The social sciences course is undertaken this semester contained valuable lessons on the importance of ethical conduct for the continued sustainability and growth of companies. A business cannot function without the trust of its customers, and to obtain it, a firm has to establish a positive reputation. Ethical conduct, both within the company and outside of it, is essential to this process, as it is easier to ruin the company’s standing with a scandal than to rebuild its relationships. As such, managers should work to understand the various factors that affect their employees and customers for purposes of decision-making.
The establishment of an ethical organizational structure is an essential part of moral conduct. Such an environment should incorporate crucial elements such as fair pay, legal practices, cooperation, and other values. However, modern businesses have to deal with new factors due to globalization and international expansion. Cultural awareness and specific management practices associated with intercultural cooperation are among the competencies a manager should currently possess. Ferrell, Fraedrich, and Ferrell (2017) also note the importance of corporate social responsibility as a sustainability mechanism. The environment and work conditions are significant concerns for many people, and CSR practices help companies integrate into communities and improve their reputation.
As humanity advances, and its circumstances change, the environments in which businesses operate change. The social sciences course helped identify current concerns and the competencies necessary for addressing them. In addition to traditional ethical values, modern managers should be capable of working with people from different cultures and organizing them. They should also be aware of corporate social responsibility practices and incorporate such initiatives into their operations. In doing so, they will be making ethical decisions and improving their company’s sustainability.
Non-Financial Information Disclosure
To show productive employment of ethical practices, many companies choose to disclose non-financial information. Examples include the balanced scorecard, corporate social responsibility reporting, sustainability reports, and others. While firms are not required to release such documentation by law, doing so may help them improve their performance by attracting investors and establishing a reputation for transparency. However, the compilation of this information into a readable form takes a significant amount of work, making a cost-benefit analysis potentially necessary. This essay will discuss the two sets of factors involved in the disclosure of non-financial information.
The creation of the reports involved in the disclosure process puts a considerable burden on the firm’s accountants and managers. They have to learn to identify essential factors and work to discover and describe them. Furthermore, a weak report is likely to damage the company’s reputation by alienating various stakeholders. However, Haski-Leventhal (2018) lists several benefits such as improved internal auditing, stakeholder engagement, issue management, strategic information gathering, and an overall reduction in costs. The data-gathering process forces management to consider and improve parts of the process and create optimized routines, enhancing performance and helping address concerns.
Most of the costs of non-financial information disclosure are upfront, requiring workers to put in additional time and effort to compile relevant data. The company also has to deal with the possibility of a bad first report, which can damage its reputation considerably. However, stakeholders will likely appreciate the transparency and give the company a chance to resolve the issues. Furthermore, the reporting will help the company identify concerns and address them in a timely fashion. It will also ultimately reduce costs by promoting the introduction of efficient data gathering practices to handle the increased workload.
Reference
Haski-Leventhal, D. (2018). Strategic corporate social responsibility: Tools and theories for responsible management. Thousand Oaks, CA: SAGE Publications.
Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2017). Business ethics: Ethical decision making & cases (11th ed.). Boston, MA: Cengage Learning.