Business Ethics: A Sustainability Approach
Business ethics and sustainability are two different aspects identified as the moral principles in the current corporate domain (Kain and Sharma 2014). Krishna, Dangayach and Jain (2011) affirmed that in concrete terms, ethical aspect of the business reflects business philosophy and precedence, which prohibit the work practices to be performed in an unethical manner. In order to ensure long-term sustainability of the business operations, organizations need to follow an ethical approach in their regular activities. The empirical studies conducted by Brunk (2010) and Chen-McCain, Tsai and Bellino (2010) raised concerns in terms of the management of different businesses related to engagement in unethical practices which in turn can hamper the brand reputation, customers’ trust, loyalty and societal image as well. Conducting business with ethical consideration should be the major priority for every organization, as the consequence of unethical practices can bring about a hefty amount of fines for the business entity along with a major tarnish in its reputation in the market (Krishna, Dangayach and Jain 2011).
Sustainability refers to an essential aspect of performing the business operations with a consistent performance along with fulfilling the requirements and ensuring satisfaction of the customers and all other stakeholders as well. Sustainability is a wider concept that leads the business to remain committed with the internal and external stakeholders socially, economically and environmentally. In the present decade, organizations were continuously pressurised by its stakeholders to enhance their performance in a sustainable and ethical manner to provide benefits to its stakeholders (Krishna, Dangayach and Jain 2011). The authors of the article ‘business ethics: A sustainability approach’ believed that a business could gain benefits by involving in the unethical and unsustainable practices, but such practices are likely to undermine the prospects of the economy and other external aspects over time. The key principle of modern business environment is to emphasise ethical aspects from both internal and external purposes which further allows the organizations to conduct their business in a sustainable manner. The authors of the article further suggested that the current practice primarily instructs employees to follow written guidelines or principles, though they are still unable to ensure the presence of ethics and sustainability in business. Providing training and supervising performance of employees are key driving constituents in maintaining sustainability and ethical practice in the organization.
According to the view of Krishna, Dangayach and Jain (2011), monitoring the environmental practices, appointing professionals and enhancing knowledge on the work culture maintenance are major aspects of the ethical and sustainable practices. Apart from environmental aspects, economic and social factors are also cornerstones in maintaining a business with sustainable and ethical considerations. Broni (2010) presented a similar view by affirming that providing a safe and secure work environment along with equal treatment to employees; organizations can easily enhance their performance with higher reputation and market preferences. Krishna, Dangayach and Jain (2011) reflected that including agencies with external expertise to assist the management in maintaining ethics and sustainable practice has become a common practice in the current business setting.
Krishna, Dangayach and Jain (2011) render a lucid comprehension regarding the factors that have gained considerable attention to enhance businesses performance. Among these factors ensuring ethical and sustainable practices within the work environment is recognised to be vital. However, certain recommendations are suggested to the authors of the article that the study could provide more transparent outcome by explaining practical viewpoints or situations in which modern organizations started to adopt ethical and sustainable practices more actively. In the article, the authors mainly concentrated on the theoretical perspectives. Thus, it can be recommended that conducting a survey with the employees, who have received formal training to deal with such aspects, might be beneficial in reflecting the drawbacks of unethical practices and providing suggestions on implementing new policy measures to reform the ethical and sustainable approaches for the business. Moreover, the outcome of the study also lacks precise summary on the evidences of whether the employees with training experience can perform responsible actions in a more ethical and sustainable manner or not. Besides, it has been presented by the authors of the article that in the current market organizations adopt several strategic measures to evaluate business ethics, but they do not name any of the mechanisms that are currently followed in the business domain.
A Stakeholder Approach to CSR: A Fresh Perspective into Theory and Practice
The study conducted by Jamali (2008) reflected Corporate Social Responsibility (CSR) as the duties, responsibilities and obligations of an organization to act in an ethical manner by remaining responsible towards cultural, social, economic as well as environmental issues related to the business. Implementing the approaches of CSR in the organizational practices facilitates the business to manage its respective activities by eliminating risk factors, improving competitiveness and strengthening the relationship with regulatory entities or stakeholders. In today’s business domain, organizations are operating in the global context by involving in the both national as well as international levels. According to Jamali (2008) business involvement in the CSR practices allows the organization to enrich its customers’ preferences, market share and brand reputation by stating that the management will always remain committed towards the social, economic and environmental aspects. Enhancing business reputation or image among the potential customers further helps to place the organization on a higher level in front of the national and international stakeholders.
Jamali (2008) asserted that the major stakeholders of the organization in both national and international levels include employees, customers, suppliers, investors and the community only, when the business operates in other nations. The CSR actions of the business differ based on the interests and values of different stakeholders. For instance, the interests and perspectives of the employees in domestic and international market adopted in the CSR activities are ensured with developing equitable reward and remuneration approach, providing fair working environment, investment in benefits programs for the employees and promoting diversity among others. Involvement of interests of national and international stakeholders is a valuable attribute in enriching the overall profitability of the organization by enhancing the reputation and customer relationship. Concerning the high competitive business environment, organizations are highly pressurised by its stakeholders to have proper balance between companies and communities with the adaptation of several CSR activities. Contextually, performing business operations linked with the CSR allows the organization to ensure business succession along with developing reciprocal relationships with the surrounding communities as well (Jamali 2008).
The significance of the outcome presented by Jamali (2008) can be justified with the fact that the CSR practice in the modern business setting is the most important phenomena. CSR allows organizations to promote their operational standards by performing acts that are contributing towards benefits of the society thereby improving the organizational image or reputation. A number of empirical studies have exhibited decisive impacts of upholding CSR on the business performance and financial sustainability (Rajput, Batra and Pathak, 2012; Karagiorgos 2010), brand value (Abdolvand and Charsetad 2013), customer behaviour (Wu and Lin 2014) and business performance as well (Bedenik et al. 2013). To remain connected with the stakeholders and maximise their values and interests, CSR activities have become an important constituent for organizations in the present competitive marketplace. Jamali’s (2008) study provides diversified perspective of the CSR practices that organizations have adopted with due consideration of the stakeholders preferences in the national and international levels. However, it can be recommended to the author of the article that future research might concentrate on categorising the shareholders management approach in terms of national and international perspectives. Moreover, further concentration should be on presenting the possible adverse impacts for organizations due to their non-involvement in the CSR practices.
The study conducted by Krishna, Dangayach and Jain (2011) reflected that organizations ensure sustainable operations by involving ethical conducts. On the other hand, Jamali (2008) asserted that CSR is an effective approach to developing relationship with the stakeholders and reducing uncertainties in the business activities in the social environment. Both the studies presented the concept of developing a positive perception on stakeholders and further contributed to the enrichment of the brand image by engaging ethical, sustainable and CSR activities within strategic priority. The value of stakeholders will be affected and likely to create adverse impact on the performance of companies that are involved in unethical practices or do not adopt CSR practices.
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