Business Ethics & Social Responsibility

INDIVIDUAL ASSIGNMENT QUESTION: Why is it important for a company to balance its social responsibility efforts with its need to generate profits? Discuss your findings with examples. Introduction What is social responsibility? There is no single definition of social responsibility but it can be said as acting with concern and sensitivity, aware of the impact or the disadvantages of the action to the others. It is generally to be understood to include the obligations of a business to protect the interests of its customers, employees, suppliers, and the general public. Social responsibility goes beyond the firm’s relationships with their customers, includes the areas of environmental protection, consumerism, support for education, compliance with governmental regulations, response to community needs and firm’s contributions to the community organizations. Besides of business and government, activist group and local communities can also associated with social responsibility. Different entities have different responsibility, for example a state has to ensure the citizens civil right and the business organizations should concern with human rights of their employees.

Beyond social responsibility Social responsibility can be divided into two main parts, the responsibility to human and the environment.

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Responsibility to human means being responsible to people, for the action of people and the affect of any action to the people. This is concern with the way of the organization in treating their customers with respect and attention, which is not for profit but taking care of the customer’s wants and needs. In order to carry out the social responsibility, an organization tries to perform as best as they can, instead of being irresponsible and often try to keep away themselves as much as possible from any problem they faced. For example, when the customer feel that the organization have done something wrong, the company will take the blame and do some steps needed to fix the problem. Organization has the moral responsibility that empowered them to help people and not to harm them. Social responsibility is a doctrine that state, whether it is a village, town, state, corporation, organization, government or individual, each have the responsibility to the society as a whole. While responsibility to environment means that the organization has responsibility to the environment and the world around them than to individual because the impact on the environment is larger and broad than the impact to consumer. An organization which concern with its social responsibility, will take every consideration into account when making their decision. This has been proved to become one of the reasons of the company to be profitable in the long run. Nowadays, many companies are more concern in fulfilling their social responsibility and every choice they made affect the consumers environmental. Some companies produce products that are packed in more than required packaging thus all the cost and impact was passing directly to the consumer but some become more socially responsible. They design their packaging to be more environmental friendly such as using items that can be recycle rather than using and wasting more resources that can be used for another important task.

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The need for a company to balance its social responsibility and gain profits is crucial as they have to give some good contribution to the public as a whole. The communities where the company operates are very important to them. The scope of social welfare is wide and varied. The companies can measure their performance, assess the impact and be committed in making further improvements for the community. The companies also can gain good image from the community by doing their social responsibility. They are viewed by the public as a good company who are concern about them. So, the public will turn to their products and services as they have the good impression about the company and buying their product or using the services will be a support or reinforces for the company to stay longer in the business, being well known and gain more profits. A company will also fulfill their social responsibility to enable them to gain appropriate standard as an achievement for the company. The standard will enable them to be known as a company who are balance in their efforts in gaining profits and taking care of the society. Companies also involve in doing social responsibility to reduce risk management by gaining good impression from their business partner. They recognize that robust management of more diverse and complex risk, sound business operations and stable earnings growth are essentials to gain broad trust of market and customers. Performing social responsibility Kellogg Company Company overview There are some companies that have been active in fulfilling their social responsibility. One of them is Kellogg Company. This company was established in 1906 by its founder W.K. Kellogg. It is a leader in producing cereal and convenience foods including cookies, toaster pastries, cereal bars, frozen waffles and meat alternatives. With only 44 employees in its early 3

opening, today it have more than 26 000 workers, operates in 17 countries and sells its products at more than 180 countries around the world. The company’s brands include Pop-Tarts®, CheezIt®, Rice Krispies®, and Chips Deluxe®. The sought by W.K. Kelloggs “invest my money in people”, act as a guide to the company and their people in accomplishing their social responsibility. Commitment and contributions Their commitment in doing this as a good corporate citizen includes protecting the environment, selling nutritious products and advocating healthy lifestyles, acting with integrity and adhering to the highest ethical standards, promoting diversity in work force and partnering with diverse suppliers and also ensuring a safe and healthy work place. For communities, this companies choose to focus on three major area; helping children and youth reach their potential, improving opportunities for minorities and women and also strengthening the communities. They support many program and endeavors, contribute money and products and encourage their employees to voluntarily their time and talents to improve the communities. They contributed for communities by giving donations for children and youth needs for their educations and potential growth and invested in a program that benefits this generation. One of the programs is Help One Student to Succeed (HOSTS), a program that helps teachers in creating individualized academic plans that can be delivered to the students anytime and anywhere. Hundreds of Kellogg’s employees and retirees become a volunteered in this program as mentors to help the students succeed in the school. For minorities and women, they provide scholarship for talented young people and involves in many programs such as in Girls on the Run programs that encourages girl in age between 8-13 to be more active, eat right and live a balance and healthy lifestyle. They also support for the American Heart Association’s Go Red For

