Corporations should be responsible for stakeholders, who comprises of supplies, customers, employees, creditors, the surrounding parties and the immediate environment. The whole subject of corporate social responsibility is an issue of applied ethics. The relevance of this area of concern cannot be slighted since businesses need to know clearly and in advance what the community would expect of them. Equally important to the subject is that government, and other authorities would want to establish a position with regard to whether laws and regulations on morality, should form part of business law, and find out whether application of such laws has justification. Finally, the community in general needs to be well aware of corporate’ social responsibility to prevent rights violations and check against over-expectations from business entities. With reference to the assignment herein, this paper strives to present evidence supporting the position that corporations ought to exercise responsibility to their stakeholders (Trevin%u0303o & Nelson, 2011).
Many thinkers of corporate social responsibility of entities have given contradicting views over whether or not businesses should be held ethically responsible for their actions. An extreme one is the view of those who argue that because the law creates interrelationship between organizations, grant legitimacy of assuming rights and responsibilities of an artificial person, they can, therefore, be responsible for their actions in the same sense that human beings are. Another extreme view is that it is senseless to demand moral responsibility from business organizations and impose a moral duty. These philosophers argue that business organizations are the same as machines and hence not liable for non-conform to any moral standards. Still also there is an assertion that a manager should be responsible to act solely in the interest of shareholders, and an activity for any other purpose constitutes a betrayal of manager’s unique responsibility for shareholders. Major moral controversies relating to the social responsibility of capitalists business practices relate to issues such as: moral status of corporate entities, insider trading, job discrimination, deceptive advertising, basic employee rights, whistle blowing, environmental impact among others (Kotler & Lee, 2005).
Knowledge holds corporations rely on the contribution of much wider set of stakeholders, thereby imposing a duty to consider the interests and needs of such stakeholders rather than just shareholders. This forms the foundation of the integrated view of the relationship between business management and ethics. According to this view, business exists as an economic entity and it has to make profits for its own survival. If business exists in society, it has to possess responsibilities and obligations for its operations.. It should hence make profits within ethical means (Trevin%u0303o & Nelson, 2011).
A business that makes positive contribution into society is likely to be regarded to be making a move towards a long-term investment in a safer, better-educated and more equitable community, which subsequently benefits corporation by creating a stable and improved context in which business is done. This position asserts that entities that commit themselves to social responsibility reap benefits for themselves, while the community at large benefits consequently. With such kind of scenario, any argument to the contrary would seem out of context (Fletcher, 1967).
When the consideration of business entity is akin to a subset of society, then an expectation lingers to have in it the morals of society. This is a proposition held by the Unitarian view of ethical business management. In the medieval era, the view held that churches prescribe that business must mean wellbeing to the society (Jennings. 2006).
Looking at the impact of corporations into society, it is easy to observe that consequences are both positive and negative. Every credit is given to every positive contribution emanating from operations of profit making enterprises. As noted, corporations cause social problems as well, such as pollution, overstretching of natural resources, human injuries, emigration just to mention a few. It tows the line of logic to require involvement in solving issues emanating out of their actions. This can be possible by implementing impact into environment before engaging new production lines or new manufacturing plants. This activity should be included to rank alongside other objectives project evaluation techniques. A corporation that commits to this is doing itself justice by minimizing possible future catastrophes such as lawsuits (Fletcher, 1967).
Employees, conventionally regarded as the most valuable resource in any organization, should get due recognition and justified treatment from the organization they work. Unfortunately, there is some kind of discrimination among workers in both formal and informal way of working. More often than not employees receive preferential or unequal treatment based on race, gender, color, religion or even national origin. Discrimination of any type mentioned above is observed in the area of selection, training, promotion, transfer and termination. Whenever there is an application of any of these discriminatory practices, one thing is clear: the entity either ends up missing the most qualified person, ends up having a demotivated workforce or at worst tarnishes its public image in the estimation of society. However, a corporation with the proper and ethical internal labor policies will end up having a competent human resource and a motivated workforce, besides building an excellent reputation to the outside world (Kotler & Lee, 2005).
Employees feel full confidence and can admit and deal with whatever comes their way. Attention to ethics in the work place helps employees to face reality both good and bad. Studies show employee’s attraction to work for and even show commitment to corporations perceived as being socially responsible.
The position of suppliers in the whole system of business complex is paramount and hence corporations should take care of their interests. Their inputs receive incorporation into the production process and have a direct dimension on the final product. Some unfair practices include deliberate abnormal delays in payment to vendors and commissions and promotion costs to dealers and holding up bills of vendors on silly reasons and ultimately buying from others to avoid payment to earlier vendors. Justice done to suppliers translates to improved business ties and mutual benefit for both parties. Other peripheral benefits may also accrue to the buyer in a way of safe credits, after sale services or installation services. Fair treatment accorded to suppliers, may be taken to mean that the corporation attaches high value to business partners and will end up winning viable cartels it madly wants (Trevin%u0303o & Nelson, 2011).
