In the wide sense, the meaning of the business ethics can be explained as a complex of ethical values and standards that the company and its members in the area of management and entrepreneurship should follow while performing its activities. In the economic world, ethics issues are strongly linked to matters of money. The money is not considered a general means of payments to suppliers anymore. It is a measure of the holder’s achievement, an entrepreneur who can (or cannot) generate enough to be perceived a successful (Audi, 2008).
Corporate social responsibility is known to be not only the ordinary duty of the firm before individuals and other companies with which it faces during its usual business development but also before the public overall. CSR is not only a complex of values, in line with which the organization creates its business procedures, however, the way of thinking of the firm about commercial and social processes that are carried out by organizations, which take into account their growth, guaranteeing a proper standard of life of individuals, the progress of the public at large and maintaining the surroundings for the next generations (Johnson, Lusch, and Schmidtz, 2016).
Based on the case content, it can be concluded that Massey Energy does not understand that business is the result of social development, and therefore it must operate within the statutory minimum rules for its legitimate existence. Observing the rules of pollution and emissions in the area of environmental protection, respecting sanitary requirements and ensuring good working conditions in the workplace for employees, paying an economically reasonable wage, paying full taxes to all levels of budgets, ensuring employees social guarantees established by law, selling the products and services related to state standards, technical specifications, observing the norms of the Civil Code, the company “gets license” to operate in society. Business social obligation is a formal commitment of corporate structures of the state and society. It is a formal and integral part of corporate social responsibility (Schwartz, 2011).
Ethics violations represent many causes of destructive trends of current society, considering the economic and monetary problems, inflation, worsening in quality of life and environmental quality. The loss of life, destruction of reputation, deficiency of sureness, economic damages (related to the necessity to address the damaging outcomes of defective manufactured goods) – this is a partial list of the public aftereffects of unfair and immoral business (Griseri and Seppala, 2010).
Massey Energy caused 29 deaths due to its inability to admit its failures and make attempts to fix the problems found. Socially responsible business cannot afford itself to state that the company is committed to safety when the situation is opposite. As socially irresponsible company, Massey Energy will have the following problems, namely weakening of its competitiveness, lack of state support, decreasing employee satisfaction, motivation and productivity, and absence of guaranteed receipt of orders.
For the business, the maximum social responsibility is a responsibility to all objects; minimum – to society, state, and nature. With regard to the permissible level, it may be less than the minimum, but it is appropriate in this case and does not extend to the entire business (e.g., small, beginner, intermediate), and the responsibility will be expressed to the society and the state (Schwartz, 2011).
Certainly, every firm requires having its own course of action, exceptional systems and methodologies, and, on the other hand, it can choose numerous most available measures to develop ethics of the personnel, implemented and used in the practice of the best world-known organizations (Johnson, Lusch, and Schmidtz, 2016):
The enlargement of ethical principles – guidelines explaining the system of mutual beliefs and procedures of the company’s behavior in the market. For instance, corruption, extortion, donations, compensation to the business companion of illegally received funds, the problem related to the conflict of interest, violation of laws generally, fraud, revelation of firm’s confidences (trade secrets), the application of data got in a confidential discussion from participants of own group, unlawful financing of political campaigns, illegitimate activities in the firm’s interests, manufacture of apparently substandard goods, and so on are not approved or punishable. Mentioned protocols are regulated in the procedure of a Code of Ethics, company’s lifestyle, etc. (Griseri and Seppala, 2010).
The formation of ethics commissions. Such commissions generally include representatives of the organization’s top management, proprietors and other investors. The role of a law officer, the integrity of the firm, bringing the formal respected moral sentences on provocative ethical issues, belongs to them (Audi, 2008).
Carrying out social inspections. The completion of official documents to the society concerning the application of social responsibility, along with the ethics of commercial activity, controlling of solution-taking and employees’ interactions is suggested. Generally, mentioned official documents are completed by independent external firms – popular periodicals, TV stations, associations, etc. with positive reputations (Amaeshi, Nnodim, and Onyeka, 2015).
