Corporate Social Responsibility
Corporate social responsibility (CSR) is a business model that companies use so they can be socially responsible for itself, their stakeholders, and the community. When committed to employing CSR, companies can be more cognizant of the influence they have on many facets of society including socio-economic status and environmental justice. To be involved in CSR dictates, during the standard progression of business, a company functions in a way that develops society and the community around it positively instead of having a negative impact. Many companies now employ staff whose function within the organization is to create, implement, and evaluate policies and actions that affect their CSR. Indeed, most companies in today’s industries are over cautious about how they are represented and their impact on society. Stakeholders have a vested interest in the companies they support. Two primary stakeholders are its customers and its employees. Paradigm Toys meets their corporate social responsibility (CSR) to their primary stakeholders by creating and fostering safe work conditions under the Occupational Safety and Health Association (OSHA) standards for their employees. Paradigm Toys has an obligation to maintain a culture where employees and customers can file grievances without fear of reprisal. For customers, Paradigm Toys has a social responsibility to provide products as they are advertised while providing quality customer service founded on respect for humankind.
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Two secondary stakeholders are activist groups and media. Both groups have an impact on the overall perception in which society views Paradigm Toys. Media is used in many ways for advertisement to increase sales in specific areas; however, activist groups can promote a company’s image positively, or negatively, which can have an overall effect on revenue company wide. Because of the influence of the media and activist groups, Paradigm Toys arguably has more social responsibility to their secondary stakeholders than their primary stakeholders. An example of this is the documentary “Blackfish”. This documentary exposes alleged cruelty to orcas that live in captivity and the effect it has on their overall quality of life (Hachard, 2013). While the documentary has been proved to be nothing more than activist propaganda it had an effect on the way society viewed how SeaWorld treated their animals. As a result the pressure for SeaWorld to improve its social responsibility has caused SeaWorld to end their San Diego Orca Entertainment Show in 2017, with plans to close the same exhibit at their Florida and Texas locations in 2019 (Howard, 2017).
In this case, SeaWorld felt a responsibility to the community to show they care about their creatures. There are many cases where companies are exposed for their human resource practices, while this effects the primary stake holders (employees) is also has an affect on the secondary stakeholders; the media in particular, can look bad if they ran a positive story about a company and later it was found the same company was violating human rights and labor laws.
The Importance of Ethical Leadership
The way an organization behaves, and how it conducts business with its internal and external stakeholders reflects how the community around them views the organization as a whole. In certain industries there are minimum standards which are required, or, at least recommended, for organizations to follow to minimize or reject, conflicts of interest or the exploitation of individuals (Kelchner, 2017). Ethics are an individual's moral idea about what is right and what is wrong. Organizational decisions may be made by individuals or groups; however, those decisions will be influenced by the culture that is represented within the organization (Kelchner, 2017). Businesses have the ability to transform the local community by developing economic growth through buying and selling products. Businesses also pay local taxes that the government can then use to strengthen local infrastructure. Organizations need to stay mindful of social culture; companies run the risk of losing its employees and customers if they do not maintain an expected level of ethics in their decisions and actions (Kelchner, 2017).
Leadership creates the atmosphere by creating the standard through keeping their promises and showing the example of what is expected; employees promote the organizations culture through their actions and speech by watching the leaders, thus, adhering to a specific code of high moral ethics creates an ethical culture that is viewed as positive. A positive culture improves the morale among employees which will increase productivity and employee retention (Demirtas & Akdogan, 2015). Increased productivity and retention can generate increased revenue for an organization which can create new growth opportunities within a company for employees.
Organizations maintain their ethical culture through audits. An ethical audit establishes a company’s weakness and its strengths. The amount and severity of weaknesses and strengths can vary depending on the local social climate, but the overall effect is the results of the audit. The auditor will use a checklist when they conduct an ethical audit. The auditor will make notes and tally marks over a broad range of acceptable ethical standards to determine a company’s ethics score. The ethics audit, if done properly, can show a company where they need to make changes in policy, if it is companywide, or, the culture if it is one location or a specific department. Company standards can be addressed, and changes made to help the organization become more socially responsible to their local community and set a standard for what is morally acceptable.
