Introduction
The role of business ethics continues to grow every day, raising new questions with the review of moral principles and environmental changes. Currently, the notions of ethics and social responsibility are considered a vital part of development for every company (Lawrence & Weber, 2017). The challenging world of business operation is burdened by the need to balance its responsibility to various stakeholders.
Thus, the field of corporate social responsibility (CSP) has risen as a substantial portion of concerns related to managing a firm (Schrempf-Stirling, Palazzo, & Phillips, 2016). The interrelationship between external and external forces of businesses shows how companies and governments influence each other in striving to adhere to or create new CSR-oriented goals. However, both parties also weigh their decisions to satisfy the needs of stakeholders whose impact on the market is substantial.
As a result, the impact of stakeholder biases can either help organizations move forward and innovate or limit their ability to engage in CSR practices. Similarly, such biases may lead to negative interpretations of some decisions in the media and the public’s view (Wang, Chen, Yu, & Hsiao, 2015). In-depth analysis and reflection are essential in examining the underlying issues and prejudices that disrupt the enhancement of socially responsible practices. Business ethics present major concerns in establishing and managing a business and the overarching effect of this discipline on corporate decisions cannot be overstated.
Stakeholders and Interrelationships
The Role of Activities in Understanding Interrelationships
The completion of activities during this course has helped me to understand how impactful and complicated the interrelationship between organizations and society is. Both sides have an impact on one another, with a possibility to bling positive and negative change to the world, the environment, politics, economy, and individuals’ lives (Taghian, D’Souza, & Polonsky, 2015). First of all, the example of tobacco industries can be brought up.
In this case, manufacturers that distribute tobacco products affect the health of people, regardless of whether the latter are their customers or not. Here, the balance between accommodating the needs of stakeholders and lowering negative outcomes should be mentioned. The in-depth investigation into the actions of tobacco firm allowed me to understand how they often choose to act in order to avoid legal action, while still preserving their competitiveness and stakeholders’ interest. One can consider the issue of secondhand smoking – when non-smokers are exposed to tobacco smoke in public places. Here, such businesses need to regard the outcomes of secondary stakeholders (non-smokers), while still managing the needs of smokers, board members, employees, and other primary stakeholders.
Another possible issue deals with the fact that tobacco products’ manufacturers need to advertise this product while keeping in mind that cigarettes and similar items can cause damage to one’s health. In this scenario, the concept of ethical behavior is tested by the advertising decision of each specific company. A similar problem occurs in situations where distributors discover that their products can cause negative consequences during their advertising campaign. Here, the example of Merck can be presented; the company selling a new drug had to navigate an issue where their drug was found to cause cardiovascular problems (Lawrence & Weber, 2017).
In both instances, firms have to measure to what extent their business tactics affect society. At the same time, the examples differ in that one is a case of a company which intentionally frames a potentially harmful product as desirable, while another presents a seemingly useful drug with side-effects. These reflections allowed me to see that business ethics is a complicated subject that can help navigate such concerns and bring awareness to the fact that each particular example shows business-society interrelationships in a new light.
The activities also demonstrate how companies’ relationship with society can bring positive change and inspire future growth of ethical practices. The case of Hewlett-Packard (HP) as a participant in green manufacturing is an example of a company that puts significant effort into restructuring itself in order to highlight the importance of addressing environmental concerns. HP’s policies and activities to lower waste production and increase the rate of recycling and repurposing reveal the deep connection between business development and societal view of contemporary problems. (Lawrence & Weber, 2017) Moreover, it shows how businesses can engage all levels of stakeholders in the process of reformation. Employees, executives, and clients need to be interested and involved in the activities in order to bring meaningful change to the industry and the business.
