Beyond Ethics: Corporate Social Responsiblity

Bombeta. Responsabilitat Social The Blake Project

Readers, I would like to pose two questions to you. First, ​have you ever considered ​what ​defines Corporate Social Responsibility? In essence, it is decision-making linked to ethical values, compliance with legal requirements​,​ and respect for individuals, the community at large, and the environment (Greenberg, 2005).

Second, do you think socially responsible companies perform better than less socially responsible ones? Frankly the answer is not so straight-forward (Greenberg, 2005). Many times leaders in organizations get the illusion that simply having a corporate social responsibility policy will lead to a so​-called “virtuous circle”. This concept posits that higher levels of corporate social responsibility in the organization fuel profits and in turn help generate more corporate social responsibility efforts (Trevino & Nelson, 1999). Although this does not automatically happen, literature has identified four areas where companies have taken action and seen positive results.

1.  Environmental sustainability: These areas include but are not limited to recycling, waste management, water management, using renewable energy sources, utilizing reusable resources, creating ‘greener’ supply chains, using digital technology instead of hard copies, developing buildings according to Leadership in Energy and Environmental Design (LEED) standards, etc. The highest ranked sustainability consulting firm in today’s environmental consulting industry is Ernst & Young.

2. Community involvement: This can include raising money for local charities, supporting community volunteering, sponsoring local events, employing people from a community, supporting a community’s economic growth, engaging in fair trade practices, etc. Starbucks is an example of a company that focuses on community involvement and engagement; since its community programs began the company has seen higher profits and greater employee engagement.

3.  Ethical marketing practices: Companies that ethically market to consumers place a higher value on their customers and respect them as people who are important to  in company. These companies do not manipulate or falsely advertise to potential consumers. This is important for companies that want to be viewed as ethical. TOMS, for example, donates a pair of shoes to the needy for every pair of shoes purchased.

4. Glass door policy: With an increase in the awareness of corporate corruption (Pinto, Leana, & Pil, 2008), companies are looking at making business more transparent. People want to know what working for a particular organization might look like. For those of you on the job hunt or just interested in finding out more about a particular company Glassdoor was created to fulfill this need. A company was recently transparent about a huge organizational decision was Toyota; once the decision was made they made their public announcement of the organizations plan to consolidate offices and move to Texas.

If this discussion piqued your interest click here and see which companies are top performers on the newly launched ESG portal. I’ll give you a hint: Intel is a company we should all watch.

References:

Camden Community Empowerment Network. Camden Community Empowerment Network Jargon Buster. Retrieved 2014-05-31

Great Forest. Services. (2013). Retrieved 2014-05-31.

Greenberg, J. (2005). Managing behavior in organizations. Pearson Prentice Hall.

Environmental Leader. Top Sustainability Consultants Revealed. 2013-01-14. Retrieved 2014-50-31

Image: http://www20.gencat.cat/portal/site/canalempresa/menuitem.a6f087d5b0b0c23195813d10b0c0e1a0/?vgnextoid=708cfddb8a137310VgnVCM1000000b0c1e0aRCRD&vgnextchannel=708cfddb8a137310VgnVCM1000000b0c1e0aRCRD&vgnextfmt=detall&contentid=b97d8d1ceb9f5410VgnVCM2000009b0c1e0aRCRD Retrieved 2014-06-02.

Pinto, J., Leana, C. R., & Pil, F. K. (2008). Corrupt organizations or organizations of corrupt individuals? Two types of organization-level corruption. Academy of Management Review, 33(3), 685-709.

Richard, M (2012-01-26). greenmarketoracle.com/2012/01/top-sustainability-trends-for.html “The Green Market Oracle”. Top Business Sustainability Trends for 2012. Retrieved 2014-05-31.

Trevino, L.K. & Nelson, K.A. (1999). Managing business ethics (2nd ed.). New York:John Wiley & Sons.

Workforce Management. Starbucks is Pleasing Employees and Pouring Profits. October 2003. pp. 58–59. Retrieved 2014-05-31.

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One thought on “Beyond Ethics: Corporate Social Responsiblity

  1. Pingback: The essence of effective leadership | Leadership Archways

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