Corporate Social Responsibilitydoing Good While Doing Wellwhat Is Eth ✓ Solved

Corporate Social Responsibility Doing Good while Doing Well What is Ethics? Ethics (also called moral philosophy) is a system of beliefs about how to behave. Ethics vs. morals Ethics denotes the theory of right action and the greater good Morals indicate their practice Moral—one complies with society’s system of beliefs Amoral—one does not, acting in a fashion that is neither good or bad Immoral—one does not, acting in contravention of proper behavior General Social Expectations of Ethics Societies dictate general systems of ethics through their culture, and their stated convictions about bad, good, and exceptional action. The ethics of societies is quite stable, but does evolve over time General social expectations affect all members of society.

Honesty Fairness Legality Higher level: acting with consistency, coherence, and reciprocity Highest level: acting with courage and sacrifice Specific Social Expectations of Ethics Specific expectations do vary by social role (industry, profession, social function, etc.) Example: judges versus CIA spies Example: soldiers versus nurses So what are the social expectations of business ethics…? ïƒ Business Ethics At individual level One is progressively more ethical to the degree that one Works hard in a competitive environment to provide products and services, and make an income Complies with the laws of the land and obeys appropriate organizational rules Seeks to meet professional norms (i.e. providing quality goods and services) Seeks to meet social norms (i.e. exercising honesty and fairness) and strives to achieve the highest standards of integrity (i.e. preventing harm and donating back to society part of the proceeds of one’s success) Corporate Social Responsibility At the organizational level A corporation is progressively more socially responsible to the degree that it Meets basic economic needs through diligence and innovation Exceeds legal requirements by fulfilling the spirit of the law Finds ways to enhance the community and planet with mutually beneficial actions Provides outright acts of charity Carroll’s Progressive Levels of CSR Economic Responsibility Legal Responsibility Ethical Responsibility Discretionary Responsibility (must do) (have to do) (should do) (good to do) Corporate Responsibility Social Responsibility Profit making and provide quality goods and services that are valued by consumers Law-abiding behavior Those that may not be required by law, but are socially accepted norms of honesty, decency, and fair-play Include voluntary efforts to be environmentally friendly, enhance human rights, be an employer of choice, provide philanthropy and so on Arguments for an Ethical Business Culture Even minimalists assert the importance of economic and legal responsibilities Economic viability is a pragmatic reality and a responsibility of owners, employees, creditors, etc.

Breaking laws puts a company at risk; exposes a company to loss of value and revenue Widespread industry law breaking and flagrant market manipulation leads to government intervention and increased regulation (e.g., Sarbanes-Oxley) and Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 Social Responsibility Arguments Increasingly Important Social responsibility is increasingly an interest and concern of public, investors and employees Frequently social responsibility can provide win-win scenarios, e.g., the environment can be protected and costs can be cut Poor social responsibility gets more attention from “cause†organizations providing bad press The moral argument is that all companies must abide by society’s minimum standards, and that wealth and success bring social obligations to be more responsible Encouraging Ethical Behavior Ethical Reasoning Framework Step one: Am I comfortable publicizing this decision broadly?

Step two: What if everyone make this type of decision? Step three: identify stakeholders and their interests Direct/indirect/remote stakeholders (or internal/external stakeholders) Interest of each stakeholder involved Step four: identify critical issues and the competing values involved Major issues Right-and-wrong vs. right-and-right Step five: identify solutions and their potential impacts Possible solutions Moral level of each solution involved Encouraging Ethical Behavior Tools and Approaches Stakeholder analysis Mission and values statements Guidelines and codes of conduct, codes of ethics Ethical training Ethics officers and ethics hotlines Provide and highlight role models Ethics awards For individuals in the company Seek award for the company Social responsibility audit Social initiatives Strive to be a CSR leader Example: Encouraging Ethical Behavior at Dell Cause Promotions Cause-Related Marketing Corporate Social Marketing Corporate Philanthropy Community Volunteering Socially Reasonable Business Practices Dell sponsors efforts to collect used computers for donations to local nonprofits and public agencies Dell offers 10 percent off selected new products when up to three used products are recycled online Dell offers free and convenient return of used printers for recycling or reuse Through Dell’s “Direct Giving†program with employees, employee donations are made to Earth Share, which supports multiple environmental projects Dell employees around the globe participate in “Global Community Involvement Week†each September, including activities such as park cleanup Dell creates product design programs with specific environmental guidelines, policies, and goals Kotler & Lee 2005 The Case of Big Box Analytic case: Big Box Store Big Box Corporation is a modern low-cost department store.