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Women, an American heart association for heart diseases. Each year this company donates $20 million of their food products for the hunger and relief to help people in needs. Kellogg company encourage eating well and healthy living, based on the philosophy that people can improve their health by eating a balanced diet and engaging in regular physical activity. They produce high-fiber cereal products that reduce the risk of heart disease and cancers that also help in achieving and maintaining a healthy body weight. This company valued and encourages the diversity of their employees backgrounds, experiences, styles, approaches and ideas that inspires the innovation to gain competitive advantage in serving customers around the world. This company is very committed in providing safe and healthy work place for their employees. They encourage employees to search for health rules and practices that can be applied to their job, include taking precautions to protect themselves and co-workers by reporting accidents, injuries and unsafe conditions. Kellogg are very concern about the environment. They work very close and have good cooperation with the local communities, suppliers and contractors, government agencies and other organizations in improving for better environment. They have their own environmental policies that promotes and maintain environmentally responsible practices for the benefits of the customers, consumers, employees and the communities. They practices their policies by using heat recovering systems, turn wasted food into animal feed, practices water conservation and reuse and participate in recycling programs. Besides focusing in energy use, they also held an audit program to measure air and water quality, waste management practices, spill prevention and control, hazardous materials management and employee awareness. This company also use completely recycle materials for their packaging for safe, efficient and environmentally reason which is applicable with their official environmental policies.

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By performing their social responsibility very well, this company manages to stay longer in the market and gain lots of customers, including gaining more trust among their business partners and increased their profits each year.

Lenovo Company Company overview Another company which involves actively in applying their social responsibility is Lenovo Company. Lenovo is an international technology company that formed from the merger of Lenovo Group and IBM Personal Computing Division. This company develops, manufacture and market cutting-edge, reliable, high quality PC products and professional services for their customers around the world. Company’s headquarters are located in Purchase, New York, USA with branches and enterprise sales organization worldwide which employs more than 19 000 peoples. This organization is committed to four company values that are; the customer service, innovative and entrepreneurial spirit, accuracy and truth seeking and trustworthiness and integrity. Commitment and contributions Lenovo is one of the companies which do very well in performing their social responsibility. As they have strong commitment to the social responsibility, they are very strict in ensuring their products, employees, sites and suppliers to apply the responsibility in their business practices. Lenovo are going deeper to integrate the core value of customer service, innovative and entrepreneurial spirit and integrity in its business and policies and procedures in the aspect of quality and safety of their products, employee’s welfare, managing a global supply chain, ethical corporate behavior, social investment and environmental affairs.

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Lenovo is very clear in ensuring the best quality and safety of their product and until now they are still continually put on their efforts in developing and evaluating new safety initiatives. They are focusing on the safety of their products at the entire lifecycle of the production from manufacturing, transportation and installation for customer to use, service and disposal. This is done to ensure that the product produced meets all legal requirement and safety rules for every product they sold. Their safeties practices are aim to help to reduce the risk of personal injuries, property damage, ergonomic discomfort and data loss while using their product. Their emphasis for product safety and quality enables them to gain high customer’s satisfaction, delivering quality products, solutions and services that help them a lot in maintaining their company in competitive business world. For this company, the people inside the organization are the most important assets for the company. Lenovo are very committed in providing safe and healthy working environment by supplying their employees with safe and relevant products and equipments for use in their daily work. It also focuses its efforts in preventing accidents at work place, injuries and illnesses among its employees. This company was known as a great employer for its employees as it provides compensation packages and abides for its employees which is applicable at minimum wage requirements at wherever places it operates. Lenovo also very concern and committed to the high standards of integrity and responsibility while working with all the stakeholders as they provide wide ethical guidance to all its employees. They also focus in helping people around the world to increase their standard of living, such as encouraging business development and social entrepreneurship. It also shows its respect on the intellectual property rights of individuals or company such as, supporting China in fighting the piracy in that country.

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Conclusion As a conclusion, companies must incorporate their social obligation with the need to earn profits. Meeting the society’s expectation may be expensive but it will worth with the company’s goal to gain profits. Companies which are consistent in fulfilling their social responsibility may bring themselves to be as one of the members of the community that may attract loyal customers for the good image they have. Doing social obligation will not turn profit seeking businesses into charitable organization. Practicing social responsibility may leave positive impact on profits as they can convince more customers and remain stable in business world.

References: •

http://en.wikipedia.org/wiki/Social_responsibility (1/10/2007)

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http://www.gapinc.com/public/SocialResponsibility/socialres.shtml (1/10/2007)

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http://www.investorwords.com/4616/social_responsibility.html (1/10/2007)

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http://www.entrepreneur.com/encyclopedia/term/82646.htmlefinition: (3/10/2007)

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http://www.pc.ibm.com/ww/lenovo/about/sustainability/ (6/10/2007)

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http://en.wikipedia.org/wiki/Societal_Marketing_Concept (6/10/2007)

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http://www.entrepreneur.com/encyclopedia/term/82646.html (6/10/2007)

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http://www.pc.ibm.com/ww/lenovo/about/sustainability/index.html(10/10/2007)

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http://www.tamron.co.jp/en/envi/report_2006/report05.html (10/10/2007)

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