Introduction
Social responsibility within the organization refers to the act of being self regulated when dealing with the company’s activities. It means that the employees within the organization are able to monitor their activities within the organization as they relate to each other, to the customers, suppliers community as well as other members of the public (Anusorn, 2008, p11). Social responsibility helps a company to address the social costs and externalities that may result from the activities of the company. This requires the employees to be sensitive of the actions they take within the company and outside the company.
This eventually helps to build the relationship of the company and the society by being able to address their welfare. Acting in a responsible manner is being able to defend and be answerable to others why one acts the way they do. In this case the employees are answerable of their own actions and they should therefore be careful with all the activities they are involved in. Social responsibility will invite a lot of caution in the actions of the employees and this promotes the interests of the company.
The organizations focus on meeting the expectations of its stakeholders by addressing the social and the environmental factors thus addressing the social responsibility of the organization. On the other hand the ethics in the human resource refer to the rules and the regulations that guide the employees within the organization. Such ethics within the organization define what is wrong and right code of behavior by the employees within the organization
(Diana, 2005 p12). The code of ethics also dictates how the employees of an organization are supposed to behave when they are dealing with the external contacts of the company such as the public. This then acts as a form of discipline within the organization.
They are standards that are used to judge the behaviors of the employees within the organization. The effectiveness of the code of ethics in the organization depends on the ability of the organization to embrace the ethics that are written down for the specific organization. The code of ethics in the organization defines the type of morality within the employees of an organization. A code of ethics that is strictly followed by an organization helps to uphold good morality between the employees and with the other stakeholders of the company
Importance of social responsibility and ethics
Social responsibility and ethics within the organization helps to focus on development of the company (Michael, 2005, p53). The stake holders today are very sensitive about what a company does and how responsible it is to its environment and the community. This therefore means that companies must also be very sensitive about how they conduct themselves both within the company and outside the company.
This affects the smooth running of the business in the present and its existence into the future. It is very important to have social responsibility as this is what helps the company to maintain internal and external relations. The stakeholders to the company always expect the organization to be very responsible in the social and community issues. Without social responsibility, the organizations cannot be able to understand and solve the problems that are faced by the stakeholders to the organization. The stake holders in this case include the consumers to the organization, the investors and the customers.
Without social responsibility the organization cannot be able to handle the issues that are crucial and which require professional attendance. Investment into social responsibility within an organization is one of the most innovative tools in today’s business world. It enhances the productivity of the company through into the future of the company (Andre, 2005, p31). Ethics within an organization aid the employees and the managers within an organization to make decisions that are morally right and acceptable within and outside the organization.
This is very crucial within the organization since all the decisions that are made will touch on the stakeholders of the organization. It is therefore very important for all the employees within the organization that is the mangers and all the employees under them to read and understand all the rules and regulations that are provided under the code of ethics of the organization. The ethics of the organization helps to build the relationships between the employees within the organization.
This eventually helps to build on the trust that the individuals have upon each other as employees. Ethics within the organization helps to control the illegal behaviors within the organization before they cause any damage. This helps to protect the reputation of the employees and the organization and this then builds on social responsibility of the company. Ethics also help to promote fairness and justice within the organization. For example the employees who are not socially responsible of their actions are usually judged against the code of ethics of the company.
Ethics guide the way people behave and communicate within the organization and this acts as a basis to which people are judged about their social responsibility. The sole responsibility of adhering to the ethics of the company helps the employees within the organization to win their stakeholders respect and confidence of maintaining their business relationships with the company. This is very important for the company since without these stake holders, the continuity of the organization into the future will be compromised. The business world today has grown and many companies are judged according to how responsible they are within the business world.
It is important to note that it is very challenging for any company to manage to achieve social responsibility without a well stipulated code of ethics which is strictly understood and practiced within the organization. The importance of ethics in an organization is that when employees do not act ethically in the course of executing their duties, it not only affects other employees but it also affects the activities of the company as a whole (Diana, 2005 p19)
Ethics, social responsibility and profit making
The success of a business today is measured by its level of social responsibility and its ethical principals to the society but not by how much profit it can be able to make (Joshua, 2001, p23). Profit making is the long-term goal for every organization. However how the companies makes this profits will determine whether they will be able to maintain making profits in the end or not. Companies that put their profit making before social responsibility and ethics of the organization act unethically.
Such profits will be accrued by the business but they will not be able to survive for long. A company cannot make it into its future if it compromises its social responsibility for making profits. It is very necessary for the managers to recognize the fact that the profits that are made by the company are aided by its stakeholders and the immediate society. Putting the needs of the stakeholders of a business as the first priority ensures that they will be loyal to the company.
The social responsibility of a business and its ethical principals are the ones that make the smooth way of surviving an organization into its future (Michael, 2005, p62). A consideration of the others within the business is the most important thing in an organization. Without the ethical principals and a feeling of social responsibility of a company the continuity of a company is threatened since this will affect the maintenance of the stakeholders of the company such as the customers and the employees of the company.
It also affects the productivity of the company mostly compromising the quality of the business products. It is therefore the duty of every organization to always consider the social responsibility and the ethics of a business before its profit making motives (Soppe, 2007, p19). Profits are controlled by the external forces within the company and it is therefore impossible to continue making profits if such external forces are not first addressed.
