Friday, June 21, 2013

Ethics and Social Responsibility in Business and Society

Ethics and Social Responsibility in Business and Society
Globalization has led to increased connectivity among different individuals and organizations in various parts of the world. Many organizations are expanding their operations across borders in order to increase sales and gain a competitive advantage. However, operation of a business in a foreign country comes is associated with so many ethics and social responsibility challenges. People from different parts of the world hold diverse views about what is ethical and what unethical. An act that is acceptable in one place may be unacceptable in another place. Business organizations are therefore supposed to study the local environment and adjust their operations according to the prevailing situation (Donaldson, 1996).

Foreign business organizations should not influence ethics in the countries they operate but instead they are supposed to conform to the local practice in order to compete favorably with others. This essay seeks to explain why it is important for corporations to follow the ethical standards of the local society.

Unethical business conduct has raised many concerns among members of the public and various governments have intervened to ensure acceptable business conduct (Paul, 2007). A business decision can either be charged as ethical or unethical depending on the society in which the organization operates. Business ethics are standards and principles that establish acceptable conduct in organizations. The acceptability of a business behavior is dependant on the customers, government regulators, competitors, the public, interest groups and the moral principles of an individual.

Businesses are not only supposed to concentrate on making profit but should also consider the implications of their own actions to the community. Social responsibility is an obligation of the organization to maximize the positive impacts and minimize the negative impacts to the society. In most parts of the world, the basic ethical as well as social responsibilities have been codified into laws and regulations to encourage business operations to conform to the standards, attitudes and values of the society (Stieghorst & Marcel, 2010).

Business managers are normally expected to obey the local laws and regulations. Most of the legal issues in business arise as a result of choices which the society considers to be unethical, unacceptable or irresponsible. All actions that are considered unethical by the society may not be necessarily illegal and the legality of an action may change over time. A business organization should always refer to laws and regulations governing business conduct (Wolfe, 1991). Business managers, employees and owners should know about the law as well as the legal system in order to avoid conflicts. The social responsibility, business ethics and laws work together as a compliance system that requires business organizations and their employees to act in a responsible manner within the society.

Establishment of corporate social responsibility is an ethical practice that organizations must achieve to enhance growth and development (Wolfe, 1991). The consideration of achieving corporate social responsibility is in accordance with the cultural and social set up of the communities and the business industry. Therefore, the establishment of unethical practices in an organization must be eliminated to reduce their adverse effects on the performance of the organization. The establishment of corporate responsibility is an ethical practice that ensures the organization provides ideal products to the consumers. Corporate responsibility considers the attributes of satisfaction, protection of clients, health attributes and the integrity of the organization. on the hand, the crisis leading to the abolition of corporate responsibility results in the enhancement of production disparities that is majorly characterized by rising disparities in the market.

The formation of the organization is based on the provision of rules and regulation that must be observed. These rules and regulations are critical because they highlight the duties, roles and functions of the entire member of the society (Idowu, 2008). Additionally, the professional code of ethics for the workers in and organization also highlights the activities that should be conducted in an organization and observation of these attributes will significantly result in the enhancement of primary interest that is characterized by an increase in stakeholder’s benefits and establishment of corporate social responsibility. The stakeholders are the investors and shareholders of the organization and they are accredited significant amount of money at the end of the trading period.

In this regard, the presence of unethical practices in the organization will result in the reduction in the amount of earnings of the stakeholders and this attribute calls for the establishment of increased organizational performance and observation of ethical practices (Wolfe, 1991). Unethical behavior is detrimental for the performance of the organization because it affects the aspect of increased stakeholder’s earnings, realization of corporate social responsibility and finally, it leads to the dissatisfaction of the consumers. In this regard, the establishment of ethical practices in any business organization should be significantly enhanced.


Donaldson, T. (1996, September). Values in tension: Ethics away from home. Harvard Business Review, 74(5), 48–62.
Idowu S. 2008. Global Practices of Corporate Social Responsibility. Berlin: Springer Berlin
Paul, H. Potts J. 2007. Corporate Social Responsibility An Implementation Guide for Business, vol. 1, pp 11-12.
Stieghorst, R., & Marcel, M. (2010). The localization of ethics. Multilingual, 21(8), 35-37. Wolfe, A. (1991). Reflections On Business Ethics: What Is It? What Causes It? And, What Should A Course In Business Ethics Include? Business Ethics Quarterly, 1(4), 409-439.