There are also serious concerns with regard to creditors. For instance, incidences indicate a trend of corporations opening current accounts in different banks to avoid adjustments against loans by earlier bankers, delayed payment of interests to financiers and taking private finance only from those who are ready to do personal favors to finance department head. Providers of capital are equally indispensable as the internal customers of the corporate and their needs should be addressed with the seriousness they deserve. There is justification to these, going by the role they play in providing funds for a new project investment, expansion strategies and research engagements. Doing them justice then increases the growth prospects of the firm, improves the credit worthiness of the entity and helps to further a case for better terms of credit in the future. Voluntarily committing to corporate social responsibility may forestall legislation and ensure greater independence from government (Kotler & Lee, 2005).
A corporate that adheres to the rule of the game avoids possible lawsuits concerning personnel matters and to effects of an organization’s services or products on stakeholders. Ethical principles constantly merge in the realm of legal matters and art. The application of these principles to ethical issues transforms them into legislation. Ethical responsiveness and attentiveness ensures accurateness of policy and procedural cultures in the workplace. It is far much better to incur the costs of mechanisms to ensure ethical policies and procedures now than to incur costs of legislation later. In matters of hiring, evaluating, disciplining and firing for instance, have major intent of a well-designed personnel policy to ensure ethical treatment of employees (Jennings, 2006).
As critical social actors, with ramifications on all aspects including usage of resources, there is an obligation of corporations to use their resources and power responsibly within that social environment. This is with regard to restraining from influencing political balances, unwarranted revolutions and other forms of societal conflicts that amount to negative economic and social impacts. However, corporations will not have direct political role to play, and some will argue that social issues and problems are the proper province of the state rather than corporate managers; that they should not and cannot decide what the society’s main interest is. Business entities should be seen to mean well to the political platform prevailing in a country. This can come in the form of civic education, improving electoral infrastructures and using their monetary power to persuade members of the political class to act in good faith towards meeting the welfare of the governed (Kotler & Lee, 2005).
Ethics programmes help to manage values associated with quality management, strategic planning and diversity management. Ethics programmes identify preferred values and ensure alignment of behavior to values, policy development and value recording, which are inclusive in these procedures. Personnel training programmes harness efforts concerning several other programmes such as quality management, diversity management and strategic planning. Total quality management demands prioritization of operating values e.g. trust, feedback, reliability and measurement. Techniques of managing ethics are of immense usefulness in strategic management, planning like market share expansion, cost reduction among others.
Diversity goes beyond the scope of color; it is acknowledging different values and perspectives. Diversity programmes require recognition and application of diverse values and perspectives. These activities form the logic behind sound management ethical programme (Jennings, 2006).
Ethics programmes promote a strong public image. Attention to ethics is also a strong public relation concern and can portray a strong positive image to the public. Managing ethics ought to extend beyond public relations to an intrinsic corporate culture. However, people see such organizations that value people more than profits as striving to operate with the utmost integrity and honor. Such a scenario would support growth and meaning (Kotler & Lee, 2005).
All stakeholders who affect the behavior of business entities have a justification in claiming against the conduct of the entity in question. This point back to the rights theory that holds that rights and there is inter-relationship of rights and duties, such that one’s right is another implies duty (John Locke 1994). He argued that laws of nature mandate that we should not harm anyone’s life, health, liberty or possessions. He furthered his argument by citing four features traditionally associated with moral rights; that rights are natural in so far as the government creates them, rights are universal in their resemblance amongst countries, rights are equal in the sense that they are applying to all people irrespective of color, creed, race or gender, and that rights are inalienable, what means that they cannot be taken away by another person. In the light of this theory, corporations cannot be treated as exceptional, but rather should on their own motion take up their societal duties. Any conduct to the contrary can only be taken as a betrayal on the side of the corporate to the sheer society that hosts and provides for them (Jennings, 2006).
In conclusion, based upon the definition that business ethics is an application of ethical principles and methods of analysis to the business, or alternatively is it the systematizing, defending and recommending concepts of right and wrong behavior, there is a justified evidence to support the proposition that formal attention to ethics in corporate is the right thing to do. An unbiased opinion can seem to hold that all corporate activities have social impacts of one sort or another, whether through the provision of products, employment of workers some other corporate activities hence they cannot escape responsibility for those impacts whether positive or negative. Further even, a careful scrutiny of the outcomes of the whole subject of corporate social responsibility leads to a conclusion that its overall impacts are desirable. In other words, adherence to an ethical code of conduct gives rise to consequences that are more favorable than unfavorable to everyone. Based upon consequentialisms, ethical measure is ascertained on a cost-benefit analysis scale of the consequences trailing corporate actions. That action attains moral approval as right, if its consequences confer favorable outcomes and wrong if unfavorable. In light of the arguments presented, there are substantial grounds to hold on the assertion corporations owe stakeholder’s responsibility in all aspects pertaining to their interactions and contact (Fletcher, 1967).
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