Business Ethics and Social Responsibilities
Executive Summary
As of now, more and more business are becoming aware of the importance of the business ethics and social responsibilities in maintaining their competitive advantage and position in the market. Both of the said aspects are important in maintaining the brand image, thus improving their relationship towards the customers. Nike is considered as one of the most successful brands in the world, and one of the most successful companies that applied the principle of CSR and business ethics in their corporate strategies. However, prior to the said success, the company had faced several critics and issues that are related to unfair employee treatment. Later on the company realized the importance of CSR and implements the said principle in their overall strategy. The author recommended that the company must focus more on the aspect of education and other social aspects, working environment and environment in order to ensure their continuous success.
Introduction
Currently, lots of statistics are supporting the argument or idea that focuses on ethics, values, integrity as well as responsibility is not only becoming an acceptable issue in the business community, but it is becoming a practical requirement (Stodder 1998, p. 1 cited in Joyner & Payne 2002). That is the reason why for most of organization, their contribution to the larger society where they operate is considered as, as significant as the profits of the organization. The event is due to the different changes that are going on in the business environment, primarily the growing awareness of the people or customer towards the society, environment and health.
Defining the Concepts
There has been an ongoing debate regarding the meaning of the terms that are involved in business ethics and corporate social responsibility. For the purpose of consistency, as well as building on the prior research about the social management issues, the following issues will be applied in this study.
Epstein (1987) stated that the corporate social responsibility focuses on the individual and organization processes in order to determine, implement and evaluate the capacity of the firm to anticipate, respond to as well as manage variety of issues and problems that are arising from the diverse claims and expectations of the stakeholders (pp. 99). The reason why the author applied this definition is because it broadly represents the CSR as the relationship between a company and the different principles that are expected by the whole society, where the organization operates (Werther & Chandler 2006, p. 16; Lea 2002, p. 10).
Business ethics on the other hand is defined as the study about the business situations, activities and decisions where in different issues about right and wrong are addressed (Crane & Matten 2007, p. 5; Velasques 1999 cited in Joyner & Payne 2002). The reason the said definition was chosen by the author because it helps to show that the business ethics encompass the core business values that are supposed to be held by most of the company like freedom, pragmatism as well as efficiency.
Business Ethics and Social Responsibility and Corporate Image
Currently, corporate social responsibility as well as business ethics is becoming significant and important to the long-term survival of different companies. The result of the survey by Pricewaterhouse Coopers shows that more than 60% f the executives and managers in Malaysia believe that CSR and business ethics had helped to improve their market share and public image (Sims 2002; Rashid & Ibrahim 2002 cited in Harrison & Newholm 2005, p. 208). in addition, the study conducted by the Clarkson Center for Business Ethics and Board Effectiveness showed that firms that place a quality and finest on its ethics and social performance make the most money (Harrison & Newholm 2005, p. 208). This is because of the fact that the corporate image has a great impact on the preference and choice of the customers. More and more people today are focusing on the ethics and social responsibility of any company with regards to the environment, society as well as its treatment towards its employee.
Case Analysis: Nike
Like any other companies, Nike is also being affected by the current trends in terms of CRS and Business Ethics. Phil Knight, the company’s Chairman and CEO in 2001, stated that the performance of Nike and every other global company in this century will be measured as much by their impact on the quality of life as it is by revenue growth as well as profit margins (cited in Kotler & Lee 2005, p. 7). Currently, Nike is considered as one of the most progressive brands in terms of CSR, but before that, the company had faced different issues regarding their business ethics. The company was criticized because of their unfair labor practices in different parts of Southeast Asia and established an image as a child labor exploiter, and they are paying their workers in less than the legal minimum wage (Sims 2003, p. 60; cited in Manheim 2001, p. 74). As a result, the company gained negative image and acquire criticism from different concern groups such as the Working Group on Nike that is composed of different organizations such as Interfaith Center for Corporate Social Responsibility, Progressive Asset Management and the United Methodist Church (Manheim 2001, p. 149).
The said event ruins the brand image of Nike and affected their global performance. The company started reconstructs their CSR and focuses on its workforce. The company implemented its change by improving the working environment inside their factories by applying holistic and integrated business approach to the entire supply chain; decreasing the global environment footprint by the process of maintaining their product innovation as well as direct operations and factories; and application of their brand in order to provide those excluded youth in the world, the superior access to the different benefit of sports (Nike 2006, p. 10).
Strategies to be applied by Nike
In order for the company to take advantage of the CSR and business ethics in the improvement of their brand image, it will be important to focus more on the improvement of the environment, social condition as well as human resource. First is that it will be important to focus on the different activities that will help the company to improve their organizational identity and employer image, this is because of the fact that it has a great impact towards the interested talents and customers if the company will have an image of great employer which provides good working environment and benefits. In addition, it will be important for the company to focus on implementing more projects or programs that will focus on the interests of the youth; this is because of the fact that the primary target market of the company is that population. The company must focus on the aspect of education by giving different scholarship and tutorial projects. Above all, it will be important for the company to focus on the interests of the entire community regarding the environment. It will be important for Nike to focus on applying different national and international standards in their processes, in order to make sure that all of their procedures are safe and gentle to the environment.
References
Crane, A & Matten, D 2007, Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization, Oxford University Press, Oxford
Epstein, E M 1987, The Corporate Social Policy Process: Beyond Business Ethics, Corporate Social Responsibility and Corporate Social Responsiveness, California Management Review, vol. 29, no. 3, pp. 99-114.
Harrison, R, Newholm, T & Shaw, D 2005, The Ethical Consumer, SAGE
Kotler, P & Lee, N 2005, Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause, John Wiley and Sons
Joyner, B, Payne, D & Raiborn, C 2002, ‘Building Values, Business Ethics and Corporate Social Responsibility into the Developing Organization’, Journal of Developmental Entrepreneurship, 1 April.
Lea, R 2002, ‘Corporate Social Responsibility: IoD Member Opinion Survey’, The Institute of Directors, UK.
Manheim, J 2001, The Death of a Thousand Cuts: Corporate Campaigns and Attack on the Corporation, Lawrence Erlbaum Associates, Mahwah, NJ
Nike 2006, Innovate for a Better 22 January 2009, <http://www.socialfunds.com /csr/repo rts/Nike_FY05-06_Corporate_Responsibility_Report.pdf>
Sims, R 2003, Ethics and Corporate Social Responsibility: Why Giants Fall, Praeger, Westport, CT
Werther, W B and Chandler, D 2006, Strategic Corporate Social Responsibility: Stakeholders in the Global Environment, Sage Publications Inc., London.
Credit:ivythesis.typepad.com
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