Corporate Social Responsibility (Business Strategy)

1. How do different stakeholders view corporate social responsibility? What types of social commitment must managers consider regarding social responsibility?

Answers: Stakeholders view companies have a lot of power in the community and in the national economy. They control a lot of assets, and many have billions in cash at their disposal for socially conscious investments and programs. Some companies may engage in "greenwashing" or feigning interest in corporate responsibility, but many large corporations are devoting real time and money to environment sustainability program, alternative energy and various social welfare initiatives to benefit employees, customer and community at large.

The social commitment considered regarding social responsibility by managers are:

a. Environmental Sustainability: Areas include recycling, waste management, water management, using renewable energy sources, utilizing reusable resources, creating 'greener' supply chain, using digital technology instead of hard copies, developing building to LEED( Leadership in Energy and Environmental Design) standards. Manager must be dedicated to specifically to environmental sustainability consulting for business of any size to utilize.

b. Community Involvement: This include manager's involvement in raising money for local charities, supporting community volunteerism, sponsoring local events, employing people from a community, supporting a community's economic growth, engaging in fair trade practice.

c. Ethical marketing practices: Manager's must ethically market to consumer are placing a higher value on their customers and respecting them as people who are ends in themselves. They do not try to manipulate or falsely advertise to potential consumers. This is important for manager's that want to be viewed as ethical.

Reference: investopedia

2. How has the Sarbanes-Oxley Act changed boards of directors’ thinking relative to business ethics and social responsibility?

Answer: The Sarbanes- Oxley Act of 2002 is considered by many to have made the most sweeping changes affecting corporate governance since the Securities and Exchange Acts of 1933 and 1934. About 4 year after its passing, however, many governance experts questions whether the time and expense of compliance engender any real reforms. This act examines whether corporation have restructured their board in response to the enactment of Sarbanes- Oxley and finds evidence that companies are implementing changes that should strengthen the monitoring ability of boards ethics and social responsibility also.

Journal of Business Ethics (2008) Alix Valenti

3. Explain the five principles of collaborative social initiatives.

Answer : The five principles of collaborative social initiatives are:

a. Identify a Long- Term Durable Mission: Companies make the greatest social contribution when they identify an important, long- standing policy challenge and they participate in its solution over the long term. Companies that step up to tackle problems that are clearly important to society's welfare and the require substantial resources.

b. Contribute " What We Do" : Companies maximize the benefits of their corporate contributions when they leverage core capabilities and contribute products and services that are based on expertise used in or generated by their normal operations. Such contributions create a mutually beneficial relationship between the partners; the social-purpose initiatives receive the maximum gains while the company minimizes costs and diversions.

c. Contribute Specialized Services to a Large- Scale Undertaking: Companies have the greatest social impact when they make specialized contribution to large- scale cooperative efforts. Those that contribute to initiatives in which other private, public or nonprofit organizations area also active have an effect that goes beyon their limited contributions.

d. Weigh Government's Influence: Government support for corporate participation in CSIs- or at least willingness to remove barriers- can have an important positive influence. Tax incentives, liability protection, and other forms of direct and indirect support for businesses all help to foster business. Endorsements can also be very valuable.

e. Assemble and Value the Total Package of Benefits: Companies gain the greatest benefits from their social contributions when they put a price on the total benefit package. The valuation should include both the social contributions delivered and the reputation effects the solidify of enhance the company's position among its constituencies.

4. Compare and contrast the different approaches to business ethics.

Answer: The different approaches to business ethics are:

a. Utilitarian: The utilitarian approach to ethical decision making focuses on taking the action that will result in the greatest good for the greatest number of people. Considering example of employing low-wage workers, under the utilitarian approach you would  try to determine whether using low- wage foreign workers would result in the greatest good.

b. Moral Rights: The moral rights approach concerns itself with moral principles, regardless of  the consequences. Under this view, some actions are simply considered to be right or wrong. From this standpoint, if paying extremely low wages is immoral, your desire  to meet the competition and keep your business afloat is not a sufficient justification.

c. Universalism: The universalist approach to  ethical decision making is similar to the Golden Rule. This approach has two steps. First, to determine whether a particular action should apply to all people under all circumstances. Next, to determine whether you would be willing to have someone else apply the rule to you.

d. Cost- Benefit: Under the cost- benefit approach, it balance the costs and benefits of taking versus not taking a particular action. For e.g., one of the costs of paying extremely low wages might include negative publicity. we should weigh that cost against the competitive advantage that we might gain by paying those wages.

Reference: Pozna Law Firm Ltd, approaches to ethical decision making