In contrast, the effect of ignoring people’s needs and concerns can be significant for both businesses and societies. The growth of interrelationships can form new economies and bring positive consequences for the environment, but it can also reveal biases if the firm fails to consider all stakeholders (Kolk, 2016). Here, the disaster of the Deepwater Horizon can be considered as an example of unethical decisions that bring negative effects to the economies and nature of multiple states. The company had focused on financial gain; thus, their innovation and growth were staggered and the performance of the company declined. The analysis of this situation demonstrates the crucial role of journaling as a way of understanding the underlying causes of disasters and other prominent issues.
Challenges of Dealing with Conflicts
Businesses have to cater to various groups of stakeholders who can have varying needs and expectations. Therefore, the occurrence of some conflict situations is virtually inevitable. In the mentioned above example of Merck and its advertisement of a new drug, the company encounters a financial and ethical problem of selling medicine that can cause health problems. Merck has to make a decision that affects multiple stakeholder groups, including, employees, customers, supply chain partners, and executives. In the discussed case, the company has chosen to withdraw the products, thus highlighting its desire to protect clients from harm (Lawrence & Weber, 2017).
This decision has resulted in the firm losing substantial amounts of money which were spent on research, manufacturing, and advertisement. Nevertheless, the company’s representatives examined the situation and chose this approach as the one with the least long-term negative effects for the business and people. Here, the perspective of the company was based on that of its clients – such stakeholders as board members and employees were not considered as those who would suffer the most significant consequences.
This case also presents some ways in which the company tried to appeal to multiple stakeholders’ needs at first. When the dangerous side effect of the drug was discovered, Merck did not recall its products, adding a small note about the potential risks instead. This move shows that the firm was searching for a compromise in managing its expenses and revenue from a product. The business’s perspective, namely its owners and investors, is represented in this choice, while the needs of other stakeholders are not present (Helmig, Spraul, & Ingenhoff, 2016).
If Merck were to neglect the new findings and continue selling the medicine, it could face additional ramifications apart from suffering financially. The company’s brand image would be damaged if it refused or postponed its decision to stop manufacturing. Moreover, people consuming the product could be affected medically; the company would be partially responsible for these persons’ health. Such consequences can be substantial in eliminating Merck as one of the major competitors on the market.
The improvements implemented by HP could be a reason for the company entering a different conflict based on financial stability. As HP attempted to innovate its practices and change many internal systems as well as its suppliers, the problem could arise with its supply chain members (Quarshie, Salmi, & Leuschner, 2016). The company likely needed to reevaluate the quality and source of its parts which disrupted the established ties with other firms. Suppliers can be considered stakeholders because their impact on the quality of the final product can not only change the overall selling possibility of the business but also bring in new companies and clients.
In this particular case, HP focused on its goals, thus making ethical principles the foundation of present and future business relations (Fernández-Guadaño & Sarria-Pedroza, 2018). As a result, the conflict was resolved not through compromise but the urge to innovate and move forward, maintaining the focus on the business’ perspective. If the company failed to find a supplier with fitting ethical standards, its path towards improvement would be disrupted.
Circles of Reflection
The reflection circle represents a process of learning about ideas and assessing their contents and implications. In the first assignment, the use of this approach is visible; it gives one an opportunity to think about the controversial problems connected to the tobacco business.
The first step in the circle is to consider how the problem affects oneself (Lawrence & Weber, 2017). This particular stage is the easiest one, as a person can usually determine to what extent an issue is linked to them. For instance, I do not smoke, but I know how secondhand smoking can affect my life and what I can and cannot do to eliminate this concern. However, this is also the least significant part of the reflecting process – the circles encourage people to think about other communities, each being more distanced from oneself than the other.
The second circle represents one’ family; here, the effect of the problem is still often considered to be personal. My family members also do not smoke; thus, they are only exposed to secondhand smoking in their daily life. This part of the thinking process encourages me to consider to what degree the issue impacts my family’s lives. As a result, the problem may arise in a different light, highlighting additional points – my younger relatives’ exposure to tobacco, their view of smoking as positive, and other potential risks. Similar notions can be attributed to other small or large groups such as one’s peers or communities.
