Business Ethics and Corporate Social Responsibility

Business ethics refers to moral guidelines that shape the business conduct as on the beliefs of what is wrong, right and fair. It has been noted that in most businesses, leaders and managers depend on their own personal conscience in carrying out business decisions, which in return rely upon the religious and moral backgrounds of the leaders and managers for guidance. Leaders and managers in one way or another are influenced by immediate colleagues, juniors and superiors in making decisions for the business (Angloamerican.co.uk, 2011). Some of the business decisions are considered ethical or unethical as the team seek for profits. A code of conduct in institutions is used in guiding leaders and managers on decision making processes.

Corporate Social Responsibility (CRS) is a philosophy in business stressing on the needs of the business entities in behaving as good corporate citizens, by not only obeying the set laws in the jurisdictions but also in conducting their marketing and production activities in ways that the business entities avoid environmental degradation and harming people. CRS argues that organizations are expected to act in a socially responsible pattern in protecting the public image (Primark.co.uk, 2010), there are social responsible behaviors that cost business entities profits, but the acts pay off in the long run.

Ethics in Anglo American Company

Anglo American Company is a multinational company based in the United Kingdom dealing with agriculture and mining. Raw materials for Anglo American identify with coal, base metals, platinum, industrial materials and ferrous metals. Mining operations have a significant impact on the societies depending on the environment. Minerals are owned by the governments; an indication that Anglo American must acquire licenses in order to process and extract the minerals, licenses allows Anglo American pay loyalties and taxes to the concerned governments (Angloamerican.co.uk, 2011). Social license is obtained after Anglo American Company gets the consent of the people living in the locality of operations, which is an ethical practice. Anglo American Company has been facing constant challenges from the general public and the pressure groups, a move that has made the business engage sound and fair business practices, and also by empowering the immediate communities where mining takes place. Anglo American promote transparency of revenues and also combating corruption as part of the agenda of the business entity, as part of making ethical decisions in the practices of business (Angloamerican.co.uk, 2011).

Anglo American use good citizenship in setting out standards and core values of the organization, where the codes are set in active consultation with the employees, governments, stakeholders and the local communities (Angloamerican.co.uk, 2011). Anglo American supports a number of initiatives identifying with The United Nations Global Compact, Extract Industries Transparency Initiative (EITI) and The Global Reporting Initiative (GRI) (Angloamerican.co.uk, 2011). Anglo American Company is acting as part of ethical practices has been influential in Human Rights and on issues of Security, all these has been enabled through voluntary principles. The codes are influential in setting practices and principles in making sure that the needs of the organization are met and also in making sure that the security of operations and employees, mainly in volatile regions are addressed (Angloamerican.co.uk, 2011).

Anglo American Company plays a critical role in making sure that the organization protects the human rights of its workforce and immediate communities, this is an ethical practice by being part of the Universal Declaration of Human Rights. Corporate responsibility of Anglo American argues that ethics is part of the organization as the firm seeks to make profits. Shareholders are offered high returns at the expense of environmental, social and moral considerations; where the stakeholders identifies with employees, governments, customers, suppliers and communities, all these are achieved in Anglo American through active stakeholder engagement (Angloamerican.co.uk, 2011).

SEAT (Socio-Economic Assessment Toolbox) process has been very influential, where the managers and leaders of Anglo American use the tool in measuring the impact associated with the activities of the communities and the organization, and also in contributing to the development of the business, particularly in new territories, where community representatives are engaged in the decision making (Angloamerican.co.uk, 2011). Anglo American has developed mechanisms of resettling communities for the mining to take place to avoid divisions and controversies as directed by the International Best Practice, as noted with the Ga Pila and Motlhotlo in South Africa.

Ethics in Primark Company

Primark is a multinational company concerned in offering its target market with garments that are ethically sourced. The world economy is highly interconnected with the rapid changes in transport, media and communications technology; clothing distribution and textile manufacturing companies are not left behind by the global changes (Primark.co.uk, 2010). Consumers are after affordable and fashionable clothes, Primark in meeting the demands of its consumers work hand in hand with the producers of the clothes in Turkey, China, India and in Bangladesh.

