The Effect of Ethical and Social Responsibility
Presented to: CEO of ABC Manufacturing, Inc.
Assessment Code: RWT1
Student Name:
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Date: November 23, 2012
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Table of Contents
Executive Summary 3
Introduction 4
Research Findings 4
Effect on the Company 4
Effect on the Employees 5
Effect on the Consumer 6
Recommendations 7
Conclusion 8
References 9
Executive Summary
As you will see from my findings how important it is to our employees, investors, and consumers that we become an ethical and socially responsible corporation. I am here to show you the effects it has on our company, employees, and customers. Through my research I did not find any consequences, …show more content…
only benefits to being ethical and socially responsible. As people become more and more aware of what companies are doing they are more responsible with how they spend their money. Our consumers have unlimited choices when it comes to which company they will choose to purchase goods from. The internet gives them unlimited possibilities of who to purchase from and to find out what companies are doing. As a company it will only benefit us to do the right thing by our employees, consumers and stakeholders.
“Many companies are starting to recognize that providing jobs and profits are not sufficient criteria to be a responsible member of society.
It is important to be socially responsible – that is, to work with stakeholders such as employees, customers, communities, and governments to make sure that the company does its part to minimize negative impacts on society and maximize contributions to important issues that are being addressed worldwide.” (McGraw Hill )
Times have changed and needs have changed. Our customers needs have changed. As the economy grows our customers have more options of who to buy from. Our employees have more options as to which companies to work for. We want to be the company consumers want to buy from and the company that people want to work …show more content…
for.
Introduction
This report will show how business ethics and social responsibility can be used to increase efficiency, the effect it can have on the companies reputation, and the effect it can have on the company’s relationships with employees, investors, and consumers. It will go into detail of what needs to be done to protect our company as well as our employees and investors. Times are changing and so are people’s expectations. We must grow and keep up with our customers changing needs.
It is important for our company to realize what effect ethical and social responsibility will have on us. “Business Ethics have only come to the fore recently. They state that there is more to business than just making a profit.” (Daud)
As the head of Human Resources I wanted to present to you, the CEO of ABC Manufacturing, Inc., how we can be a better company for everyone. From my presentation you will see the positive benefits it can have on all of the employees and how it will benefit the company.
Being in an HR role I see the conflict among the staff and we need a way to resolve it. We need guidelines in writing and we need everyone on the same page. Upper management will lead by example why we put a training program in place.
We will grow and move forward as a company and do it to the best of our abilities. Becoming an ethical and socially responsible company will only benefit us as the employer in regards to productivity and profitability.
Research Findings
Effect on the Company
Companies put so much emphasis on profit that they were willing to stretch the truth. Look at former CEO Richard Scrushy of HealthSouth. He reported that the company made $2.7 billion more then what they actually did to meet the shareholder’s expectations. Now he is being charged with 85 criminal charges. It didn’t only affect him personally, but it affected the employees, shareholders, and community.
People were so negatively affected by the downfall of Enron that they are paying attention to what companies are doing. It affects where they do business. Nowadays people are putting more emphasis on the environment and the effect we have on it that they are willing to pay a little more to do business with an ethical company. Also, with the internet it gives them the opportunity research companies better then they have been able to before, but it also gives them the opportunity to do business with more companies then they did before. Companies have to sell themselves harder then they did before. Being ethical and socially responsible is just as big of a piece of marketing as anything else. For some consumers it is the biggest piece. Many people are refusing to buy from companies that are unethical. They want companies to see how important it is.
With the popularity of “Going Green” people are paying attention. They are realizing the effects companies can have on the environment, and the effect they have on the communities. They know now that companies don 't have to be wasteful and have a negative impact on the environment.
It is also important that they work for an ethical company not only because that is what they believe it, but because of the negative effect it can have to work for an unethical company. Employees fear working with unethical people because they will not be treated fairly. They will see the unethical people receive promotions while they are left behind. They need clear cut ethical standards for the entire company to have to abide by.
In the past a company could just be selfish and just worry about their profits, but there is so much more to it now. Companies will continue to worry about their profits, but with the studies of companies who are ethical and socially responsible, their profits have only increased. “A company’s reputation is a major business asset. A reputation that has taken decades to establish can be severely damaged overnight, particularly given the speed with which information is shared among various stakeholders.” (Shoemake)
Many businesses proudly display their values in their marketing. If business ethics are properly executed in a company it can serve to enhance the profitability. Negative judgments will affect a company’s ability to build relationship with their stakeholders. It takes a long time to establish a good reputation, but with the internet and news media a company’s reputation can be ruined in a day.
