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Corporate Social Responsibility
This paper presents a discussion of the pros and cons of ethics in corporate social responsibility. This is done with special reference to the UAE. Corporate social responsibility entails the undertaking of activities beyond the core reasons for formation or carrying out of operations of an organization in a bid to assist the employees and the community or society (Palmer, Dunford & Akin, 2006). These activities entail conserving the environment for the benefit of the society and promoting activities that serve to aid in improving the welfare of the community. The engagements can include funding for development of infrastructural facilities like roads, dams, rivers, hospitals, schools or taking part in environmental protection.
Ethics is concerned with activities that conform to the upholding of respect, dignity, and fairness for every human being. The principles of ethics are supposed to conform to moral standards of good practice in the society. Corporations or multinational firms have in the past found themselves at loggerheads with the authorities regarding some acts that do not promote corporate citizenship (Aras & Crowther, 2008). These have majorly touched on the environment and promotion of activities that benefit the local residents directly. Organizations exploit resources to produce finished products. Some of the organizations do not contribute to improving the welfare of locals. This presents unethical practices by the organizations concerned.
The pros and cons of ethics in corporate social responsibility are discussed as hereunder. This is done with reference to the UAE. This is an Arab Country located in the South East of the Arabian Peninsula on the Persian Gulf. Major economic activity of the UAE is processing and refining of oil and gas products. This activity entails emission of dangerous gases when released to the environment (Aras & Crowther, 2008). The organizations and authorities concerned are called upon to understand the pros and cons of ethics in corporate social responsibility. Since information is power, they would stand a better chance of making sound decisions concerning matters of corporate social responsibility.
Pros of Ethics in Corporate Social Responsibility
Ethics entails undertaking of morally upright activities and operations. Such include environmental conservation. Conserving or protecting the environment contributes to the reduction in resource depletion. Excessive extraction or exploitation of minerals without due regard to future utilization constitutes environmental degradation. Activities or processes that lead to emission or dumping of waste materials also promote the pollution of the environment. Such an environment would not be able to sustain other resources or organisms. Dumping of waste to the rivers or running of stagnant water masses would kill the aquatic life (Palmer, Dunford & Akin, 2006). The world is interdependent on other players for sustenance and survival. Humans greatly depend on the environment. Food and recreation are products of the environment. Where the environment is polluted, human life would be compromised as well. On the contrary, there are immense benefits for conserving the environment. Healthy living, plenty of resources, food, and recreational facilities would be some of the enjoyments that would accrue.
Upholding of ethics as part of corporate social responsibility leads to improved company reputation. All reasonable and rational humans tend to prefer to be associated with positive attributes. Where an organization is credited for ethical behavior, many people would desire to be associated with it (Dunphy, Griffiths & Suzanne, 2006). The effect of such is that it creates a good rapport between the organization and its environment. Its employees would be motivated to offer their very best towards the operations of the organization. If employees are motivated, the organization stands to benefit. Their objectives would be realized with such a motivated workforce. Other stakeholders in the affairs of organizations are the ultimate consumers of the products. With an improved reputation, existing customers would be retained as well as new ones would be attracted. Such policy enhances the revenue levels of organization.
Cons of Ethics in Corporate Social Responsibility
Upholding ethics would include minimizing or absolutely stopping operations that pollute the environment. Some operations may necessitate the use of systems and programs that constitute environmental degradation. In the UAE, refining of oil is bound to emit gases, thus contributing towards environmental pollution. Currently, there is no knowledge or technology that would help eliminate emissions of harmful gases. From the above mentioned, the followed questions arise: Does that mean that no refining would be done? Should all the operations that emit gases be stopped? The answer to the above is definitely negative. To attain meaningful economic prosperity and enhance the welfare of human life, resources must be exploited and processed to useful products (Aras & Crowther, 2008). Other measures required to conserve the environment are costly. The costs of acquiring new machinery and implementing the necessary changes in conformity with conserving the environment are also high.
There are no guarantees that upholding ethics as part of corporate social responsibility would lead to increased benefits to an organization. Any business organization is formed for the sole reason of running at a profit or making a profit. An organization may offer appropriate services to the community as required by ethics, but such may not have any impact on the activities of the organization. The demands of communities in the name of ethics as part of corporate social responsibility may hinder or hamper the efforts of the organization to undertake its core mandate (Dunphy, Griffiths & Suzanne, 2006). When the society demands for services to benefit them at the expense of the corporation and shareholders, it is considered unethical. Some locals engage in activities of sabotage in case the organization rejects their exaggerated demands. Such has the potential of causing disputes and strenuous relations.
Ethical activities may call for major changes in the operations of an organization (Palmer, Dunford & Akin, 2006). Some of the changes may lead to higher costs of production. Where new machinery is supposed to be acquired for production processes, it would entail an extra cost. This has the potential of drawing resistance from the shareholders. Part of the management team may also differ on the issue of change to adopt ethical practices. This can be the case when the organization experiences financial challenges. There could be an obstacle in deciding whether to invest in ethics or go for a financial return. In case the decision conforms with the ethics, this leads to the reduction in revenues to an extent that an organization cannot finance its projects, thus a challenge emerges.
The UAE has a duty to embrace sustainable environmental practices in its operations as part of good citizenship which is considered ethical. In all its operations, the country is supposed to ensure that an allowance for corporate social responsibility is factored in. Such would ensure that there is fairness and sustainability in the affairs and management of resources of the country. Ethics is part of corporate social responsibility. There are numerous advantages of upholding ethical practices and few pitfalls alike. From the foregoing discussion, a balance would be struck on the need to uphold ethics and the aim of attaining financial success as envisaged in any companys objectives. Financial prosperity is important for the economy and all stakeholders involved (Aras & Crowther, 2008). Ethics would serve to ensure there is fairness for all stakeholders in the enjoyment of the benefits accruing from operations of an organization. The UAE should remain abreast of such facts for appropriate decision-making. It is each partys duty to take part in promoting ethics and enhancing engagements in corporate social responsibility.