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Business ethics is the behavior of businesses with respect to the surrounding environment which includes people, other businesses and the general environment. Ethics are best enshrined in the business cultures adopted by the said organization. Adopting positive attitudes is normally the starting point towards establishing proper business ethics. Ethics also define the internal relationships within an organization. The interrelationships between employees in the context of an organization should be engraved as part of business ethics so as to ensure energies are not directed towards confrontations. Again, the relationship between the seniors and juniors in management is defined by the ethical standards set. However, the interaction between the organization and the external environment is the most critical component of business ethics.
Relationships with external parties comprise the incorporation of corporate social responsibility by the business organization. Principles of corporate social responsibility state that the business generates returns from interactions with the general external environment therefore it is only fair that sufficient efforts are applied in improving the environment or in the case of the physical environment, reducing negative impact. In so doing, the organization not only gains positive reputation among customers and dealers but also contributes to the sustainability elements of its business practice.
Company Qs attitude towards corporate social responsibility is simply wrong. A critical element of effectiveness of the corporate social responsibility is the presence of opportunities to act. Whenever a social situation arises, the onus is on the organization to aid in the solving the problem as opposed to ignoring or simply finding ways of escaping. Opportunities come in the form of problems developing within the society where the organization operates from as well as response to some extra needs presented by the people as concerns the products offered by the firm. The company is faced with three clear opportunities to act. Analyzing each scenario will help bring out the negative attitude adopted by the firm as concerns corporate social responsibility
The first is the rise in crime rate in certain areas of the metropolitan city which caused consistent loss of money for the organization. In the case of insecurity in certain areas of the city, the firm simply closed the affected branches citing loss of revenue. Possible action could have been calling for the cooperation of the various stakeholders in security issues which may incorporate community leaders and security forces to develop programs geared towards improving security in the neighborhood. All the stakeholders in the society, the company, the community and the police should start programs like the community policing where the community assists in identifying the criminals and handing them to the police. Security is paramount to the community and the business as well. The company with the assistance from the police can organize vigilante groups at the community level to assist the police provide security. Such positive contribution would have cost the firm a dismal amount but the benefits of maintaining the stores open would be immense and more importantly, the local communities would better appreciate the organization which would translate into bigger sales for the firm.
Secondly, there have been requests from customers for health-conscience and organic products. The ultimate goal of every business is to maximize profit. The company has a social responsibility to provide its customers with products they request. The customers request for health-conscience and organic products implies that they are in high demand and so the company should provide the products as demanded. Failure to satisfy the needs of the customers is a failure to the company. The company should therefore restructure its supply systems to include what the customers desire. The company should develop a system where by the customers can communicate their views so that the management can evaluate and consider those views in its decision making. This can be through provision of suggestion boxes where customers can post their recommendations. The requested products offer higher margins in comparison to the products already offered by the grocery. This means that in adopting the negative attitude towards providing nutritionally rich products, the grocery is losing out on opportunities to improve profits. The firms response to this has been by offering little amounts.
Thirdly, the firm has been requested by the local food bank to donate the one day old food products and the management responded negatively citing worries over lost revenues due to possible fraud by employees on the premise that the food is for donation. The company management should understand that social corporate responsibility requires the business to provide for the welfare of the society in which they operate. Refusal to donate food which is later to be disposed is not only mean but also irrational. Donating food stuffs to the food bank is the cheapest way to assist the society. By donating food, the company is able to improve its image to the public. Enhanced public relations will increase the companys sales and hence more profit to the firm. The excuses given cannot be convincing since there are proper controls which can be enforced to ensure no fraud occurs. With the recent technology, the firm can put into place systems that can be able to track movement in stock. Proper auditing of the companys books of account is a good measure of controlling fraud in any business. The business could have used these measures to curb stealing by employees and fraud. Refusal to donate the food amounts to denying food to a hungry person but feeding it to the pigs. The implication of such action on the reputation of the grocery can be disastrous.
The three incidents testify the fact that the company is only concerned about its own interests and has least regard to the external parties who actually support its existence. This is a flawed view towards corporate social responsibility. Clearly, the opportunities availed by the situations are genuine and can lead to a better firm. It is clear that corporate social responsibility may not be a cheap affair and the fact that it does not result in quantifiable results puts off managers from undertaking such projects. However, it is a moral obligation that one must give back to the environment which facilitated the success achieved. Even more important is the fact that, in the process of giving back to the society, the organization may easily find opportunities to grow, expand and even enhance the ability to survive by offering products whose demand is rising.
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