The next circle shows a more generalized approach, outlining the major effects that a problem can cause for a whole country. Governments have a way of controlling or negotiating with industries in order to protect or impact its citizens (Knudsen, Moon, & Slager, 2015). Therefore, an issue’s influence on the country presents some additional considerations. In the case of tobacco smoking, it can ban tobacco distributing to people of certain ages or develop rules for selling points to be removed from schools and territories with a high concentration of children. These measures influence both the public and the industry, dictating the rules that restrict consumption and construct a system of legal punishments.
Therefore, secondhand smoking can also be reformed from being a personal or family issue into a violation of the law. As a result, the effects that such decisions have on the country also differ; a business which does not comply with selling or advertising guidelines can be fined or closed. The role of the government presents an additional set of concerns that one does not think about when considering only the personal level of impact.
One can see how strongly the approach of reflection circles can change the thinking process. It invites people to analyze the bigger picture and imagine the thoughts and ideas that other persons may have. Moreover, it informs the perspective by adding some information from sources which might otherwise be ignored. Seeing an issue from different sides broadens one’s understanding of it and puts one’s personal opinion in a system of causes and effects, adding complexity and insight.
Forces and Influences
Ethics and Social Responsibility
Internal and external forces in businesses dictate the ways in which all operations and procedures are performed. External influences include the spreading effect of globalization, the continuously changing economics of nations, political issues and ideologies, and the surrounding environment. For example, the external regulations established by a country’s government can restrict or increase competitiveness, increase prices, or demand specific working conditions (Dahan, Doh, & Raelin, 2015). Internal forces include customers’ rights, the industries’ concern about diversity, corporate citizenship, and others. If CSR activities are encouraged or simply viewed favorable by the clients, their implementation process will differ from that which is enforced by the government.
In the example of Merck, FDA acts as an external influence, being a political authority, since it develops rules to which companies need to adhere. While Merck decides to withdraw its products out of its own volition, it can be assumed that FDA’s impact is still present. The firm anticipates the internal influences such as the customers’ protection and the external ones, including a governmental response.
The case of HP pursuing eco-friendly and sustainable practices demonstrates how the combination of such forces drives the innovation forward. The industry of technology has changed its focuses which shifted towards strategic leadership (Burgelman, McKinney, & Meza, 2017). As an outcome, HP was able to improve its systems as well, being stimulated by the socially-oriented mechanisms of the business sector.
Here, the external force of the environment provided with an opportunity to integrate new business ethics into their structure effectively. Another mentioned factor is the relationship with the government which HP utilized to develop corporate regulations that are based on financial responsibility and environmental protection. By collaborating with the government agencies, HP was able to enhance the quality of their products and further support their goals of a sustainable business.
The company also was influenced by some internal factors during its renovation. For instance, HP redefined its corporate citizenship principles, highlighting the need to preserve the environment and protect the planet from pollution (Burgelman et al., 2017). Therefore, it reviewed its connections with the members of the supply chains, setting different standards for firms dealing with materials, components, and software. The structure of the company itself was updated as well to benefit workers and consider their rights and opportunities.
A separate example of external and internal forces being neglected by a business entity is the disaster of the Deepwater Horizon. Here, the owner of the oil drilling facility, BP, failed to consider the external aspects such as the environment and internal factors, including CSR. As a result, BP’s decisions led to one of the most disastrous environmental catastrophes which endangered multiple species, changed the climate, and affected all living beings in the proximity of the blowout (Beyer, Trannum, Bakke, Hodson, & Collier, 2016). The economic and political spheres were impacted by this event as well. It is clear that the company could have prevented this outcome if it considered the potential risks of its choices and increased its attention to CSR practices as opposed to financial cuts.
Personal View of Workplace Ethics
Journaling has strongly affected my understanding of business ethics and CSR. This approach to reflection forced me to look at various problems, both small and prominent, from different points of view. For example, the first assignment was mostly based on the impact of a situation on my life and the lives of my relatives. The following activities, however, considered the problems that affected communities, populations, and the whole planet.