Why ethics and social responsibility should be ahead of profit making in a business
It is the responsibility of every organization to always ensure that its actions are executed in a manner that serves the interests of its stakeholders. Social responsibility should for example address the environmental responsibility of the organization. The pollutants that may be residue or the by products that come from the company process of production should always be disposed in a manner that does not affect the immediate society.
This is an act of being responsible of the environment that the organization is working in. This benefits the company by ensuring that the immediate societies who are one of the stake holders of the company are not affected by the company processes. The continuity of such a company into the future will be secured since no complaints will arise in the environmental factors meaning that the factors of relocation are factored out. This also helps the immediate society appreciate the existence of such a company in their neighborhood.
It is very expensive for a company to always be paying penalties of acting unethically or forgoing their social responsibility (Diana, 2005 p27). An organization can be able to make profits using unethical means but these profits do not last for long. Such profits are usually reduced as the company is constantly involved in very expensive scandals and heavy fines of not conforming to its ethics and also social responsibility. Unethical means within an organization will always result into actions that will cost the company or the organization by causing disruptions of the normal routine activities.
This destroys the reputation of the company in the public eye and thus marketing of the company products becomes a very huge task. The employees of such a company will no longer feel proud of being associated with such a company and neither will be the external stakeholders of the company be willing to continue with long term relationships with such an organization. In the end the productivity of such organization is affected since its sources are affected and also the market for its product is also tarnished. The public may lose the confidence with such a company and at the end; the company loses all the profits it held precious plus the means to make such profits.
Lack of good ethics in the company can also cost the company many financial scandals where the employees of the company or even the managers are involved in fraud practices. Fraud in an organization eventually leads to bankruptcy within the organization. This then indicates the importance of ensuring that the employees of an organization are always responsible of their actions. Employees who have the intention of committing fraud will be able to feel that their actions will affect the future of the company and also of the other employees and thus feel mandated to act responsibly.
Social responsibility and ethics within any organization creates an environment that is always welcoming for the stakeholders of the company (Andre, 2005, p38). The problems of the company are usually not exposed to the public and thus the reputation of the company is saved by solving issues very ethically. Ensuring a favorable environment ensures that the customers of the organization’s products are always coming back in addition to fetching other customers from other competitors.
The feeling of comfort and wanted at all times is what the organizations should ensure for their stake holders to enable them continue making profits into the future. This can only be achieved if the company invests in social responsibility and ethical principals. Social responsibility and ethics within the company are a means to the end but not the other way round. A company starting with profit making cannot make it to the end. Organizations must always learn how to create value for their stake holders within the organization through these two factors.
Research evidence
Lack of social responsibility and ethics has been evidenced to be a costly venture for some companies in the business environment. A good example is the Enron Company in the United States. The company was a leading business enterprise in natural gas, electricity, paper and communication. Lack of social responsibility and adherence to ethics led the company to very costly scandals that led to the dissolution of the company (Joshua, 2001, p37).
The company directors were involved in one of the historic financial scandal in the securities market of the U.S in 2001. The scandal was mainly financial where the directors of the company were involved in fraud practices. This led to very expensive law suits against the directors of the company. The irresponsible acts and lack ethics by these directors also caused the dissolution of the accounting firm Arthur Andersen thus affecting the business world further.
They destroyed the reputation of the firm especially by creating profits through selling of stocks at inflated prices. The assets of the company and the stocks were maintained at very inflated prices thus misleading the public about their real profits. Some of the assets were actually inexistent since they were already defrauded by the directors. The directors made many profits using very unethical means such as limited and very controlled partnerships. The debts and the losses of the company were in turn not indicated in the financial statements of the company. Another example of a company that ever suffered from lack of social responsibility is the Johnson and Johnson Company.
In 1982, they marketed a product by the name Tylenol. The product was later discovered to have bottle tops that contained cyanide and thus the customers stopped buying the product. This scandal cost the company many resources through dropped sales and losses. However the company decided to invest in social responsibility and long run ethical motives. It however cost the company a lot of money to regain public confidence about their products. Today Johnson and Johnson is one of the companies that appreciate the need to invest in social responsibility and ethics since it has managed to win and maintain the confidence of its customers (Soppe, 2007, p24).
This has ensured continued productivity and profits for the company. Other companies that boast of social responsibility and ethics include the Macdonald company, Dell, Toshiba, Hewlett-Packard, Clorox among other companies which have made social responsibility and ethics an important part of their company structure
Conclusion
In conclusion, social responsibility and company ethics are very crucial factors in a company’s human resource. They direct the company to make decisions that aid its profit making ability in the long-run (Joshua, 2001, p42). Investment into social responsibility ensures that the internal and the external factors that control profit making in a business are satisfied. Profit making and its continuity into the future is controlled by other external forces which must be satisfied if the company will be successful to the future
(Soppe, 2007, p28). Through social responsibility and good ethics the stake holders of the company are satisfied and happy and they will be willing to always come back to the company. It also saves the company involvement into expensive scandals that may lender the company bankrupt and thus dissolution. Success of a company will always be measured against its social responsibility to the society and not only by its profits margins.
References
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Joshua Daniel Margolis, James Patrick Walsh, 2001. The link between a company’s social responsibility and financial performance. Lawrence Erlbaum Associates.
Marco Koster, 2007. Ethics and corporate social responsibility in Human resource management. Grin Verlag publishers.
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