. For example, by implementing fair trade strategies into the supply chain it means that both the suppliers of materials, contractors, distributors and consumers all benefit and experience the same advantages in a just manner. Modern day businesses must take into account its duty to society by showing environmental awareness which can be exhibited in a number of ways. Firstly, a major issue facing today’s businesses is that of deforestation a term used to describe the cutting down of trees for...
References: * Anthony E. Henry (2011) Understanding Strategic Management. 2nd edition.
* Kew, J. and Stredwick, J. (2008) Business environment: managing in a strategic context. 2nd ed. London: Chartered Institute of Personnel and Development.
* 2012), Available through - http://ethisphere.com/wme/, (Accessed on 13/05/2013).
* Reference teachers lecture slides.
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