What is corporate social responsibility?
Corporate social responsibility can be regarded as some kind of self-regulation for companies. It is a set of ethical norms that are followed by companies. It is possible to single out several benefits of compliance with these conventions. Companies often integrate business ethics to enjoy these benefits. Firstly, compliance with ethical norms can help a company develop an appropriate image, which will lead to the loyalty of customers. Secondly, it also contributes greatly to the development of trust on the part of partners and regulatory bodies. Furthermore, if a company follows ethical norms, the company’s employees remain loyal and committed to the company. It is also beneficial in terms of manpower as compliance with ethical norms attracts young and gifted professionals. One more reason why companies may follow ethical norms is that it helps avoid attention from regulatory bodies and media.
Why did global business ethics emerge?
Many large companies operate globally now as technological development has enabled people to communicate and run their businesses irrespective of distances. There are at least five reasons for the emergence of global business ethics. Large companies start following ethical norms to develop favorable images in the market(s). Since they operate globally, this trend is spreading around the world. Besides, such companies tend to collaborate with businesses that also follow ethical norms, forcing companies in different countries to comply with ethical regulations. Besides, people in many countries start paying attention to corporate social responsibility. Employees also try to work in companies that follow the ethical norms accepted globally. Companies can integrate business ethics in their operations in many ways. They can develop a specific ethical code to follow. This code should cover all conventions accepted globally. When collaborating with other companies, the company should ask the partner to comply with the regulations stated in the code of conduct. Employees should also be aware of the code, and they should follow the regulations. It is also important to revise the code of conduct as the business world is changing rapidly, and many different situations occur. Finally, the company should make clients aware of ethical norms accepted, and the employees should be trained to act ethically in different situations.
Why do businesses engage in the development of a global code of business ethics?
Many multinational companies like Apple Inc., Coca-Cola, BMW, etc., operate internationally. They are entering new markets and develop their codes of conduct. However, many codes of business ethics developed by companies may differ. Thus, it can be effective to develop a single global code of ethical conduct. This will help companies find partners and attract more customers. Some companies fail to develop consistent codes of conduct, and a single global code may be helpful. Besides, some companies continue focusing on financial benefits and ignore ethical norms. The development of a single ethical code can make companies follow ethical conventions. A single ethical code can also help address five global challenges to business ethics. First, corruption and bribes are common in many countries of Eastern Europe, South America, and Asia, which makes many companies ignore ethics. Regulatory bodies are underdeveloped in many countries, and legal systems have many loopholes. Poverty and social constraints enable companies to exploit manpower and ignore ethical norms. The scarcity of natural resources in many areas contributes to the unethical conduct of many companies. Cultural peculiarities also make certain ethical norms acceptable in some countries and unacceptable in other countries.