The discussed case studies have shown how critical business ethics can be for a company and the world as a whole. For instance, in the second assignment, I analyzed the catastrophe of the Deepwater Horizon and the involvement of businesses in the matters of other countries. During my investigation into these topics, I was able to evaluate my understanding of philosophical notions concerning one’s responsibilities and actions.
I brought up the utilitarian theory and implemented it to talk about universal rules for all businesses. My opinion about business ethics did not shift as a result of such activities as I always thought that business ethics have an important place in managing companies. Nonetheless, I enhanced my understanding and considered the details of each choice made by corporations.
The crisis at the Deepwater Horizon demonstrates the significance of corporate ethics for the industries. If the company in charge updated its policies and thought about the possible negative outcomes of their actions, it could have prevented a serious problem and save both the environment and itself. It is clear that financial problems or political pressure were not among the core reasons for the catastrophe to take place (Beyer et al., 2016; Chell, Spence, Perrini, & Harris, 2016). Instead, one can see that the neglect of safety-encouraging practices, anticipation of environmental risks, and concern about the employees was the major issue for BP. As a result, people died, nature was damaged significantly, and the company lost its brand image, status, prospects, and money.
However, apart from the negative sides of ignoring business ethics, I was also able to examine how CSR and innovation are closely connected in the current state of businesses. The example of HP described a company which used its opportunities not only to advance its development and financial growth, but also to create a meaningful relationship with the stakeholders. In this case, CSR acted as a supporting framework for the firm to upgrade its structure and principles. The readings for the course and assignments provided multiple opinions, where each of them considered a particular benefit which business ethics can bring.
McIntyre and Ortiz (2016) showed that the growth of a company such as HP is not accidental or based on the quality of the manufactured product alone. The culture ingrained in the process of creation and distribution, attention to detail, and a position of environmental protection and sustainability contribute to one’s betterment as well. Thus, business ethics is vital in establishing a company and ensuring its stability without sacrificing the environment or people’s rights.
Interrelationship Between External and Internal Forces
While both internal and external forces have an impact on businesses, they are dependent on each other as well. The influence of the external factors is difficult to deny – political and economic systems often have an impact on the rights of workers and social responsibility. For instance, in the study of the pharmacological company Merck, the FDA is brought up as an official entity that monitors the adherence of companies to standards of products quality and people’s health.
Therefore, this external force (the government) is monitoring the level to which the internal forces (CSR) are effective for the business. Workers’ rights can be enhanced or limited depending on the external influences. If the political principles of a country do not have any information about employees’ protection, it may limit their power to contribute to the workplace and bring any changes to the system (LĂłpez-RodrĂguez, 2016). As a contrast, a collaboration between governments and organizations in placing regulations for workers can enhance the experience of the staff and establish their rights as well as opportunities.
Globalization is another factor that significantly changed the way people perceive CSR. The case of clean open stoves would not be discussed at a time when the information about other nations’ living arrangements was available. Furthermore, the decision to change the situation in Kenya is not based on human compassion alone but also on notions of social responsibility – people’s cooking practices affect the planet’s climate, thus leading to changes in the ecosystems of all nations.
The accessibility of such information and the ability to engage different parts of the world in international issues is an example of people adapting their CSR beliefs to the present times. The contemplation about a uniting set of rules for all countries can have a similar effect on CSR and other internal forces, changing the ideologies which do not promote similar customer protection or workers’ rights.
Globalization can also influence workplace diversity as discussed in the journaling assignment about undocumented immigrants. The availability of positions offers both benefits and concerns to the receiving employers. Immigrants can contribute to the economy, but their undocumented status disrupts the usual tax system which distributes funds according to the societal needs. Here, political decisions formulate CSR and workers’ protection – governments can influence the hiring process and grant some people more freedoms in choosing their occupation (Dahan et al., 2015). The connection between external and internal forces is visible here, as politics mold the standards of employees’ rights.
