Introduction
Corporate Social Responsibility (CSR) is a concept that aims at promoting the continued commitment of companies to behave ethically and contribute to economic development in a bid to achieve positive social and environmental change.
In the contemporary society, most companies have evolved into enormous multi-national organisations that have control over billions of revenue and assets, and thus they contribute greatly to the national economy coupled with wielding substantial power in the community.
Thus, corporate social responsibility is an integral management concept of a company that decides to go a further step to contribute towards improving the quality of life of the workforce and the society at large in the future without solely being interested in financial gains, particularly by being interested in charitable accomplishments and environmental stewardship (Kotler & Lee 2007).
This goal can be achieved by creating jobs for the communities living near a company and acting appropriately to conserve the environment.
Ethical issues that the company has faced
Unfortunately, despite some companies having the interests of improving the livelihood of the society, corporate scandals have been on the rise. ABCD group, just like most financial companies around the world, is faced with ethical problems that greatly affect its CSR responsibility, which is to improve the well-being of the society.
As the managing director of this financial company suggests, its main objective is to create more wealth, and it does not matter who is affected in the process. This company faces serious ethical problems as the person in charge does not seem to be concerned with the origin of wealth and he treats the matter as just another business transaction that is of benefit to the company.
As the company’s policies are not tailored to promote self-control, but to promote the monetary nature, employees have been given the freedom to exploit the customers to enrich themselves through high commissions.
The management has given employees the right to rob customers of their hard-earned money and this aspect has a great impact on the lives of the customers, as money is a very important element in the livelihood of humankind.
The misconduct and dishonesty by the company’s employees are attributed to fraud and personal interests as well as saving the company by earning more money from customers (Beauchamp 2003).
Therefore, handling money without ethical considerations amounts to overlooking a critical moral issue and the unethical behaviour by the financial participants is contributing to a crisis in the financial sector, and thus it should not be ignored.
The firm has also failed in fostering an environment of trust between customers and employees as shown by the employee who made a huge transaction on a customer’s account in a bid to have a high commission.
Though this act was legal, as the customer had signed an authorisation part that allowed the employee to carry out a transaction without being notified, it certainly cannot be classified as ethical as the investment was not successful and it led to the loss of about 200,000 HKD.
This aspect shows that there is no mutual understanding between customers and employees, and thus fraud in the firm can happen easily leading to loss of substantial amounts of money. The clients’ interests should come first and they have a right to be informed on any attempts to access their accounts so that they can also give their informed suggestions on any investment before they commit their money (Velasquez 2011).
In this case, the customer might have fallen into the deception trap of the ill-minded employee whose main agenda seems to be increasing his commission income and maintaining his job at the company by signing the authorisation part of the agreement.
The management of this firm is to be blamed for these unethical practices amongst employees as its policies encourage employees to make money at the expense of their potential customers.
This ethical issue does not only affect the ABCD group, but also other organisations worldwide. Other notable organisations that have been associated with ethical issues are the Wall Street firms in the United States, which almost led to the collapse of the US economy due to questionable business practices.
Therefore, the management of the ABCD Company should learn from the ethical lapses of some of the biggest multi-national companies that failed as improved ethical behaviour can contribute in improving the company’s economic performance in addition to respecting ethical values in the interest of the stakeholders (Velasquez 2011).
One way that the management can achieve this goal is by not solely being money-oriented and educating employees on the importance of being honest, trustworthy, reliable, and avoiding any kind of fraudulent activities by all means possible.
The process can be successful if the managing director monitors employees closely and abundantly rewarding those who make sound ethical considerations while dismissing those who are unethical.
How the company has embraced corporate social responsibility
As stated above, the ABCD group has been affected by some moral standards and principles that guide the behaviour of employees, thus resulting in unethical behaviours like fraud that might have tarnished its good reputation in the public. The management has realised the need to change the image of the firm to be acceptable and utilised by the society.
