Current Trends in Business Ethics and Corporate Social Responsibility

The purpose of this paper is to understand the impact of Business Ethics and Corporate Social Responsibility (CSR) in a business environment and its trickle-down effect on society as a whole. Consumers are very knowledgeable and have multiple options to decide, which makes Corporates to structure their activities to fulfill the needs of their target market without violating the societal values. The old principles of making money using any means are no longer valid and do not appreciate by society. The first part of this paper covers the definition, analysis of current trends, and globalization. The second half of the paper changes the direction to discusses the role of leadership, changes in the Criminal Justice field and the ethical standards prescribed by the author.

What is Business Ethics and Corporate Social Responsibility (CSR)

According to Abend (2016), Howard Bowen author of “Social Responsibilities of the Businessman” (1953) is considered as the founding father of the CSR Concept. However, the description of CSR by Howard F. Merrill (1948) is still relevant to the current environment. Merrill defines the roles and responsibilities of a Businessman who is not just limited to his immediate associates and any other group impacted by their business decision. This is a very comprehensive definition and not only covers employee relation but also consider customer proposition, environmental impact, vendor management, and resource management. The concept of Business honesty and ethics are founded in most of the current religions; it was mentioned in the Quran that the true believer must trade in mutual goodwill. The flavors of common goods and the community interest must be found in the corporation framework to be successful in today’s economy.

Current Trends and Impact of Social Media on Corporations CSR’s Policy

The business landscape has significantly changed in the last 15-20 years where the business decisions were only curtailed within the four walls of boardrooms or could be found after a week on some newspaper articles. Social media is instrumental in creating awareness and removing the doubles standards found in the business environment. If Child labor is banned in the west, then it is no longer acceptable for Western firms to use child labor in other parts of the World. Videos of children sewing fabrics for a luxury brand was viewed by millions on YouTube and have demanded to close their production facility. Amazon and Google review system helps buyers deciding without having any influence from the sellers.

Chae and Park (2018) performed a survey of trends and CSR topics using Data from Twitter, which is the largest social media platform, and discovered very important and useful information connecting the current trends predicted by Merrill in 1948. Data were collected between October 2013 and November 2016 and was cleaned to remove impurities before drawing conclusions. The research concludes that some of the most important topics related to CSR are the community, charity, climate, supply chain, and good governance.

How Globalization Crosspath with CSR

A survey conducted by Chae and Park (2018) revealed that India and Saudi Arabia are actively using Twitter to discuss CSR issues. There are still some countries such as China and Russia where Government agencies control content on social media and have developed similar platforms for their local market. The company’s CSR policy depends on its core value system in creating a positive working environment for all the stakeholders (Battistini and Gazzola 2015). The integration efforts of CSR defined by Battistini and Gazzola (2015) depends on the size of the firm; a small firm may have an informal and charitable approach where multinationals may have innovative and dominant CSR policy. Berger and Scott (2018) highlighted a trend of involuntary or “Good to have” approach towards CSR have converted into a mounting pressure from the stakeholders and in some instances, it is required by the law. As the trade routes have s shrank and business has expanded, the problem in one jurisdiction could affect the area.  A collapse of Rana Plaza factory in 2013 with a death toll of 1,134 is not just a problem for the People of Bangladesh; it has affected all the boutiques on fashion avenue and the customers. New Business laws have been enacted in the last 20-30 years to support and create awareness concerning human rights, environmental protection, and business practices. Scherer & Palazzo (2011) shown a transition in business practices from a legal point of view, where corporations are not just bound by the local governance system (Hard Law) but also voluntary self-regulated (Soft Law). The legal system is currently in the debate to define the limitations caused by globalization and found ways to implement and enforce the regulations.           