Political systems can also establish rules to protect the environment, thus affecting internal forces once again. Overall, the connection between the two categories of impact shows that external forces are powerful in dictating the rights and opportunities of individuals, while internal forces form according to people’s cultures and ideologies at any given moment.
The Role of the Government in Business and Society
As it is discussed above, governments play a significant role in the establishment and existence of businesses and societies. A government can be an external force, influencing the world through policies regarding the economy, the political landscape, and international concerns. Some governments are rigid; their decisions may stagger the economic growth of companies and the quality of people’s lives (Dahan et al., 2015). Others can be more flexible, changing the procedures and policies according to the current state of people’s needs and wants.
In the case of Merck, the FDA is a government entity that monitors pharmaceutical companies’ adherence to set rules. Its impact on this industry is substantial, although the firms still compete with each other in prices and products ranges. Nonetheless, the government influences businesses in order to ensure society’s safety, thus acting as an external influence.
Governments can also be examined through the lens of globalization. Their international affairs may involve customer- and employee-related concerns such as in the case of developing a uniting framework of business ethics. By enforcing standards for businesses located on other territories, state influence not only national CSR but also the societies where such firms are active (Dahan et al., 2015). For instance, if another government chooses to support the financing initiative supplying the stores of Kenya with cookstoves, it will inevitably change the purchasing decisions of the local communities, thus expanding its influence on the global market. If the Kenyan government decides to act in the same way, it may collaborate with other nations and change global relations as a result.
In the other hand, governments can be viewed as internal influences, participating in the fight for workers’ rights and customer protection. Again, the ethical guidelines for businesses located abroad can come from governmental institutions. Here, the internal and external influences are intermixed, as the local government can come into an agreement with a company and its country of origin in order to negotiate employees’ duties and rights.
Finally, a government can be considered a stakeholder of a business, as the latter has an impact on the national economy. Governments are interested in industries having high profits and giving people jobs. Therefore, governments can make decisions that support working environments and encourage companies to innovate. In the example of the Deepwater Horizon, both American and Canadian governments can be viewed as affected parties and stakeholders of the responsible business.
BP’s activities affected the governments in many ways, and the countries were impacted by the catastrophe. The event disrupted flora and fauna of multiple regions and contaminated the water. As an outcome, both states had to review their budget with means that their performance and financial stability depended on BP’s decision is some capacity. In a similar way, the US government can be considered a stakeholder for such businesses as HP. Here, the government is impacted by the way HP manufactures and distributes its products as it concerns the national environment and the country’s recycling efforts.
Final Reflection
The Impact of Journaling Activities
By participating in the journaling activities, I was able to understand how my personal and other biases can affect the sphere of business ethics. One’s individual beliefs often inform people’s decisions; it is vital to analyze such thoughts in order to separate biases from researched conclusions. For example, the discussion about tobacco advertising and secondhand smoking can lead to varying findings depending on who is presenting their opinion. As a non-smoker, my stance regarding public smoking is negative – people should not be exposed to the negative effects of tobacco, and I would not want to ingest it as well. On the other hand, a smoker’s decision is based on their desire to smoke regularly, and their idea of public restrictions may be different. Therefore, our propositions for rules about smoking in public will be different since they are informed by our perceptions.
Companies also show some biases since their primary interest is not the delivery of goods or clients’ satisfaction but the aggregation of profit. While many firms declare that customer’s positive feedback and enjoyment of their products is the main goal, the core purpose of businesses is financial gain. In the case of tobacco industries, this idea is applicable as well; companies continue to advertise their products such as cigarettes, even though these items may be dangerous to people’s health.
The study of Merck can be compared to that of tobacco manufacturers. While Merck made the decision to withdraw their product and it appeared to be an ethical decision, one could argue that the bias of investors to gain profit was still in place. Although the firm lost some money on research and distribution, the recall most likely supported the business’ long-term goal of preserving its place in the market. Thus, one may assume that the biases were not ignored or eliminated with this move.
