Explain the Role of Ethics and Social Responsibility in Developing a Strategic Plan, Research Paper Example
Words: 841Research Paper
Ethics from a business perspectives according to Dienhart and Curtnutt (1998), examines how self interest, personal relationship, national interest and fairness fits together in the same environment, while goals and objectives are being pursued and products and services are produced and delivered.
Milton Friedman has argued for years that corporations should focus on business and not society through his book “The Social Responsibility of Business is to increase Profits”, and went on to emphasize that in the free market, as long as business make profit, all will benefit, and the government in the end will be able to fulfill its duty of taking care of the social well being of the society (Dienhart &Curtnutt, 1998).
However, Edward Freeman countered the eminent scholar’s argument in 1984, after 14 years, by postulating that Corporate Social Responsibility extends further than production for profits, and typical shareholders like customers, suppliers, employees, creditors, and communities are significantly affected in various ways by the conducts of companies, and should be given considerations prior to all activities, to ensure continuing success (Dienhart & Curtnutt, 1998).
Strategic Planning according to Bowman (2005) is a powerful tool to provide focus for the few things that organization must do in the next few years, as it strive to add value to its activities and increase profits. Corporations, according to Bowman (2005) can only minimize negative effects of change by not ignoring the ethical implications of any proposed strategies, and the best approach will be to embed ethics in all its plans at the outset.
A company for example, that is considering as part of its strategy to extract minerals form a specific region in order to reduce the importation cost of raw material from the Middle East, will have to consider the impact of its actions on the underground water supply, the safety of the employees, the effect of its employment practices on other companies in the environment, the competitiveness of the wages paid to workers, the level of government taxation, the profit it will earn, the possible response of environmental organizations to what they may perceive as threats to endangered species in all operational zones, as well as the possible impact on its corporate image in the area.
It will then have to ethically examine its interest against a sense of fairness, as well as how its actions will affect its relationship with all these shareholders, and then decide whether it should proceed or not.
By considering the ethical implications of its actions at the strategic process level, the company may be able to forecast a friendly or hostile environment, as well as cost implications, and make proactive modifications to ensure that it will not incur unnecessary losses as well as the possibility of being considered socially irresponsible by consumers, who may in the short run take their businesses elsewhere.
Hershey’s Incorporated is one of the world’s largest manufacturers and distributor of chocolate, but according to Cantanese (2006), a major supplier of its cocoa raw materials comes from West Africa and the Ivory Coast. Research found that the cocoa planters in these two regions in particular are using as much as 15,000 children as slave labor to process the cocoa and maintain the plantations.
Economically, Hershey’s in ensuring its interests are covered pays the cocoa farmers minimum prices so that it can compete on the world market and the farmers in turn have to use slave labor to ensure their operational costs are minimized. Thus the company is guilty of poor ethical practices, especially due to the fact that these children are stolen from their parents and sold for a few dollars, then make to work under very oppressive conditions that even result in poor health and deaths among them.
Hershey’s profits were therefore for years stained with the blood, sweat and sufferings of these young children, and its ethics committee and leadership should immediately rescind all purchasing agreements and transactions with these planters, as well as investigate the accuracy of the information aired.
Additionally, the multinational giant should seek alternate sources for its raw materials, as well as convene strategic process meetings to consider the implications of its ethical violations and make decisions as to how it can repair its image in West Africa, Ivory Coast, other countries of the region and the global market.
The company should also report the cocoa planters to The International Labor Organization and Human Rights Council then apologize to all its stakeholders for its poor ethicality, before approaching the government of both West Africa and Ivory Coast, regarding making significant investment in their education, agricultural and health development projects for specific periods.
Finally the Ethics Committee of the organization should rewrite its ethics policy and make prepared statement to its stakeholders about the actions it has taken on the recent issue, and what are its future obligation and commitment in light of its involvement in such unethical practice.
Bowman, S., (2005). Embedding Ethics in Your Strategic Plan Life Ministry www.australianstrategicplanninginstitute.com/results , 12/13/11
Cantanese, S. (2006). An Inconvenient Truth I.H.S. Child Slave Labor News www.ihsnews.org/view-article.php?id=174 , 12/13/11
Dienhart, J.W., Curtnutt, J., (1998). Contemporary Ethical Issues ABC-CLIO Denver, Colorado
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