Training of moral way of conduct. Currently, ethics lessons consist of numerous training initiatives and specialized courses. The objective of such lessons is to increase the global culture of actions, besides to explain individuals the idea of ethical obligation and moral consequences of activities performed by them (Johnson, Lusch, and Schmidtz, 2016).
Particular pattern of the firm’s supervisor. The head commonly is the ethical groundbreaker of the organization, whose duty is to set the whole atmosphere and identify the rate of ethical way of conduct. Highly ethical way of conduct of the firm’s supervisor practically always encourages the staff to adhere to ethical principles (Silberberg, 2016).
Responsibility to the employee means that at the conclusion of the labor contract (agreement), Massey Energy is obliged to provide conditions and labor protection, the payment of not below the minimum level, as well as other social benefits, including social and health insurance and social security in accordance with applicable law. When disability occurs, it should provide reimbursement to the victim in the cases and in the manner prescribed by the law. Social responsibility in the field of employment provides for non-discrimination due to ethnicity, race, gender, age, religion, disability or other characteristics. Differences in the provided work and, consequently, its payment may be due to only the skills, education and professional training of workers (Silberberg, 2016).
Temporary closure of dangerous mines and financing of new safety system will turn onto economic motivation for Massey Energy because it will be an opportunity to improve its reputation in the eyes of the public, to create a positive image of the company. This will help to increase the intangible assets and the value of company’s name as well as to generate credibility, which eventually will make a progressive influence on the amounts of sales, the excellence of collaboration with business companions and participants of other involved parties (Amaeshi, Nnodim, and Onyeka, 2015).
Knowing the needs of stakeholders will help the company to provide public demanded products and services, as well as to develop new businesses. Consequently, the business will turn into a source of positive modification and modernization as share of its essential operation, including over the sustenance of study, improvement of socially substantial goods and services and the expansion of the empty market, and, simultaneously, growing its attractiveness and effectiveness (Amaeshi, Nnodim, and Onyeka, 2015).
The use of technologies with enhanced technical characteristics and resource productivity will form extra prospects to save natural recourses available for the company’s proper functioning, namely energy, water and others, for example, the decrease of waste procedure. Furthermore, the launch of CSR has a positive effect on the labor productivity development (Schwartz, 2011).
In determining the investment prospects of firms in foreign stock markets, financiers study their performance with respect to corporate social responsibility. A stable growth in the quantity of banks, which follow the philosophies of liable sponsorship, is a supplementary motivation to raise the social responsibility of the firm as well. The combination of internal and public features in the process of solution-taking by the management permits the firm to develop its perspectives and forecasting and bear in mind a varied complex of jeopardies and prospects, which forms the prerequisites for sustainable lasting company’s enlargement (Johnson, Lusch, and Schmidtz, 2016).
Areas, where social responsibility pays off best, are primarily relations with the authorities and public relations. In this case, socially responsible businesses have more chances to obtain the authorizations and permits as well as to eliminate the prevailing regulation and prevent the adoption of the new directive. The environmental programs are the most successful in terms of PR unless, of course, the company’s activities have a noteworthy effect on the surroundings (Amaeshi, Nnodim, and Onyeka, 2015).
Thus, adherence to the social responsibility will give many advantages to the company, first of all, from the side of society’s attitude. Also, in the future it will bring numerous economic benefits described above in the forms of investors, decrease of depreciation costs, mitigation of risks, resources’ savings, etc.
Amaeshi, K., Nnodim, P. and Onyeka, O. (2015). Corporate Social Responsibility, Entrepreneurship, and Innovation. Abingdon-on-Thames: Routledge.
Audi, R. (2008). Business Ethics and Ethical Business. Oxford: Oxford University Press.
Griseri, P. and Seppala, N. (2010). Business Ethics and Corporate Social Responsibility. Boston: Cengage Learning EMEA.
Johnson, C., Lusch, R. F., and Schmidtz, D. (2016). Ethics, Economy, and Entrepreneurship. New York: Sagent Publishing.
Schwartz, M. S. (2011). Corporate Social Responsibility: An Ethical Approach. Calgary: Broadview Press.
Silberberg, P. (2016). The Ethical Entrepreneur: Succeeding in Business without Selling Your Soul. New York: Morgan James Publishing.