Corporate Citizenship and Business Ethics

Ecology, sustainable development, managing environmental issues

After reporting the unprecedented ecological challenges in the 21st century, the world community developed a new strategy of sustainable development for business and industry. The objectives of the programs of sustainable development include meeting the economical goals without sacrificing the natural resources on which the well-being of the following generations depends.

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The First World Summit on Sustainable Development was held in Rio de Janeiro in 1992. During these sessions, the delegates discussed the increasing risks of the world’s environmental degradation and the importance of fostering the economical development of the poorer regions of the world. On the one hand, economical growth is required for protecting the environment because poverty is one of the major preconditions of environmental degradation.

On the other hand, achieving economic development by implementing extensive strategies at the expanse of damaging the forests, lands, and water resources is inadmissible. The preservation of the environment and natural resources for future generations has become a new imperative for governments and businesses. The term sustainable development can be defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Lawrence and Weber 578).

The international agreements address the issues of global environmental problems, mentioning the measures which need to be imposed for settling them. Along with the efforts of the international organizations and the state governments, the contribution of each company can be significant for meeting the global objectives of sustainable development.

The principles of sustainable development are crucial for planning the strategies for each company’s growth for meeting the generally accepted standards of business ethics and creating a competitive edge.

Ethics and ethical reasoning

People working in the sphere of business often face moral dilemmas related to their job. The knowledge of the causes of the occurrence of ethical problems is important for both managers and employees. Understanding the importance of ethical business behavior and awareness of the possible ways of ethical resolution of dilemmas are necessary for meeting the economic objectives of the firm.

The concept of business ethics implies the implementation of the generally accepted ethical principles in business behavior and practice. The parameters for evaluating the morality of particular business activities are based on the general set of ethical ideas. In other words, the belief that managers and employers can implement weaker or stronger ethical norms to business situations is a misconception, and measures need to be imposed for overcoming it.

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The cases of business misconduct, including thefts, sexual harassment, misreporting of the working hours, and violation of the safety regulations are observed in many organizations and often remain unreported. The recent corporate scandals at WorldCom, Tyco, Adelphia, and Enron demonstrated how harmful the immoral conduct of managers can be for their companies.

The article “Legislated Ethics: From Enron to Sarbanes-Oxley, the Impact on Corporate America” by Howard and Joanne Rockness illuminates the cases of frauds at these corporations, emphasizing the role of the Sarbanes-Oxley Act of 2002 in preventing the future misconduct and failures of corporations (Rockness and Rockness 42). Along with meeting legal requirements, the major reasoning for complying with the norms of business ethics comprises enhancing the business performance and minimizing the risks of failure for the companies.

The principles of business ethics are a significant component of companies’ policies which is crucial for meeting the economic objectives.

Global corporate citizenship

With the globalization of markets, the societal expectations have changed, introducing the new concept of global corporate citizenship into business practice. Corporate citizenship implies companies’ commitment to the principles of social and environmental responsibility. The concept of corporate citizenship requires broadening the concerns of financial performance with social and environmental considerations and developing integrated strategies.

In case if a company has its subsidiaries in more than one country, the principles of global corporate citizenship would demand treating all the company’s stakeholders fairly, disregarding the country of their location. Along with acknowledging the value of social and environmental responsibility of businesses, contemporary companies need to implement the established principles in practice by developing strategies and making the necessary changes in their organization.

It is recognized that there is no universal recipe for integrating social values into the companies’ policies and it explains the wide range of corporate social responsibility (CSR) management patterns. Some companies assigned the responsibility of integrating the social values into the company’s strategies to a committee of the board or an executive group. The transformation of the companies’ strategies for complying with the principles of corporate citizenship is a gradual process comprising several stages.

Developing the supply chain code of conduct, the contemporary companies need to take into account their social responsibility for coming up to society expectations and meeting the demands of sustainable development and the effective use of resources.

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With the growing societal expectations, the companies’ objectives cannot be limited to meeting their economic goals only. The social and environmental responsibilities need to be taken into consideration while developing the companies’ strategies.

Business-government relations

Governments are responsible for developing the rules according to which business operates and their policies can affect businesses significantly. At the same time, business-government relationships can be cooperative and seek for meeting mutually beneficial goals. The relationships between business and government spheres are dynamic and complex.

Governments are aimed at creating the conditions under which the businesses would be able to create a competitive edge in present-day economic realities. Government policies play an important role in balancing the relations between society and business. Even international corporations with subsidiaries all over the world have to obey the national policies of particular countries. In various situations, the government can cooperate or conflict with business.

The relationships of cooperation can take place when both the government and business sectors have a common problem and needed to unite their efforts to solve it. The conflict between the sectors can occur when businesses fail to comply with the current regulations and do not conduct legally. The recent corporate scandals at Enron, WorldCom, and Tyco are examples of the conflict relations between the government and the firms.

In general, the relations between the government and business sectors can range from mutually beneficial cooperation to conflict and are constantly changing. At the same time, cooperation in some spheres does not exclude the opportunity of conflict in other situations. The contemporary managers should acknowledge the importance of positive business-government relations and the significant impact of government on the company’s operation and success. With the globalization of the markets and the recent changes in the community, the legal and ethical considerations are important for preventing conflicts with the government.

Consumers’ and workers’ rights

The protection of the rights of workers and consumers are the two sides of the companies’ social responsibility. Providing consumers with high-quality products or services at the prices they expect and creating safe working conditions for the employees are the two most important components of the companies’ ethical responsibility and none of them can be compensated at the cost of another.

According to the principles of corporate citizenship, firms need to come up to the expectations of all their stakeholders while the violation of their rights is out of the question. Unfortunately, some companies are inclined to sacrifice the interests of their employees to enhance the consumers’ satisfaction with the quality of the provided services. These include irregular working hours and the violation of the labor safety rules.

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These practices which often remain unreported are inadmissible with the recent shift towards corporate citizenship and focus on business ethics. At present, the companies cannot limit their mission to meeting the economical objectives only and have to integrate the social and legal responsibilities with the financial element. At the same time, the majority of the firms have already understood that with the increasing competition in the market, not coming up to the consumers’ expectations would not allow the company to create a competitive edge and can decrease the company’s revenues significantly. Still, the issue of consumers’ and workers’ rights is not a moral dilemma because both components are equally important in terms of business ethics.

The protection of the workers and the consumers’ rights are the integral parts of contemporary business ethics and the imperatives of contemporary companies.

Works Cited

Lawrence, Anne, and James Weber. Business and Society: Stakeholders, Ethics, Public Policy. Boston: McGraw-Hill Irwin, 2008. Print.

Rockness, Howard, and Joanne Rockness. “Legislated Ethics: From Enron to Sarbanes-Oxley, the Impact on Corporate America”. Journal of Business Ethics 2005: 31-54. Print.

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