Ethical Dilemma Framework
In business, theft is a common ethical issue. Some people knowingly steal by taking things, while others, commit theft unknowingly by conducting personal business while at work. Identifying dilemmas can be tricky; many employees do not view taking care of personal issues while at work is stealing, or, using company products for personal needs as theft. This thinking is usually qualified with arguments the company expects its employees to use the inventory for personal reasons, that is why they order extra items; or, employees believe it is okay because it is compensation for lower wages. Regular audits are important. In the food industry making an inventory check everyday allows a manager to track how much food is actually being used versus how much is supposed to be used. If the variance of used inventory is greatly higher than the projected usage, a manager can further investigate which time of day is overusing products; once a shift has been determined it can be narrowed even further to specific employees. Whether employees are guilty of over using products by commission or omission it is still considered theft by the company. Since every employee is provided comprehensive training on portion control. The overuse of inventory items becomes a conscious choice.
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Many times, I have witnessed, it is not an overabundance of portioning in the food that is created for customers as it is employees taking food and eating it without paying. There are two ways managers can handle this; first, they may offer rewards to employees if the inventory variance in a certain location is brought into an acceptable range; the second is drastically different, some managers give noticed that employees found taking food without payment will be immediately terminated. Also managers have taken away the benefit of an employees’ free meal on their lunch break, or, their half price discount when not working. The latter solution never fares well with staff and soon management is having to spend more money through hiring and training new employees. The solution I have used is creating more rewards programs for the employees to keep them from over using inventory or right out stealing. Depending on the company I worked for, and in connection to the benefits the employees already received, I may offer a free meal at anytime for a specific employee that best exemplified the core values of the company. In one instance, I had cans of soda go missing; I knew the employees were drinking them and not paying for them, even with the employee discount they were outrageously priced. To mitigate my losses I created a coupon in the computer system for employees that would only charge the cost price for me from the manufacturer. When I rolled out this program, all of the employees agreed to start paying for their soda with the discounted price while at work; this resulted in my soda inventory getting under control while maintaining the company’s motto of fairness to my employees.
While personal ethics is inherent and not something that can be trained, ethics in business is important to have specialized training; it helps to consider business ethics more like standards of conduct. Every business has a vision statement; the vision statement usually outlines the companies code of ethics. Ethics, or standards, training should include roleplaying exercises as well as open discussion related to the information being covered. This training will be held as part of new hire general orientation; and, while not all standards of conduct will be taught beyond general orientation, three key components of training would include Paradigm Toys’ code of conduct, personal accountability, and compliance. Conduct which affects the safe operation of, brings discredit to, or, any action that is offensive to an employee, visitor, vendor, or Paradigm Toys is unacceptable. Such conduct will be grounds for disciplinary action, up to and including termination.
Behaviours that are considered undesirable:
- Dishonest, criminal, or unlawful conduct.
- Refusal to comply with or follow instructions from authorized supervisors.
- Consuming or being under the influence of drugs, narcotics, or intoxicants while on Paradigm Toys’ property, this includes unlawful possession of controlled substances.
- Theft, deliberate destruction, or damaging any property of Paradigm Toys.
- Gossip or criticism that contributes to reducing morale of employees.
- Incompetence, negligence, or inadequate work performance.
- Disregard for safety regulations and operational policies and procedures.
- Sexual harassment upon or toward employee, visitor, or vendor.
- Any type of abuse to any employee, visitor, or vendor.
Employees must cooperate with all compliance -related inquiries and aggressively work to correct any unethical, illegal, or inappropriate practices that are identified. We do not tolerate retaliation of any kind against any individual who reports suspected violations of law, regulation, our Code of Conduct, or the compliance program of Paradigm Toys. We strive to create a work environment in which ethical concerns will be addressed. Paradigm Toys does not tolerate discrimination or harassment of any kind; we provide compliance and ethics training upon hire and twice a year. As an employee, you are accountable for guaranteeing that you will comply with all compliance educational programs.
- Demirtas, O., & Akdogan, A. A. (2015). The effect of ethical leadership behavior on ethical climate, turnover intention, and affective commitment. Journal of Business Ethics, 130(1), 59-67. Retrieved from https://link.springer.com/article/10.1007/s10551-014-2196-6
- Kelchner, L. (2017). The importance of ethics in organizations. Accessed May, 10, 2017. Retrieved from https://oapub.org/soc/index.php/EJEFR/article/view/164
- Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117. Retrieved from http://file.scirp.org/pdf/IB_2014091916083406.pdf
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