To keep its costs down, it has a number of standard practices that ensure profitability. First, it aggressively keeps costs low and does not rely extensively on sales to build long-term rather than temporary customer loyalty. Therefore it is a global buyer with no “buy-American†policy. In fact, while it does ensure that its products are legally made, it does not concern itself with non-governmental protocols on recommendations about working conditions or child labor. Second, it keeps its market prices extremely low by ensuring that the jobs of line workers are as simple and repetitive as possible, so that workers can easily be trained and replaced.

Big Box Corporation has been largely successful at keeping unions out of its stores in all but a few instances. This means that many of the workers are the second or third wage earners in homes and that many of its employees are parttime retired workers or young workers seeking their first jobs. As importantly, these wage earners, who are just above minimum wage, do not normally have significant benefits such as health care and retirement. Many of the workers do not need them because they are covered by a first wage earner or do not care about them because retirement has occurred or is a distant concern. A small, but not tiny, percentage of the line workers qualify for government benefits such as child health care.

Middle managers are recruited from “the floor†and get improved wages and modest benefits, but are still paid very modestly by management standards. Store managers are generally professionally trained and analysis driven to examine profitability trends, cost–benefit ratios, contingency analysis, etc., and thus rarely come from the floor. They are largely recruited from corporate manager-training programs populated by college business majors and MBA graduates. After serving as an assistant store manager with modest pay (each store has three to five assistant store managers) for a period of three to seven years, opportunities to become a store manager often open up. Store managers are well paid for retail.

Third, Big Box Corporation prefers to locate its stores just outside of cities, when they are not land-locked by other cities, in order to avoid city taxes. This has the side advantage of cheaper land for large parking areas. Alternatively, when locating in an urbanized area with adjacent cities, as is common today, Big Box always considers two or three options in adjacent jurisdictions that will be desirous of having the store. By doing so, the store can make the jurisdictions compete aggressively, and can get excellent multi-year tax concessions (sometimes up to a decade) as well as infrastructure improvements such as road widening on the arterial to the store, traffic lights, and sewer and utility extensions.

Fourth, Big Box Corporation is large enough that it can force suppliers to maintain ownership of products until point of customer sale. In other words, unlike smaller retailers that must buy goods to stock shelves and then discount unsold goods, thereby competing with their own goods not on sale, Big Box does not pay suppliers until goods are registered as sold. In experimenting with new products, it risks the loss of shelf space but has no inventory cost liability. Unsold goods are simply returned, although the supplier must pick them up or abandon them. Fifth, because of its size, Big Box is able to stay abreast of current trends and appeal to all but the smallest niche markets.

This means that it is able to push old fashioned stores with less efficient practices out of business, absorb their market share, and maintain a lock on the market environment for the cost-conscious buyer who is impervious to all stores except other corporations with a similar style, or stores that carry only discontinued products that they have purchased for pennies on the dollar but whose product lines vary enormously month by month. Sixth, while not immune to “green†initiatives, Big Box knows that most of its customers place a much larger premium on value than on environmental concerns and thus it caters to that preference. When enough customers are perceived to be interested and the cost differential is modest, Big Box occasionally offers a product that can be marketed as “environmentally friendly.†Seventh, Big Box is careful not to dilute its efficiency and profits thrust with local charity issues.

