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Business Ethics And Social Responsibility 

By Dr Abong Peter Ngeh*
 

The Oxford Advanced Learner’s Dictionary defines ethics as "moral principles that control or influence a person’s behaviour". There are moral principles that influence not only a person’s behaviour but also the way business should be done.  For example, breweries produce alcoholic drinks and would want the public to consume as much of their products as possible, in order to increase their profits. But responsible breweries put a warning on their drinks asking consumers to "drink responsibly". Some even put an age limit for consumers usually +18 – an indication that they are not interested in profits only; they also care about the health and the statutory age of consumers. 
 

This article’s concern is on business and ethics. When business and ethics are mentioned, they are construed as incompatible since the introduction of any dose of ethics or social responsibility serves as a hindrance to achieving high profits. Why adopt a set of moral values to interfere with the way corporations and businesses operate? It is a truism that the rise of the modern corporation has created and continues to create many social and environmental issues. The argument follows that the corporate world should assume responsibility for addressing these problems, since they are at the core of their creation.
 

Those arguing against say that taking on social and moral issues is not economically feasible, and that assuming social responsibilities places those corporations doing so at a competitive disadvantage relative to those that do not. The very high profile conference at Copenhagen was a bold attempt to put pressure on emerging and big economies to address issues affecting the planet, causing climate change.  Countries like China that recently reported double digit growth (10.7 percent), have done so at the expense of the environment.

Too many cars on our roads have also taken a toll on the environment, and irrational exploitation of the world’s natural resources is raising eyebrows.
It is unfortunate that climate change, coupled with other economic challenges, will have negative and devastating repercussions for sub-Saharan countries. The effects of climate change are also very likely to affect the poor most, when they are those contributing least to global warming.

Big corporations have contributed heavily to the high levels of pollution.  Businesses, therefore, cannot be indifferent to these happenings.  In meeting our needs today, we are destroying the ability of future generations to meet theirs. Professor Hart has stated that "rapid population and economic development in the emerging economies – are political and social issues that are beyond the mandate and capabilities of any corporation but corporations are the only organizations with the resources, the technology, the global reach, and, ultimately, the motivation to achieve sustainability".

Way Forward For Businesses

It is therefore incumbent on corporations and other big businesses to start thinking ethically – asking themselves whether they are part of the problem or solution. Corporate Social Responsibility (CSR) is beginning to gain ground.  Carroll and Buchholtz, 2003, have defined CSR as "the economic, legal, ethical and discretionary expectations that society has of organizations at a given point in time". 

This concept of corporate social responsibility implies that organizations have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law. CSR requires organizations to adopt a broader view of their responsibilities not only to shareholders, but to many other constituencies as well. These include employees’ welfare, suppliers, customers, the local community, the governments etc.

Practical Examples of CSR

It is gratifying to note that some big corporations in Cameroon and the world are factoring certain social criteria into their strategic decision process. They are initiating projects that will improve their images in the communities where they operate and beyond, for example, providing potable water to remote communities, sponsoring sporting events, constructing schools, providing health care, and championing the fight against HIV/AIDS.  Others are resorting to technologies that reduce energy consumption and lower waste rates and improving conditions of workers. Quite a lot is happening in the area of pollution prevention, which focuses on minimizing or eliminating waste before it is created.

Urban pollution in emerging economies of Asia has reached oppressive levels. In Hong Kong, for example, visibility is considerably reduced on certain days because of pollution. There is the urgent need to replace current product and process technologies with new cleaner ones, which will eliminate or neutralise greenhouse gas emissions. Companies should ask themselves the important question: To what extent have we progressed through the stages of environmental strategy from pollution prevention to product stewardship to clean technology?

Conclusion

The terms CSR and business ethics relate closely though they are slightly different. Business ethics is regarded as a component of the larger study of CSR. These boundaries do exist, but in most cases, they are often taken to mean the same thing. The corporate world depends on the world’s resources for their production needs. The irrational exploitation of these resources is catastrophic – everyone will lose at the end. Hence there is urgent need for business to adopt sound social strategies that help us to meet our needs today and improve the chances of future generations to meet theirs.

Corporations should continuously find out how their activities affect the environment and the local communities; they should endeavour to plough back some of their profits to improve the quality of life in communities where they operate. Corporations should be sensitive to ethical issues in their increasing quest to satisfy stakeholders’ expectations. Local communities should also feel good about big corporations. The end results should be a win-win for all.
 

*Dr. Abong Peter Ngeh specializes in issues surrounding fair trade

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