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Ethics primarily acts as a check to ensure that the corporate strategy is enacted effectively. Rarely do firms take ethics into account as a key element of strategy, though it does happen once in a while. Generally, the role that ethics plays is tangential to strategy aside from its role as a check. Robin and Reidenbach (1988) elaborate further on this idea, noting that "without the integration of ethics at the very beginning of the planning process… the organizational culture may not provide the checks and balances needed…" Their argument is that while corporations tend to put the profit motive forward first, a lack of ethics can undermine the objective of maximizing shareholder wealth. Having a strong program of ethics built into the organizational culture reduces the risk of major ethical lapse.
A couple of recent issues highlight the importance of building an ethical culture to maximizing shareholder wealth. Enron designed its entire company around an unethical business model -- accounting fraud was rampant and other practices were just as unsavory. The result was that once such fraud was uncovered, the company went out of business. Other firms involved in accounting scandals suffered similar fates around that time. Even the Martha Stewart issue, where the ethical lapse was unrelated to the company business, resulted in damage to the brand and the loss of the company's CEO while she went to prison, again to the detriment of shareholders. Even...
Ethics are easily defined because there are only a few different major systems of ethical thought, and the laws of the land help to determine what the ethical standards for business are. Social responsibility is a much vaguer concept -- ask thirty CEOs what corporate social responsibility is and you will receive thirty answers (Dahlsrud, 2006). Corporate social responsibility therefore becomes a voluntary policy, self-regulation that governs how the business will interact with key stakeholders (Davis, 2013).
Thus, firms build corporate social responsibility into the strategies in different ways. Some firms integrate CSR as a means of improving operations. Such an approach reflects a "balanced scorecard" approach to business, where optimizing multiple facets of the business will ultimately make the business perform at a higher level, to the benefit of the shareholder. Wal-Mart takes this approach, and focuses its social responsibility efforts on things like reducing waste that will allow the company to be more efficient.
Other companies engage in corporate social responsibility…
References
Dahlsrud, A. (2006). How corporate social responsibility is defined: An analysis of 37 definitions. Corporate Social Responsibility and Environmental Management. Retrieved November 19, 2013 from http://www.mcxindia.com/csr/newsarticle/pdf/csr_news45.pdf
Davis, S. (2013). Examples of social responsibility strategies. Houston Chronicle. Retrieved November 19, 2013 from http://smallbusiness.chron.com/examples-social-responsibility-strategies-10633.html
Friedman, M. (1970). The social responsibility of business is to increase its profits New York Times Magazine. Retrieved November 19, 2013 from http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Robin, D. & Reidenbach, R. (1988). Integrating social responsibility and ethics into the strategic planning process. Business and Professional Ethics Journal Vol 7 (3-4) 29-46.
Therefore, corporations have had to change their viewpoints and start looking at the long-term consequences of their behavior, as well as looking at the bottom line. Businesses also have to be concerned because consumers have also become aware of environmental concerns, and many consumers are demanding earth-friendly products and have shown a willingness to pay more money to competitors who observe environmentally-friendly practices. Interestingly enough, this demand has given rise
Intent to perform a greater good would not affect the possibility of being exposed to a prison sentence of up to 20 years and a fine of up to $250,000, plus possible penalties under state law. Montana compares this legislation with that of the regulation of firearms. It is not the mere possession of malicious code that is criminalized, but the use and the damage to computer systems and association
Moreover the 'diyya' or blood money stipulated for killing or mutilating of a man was stopped. However, whipping as a punishment for theft and added offences remained in its applicability in local courts. (Pitaszewicz, 87) Hence till 1960, the Alkali Courts applied the Sharia also in penal cases fulfilling the changes and bans launched by the British. Prior to the declaration of independence, the British signed a negotiation with Sir
Tesco’s Fraud in the Accounting Information System The Accounting Information Systems (AIS) plays a central part in the business computing structure of any organization. AIS deals with the classification, collection, storage, monitoring, and conversion of the company’s data into information utilized for internal control and reporting (Smith, 2016). Once an organization adopts an Accounting Information System, they can keep accurate records, and manage the assets of the organizations properly. The management
Morality and ethics: what are they and why do they matter? All you need to know about ethics approaches and theories Means, ends, principles and virtues six step process of ethical decision making for you to follow Surviving professional life ethically Ethical dimensions of the professional -patient relationship Special challenges: "difficult patients" and patients in suicidal crisis This is a time of great change in our understanding of health, illness, and health care systems. Medical researchers,
Aviation Business Ethics and Sept. 11 Industry Implications On September 11, 2001, nineteen terrorists passed through several security checkpoints at three United States airports and proceeded to hijack four commercial jets. The horror began at 8:45 A.M. Two hours later, more than three thousand people were killed in New York City, rural Pennsylvania and Arlington, Virginia (Duffy, 2002). shattered the nation's sense of safety and security and forever changed the way people