Ethical And Socially Responsible Business Practice Management
Around the world organizations are being forced to struggle to meet the requirements of the existing generation without compromising the facilities of the succeeding generations to come across their own needs. Organizations are requested to take responsibility for the actions their conduct influence humanities and the natural environment. Additionally, they are being requested to implement sustainability principles to the habits in which they do their business. Sustainability in the organization refers to voluntary activities that exhibit the presence of public and ecological concerns in business actions and in connections with stakeholders. It is no further acceptable for an organization to practise economic success in separation from those which are impacted by its actions. An organization should now emphasize its attention on both maintaining its profits and being a good corporate citizen. Organizations have been forced to restructure their frameworks, rules and business models to provide both private and public benefits while keeping well-informed of global trends and remaining devoted to financial duties. To understand and improve existing efforts, the most socially responsible organizations carry on revising their short-term and long-term plans, to stay ahead of rapidly changing challenges. Although it is easier said but in reality the implementation is challenging and limited in scope, however, there are benefits to the organization.
This piece of work will give an outline of the challenges, limitations that a business encounters and the strengths that are derived from their ethical and socially responsible business practice.
"Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. More troubling, the groups say, is some suppliers' disregard for workers' health. Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77." - Duhigg & Barboza. The New York Times (2012). In China, Human Costs Are Built Into an iPad.
Organizations, here for instance Apple Inc., to escape from their unethical and embarrassing situation to entail them to additional costs in order to decrease the excessive hours of labour. For example, a decrease in the regular working hours from the existing sixty to seventy hours per week to forty-eight hours per week would demand in the region of more than 30 per cent upsurge in the labour force to sustain the existing rate of productivity. In order to provide accommodations for the increase in labour force the factory would be required to build extra related infrastructure, such as kitchenettes, security guards, healthcare policies and transportation facilities. The initial capital investment has to be quite generous to rapidly amend all the situations at hand.
The labour force, usually in developing countries, do not prefer less overtime hours because it sinks their earnings. Factory owners love to keep regular wages as low as possible so as to incentivize workers toward overtime work. Considering the point of view of the factor owner or organizations, such as Apple Inc., the actual cost is the average wage per hour and the difference between fixed and overtime wage rates is a scheme to make the labour force work more hours.
The issues surrounding well-being and safety relating to production facilities are also rooted in the principal manufacturing scheme and occur for reasons that are similar to wages and working hours. The improvements to the physical conditions to the factory would include improved air filtration arrangement, better tangible work assets and the establishment of safety equipment would entail to non-productive capital factory area and result in the rise of operating expenses without proportionate rise in the quantity of units manufactured per any measures of productive efficiencies. From Apple's viewpoint, the disputes of the labour force earnings and working environment has been the needless interference that must be minimized before the strong and determined displeasure of Apple's customers, stockholders and regulators - who are their three main body of voters.
To abide by with higher standards of social responsibility, organizations have undertaken inspection on the firms they employed in their supply chain. Differences between authentic and audit results do exist. For example, at Foxconn after the heart-breaking events of workers suicide, Apple inspected the working condition of those related factories. Its enquiry report demonstrated no problems of worker overtime and no child labour. Ironically, after the assurance of good working conditions in the enquiry report, the suicide incidents have continued. The difficulty in auditing is that the firm can hide the faults and workers can hide the truth out of fear.
When becoming involved in ethical business practices, developing consumer scepticism limits the business progress. They are doubtful about the true incentive behind the practices and are not easily influenced that a business is acting in the benefits of the community. Another significant limitation that results from business practices is that it can negatively affect business profits. How can a business defend expenditure on activities that offer no returns for the business? Unethical practices will cause a bad reputation which in effect will result in falling stock prices. Organizations that maintain high ethical principles are provided with legal and financial incentives by regulatory bodies.
"Facing mounting criticism, factories have made significant changes, but bigger steps are ahead for electronics supplier. Foxconn, Apple's top manufacturer, has improved safety conditions and cut working hours in an effort to resolve violations at its plants that triggered a global scandal for the iPad and iPhone maker. The FLA said Foxconn had made significant improvements such as introducing more breaks and better maintenance of safety equipment. The company more than doubled wages after protests from worker groups and is backing a local law adjustment that will extend unemployment insurance." - Dominic Rushe. The Guardian (2012). Apple manufacturer Foxconn improves on Chinese workers' hours and safety.
Evaluating the above reference it is observed that Apple realized the bigger picture. In general and in accordance to the reference, a number of strengths can be derived in advantage to Apple and organizations. Ethical business practices can provide a distinction of an organization from its competition. Whether an organization is affiliating with non-profit organizations, offering employee benefits, maintaining environment friendly policies - these practices will improve your company's internal atmosphere and industry connections. All these aspects will develop the organization reputation and build a long-term strategy for success.
As the organization grows a reputation for ethical business practices, the customers will begin to consider the business as trustworthy and morally honest. The confidence your customers sense for the organization is an essential element in developing long-term customer relationships and brand loyalty provided your business provided quality products. These passionate customers will talk to their related people and positively create more brand loyal customers. Brand loyal customers are a good medium of advertising helping organizations to become profitable and successful.
Ethical and socially responsible business practices towards the organizations employees such as providing being working environment and incentives will lead to efficiency and productivity. The productivity of employees increases with good ethical practices existing in an organization.
People regard ethics, social responsibility and business ethics in terms of administrative defiance with legal principles and observance to internal regulations. In order to achieve success many organizations believe that they must earn the respect and assurance of their customers. Organizations are being questioned, encouraged and pushed to improve their business practices to put emphasis on legal and ethical conduct. Companies, professional firms and individuals are being held more and more responsible for their engagements, as demand grows for higher principles of corporate social responsibility. Business will be obstructed by challenges and limitations but it will require a lot of patience, encouragement and money to gain the benefits from their ethical and socially responsible practices.
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