Corporate social responsibility is defined as a commitment by corporate bodies to contribute towards sustainable economic development by working with the local community, employees and their families and the entire society in order to augment the quality of life they lead. However, owing to the widespread corporate corruption, organizations have been changed to benefit those who own them at the detriment of those who do not have a stake in the organization. This is in total disregard of the theories of corporate social responsibility and stakeholder.
Corporate social responsibility has a discretionary and voluntary aspect. It requires that a company exceeds its legal obligations in its activities. Various principles of corporate social responsibility would help reduce the menace that is corporate corruption. Firstly, the principle of managerial discretion requires that individual managers focus on morality and ethics. A manager should feel obliged to pursue activities that are both moral and ethical. Secondly, the principle of legitimacy illuminates on those sanctions and obligations that predicate the boundaries of the relationship between a business and the society (Ferrell, Fraedrich & Ferrell, 2010, pp.54)
Although the general assumption is that governments and societies determine what is legitimate and what is not, businesses should feel obliged to adhere by the sanctions and obligations determined by the government and the society. Thirdly, the principle of public responsibility requires business to assume responsibility for their actions and activities. The stakeholder theory holds that the point of a business is to add value for its stakeholders. As such, and in order to achieve success and sustainability, managers must align the interests of the suppliers, customers, communities, employees and other shareholders in one direction (Ferrell, Fraedrich & Ferrell, 2011, pp.87).
Global ethics is of great relevance to business. This is because in the contemporary world, businesses are increasingly operating in a global environment. Global ethics is important for businesses to lessen potential costly fines, improve reputation, decrease vulnerability, provide access to operating capital, enhance capital loyalty and increase employee commitment. Businesses operating in regard to global ethics have a better chance of enhancing sustainability of their business ventures (Banerjee, 2008, pp.11)
The readings have shed light on the widespread nature of corporate corruption. I have also been able to perceive on the dangers of unabated corporate greed and hence the importance of ethics in business. Sustainable economic development is pegged on ethical business activities. As such, business ethics is important to the existence of our communities.
Banerjee, S. B. 2008. Corporate Social Responsibility: The Good, the Bad and the Ugly. Journal of critical sociology. Available at http://crs.sagepub.com/cgi/content/abstract/34/1/51
Ferrell, O. C., Fraedrich, J., & Ferrell, L. 2010. Business ethics: ethical decision making and cases : 2009 update. Mason, OH, South-Western Cengage Learning.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. 2011. Business ethics: ethical decision making and cases. Mason, OH, South-Western Cengage Learning.