Primark is part of the ABF (Associated British Foods); the target market is based on the consciousness of fashion and value for money. Primark enhances value for money through using local trims and fabrics, sourcing the products in an efficient manner, designing simpler clothes, producing the popular sizes, minimizing expenses on advertising and buying clothes in volumes. Primark has a definite stand on its business ethics, where the organization is committed as the ‘great force for good’ (Primark.co.uk, 2010). Primark makes sure that the supply chain benefits from the organization and that even the employees producing the clothes are treated ethically (Primark.co.uk, 2010).

The values of Primark are equally shared with parent ABF, which shapes the business relationships among the stakeholders. Primark is committed in being good to the community, taking care of the employees and fostering ethical relationships with business partners. Primark respects Human Rights and has set aside an Ethical Trade Director who guide in sourcing the products, as part of the ETI (Ethical Trading Initiative) as the program coordinates with international companies, nongovernmental organizations and trade unions in making sure that the workers in the industries are ethically treated (Primark.co.uk, 2010). Primark enjoys economies of scale, operational practices that are efficient and through lean productions. The code of conducts at Primark is in line with the code of ILO (International labor Organization), which is part of the United Nations (Primark.co.uk, 2010).

Benefits and Costs Attached to Organizations Behaving Ethically

There are benefits and costs incurred in companies behaving ethically, it has been noted that financial costs on labor and equipment and materials is the immediate cost. There are a number of non financial costs associated with impact on the environment and noise on the part of Anglo American Company, engaging stakeholder’s takes money and time. Alaskan Pebble Project carried out by the Anglo American company is an example of taking control of the non financial costs (Angloamerican.co.uk, 2011).

Benefits attached to Anglo America Company working ethically are in minimizing fatal accidents, increasing efficiency in energy, minimizing occupational ailments, encouraging diversity in the places of work and empowering the local communities (Angloamerican.co.uk, 2011). The benefits have been critical in developing a competitive edge, basing on the fact that all the stakeholder’s benefit from the business. The stakeholders identifies with the employees, shareholders, local communities, suppliers and the governments.

Costs in Primark identify with employing global Ethical Trade Team, training buyers on issues of ethical trade, paying and managing external audits and assisting suppliers in making the right ethical decisions. Primark has benefitted from ethical practices basing on transparency, increased sales, strong brand and in meeting the exact needs and choices of the target market (Primark.co.uk, 2010).

External Stakeholder Relationships

Primark and Anglo American companies engage external stakeholder relationships as an ethical practice in making sure that the organizations meets the exact needs of the target market. External stakeholder relationships have enabled the organizations to benefit all the stakeholders in the business; including the local communities, which are at most times ignored. External stakeholder management has enabled the two organizations to design strategic objectives that address issues at both the internal and the external business environments (Svensson & Wood, 2008).

Positive relationships according to Svensson and Woods (2008) have allowed the two organizations in managing the agreed and expected objectives of the target source and market. Stakeholder management is a control and also a process well planned depending on the underlying principles, where intelligence is enhanced in the stakeholder identification, stakeholder analysis, stakeholder matrix, stakeholder engagement and in the communicating the information (Svensson & Wood, 2008); as a way of enhancing integrity in the international business. External stakeholders relationships is considered part of the transformative process, in which business ethics is considered highly continuous and dynamic, where the relationship between the society and the business encourages responsible and interdependent outcomes for sustenance (Svensson & Wood, 2008).

References

Angloamerican.co.uk. (2011). Business ethics and corporate social responsibility. Anglo American , 25-28.

Primark.co.uk. (2010). Primark: Providing consumers with ethically sourced garments. The Times Newspapers Limited , 1-4.

Svensson, G. & Wood, G. (2008). A Model of Business Ethics. Journal of Business Ethics , 303–322.