Business Management for Operational Activities

Discuss about the  Business Management for Operational Activities.

Introduction

Businesses across the world need to carry out their operational activities in an ethical manner for safeguarding the interests of all its stakeholders. Ethics involves the morals and beliefs of an individual regarding right and wrong. Business ethics are also developed on the concept of general ethical principles that guides the behaviour of an individual in daily life. Similarly, business organisations developed and implement ethical principles to govern the functioning of their daily operational activities. Businesses are recently emphasising more on the concept of achieving Corporate Social Responsibility (CSR) rather than business ethics. Business ethics, however, incorporate social responsibility of business managers as it involves moral obligations of businesses to promote societal welfare (Sher, 2015). In this context, the present essay aims to provide a depth analysis regarding managers should ensure that their organisation operates ethically regardless of its approach to corporate social responsibility.

Managers should ensure that their organisation operates ethically regardless of its approach to corporate social responsibility

Business ethics can be defined as the code of conduct and internal values of an organisation that governs its corporate culture. The ethical principles and standards developed by an organisation influence the decision-making process regarding its social responsibility with respect to the external environment. Ethical issues are the problems that occur in an organisation when its operational actions can have an adverse impact on the society and environment. Ethics standards established by a business firms are the codes of conduct that is based on shred principles and values about its moral obligations towards all its stakeholders. Business ethics can be referred to as a broad term that encompasses the application of ethics to all the organisational functions such as from supply chain management to marketing and accounting (Flynn, 2008). Ethical decision-making is most significant for an organisation to carry out its business operations in a responsible manner that is legally and morally acceptable to the community. Thus, business manager’s decisions must be in accordance with legal laws and morally correct to ensure its acceptance by its stakeholders.  Ethical codes of conduct establish standards that govern an organisational behaviour in internal as well as external environment. The ethical codes of conduct develop a socially responsible corporate culture in an organisation that emphasises on societal development besides focusing only on their profit motive. Ethical standards are not codified and as such ethical dilemmas often occur in an organisation where business managers are faced with the situation of deciding the right and wrong. Therefore, it is essential for business managers to incorporate their ethical and moral codes of conduct on their strategic objectives and aims to avoid the occurrence of ethical dilemmas in their regular work activities (Idowu, 2015).

On the other hand, Corporate Social Responsibility (CSR) term specially refers to the duties and obligation of a business corporation towards the society. The term was introduced to emphasise on the responsibilities of an organisation for its stakeholders such as employees, community and environment rather than producing profit for its shareholders. However, CSR does not place focus on the moral obligations and codes of conduct that should be implemented by an organisation for conducting its daily operations. As such large number of business firms around the world only emphasise on delivering benefits to society rather than conducting their business functions in an ethical manner. Business leaders have incorporated the concept of corporate social responsibility as corporate philanthropy and they strive to strengthen their brand image by making donations and charity for the betterment of society (Anderson and Anderson, 2010). CSR activities are utilised by large number of business firms around the world as maximising their profit by improving the brand image by associating themselves with a social cause. Corporations as such aims to achieve good image in the customer’s mind so that they can improve their market sales and generate increased revenue. Thus, CSR is often providing business organisations as their marketing strategies through which they can promote their goodwill in the market (Arguments against corporate social responsibility - And some responses, 2008).

It can be thus said that philanthropic activities conducted by an organisation does not necessarily indicates its ethical behaviour. An organisation can act unethically for maximising its profit motive and then can contribute donations or charity for improving its social image. As such, corporations aim to gain legitimacy and avoid the rules and regulations concerning about protecting the environment or society from the adverse impacts of their operations. However, CSR plays fundamental role in protecting the society from negative impact of business operations but the concept is being largely used by organisations to build brand image rather than promoting societal welfare. CSR is used a tool for maintain and improving the public relations by organisations. Businesses are aiming to overshadow their unethical practices by advertising themselves as largely engaged with philanthropic activities.  Corporations are also largely using CSR as a strategy for avoiding governmental regulations. Business corporations increasingly argue that increasing pressure from governmental regulations can negatively impact their business practices aiming at societal development. Hence, they tend to avoid the rules and regulations existing for the protection of environment and society (Swanson and Fisher, 2011).

Business ethics, however, mandates organisations to follow the codes of conduct that protects the society and environment from any type of their operational adverse impacts. The ethical codes of conduct adopted by an organisation cover the societal responsibility of organisations in an ethical manner. Thus, CSR can be regarded as a sub-set of business ethics. As such, managers need to emphasise more on their ethical behaviour rather than incorporating CSR strategies for safeguarding the interests of all its stakeholders. Business ethics maintains accountability and transparency in business operations thereby promoting the well-being of all the stakeholders. The fact can also be interpreted from various ethical theories that provide guidelines for business managers to act in a socially responsible way through developing and establishing their codes of conduct and standards (Crane and Matten, 2010).

Utilitarian theory in ethical context states that moral behaviour of an individual produces greatest good for the people. The approach for business managers implies to properly evaluate the impact of their decision on each of its stakeholder and to select the decision that optimises the satisfaction of all its key stakeholders. The approach focuses on implementing and adopting the decisions that deliver that are favourable for others as well not just for yourself. Business corporations often develop ethical codes of conduct for restricting the use of alcohol or using internet for personal purpose in the workplace based on the utilitarian approach. These practices of employees can negatively impact the corporate culture thus having a direct effect on the society (Managerial Ethics and Corporate Social Responsibility, 2010).

