Business Ethics and Social Responsibility of Businesses
During this week’s mini lecture, we will discuss the importance of business ethics and social responsibility to the long-term success of a business.
What is Business Ethics? That’s a great question and I’m glad you asked! If you read the papers or watch the news, you constantly hear stories about business fraud and how it is so prevalent in today’s business climate. If you were to ask my personal opinion, I’d tell you that these stories seem to be as common as parents telling their children about Santa Claus or the Tooth Fairy. Nowadays it seems that in order to become the CEO of a Fortune 500 organization it requires you to have a Master Degree in Creative Accounting and that your moral compass needs to have an on/off switch.
Simply stated, business ethics is doing the right thing when it comes to your business and your stakeholders by employing a smart, responsible approach that can keep your business around for the long term. When an organization takes care of its employees, its customers, its suppliers and its stockholders all at the same time while still being able to make a profit, it’s a win-win for everyone.
Ethics in business is specifically important when it comes to dealing with customers. Integrity, when dealing with customers of your business, is essential to building and maintaining strong customer relationships. It’s especially important when it comes to how the business handles customer issues and service. We’ve all seen the businesses that have no problem sacrificing their customer service for dollar signs. While in the short term these businesses might be profitable, we all know people love to talk about bad experiences they have with businesses and sooner or later enough bad experiences will shut them down. There’s an old saying that, generally speaking, when we have a good experience at a business we will maybe tell a couple of people that are close to us, if anyone at all. On the other hand, when we, generally speaking again, have a bad experience with a business we will tell anyone that will listen from the cashier at the grocery store to posting it on Facebook! It is just unethical and quite frankly, not good business, to not provide your customers with excellent customer support when they have a problem with one of your products.
I’d like to shift gears and now discuss social responsibility of businesses. I think it would be helpful to again begin by defining what social responsibility is. Simply stated, social responsibility is an organization’s initiatives to assess and take responsibility for its effects on the environment as well as its impact on social welfare.
In today’s business climate, social responsibility in business is becoming an expectation. Organizations are continuously being told by the government, the media as well outspoken consumers about the advantages of acting socially responsible and warned about the risks of a lack thereof. Many organizations are seeing that they can gain a competitive edge by appealing to the increasing numbers of socially and environmentally responsible consumers, investors as well as employees.
Many business leaders see business social responsibility initiatives as something that might be nice to do but are not connecting it to expanding the business and increasing their profits. The problem with this mindset is that they are not considering that being socially responsible can make all the difference to their competitive advantage. Organizational initiatives such as volunteering, philanthropy and supporting community-improvement initiatives can significantly increase its brand, reputation and valuation of their business. An advantage to a business being socially responsible is that it can create goodwill among the community it serves as well as increase their trust in the business. In my personal opinion, consumer trust and having a good reputation are some of a business’s most beneficial assets. In fact, I will go on to say that without these two things, the business might very well find itself out of business. An important aspect to an effective corporate social responsibility initiative is that a business should make sure that they develop the right kind of socially responsible program for the business, or one that consumers in the community will find valuable. When initiated properly, it can open up a variety of new business relationships and opportunities. The bottom line is that if effective, not only will the business see success in their local communities grow, but their businesses culture as well. It can become a culture where the employees enjoy coming to work and where the community will choose to buy their products from.
We will end our lecture by briefly discussing the three main approaches to corporate social responsibility and what they mean below.
- The Responsibility Project – company assigns group to undertake projects that establish standards, planning, and evolution of various aspects of the business
- The Responsibility Program – companies become more proactive and comprehensive
- The Responsible Business – a business understands its actions can actually improve and evolve healthy systems and responsibility becomes fully integral to the way all business activity and thinking is conducted.
The requirements below must be met for your paper to be accepted and graded:
- Write between 500 – 750 words (approximately 2 – 3 pages) using Microsoft Word.
- Attempt APA style, see example below.
- Use font size 12 and 1” margins.
- Include cover page and reference page.
- At least 60% of your paper must be original content/writing.
- No more than 40% of your content/information may come from references.
- Use at least two references from outside the course material, preferably from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the two reference requirement.
Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must be identified in the paper and listed on a reference page.Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must come from sources such as, scholarly journals found in EBSCOhost, online newspapers such as The Wall Street Journal, government websites, etc. Sources such as Wikis, Yahoo Answers, eHow, etc. are not acceptable.