Ethics and Corporate Social Responsibility Management

Question: Discuss about the Ethics and Corporate Social Responsibility Management. Answer: Introduction This paper critically evaluates the topic the role of the leader in the practice of good governance and social responsibility in a publicly or privately held company. For this paper, Westpac Banking Corporation is selected to explain the concepts of organizational CSR commitment and organizational ethical decision making. Westpac Banking Corporation that is also known as Westpac (an Australian bank and financial-services provider) more commonly applies the CSR and ethical strategy to maintain its reputation and goodwill in the markets of Australia, New Zealand and the near Pacific. Westpac Group has been awarded as Socially Responsible Bank of the Year 2015 by Money Consumer Finance Award. The company recognizes the bank's social and environmental leadership effectively (Westpac Banking Corporation. 2017). Concept of Corporate Social Responsibility (CSR) Corporate social responsibility (CSR) is the responsibility of an organisation for the society, people and environment that fulfill by it to behave transparent, legal and ethical. The main concept of the CSR is that the organization is responsible for not only their investors or stakeholders but also responsible for people, society, and environment; so it integrated social, environmental and ethical concerns within organizational business process. The concept of CSR explains that organizations must contribute into sustainable development by focusing on health and welfare of society (Carroll and Shabana, 2010). According to the CSR, the organizations must consider the interest of all stakeholders and focus on fulfillment of the expectations of stakeholders including, employees, customers, suppliers, dealers, investors or shareholders, local communities, government, and the environment. Moreover, after the globalization of the market, the CSR concept has been converted in compliance with applicable business laws, ethics and international norms of behavior. In the twentieth century, the concept of the CSR has been developed as a global governance mechanism by the global trans-national institutions such as the United Nations (UN), The World Bank, Trade Organization (WTO), The World Bank, the International Labour Organization, and the Organisation for Economic Cooperation and Development (OECD). These global trans-national institutions and arrangements have developed the concept of CSR with respect to human rights and economic development (ACCSR Environment Policy, 2016). In the same manner, the business leaders are mainly responsible in setting and shaping CSR as they considered the interest of all stakeholders while taking the business decisions. Business leaders must follow the laws, ethics and international business norms in the practice of good governance and social responsibility in a publicly or privately held company. Business leaders are responsible for business failures similar as they also responsible for CSR issues and unethical issues (McWilliams, Siegel and Wright, 2006). Along with this, business leaders and management are responsible to understand the concepts of CSR and ethics (morals and values) as a response to business social responsibility and obligation to the community. Concept of CSR, Ethics, Morals and Values The concept of ethics means the corporation or person must behave right and follow morals or values to promote the good of everybody in the society or community. The concept of ethics is different with the concept of CSR because of ethics talks about the values and morals of a person/organization, while CSR is a practice that involves a small part of each of these ethical areas. CSR concept means corporations have responsibilities to a variety of other stakeholder, while the concept of ethics indicates corporations have moral responsibilities to follow laws and ethics to prevent the people and environment. The CSR concept means corporation focus on profit with social responsibility for people and environment, while ethics means corporations follow laws and regulations to perform business activities to make a positive move or provide benefits to society (Carroll and Shabana, 2010). In addition, ethics is related to a society, CSR related to people and environment and morality values are related to an individual person. Ethics and CSR are related more to a professional life and business or corporation while morals or values are related to individual as what beliefs and principles individuals follow independently. Strategic Implications of Adopting Corporate Social Responsibility and Business Ethics The CSR and business ethics are an integral element of a firms business, so that strategic implication of adaptation of CSR and ethics is essential for any kind of firm at the present times. In recent times, many MNCs are adopting the CSR and business ethics as the strategic implications to create their image and reputation in the minds of people. The main reason behind it is that it gives message to people that organization behaves ethically and prevents the people and environment. For instance, Westpac publishes its annual reports on social responsibility that describe its CSR strategies or activities that the company uses to reduce the pollution, save energy, and save the people or environment through focusing on the reduction of emission of carbon. The major strategic implication of adopting CSR and