“Since public image is largely a result of company behavior, business ethics play a large role in determining public image since they determine behavior. And public image is important to success in most cases, which is one of the reasons as to why business ethics are important to a company’s overall success.” (Vasquez)
Analysis
To continue to be a top performing company it is clear that we need to put an ethical program in place, market it to our employees and consumers, and follow through. As you will see from my findings Ethical and Social Responsibility is not an option if you want to stay in business. Thanks to the internet and the media, what we do as a company will be displayed for everyone to see and it matters because consumers, employees, and shareholders are looking for it. No one wants to put any faith into a company that could come crashing down like Enron. If we choose to ignore it, it will severly damage our public image and then eventually profits and everything else.
Effect on the Employees
A lack of ethics has a negative effect on employee performance. In some cases, employees are so concerned with getting ahead and making money that they ignore the procedures and protocol. This can lead to additional paperwork and careless errors that result in the task having to be completed again. Additionally, employees who feel acting ethically and following the rules will not get them ahead in the business sometimes feel a lack of motivation, which often leads to a decrease in performance. (Zeiger)
This is a very dangerous road for any company. Employees can cause many problems for a company if they decide not to follow procedures or protocol. The clean up could be disastrous and not only will it effect the company it will effect the other employees. Our employees do not want to feel like they don’t have the same opportunity or even a better opportunity then someone who is not ethical. They need to be able to report these issues in an anonymous setting without feeling like they are going to be names for telling on someone.
According to Jaworski and Koli “employee commitment comes from employees who believe their future is tied to that of the organization and their willingness to make personal sacrifices for the organization” (1993, p. 57)
Our employees want to know that they have a future here with the company. It would be too stressful to come to work everyday not knowing what tomorrow will bring. Why would they stick around when they can go to some other company and find what they need? With our employees commitment we can improve this company and improve it with productivity which leads to more profits. “Developing more socially responsible work practices, including waste, encourage employees to conserve office supplies and reduce the amount of disposable goods in the workplace.
This streamlining of a company’s waste management can lead to increased productivity and engagement by the workforce as employees begin to view the organization in a more positive light. Workers begin to associate more positive emotions with the company as it increases socially responsible behavior according to the Center of Association Leadership’s website.” (Lister)
Our employees need to know that this is their company to and what an impact they will have. If they can do simple things such as conserving office supplies they will realize what an important asset they are and that one individual can affect the company.
Our employees are such an important asset because of what they can give us in return. It is important that they feel important and they are happy with their job, but not only can they be productive, but with ethical guidelines they can help save the company from other employees and they want the same in return. They don’t want to come to work and face unethical people everyday that will do anything to get to the top. They want a fair environment that gives everyone the same
opportunity.
Analysis
As a company we need to bring an Ethics Program on board, but it’s our employees who have to buy into it. During my research I only discovered that it was positive for all employees. The employees who didn’t find it beneficial probably weren’t ethical and we don’t need them working for the company. We need employees with a moral compass and we can guide them into the path we want to take. Employees were clearly happier in their jobs which lead to increase productivity and reduced waste. As a company that is a huge benefit in everyway.
Effect on the Consumer
“Running a socially responsible and ethical company isn’t just the “right” thing to do – it’s often the best thing for your business. By creating a company that stands for ethical values, you show people integrity and empathy, characteristics that many seek in the people they do business with.” (Lawhorne 2011)
It is so important to our clients anymore that we as a company are doing what is best for everyone and not just for the company. Our clients are so important to us why would we not give back to the community and show our support for the people that support our business?
According to Ferrell, Fraedrich, and Ferrell, “it is generally accepted that customer satisfaction is one of the most important factors in successful business strategy. Although a company must continue to develop, alter, and adapt products to keep pace with customers’ changing desires and preferences, it must also seek to develop long-term relationship with customers and its stakeholders.” (2009, p. 20)
It has always been our goal to be on the forefront of our products and we will continue to do so, but it is a reminder of the fact that it is a requirement to keep our customers and stakeholders happy. Building strong, long-term relationships with our customers and stakeholders is extremely important to us so we will continue to head in the right direction.