According to the individualism approach of ethics, an individual should undertake an action by comparing its good or bad outcomes. Thus, the theory states that an individual act is moral when it leads to the production of greatest good for the society. Business organisations often adopt the approach of individualism for resolving ethical dilemmas of selecting the most appropriate decision that results in greatest betterment of society. As per the theory, business managers can compare the good or bad outcomes generated from the list of possible actions and adopt that action leading to the greater good. Individual approach suggest to business corporations to tend to incorporate that action that an individual thinks fit for serving his/her own long-term interests and often develop a moral responsibility of selecting such actions for others also. In addition to this, moral rights approach of ethics states that a decision is ethically correct when it tends to protect the fundamental rights of all individuals that will be impacted by the respective decision. The approach demonstrates the six fundamental moral rights of an individual that should be ensured to be protected by business corporations at the time of decision-making. These are right of free consent, right of privacy, right of freedom of conscience, right of free speech, right to due process and right to health and safety. Thus, as per the approach business corporations should safeguard all these moral rights of its stakeholders while implementing a decisional change in the organisation (Managerial Ethics and Corporate Social Responsibility, 2010).

Justice approach, in this context, states that moral decisions are mainly developed in the standards of equity, fairness and impartiality. Business managers must ensure following three types of justice to its stakeholders that are, distributive justice, procedural justice and compensatory justice. Distributive justice states that business corporations should provide same type of treatment to its employees irrespective of their diversity. Procedural justice refers to impartial enforcement of the rules and regulations for the employees. The rules and regulations need also to be clearly stated without any confusion to all the stakeholders. At last, the compensatory justice emphasises on the moral obligations of the employers in the case of any injury suffered at the time of carrying out their work role. Thus, justice approach lays foundations for the business managers to promote equal treatment to all the stakeholders and provide justice to them in all the materialistic cases (Spence and Morland, 2009).

On the basis of the above theories, it can be stated that business ethics incorporate all the moral obligations of business leaders towards the society. As such, businesses should not ignore the integration of ethical standards in their work procedures by merely integrating CSR strategies. CSR is a narrow term that only covers the duties and responsibilities of managers towards society and not about protecting the interests of its other stakeholders such as environment, suppliers and government. Business ethics is a much wider terms than corporate social responsibility and its guarantees the moral behaviour of organisations in all of their operations.  Businesses who have established ethical codes of conduct for monitoring and controlling their business operations need not to emphasise on the concept of CSR as a means of promoting social development. Business ethics itself is enough for safeguarding the societal welfare by restraining the business operations that can negatively impact societal development. On the contrary, business organisations emphasising solely on the concept of CSR and does not place focus on developing ethical codes of conduct often do suffer in long-term. Business ethics enables organisations to achieve sustainability by carrying out their operational activities in manner so that it does not violate any legal rules and obligations. However, businesses avoid legal rules implementing CSR strategies that can impact their long-term growth and development by the occurrence of any scandal that can degrade its brand image. Unethical practices can prevail extensively in organisations that tend to avoid business ethics and only focus on philanthropic activities as a means of strengthening their brand reputation. The philanthropic activities can promote the brand image of any organisation only on short-term basis but will ultimately lead to its negative growth if not integrated with business ethics (what's wrong with corporate social responsibility? The arguments against CSR., 2016). Corporate social responsibility initiatives of an organisation are only successful when they are applied with the implementation of ethical codes of conduct and standards. Thus, it can be said that businesses should not avoid the adoption of ethical standards by emphasising only on their CSR strategies as a means of achieving sustainability. They should rather incorporate ethical standards for governing all their business operations that will also ensure the societal development (Armstrong and Stephens, 2005).

Conclusion

The discussion held in the overall essay summarises that business managers should first in place ensure that they operate ethically regardless of their approach to corporate sustainability. Business ethics is broad term that encompasses corporate social responsibility initiatives of an organisation as well. However, CSR strategies of an organisation in the absence of ethical codes of conduct do not ensure its sustainable development.

References

Anderson, D. and Anderson, L.A. (2010). Beyond change management: How to achieve breakthrough results through conscious change leadership. United States of America: John Wiley & Sons.

Arguments against corporate social responsibility - And some responses. 2008. Retrieved September 11, 2014, from http://mallenbaker.net/article/clear-reflection/arguments-against-corporate-social-responsibility-and-some-responses

Armstrong, M. and  Stephens, T. (2005). A handbook of management and leadership: A guide to managing for results. Kogan Page Publishers.

Crane, A and Matten. 2010. Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. OUP Oxford.

Flynn, G. 2008. Leadership and Business Ethics. Springer Science & Business Media.

Idowu, S. 2015. Key Initiatives in Corporate Social Responsibility: Global Dimension of CSR in Corporate Entities. Springer.

Managerial Ethics and Corporate Social Responsibility. 2010. Retrieved September 11, 2014, from http://www.cengage.com/resource_uploads/static_resources/0324405715/8910/0-324-40571-5_04_REV.pdf

Sher, S. 2015. What is the relationship between business ethics and corporate social responsibility (CSR)? Retrieved September 11, 2014, from https://www.quora.com/What-is-the-relationship-between-business-ethics-and-corporate-social-responsibility-CSR

Spence, L. And Morland, M. 2009. Ethics in Small and Medium Sized Enterprises: A Global Commentary. Springer Science & Business Media.

Swanson, D. And Fisher, D. 2011. Toward Assessing Business Ethics Education Ethics in practice. IAP.

WHAT'S WRONG WITH CORPORATE SOCIAL RESPONSIBILITY? : The arguments against CSR. (2016). Retrieved September 11, 2014, from https://corporatewatch.org/content/whats-wrong-corporate-social-responsibility-arguments-against-csr.

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