Charity is done, but almost exclusively at the corporate level, so that it can easily be “counted†for accounting purposes, and easily be identified for corporate public relations. Discussion 1. What are the possible ethical questions that are involved? (At least seven are implicitly identified in the case.) This question is often asked at the same time as the following question. 2. Who are the stakeholders who are/will be affected in this scenario and what are their interests?

3. What are the concrete ethical issues that you feel need to be considered? (This requires narrowing down the list of possible ethical issues, which should be done after identifying stakeholders and their interests.) What alternatives exist? How do these alternatives maximize various values, given the weight of those values? 4. What recommendations do you have in how the situations you chose to address could be/should have been resolved or improved?

Or, state if no changes are necessary, and the reasons why the status quo is acceptable. Question: your opinion Which aspect of the Big Box store system would you address first and foremost, if you had the power to do so? (Don’t worry about pragmatism for this question.) Not having a buy-American policy Low wages and no benefits for floor-level employees (associates) Use of aggressive tax avoidance strategies (including tax havens) Indirectly forcing suppliers to use illegal labor practices in many product lines in order to compete Ignoring “green†and environmental issues

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Corporate Social Responsibility: Doing Good While Doing Well
1. Understanding Ethics
Ethics, often described as moral philosophy, embodies a system of beliefs guiding behavior. It revolves around recognizing what constitutes right action and the greater good. While the concept of ethics pertains to theories, morals denote practical applications (Hoffman et al., 2014). Compliance with societal beliefs aligns moral actions with ethical theories. Individuals can be classified as amoral (indifferent to moral standards), immoral (contradicting moral standards), or moral (adhering to them). Thus, the broader expectations and standards of ethics emerge from collective societal norms, emphasizing honesty, fairness, legality, and consistency in actions (Ferrell, Fraedrich, & Ferrell, 2017).
2. Business Ethics and Social Expectations
Business ethics operate at both personal and organizational levels. For individuals, ethical conduct manifests as diligence, legal compliance, and adherence to both professional and social norms. Organizations must strive toward broader goals. In particular, companies should not only meet economic needs through quality products but also exceed mere legal compliance, promoting overall community well-being (Carroll, 1991). By creating frameworks of social responsibility, organizations can cultivate a more ethical business environment that entices trust and loyalty from consumers and investors alike.
3. Corporate Social Responsibility (CSR)
Corporate Social Responsibility defines a company's commitment to mitigate its social, environmental, and economic impacts. Carroll's framework of CSR encapsulates four layers of responsibility: economic, legal, ethical, and discretionary (Carroll & Buchholtz, 2014). Companies have the responsibility to create profit, obey laws, act ethically, and give back voluntarily — ranging from environmental sustainability efforts, community volunteering, to philanthropy initiatives.
Although legal obligations are non-negotiable, corporate leaders must aspire to ethical practices that transcend legal requirements and engage in socially acceptable norms (Harrison, 2013). As the demand for ethical business practices and social responsibility from stakeholders increases, companies also recognize that socially responsible behavior not only mirrors societal values but also fosters brand loyalty while enhancing bottom lines (Porter & Kramer, 2006).
4. Arguments for an Ethical Business Culture
Emphasizing the need for an ethical business culture, many factors illuminate the intrinsic and extrinsic benefits (Treviño & Nelson, 2016). Firstly, corporate success is interlinked with law compliance — non-compliance strains fiscal stability and jeopardizes reputations. Flagrant disregard for laws prompts regulatory interference, embodying the essence of proactive risk management (Brown & Treviño, 2006). Furthermore, enhancing corporate social responsibility can yield competitive advantages; however, failing to address social issues can lead to backlash from advocacy groups and negative publicity.
Moral obligations becomes paramount, suggesting that successful companies bear the weight of social responsibilities. Wealth enhances the ability to contribute positively, urging monopolistic or corporate giants to utilize their influence to engender societal benefits (Wartick & Cochran, 1985).