The case of Deepwater Horizon demonstrates the tendency of money-based priorities clearly, showing how a company’s biased decision-making led to a catastrophe. It is possible that the main acting stakeholder group was represented by the business’ investors or executives, and other involved persons did not have any authority over BP’s actions. As a result, the bias supporting high profits outweighed the company’s need to analyze potential risks. If these approaches managing a business were absent, the firm might have updated its technology, protected workers, and ensured that everyone was following safety protocols. One can perceive how a differing approach to quality assurance led to the business suffering from unethical decisions.
Specific biases can also influence the opinions of the public and the media. Returning to the case of tobacco, one may presume that advertising shapes the audience’s opinion. Therefore, the media’s portrayal of smoking is impactful, and its effects depend on whether it is positive or negative. Fulmer et al. (2015) find that advertising campaigns increase the rates of smoking teenagers. The authors also note that favorable smoking characters in movies and shows can positively impact the growth of smokers. Therefore, a biased portrayal is highly effective in changing the opinions of the public. In turn, peer pressure and example are among the other ways to change someone’s beliefs. One can see that exposure to such biases has consequences, especially if the audience is vulnerable to manipulation.
The Most Significant Learning
This course has provided me with a chance to assess various issues not only from an individual perspective but also by using the academic information which represents findings, informed conclusions, and other communities’ opinions. I consider the implementation of circles of reflection as the most important learning because it established a foundation for all other knowledge received through the readings and journaling activities. It is a process that is simple to understand and integrate into one’s practice. Nonetheless, it offers many possibilities for learning and contributing to research.
Business ethics concern different levels of people engaged in a company’s processes. CSR also includes many stakeholders whose input and contribution are valuable for innovation and growth. Thus, it is crucial for a person dealing with ethics to have a way of investigating the needs, wants, and concerns of these individuals and groups. Circles of reflection that were utilized in the assignments broadened my thinking from my perspective and systematized my activities in researching a problem.
When thinking about smoking prior to the first assignment, I did not attempt to dissect the issue with a similar degree of attention, simply considering it at a level of my friends and myself. However, the idea and countrywide solutions can significantly alter the situation and bring new solutions was somewhat new to examine. The readings also enhanced my understanding of the consequences of such interventions.
Other cases may be discussed in a similar way, revealing the usefulness of this thinking method. The impact of the Deepwater Horizon well blowout, for instance, was not very impactful for me personally. Therefore, some people with similar experiences may underrepresent the significance of this event. Nevertheless, the consideration of this catastrophe as a national and global environmental problem lead to completely different results.
The accident can be described as tragic in regards to its effect on marine life, flora, and fauna, as well as the lives of workers who were employed at the site. The impact of this catastrophe is major for the environment, as it contributed to the change in climate and pollution. The utilized analysis for this discussion assisted me in understanding the importance of business ethics in that particular situation as well as all others.
Conclusion
The subject of business ethics gains more and more attention as companies shift their focus from pure profits towards customer experiences, workers’ rights and duties, and environmental preservation.
The current changes in climate encourage various companies to review their practices, and social responsibility is being modified to include such concerns. The role of business ethics is the relationship between business and societies is essential – corporate responsibility encourages the development of policies protecting people on both sides of any business activity. The ability of a company to change and adapt to the current state of the market leads to increased innovation and meaningful collaboration with other members of the supply chain. HP is a business that can be provided as an example of such active participation.
On the other hand, firms that fail to consider the ethical aspects of their business, focusing on profits instead, may face problems similar to those of BP, causing environmental catastrophes and losing not only money but also workers, resources, and status. Here, the role of business ethics is highlighted again since it can act as a measure to predict such risks and protect the company from them. In order to successfully implement the principle of CSR, companies should understand and use business ethics, removing biases and reflecting on the potential problems and consequences for themselves, their communities, and their country.
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