Ethical Strategies the Emphasis Strategic Decisions Companies

Ethical Strategies

The emphasis strategic decisions companies make ethical implications. You briefly summarize ethical dilemmas

Strategic decisions that companies make and ethical implications

According to Laura Olkkonen and Vilma Luoma-aho's article "Managing mental standards with corporate citizenship profiles," "when talking about corporate responsibility and stakeholder thinking, companies need to find ways to combine two profound needs to function; the society's need for production and companies' need for societal consent" (Olkkonen & Luoma-aho 2011:12). Corporations are ethically bound to show a profit for their shareholders. It also could be argued they have a responsibility to stay in business keep their employees at work, as well as to honor the vision and mission statement of the founder. But what happens when the ethics of social responsibility seem to conflict with the need for a company to make money?

But acting unethically does not automatically result in profits in the long-term. Companies that egregiously flout basic safety standards draw fire from the public and the media. If companies break the law, regarding their accounting, environmental or labor policies they may be faced with considerable legal expenses and even put out of business. Olkkonen and Luoma-aho suggest that companies strive to add value by branding themselves as showing environmental, cultural or technological citizenship in a manner that generates additional revenue for the company by fostering good will and boosting the profile of the organization.

An organization does not need to be outstanding in all of these areas. Rather, the organization should focus on social responsibility in an area which is well-suited to their industry. For example, a technology company might support an initiative to donate computers to low-income students or to provide scholarships for low-income students to study technology in college. However, this does not mean that a corporation can choose to be responsible in one area and ignore the other areas of corporate responsibility. Not polluting or endangering the welfare of the public through environmentally unsafe practices must be regarded as a minimum, basic standard for all corporations to fulfill. Corporations overlook cultural responsibilities at their peril, as can be seen in the negative backlash against fast food and sugary cereal advertisements directed at children. And all companies, regardless of industry, must act in a socially responsible manner in terms of the way they deploy new technology (such as using the Internet to market to children).

The company does have a responsibility to communicate to stakeholders how these ethical actions will produce value and to assure them they are meshed with the company's profit-making intentions. "Companies are growingly interested in stakeholder expectations, since maintaining a good rapport with stakeholders is believed to strengthen organizational legitimacy and long-term performance" (Olkkonen & Luoma-aho 2011:12). However, shareholders' uncertainty about the value of charitable corporate actions seems to be waning, and like all corporate trends, is subject to constant change. In the modern business climate, unlike in the past, "to maintain basic legitimacy, companies need to achieve at least a minimum level of responsibility of causing no harm to others with their business" (Olkkonen & Luoma-aho 2011:13). To gain a true competitive edge, however, Olkkonen and Luoma-aho even argue that these basic expectations must be exceeded, much like expectations of increased revenue.