In a bid to achieve this goal, the firm has embraced corporate social responsibility to improve the livelihoods of the society without sacrificing the well-known main goal, which is financially oriented. For instance, according to the managing director of the firm, is involved in sponsoring a local school during sporting events.
This move is a good initiative as the firm has reshaped its framework from just being a financial institution whose main and only goal is to make profits to an organisation that is involved in charitable events (Bolton & Benn 2012).
Such sporting events have a great impact on the society, especially on the children who come from poor families as they get sponsorships, which underscores a great opportunity for them to exploit their hidden talents.
Thus, by the firm engaging in such a charitable organisation aimed at uplifting the livelihoods of the community, it attracts more customers and investors as they feel that such kind of firm is interested in the welfare of the society. This strategy is also advantageous to the company when it comes to its publicity to the community, as people are made aware of the services that are offered and how they can benefit.
Additionally, the company has made another great important step by deciding to incorporate the staff welfare plans with aims o building community relationships by visiting the elderly in the society. As the number of the elderly people in society is increasing drastically, the decision by the manager to let employees visit the elderly twice a month is important and it leads to boosting of the relationship between the firm and the community.
This move is also important in promoting ethical behaviours, as some employees who may have been involved in fraudulent activities may be discouraged to do so in the future once they have an opportunity to get advice from the elderly who are considered as the greatest source of wisdom.
Employees often feel proud of the organisation that they work for if it is doing notable work, which explains why by visiting the elderly, the employee-employer relationship has developed, as employees are more satisfied with their work.
This aspect not only creates a reliable workforce, but also there is less likelihood of employees looking for better jobs elsewhere as their attitude towards the company is changed for the better due to the positive impact of the CSR (Urip 2010).
Way forward for ABCD group in Hong Kong
The firm should realise that to achieve economic prosperity as well as influencing the society it should continue to revise its short-term and long-term policies to keep abreast with the rapid changes that are taking place. Although being socially responsible is the new realism of businesses, the firm should embrace CSR entirely with the aim of not only influencing the local community, but also the global community.
Irrespective of the size of the company, it can assist in curbing climatic change, which has affected the livelihoods of many people by engaging in investment activities that are environmentally friendly and adopting energy-efficient practices in its business setups (Urip 2010).
The firm can achieve this goal by integrating climatic changes concerns in its daily operations and reporting the development towards the environmental goal. In addition, it can be involved actively in the use of renewable sources of energy, such as the use of solar energy. Solar energy, as compared to other sources of energy does not emit hazardous gases that affect the climate and is cheaper.
Thus, by using such kind of energy to power electronic gadgets, the company will be preserving the environment for the current and future generations. This aspect is also extremely important, as the company will be stretching beyond statutory obligations by taking additional steps to improve the quality of life for all stakeholders.
Conclusion
Companies’ management teams should realise that promoting ethical behaviour amongst stakeholders is their responsibility and s unethical behaviour of one individual reflects the laxity of the management in relation to promoting ethical leadership.
Promoting ethical behaviours and corporate social responsibility is critical in the success of an organisation, if it will be of benefit to the current and the future generations, and managers are the only force for creating an effective ethical culture. Therefore, the management should draft ethical and corporate social responsibility policies carefully so that all the stakeholders have an understanding on what is expected of them.
The policies change individuals’ behaviour coupled with how they interact with customers and this aspect will be of great benefit to the organisation. The company should not be involved in CSR as a way of complying with the law, but with the aim of providing solutions to societal and environmental challenges.
Reference List
Beauchamp, T. 2003, Case studies in business, society, and ethics, Pearson Publishers, New Jersey
Bolton, D. & Benn, S. 2012, Key concepts in corporate social responsibility, SAGE Publications, New York.
Kotler, P. & Lee, N. 2007, Corporate social responsibility: doing the most good for your company and your cause, Wiley Publishers, Hoboken.
Urip, S. 2010, CSR strategies: corporate social responsibility for a competitive edge in emerging markets, Wiley Publishers, Hoboken.
Velasquez, M. 2011, Business ethics: concepts and cases, Pearson Publishers, New Jersey.