The Role of Ethics and Social Responsibility in Business - Paper Example

Introduction

Ethics and social responsibility are two principles that scholars and practitioners believe go hand in hand in the business environment. In the recent past, the various financial scandals at companies and financial institutions brought into the limelight the previously unnoticed trend in the failure of ethical behavior in business organizations (Ferrell, Thorne, & Ferrell, 2017). Therefore, the problem has sparked an interest in research ethical issues in companies by both business practitioners and scholars. The issue of ethics follows two fundamental and complementary routes. Firstly, it seeks to analyze and understand how people make decisions on ethically dubious challenges. Secondly, to understand the impact of corporate social responsibility (CSR) and sustainability practices on an organization. Ethics is a set of moral guidelines and principles that guard the code and conduct of human behavior in the society. It also refers to the ability to distinguish between right and wrong. With this note, business ethics elaborate the moral principles an institution utilizes to ensure that all employees' behavior is acceptable while fulfilling their organizational tasks and obligations (Hartman, DesJardins, & MacDonald, 2018). Likewise, the government and the general public around the world believe that social responsibility is when businesses operate in a manner that does not counter the societal norms. In light of this development, the entanglement of social responsibility and business ethics is implemented when organizations implement a written code of ethics to symbolize that it acts in the best interests without breaching the social responsibility expectations. Therefore, ethics are social responsibility is of great benefit to organizations. The two principles are fundamental in the business environment.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Businesses across the globe are required to employ morally upright actions. However, most companies and corporations engage in activities that fail to meet the required ethical standards because of the profit motive. In the business environment, ethical conduct implies that organizations utilize the fundamental concepts of fairness, honesty, and transparency to the relationship with customers and coworkers. The growth of business institutions relies heavily on their sound ethical codes of conduct implemented to guide the activities of the employees and the management (Ferrell, Thorne, & Ferrell, 2017).

Since businesses are important parts of the society, the executives should be aware that their prosperity is founded on the broad association with a wide range of persons, organizations, governments, and groups. The implementations of sustainable ethical principles benefit organizations on a variety of ways. Sustainable ethical codes of conduct help an organization to build customer loyalty. The base of loyal customers is critical to the long-term business success (Morrison, 2017). For instance, if the customers believe that they are treated in an unfair manner such as price overcharge, they definitely will not be repeat customers. Therefore, if a business builds a reputation for ethical behavior, it creates a positive company image in the marketplace significance for attracting a wide customer pool. Consequently, a negative reputation due to unethical practices hurts the company's image as well as finances. On the other hand, sound ethical principles help a business to retain good employees. The talented persons at all organizational levels are driven by the desire for fair compensation for their work and dedication. According to research, companies with fair and transparent dealings with their employees have a high retention rate (Morrison, 2017). They also experience a high level of employee job satisfaction and motivation resulting in increased productivity. Similarly, the success of an organization requires the employees to observe and work within the ethical code of conduct. Employees have the responsibility of being ethical in the sense of honesty in their experiences and capabilities. Ethical employees are defined as team players because they develop positive relationships with the colleagues, supervisors, and managers (Ferrell, Thorne, & Ferrell, 2017). It also important to note that the implementation of a high standard of ethics and social responsibility provides information and signals to job seekers about the organizational norms and values. Such a brand image attracts highly qualified and talented workforce. Moreover, the employees are the core stakeholders that directly contribute to a company's success. As such, their understanding of the social responsibility activities undertaken by a firm could help to answer the lingering questions about CSR (Hartman, DesJardins, & MacDonald, 2018).

On the other end, business corporations and companies are experiencing the increasing demand of focusing beyond their own interests and prioritizing the needs of the society they operate within. The belief that business institutions have the responsibility to the society beyond the stakeholders and profit motive has been around for centuries. It is viewed that businesses build their operations within the society. In return, the society expects something in return as a sign of goodwill between the two parties (Schmidpeter, 2013). Corporate social responsibility (CSR) is no longer viewed as the amount of monetary benefits a company contributes to charity, but its overall involvement in activities that improve the status of the society and the quality of life for the people within it. As a result, it has become a routine enshrined in a company's code of ethics to indulge in serving the society through offering sponsorship to the local people and supporting local charities. The growing interest in social responsibility in business is as a result of the growing expectations and concerns by the consumers, citizens, and the government (Morrison, 2017).

CSR is as important as business ethics. Being socially responsible helps companies to bolster their image and build their brands. The perception about a company by the public is essential to the shareholder and customer confidence in the organization. Projecting a positive image through engaging in sustainable CSR practices leads to financial profitability and social consciousness in a business institution (Schmidpeter, 2013). Furthermore, a highly active company in the society through its employees leads to an engagement with potential customers, hence indirectly marketing the company in the process. On the other hand, engaging with customers by building relationships with them acts a cornerstone to the success of a company. If a company implements a social responsibility policy, it can impact the consumer purchasing decisions. Some of the customers are willing to pay more for products if they know that a portion of the profit is directed towards activities such as environmental protection. Environmental degradation is a growing concern in the world due to global warming. Investing in environmental conservation programs such as handling industrial waste through proper, safe and efficient disposal mechanism that lowers the risk of pollution is a growing social responsibility concept in the business world (Hartman, DesJardins, & MacDonald, 2018). The environment is the only natural resource that is invaluable to humans. Furthermore, education is another critical factor that should be considered in CSR programs. Education helps to nurture future talent and is the key to a prosperous society. Corporations should fund educational development programs and set up schools especially in low-income neighborhoods fostering bridging the gap in education access (Schmidpeter, 2013).

Conclusion

In conclusion, ethics and social responsibility are two important and complimenting factors in business. Ethical conduct helps a business to formulate a strategic plan that serves as the backbone to an institution's principles. In spite of being driven by the profit motive and achieving a positive return on investments, businesses should be bound by the moral and ethical standards. Ethics and social responsibility have proven to be fundamental concepts that improve the companies' image and brand. Positive ethical conduct by the employees and senior management helps to attract potential customers. Similarly, the obligation to give back to the society by ensuring fairness in social responsibility engages the customers as well which helps to build a positive brand image. Therefore, social responsibility and ethics are undeniably the driving forces for successful business practices and ventures. Furthermore, social responsibility should show the ethical standards of a company because it combines the financial goals of the investors with the obligation to promote the well-being of the society through environmental protection, justice and economic growth among other factors. The bottom line is that the maintenance of high ethical standards and corporate social responsibility is an obligation but not an option for all businesses.

References

Ferrell, O. C., Thorne, D. M., & Ferrell, L. (2017). Business and society: A strategic Approach to Social Responsibility & Ethics.

Hartman, L. P., DesJardins, J. R., & MacDonald, C. (2018). Business ethics: Decision making for personal integrity and social responsibility.

Morrison, J. (2017). Ethics and Social Responsibility. The Global Business Environment, 375-411. Doi:10.1057/978-1-137-48377-5_11

Schmidpeter, R. (2013). Corporate Social Responsibility: A New Management Paradigm? CSR, Sustainability, Ethics & Governance Corporate Social Responsibility, 171-180. Doi:10.1007/978-3-642-40975-2_10