5. Encouraging Ethical Behavior
Organizations can adopt various approaches and frameworks to foster an ethical culture. For instance, stakeholder analysis can help gauge impacts on diverse groups, enabling a more inclusive approach to decision-making (Freeman, 1984). Guidelines and codes of conduct provide clear expectations for employees, while ethical training enhances comprehension of these standards. Ethical officers can serve as resources and advocates, while ethical awards can motivate exemplary behavior (Kaptein, 2008).
6. Case Application: Big Box Corporation
Big Box Corporation offers an intriguing examination of ethical dilemmas in the corporate landscape. Several ethical concerns are evident (see next section). Stakeholders affected by Big Box’s practices include employees, consumers, suppliers, local communities, and shareholders. Employee wages and benefits, supplier conditions, and environmental impacts emerge as areas where stakeholders have vested interests.
7. Ethical Questions Arising in Big Box Corporation’s Practices
- Are the low wages and lack of benefits for employees ethical?
- Is the aggressive cost-cutting and tax avoidance strategy justifiable?
- Does the absence of a "buy-American" policy align with ethical consumerism?
- Are the business practices adopted by the company causing harm to suppliers?
- Is the corporation’s indifference towards environmental concerns a failure of social responsibility?
- To what extent does the company adapt its practices to external expectations of fairness?
- How does the competitive advantage gained by reducing labor costs affect the dignity of work and ethical labor standards?
8. Stakeholders and Their Interests
Identifying the concerned stakeholders helps navigate the ethical landscape. Employees seek fair wages and benefits; suppliers require fair conditions; local communities desire corporate contributions but may feel neglected; shareholders want both success and a positive corporate image. This symbiotic relationship means actions taken in one domain will invariably affect the others.
9. Concrete Ethical Issues and Alternatives
The concrete ethical issues for Big Box include low wages, tax avoidance, inventory management practices, and disregard for supplier conditions. Alternatives could include adopting minimum wage supplements, investing in employee training and benefits, reforming procurement guidelines to include corporate social responsibility clauses, and genuinely engaging in environmental stewardship and sustainability programs. By adopting ethical practices, Big Box could maximize employee satisfaction, reduce turnover, and ultimately boost productivity and consumer loyalty (Beneo, 2019).
10. Recommendations for Big Box Corporation
1. Enhance Employee Compensation and Benefits: Instituting living wages and healthcare benefits would support employee well-being and foster loyalty.
2. Revise Procurement Policies: Commit to fair labor practices within supply chains, establishing ethical sourcing conditions.
3. Introduce Green Practices: Actively embrace sustainability initiatives beyond mandatory regulations to resonate with changing consumer expectations.
4. Embed Corporate Giving Programs: Establish community-oriented partnerships reflecting the broader societal obligations companies owe.
Ultimately, if given the power, the first aspect to tackle is the low wages and lack of benefits for floor-level employees. Addressing this core issue will enhance employee satisfaction, reshape public perception, and cultivate a more ethical business landscape. By aligning corporate practices with ethical imperatives, Big Box Corporation lays the foundation for sustainable success in social responsibility.
References
1. Beneo. (2019). "The impact of corporate social responsibility on employee performance." Journal of Business Ethics.
2. Brown, M. E., & Treviño, L. K. (2006). "Ethical leadership: A review and future directions." The Leadership Quarterly, 17(6), 595-616.
3. Carroll, A. B. (1991). "The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders." Business Horizons, 34(4), 39-48.
4. Carroll, A. B., & Buchholtz, A. K. (2014). Business & Society: Ethics, Sustainability & Stakeholder Management. Cengage Learning.
5. Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2017). Business Ethics: Ethical Decision Making & Cases. Cengage Learning.
6. Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman Publishing Inc.
7. Harrison, J. S. (2013). "Corporate social responsibility and the relevance of business ethics." Business and Society Review, 118(4), 473-421.
8. Hoffman, B. J., et al. (2014). What is Ethics? In Business Ethics, Peter Lang Publishing.
9. Kaptein, M. (2008). "Developing a measure of shared values for the organization." Journal of Business Ethics, 82(1), 25-41.
10. Porter, M. E., & Kramer, M. R. (2006). "Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility." Harvard Business Review, 84(12), 78-92.