“Businesses have an ethical responsibility to customers who buy goods and services from them. Social responsible business means that companies do the right thing for their customers. Companies consider profit, consumer satisfaction, and societal well being as equally important in the way business is conducted. Governments often enact laws that force businesses to function ethically. Consumers also can force businesses to act ethically regarding their purchases. For example, in the United States today, consumers and consumer activist boycott over 800 products.” (England)
The growing concern for legal and ethical issues in business will only continue. As it does we need to continue to put programs in place to necessitate the growing needs.
Analysis
Our customers keep us in business. If consumers are willing to boycott over 800 products then we don’t want to be on their list. As you can see it is important that we continue to develop and grow our products, but it won’t do any good if the consumers don’t want to do business with us. Consumers will watch as we improve and grow and make sure that we continue with our ethical standards. If we let it slip our reputation will be changed over night. So I have attached my recommendations to move forward in the right direction.
Recommendations
· Develop a Code of Ethics – Guidelines for behavior need to be in writing and visible. The purpose of the code of ethics is to have a reference and a guide to support the employees with there day-to-day decisions. It is designed to reflect the company’s important values and standards. Important guidelines to show employees how to handle ethical dilemmas that they may encounter in their work life. To cover the new Code of Ethics we will need a training program in place for all employees.
· The Code of Ethics should contain what rewards will be given as well as the punishments that they will receive for not following the policies. It needs to be clear as to what is acceptable and what is not. Everyone also must follow the rules and lead by example.
· Promote Business Ethics – The vision of the company needs to be shared with our employees, customers, and shareholders. Each employee, especially managers, need to set an example of how to be ethical. If management continually leaves early then the employees will want to leave early.
· Offer tools to resolve business ethics dilemmas – A big piece of continuing an ethical company is to give the employees the opportunity to be able to report unethical conduct. We need to have a plan in place so the employees can call and report an unethical conduct and also not be reprimanded for it. No one will speak up if they feel that someone will find out that they reported them. They must remain anonymous.
Conclusion
As you will see from my recommendations we will have a code of ethics program in place with the proper training for new and existing employees. The Ethics Program will have a positive impact on the company in so many ways. As we begin to train and enforce the program we may see a few employees come out that are not as ethical as we need for our company. With our employees being able to report any ethical issues we have the company will avoid many issues such as theft or cheating and any red tape that goes along with it. As everyone follows the guideline productivity will increase as the employee satisfaction will increase. Profitability should also increase due to the buy in from our consumers and new consumers as we get the word out.
Having a Code of Ethics will be the beginning of the company stepping into the right path which is needed for the future. As a corporation it is important to the well being of the company, employees, customers, and any stakeholders that we put an ethical program in place and enforce it. It will only benefit us as a company and if we want to continue as a successful company this is what we need to do to move forward.
References
Bernard J. Jaworski and Ajay K. Kohli, “Market Orientation: Antecedents and
Consequences”, Journal of Marketing 57 (1993): 53-70
Daud, Nazir, (2007). Retrieved from http://EzineArticles.com/554610
England, Dr. Lizabeth, (2012) Business Ethics. Retrieved from http://exchanges.state.gov/media/oelp/pdfs/e-journals/business_ethics.pdf
Ferrell, O.C., Fraedrich, John, & Ferrell, Linda. (2009) Business Ethics Ethical Decision Making and Cases 2009 Update. Mason, OH: South-Western Cengage Learning.
Highered, McGraw-Hill, (2012). Business Ethics and Social Responsibility. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0073511722/620358/ ferrell7e_chapter2.pdf Lawhorne, Pam, (2011). 3 Reasons Why Social Responsibility and Ethics in Business Is Important. Retrieved from http://pamlawhorne.com/3-reasons-social- responsibility- ethics-business-important/
Lister, Jonathan, (2012). How Organization Theory of Ethical and Social Responsibility
Affects the Workplace. Retrieved from http://smallbusiness.chron.com/organization-theory- ethical-social-responsibility-affects-workplace-17849.html
Shoemake, Bob, (2012). Corporate Responsibility – A Look at Leading Edge Issues.
Retrieved from http://www.cebcglobal.org/index.php?/knowledge/corporate-responsibility/
Vasquez, Martha, (2012). Why Business Ethics are Important for a Company and its
Success. Retrieved from http://www.streetdirectory.com/travel_guide/161760/corporate_matters/why_business_ethic
Zeiger, Stacy, (2012). Effects of a Lack of Ethics on Business Environment. Retrieved from http://smallbusiness.chron.com/effects-lack-ethics-business-environment-23332.html