Ethics and Corporate Social Responsibility in Business

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Introduction

The contemporary business environment is characterized by globalization, unprecedented technological advancements, and fierce competition. These factors have necessitated the adoption of adoption and incorporation of ethics and corporate social responsibility (CSR) into business operations for enhanced success. Ethics can be defined as the moral principles that govern the way an organization operates, and issues range from corporate governance to bribery. CSR refers to the involvement of a business in social issues that promote the welfare of the society, above and beyond the need for increased profits. In that regard, it is important for organizational members to ensure that these concepts permeate the operations of the organization at all levels. In addition, they should ensure that organizational decision-making is founded on the principles of business ethics and CSR.

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Ethics and CSR in Organizations

As mentioned earlier, CSR and ethics are two key ingredients that are necessary for the attainment of organizational success in the contemporary business environment. The idea that business establishments have greater responsibilities above paying employees and earning profits has existed for many decades. A common belief that is prevalent in the business world is that business enterprises have a social and ethical responsibility of taking care of their employees and customers, the environment, and society at large (Malecki, 2018). In an organization, internal values are based on business ethics and comprise the application of honesty and fairness in the treatment of employees and customers (Ferrell et al., 2017). Business ethics are beneficial to organizations because they create customer loyalty, enhance employee retention, create a positive work environment, and minimize legal problems (Malecki, 2018). CSR encompasses all activities and processes that address the prevailing social and environmental issues that are important to an organization. Its benefits include an improved public image, increased brand awareness and recognition, cost savings, better employee and customer engagement, and the creation of competitive advantage (Malecki, 2018). Successful corporations have strong codes of ethics and CSR programs.

Excellent CSR Example

Wells Fargo is an example of an organization that has an excellent CSR program. The company donates a percentage of its earnings to charity annually. In 2018, the firm made donations to more than 11,000 nonprofit organizations across the globe (Pacek & Llewellyn, 2019). The $444 million donated was used to fund programs that promote affordable housing, education, sustainability, and the growth of small businesses (Pacek & Llewellyn, 2019). Regarding its employees, the organization allows its workers to take two paid days off annually. These days are spent volunteering services to charity organizations of their choosing. The company’s members also spent 2 million hours volunteering for various charity programs (Pacek & Llewellyn, 2019). Their CSR practices also include providing financial education and economic opportunities for poor communities, environmental sustainability, diversity and inclusion, and supporting the growth of small businesses.

Role Played by Organization Members

Organizational members, including leaders, managers, and employees play a key role in ensuring that ethics and CSR are practiced at every level. Employees should apply the principles and values that form their organization’s corporate culture in making decisions (Malecki, 2018). This could involve putting organizational values before self-interest and avoiding actions that violate business ethics. Managers should uphold ethical standards in their actions and act as role models for other employees (Ferrell et al., 2017). This could include abiding by their organization’s ethical code and punishing employees who act unethically. Organizations’ leaders should promote fairness, transparency, and integrity, and they should show concern for sustainability. In addition, they should offer ethics training to employees in the form of workshops, discussions, and lectures (Ferrell et al., 2017). These are effective in clarifying and communicating to employees the values and principles that they are required to follow.

Integration into Decision-Making

Ethics and CSR should be a component of decision-making in organizations. Prior to making a decision, employees should thoroughly evaluate their options and choose the one that is consistent with ethical principles (Ferrell et al., 2017). Commitment, competency, and consciousness are ingredients that allow individuals to make ethical decisions. It is important to identify the ethical issues inherent in every decision and address them through the application of business ethics and organization principles and values (Malecki, 2018). Moreover, leaders and employees should consider the ethical implications of every choice that they make. Following a code of ethics and standards, promoting confidential reporting, and offering counsel on ethical matters are also effective ways of ensuring that all business decisions are ethical and promote CSR.

Conclusion

Ethics and CSR are key components of success in the contemporary business environment. Ethics comprise moral principles that govern how businesses operate while CSR refers to a set of policies, programs, and practices that go beyond profit maximization to improving the welfare of society. These concepts are beneficial to organizations because they create customer loyalty, enhance employee retention, create a positive work environment, and minimize legal problems. On the other hand, CSR improves the public image, increases brand awareness and recognition, enhances employee and customer engagement, and creates a competitive advantage. Organizational members should ensure that their actions and decisions are based on ethical principles that cater to the needs of all stakeholders, including coworkers, customers, shareholders, and society in general.

References

Ferrell, Q. C., Fraedrich, J., & Ferrell, L. (2017). Business ethics: Ethical decision making and cases (11th ed.). Cengage Learning.

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Malecki, C. (2018). Corporate social responsibility: perspectives for sustainable corporate governance. Edward Elgar Publishing.

Pacek, J., & Llewellyn, K. (2019). A year of giving: Wells Fargo donates $444m to nearly 11,000 nonprofits in 2018. Wells Fargo. Web.

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BusinessEssay. 2022. "Ethics and Corporate Social Responsibility in Business." September 16, 2022. https://business-essay.com/ethics-and-corporate-social-responsibility-in-business/.

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BusinessEssay. "Ethics and Corporate Social Responsibility in Business." September 16, 2022. https://business-essay.com/ethics-and-corporate-social-responsibility-in-business/.