business ethics of Westpac is to investment in CSR in order to develop reputation in the marketplace (Ramasastry, 2015). As CSR and ethics strategic implication, Westpac is able to at tend the interests of a wider set of stakeholders that enhance its intangible assets such as: relationships, goodwill, reputation, image, trust, brand value and opportunities for innovation. On the other hand, most of the MNCs are adopting CSR and business ethics as a strategy of achieving the competitive advantages in the market. Westpac adopts CSR and ethics as strategic implications for considering the interest of all stakeholders to provide benefits to them through the business processes or operations. Profit earning is not the only aim of the Westpac, but it focuses on contribution into the society and environment as well as improves people living way through strategic CSR and business ethics (McWilliams, Siegel and Wright, 2006). Moreover, after the globalization, in more competitive global markets, the organizations like Westpac gains a competitive advantage by providing benefits to the public all the way through strategic adaptation of CSR and business ethics. Ethical Business Dilemmas and Their Overcome In recent times, employees face several types of ethical dilemmas and some of them on a regular basis. For case, discrimination at workplace, unfair wages, taking credit for others, side deal or gross negligence, financial fraud, misleading financial statement, etc. are the major examples of ethical business dilemmas. Employee differentiation on the base of gender, culture, tradition, religion, norms, citizenship, etc, is the unethical behavior of the leaders. Harassing behavior such as mentally, sexually or physical harassment is also example of ethical dilemma that impacts other employees self-esteem as well as performance. In recent times, ethical dilemma related to financial fraud and misleading financial statement related has become a major subject of concern to the organizations (Valentine and Fleischman, 2008). Along with this, business organizations adopt and implement CSR and business ethics to overcome ethical dilemmas related to harassment, discrimination, financial fraud, misleading financial statement and so on effectively. Westpac also adopts CSR and ethics in the workplace to bind the leaders, managers and employees behave ethically with others in the organization. Westpac implements the code of ethics in the organization to overcome the ethical dilemmas in an effective and an appropriate way. Leader Role in Setting and Influencing Corporate Responsibility in Organization Business leaders or managers of Westpac play a major role in strategic implications of corporate social responsibility and business ethics. Business leaders or managers of Westpac reform their business frameworks, rules, and models to consider the interests of stakeholders and follow laws while taking business decisions or making business policy, plan or strategy (Michelon, Boesso and Kumar, 2013). Along with this, Leader or manager sets and influences CSR in Westpac by aligning employee goals with Westpacs CSR goals. Managers or leaders maintain the regular communication with its employees about their individual goals with Westpacs CSR goals during staff meetings, week or monthly meetings by phone, emails, social media, etc. Moreover, Leaders set and influence CSR in workplace by setting an example of role model for its employees; so they can behave ethically and responsibility. Leaders are also adopting CSR and business ethics through setting or implementing code of ethics for empl oyees in Westpac. Leaders recognize and reward to employee for their contributions to Westpacs CSR activities (Ruggie, 2014). Conclusion On the premises of above report, it can be concluded that CSR and business ethics has become essential business aspect for Westpac to maintain its brand name and image in the market. Moreover, leaders or managers of Westpac play major roles in the practice of good governance and social responsibility through aligning employee goals with CSR goals of Westpac. References ACCSR Environment Policy. (2016). What is CSR? [Online]. Available At: https://accsr.com.au/what-is-csr/ [Accessed On: 09th January 2017] Carroll, A. B. and Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), pp. 85-105. McWilliams, A., Siegel, D. S. and Wright, P. M. (2006). Corporate social responsibility: Strategic implications. Journal of management studies, 43(1), pp. 1-18. Michelon, G., Boesso, G. and Kumar, K. (2013). Examining the link between strategic corporate social responsibility and company performance: An analysis of the best corporate citizens. Corporate Social Responsibility and Environmental Management, 20(2), pp. 81-94. Ramasastry, A. (2015). Corporate Social Responsibility Versus Business and Human Rights: Bridging the Gap Between Responsibility and Accountability. Journal of Human Rights, 14(2), pp. 237-259. Ruggie, J. G. (2014). Global Governance and New Governance Theory: Lessons from Business and Human Rights. Global Governance, 20(1), pp. 5-17. Valentine, S. and Fleischman, G. (2008). Ethics programs, perceived corporate social responsibility and job satisfaction. Journal of business ethics, 77(2), pp. 159-172. Westpac Banking Corporation. (2017). Westpac named Socially Responsible Bank for third year running. [Online]. Available At: https://www.westpac.com.au/about-westpac/westpac-group/company-overview/our-strategy-vision/ [Accessed On: 09th January 2017]