Role of Leadership and Current Research Practices

The core principle for any manager is to look after the interest of the corporation and make informed decisions. A leader uses historical information to foresee the upcoming trends and challenges to set the tone of the organization. The adopted strategy must be in accordance with the founder’s vision and generally accepted by all the stakeholders. There are several Key Performance Indicator to analyze the financial stability of any organization, and the stock price is by far the most important factor for any publicly listed entity. Blodgett & Markelevich (2014) highlights the importance of CSR strategy when it comes to financial performance. Prices of Facebook stock fell nearly 40% last year due to data privacy issues, Macy's and other organizations have faced a similar problem. It is now in the hands of leadership in regulating themselves in the non-regulated environment and committing themselves to higher standards. Due to increased pressure from the non-profit sector, trade agencies, labor unions, law enforcement and educated customers are changing how business operates in the 21st century. As a result of increased pressure, Energy sector has seen innovative ways to generate electricity, fuel-efficient cars are on the rise, Machine Learning and Artificial Intelligence have integrated into daily transactions, and a generation have witnessed a boom of the shared economy in the form of Uber, Airbnb, and others.     

Business Ethics and CSR in Criminal Justice

By definition, criminals operate outside of any code of conduct, and they aim to exploit any available resources for their illegal gains. Due to globalization, access to the open market, banking system, and social platforms; Criminals are using these channels to propagate their agendas in the form of stealing personal information, trading drugs on dark web, illegal arms dealing, and money laundering. New regulations were executed to address these issues; some of the regulations are Office of Foreign Asset Control (OFAC), Bank Secrecy Act, GDPR, and Data Protection Act. 

Four Ethical Standards

Individual’s belief system is very important to define the code of ethics that they set for themselves and the corporations they lead. I as Muslim draw inspiration from the Quran and the teachings of Prophet Muhammad (PBUH). Islam is a complete way of life and address issues ranging from family to business to inheritance. Following four principles were created in my public dealing and operations  

1.     Respect others as you should be respected - This includes fair treatment to employees, vendors, community members, and stakeholders

2.     Preserve water even if you are on a running stream of the river – Resource management is a very sensitive topic, and the focus is on creation using minimal resources

3.     Pay Zakat (Charity) to needy every year – Zakat, paying Charity, is obligatory on Muslim and treating corporation as a living person eligible for paying Zakat will bring good to the community

4.     Don’t sell that’s considered Haraam (Harmful for the community) – The concept of Halal (Permissible) and Haram (Impermissible) is very clear and well-defined. Any service or product that will be harmful to humanity at large is not allowed in Islam and therefore forbidden.

 References

1.     Abend, G. (2016). How to Tell the History of Business Ethics. Zeitschrift Fuer Wirtschafts- Und Unternehmensethik, 17(1), 42–76. https://doi-org.proxy1.ncu.edu/10.5771/1439-880X-2016-1-42

2.     Battistini, C., & Gazzola, P. (2015). Is CSR just a Matter of Resources? Economia Aziendale Online 2000 Web, 6(2), 43–47. https://doi-org.proxy1.ncu.edu/10.6092/2038-5498/6.2.43-47

3.     Berger, W. G., & Scott, I. (2018). Redefining Corporate Social Responsibility in an Era of Globalization and Regulatory Hardening. American Business Law Journal, 55(1), 167–218. https://doi-org.proxy1.ncu.edu/10.1111/ablj.12119

4.     Blodgett, M. S., Hoitash, R., & Markelevich, A. (2014). Sustaining the Financial Value of Global CSR: Reconciling Corporate and Stakeholder Interests in a Less Regulated Environment. Business & Society Review (00453609), 119(1), 95–124. https://doi-org.proxy1.ncu.edu/10.1111/basr.12026

5.     Chae, B. (Kevin), & Park, E. (Olivia). (2018). Corporate Social Responsibility (CSR): A Survey of Topics and Trends Using Twitter Data and Topic Modeling. SUSTAINABILITY, 10(7). https://doi-org.proxy1.ncu.edu/10.3390/su10072231

6.     Scherer, A. G., & Palazzo, G. (2011). The New Political Role of Business in a Globalized World: A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy. Journal of Management Studies, 48(4), 899–931. https://doi-org.proxy1.ncu.edu/10.1111/j.1467-6486.2010.00950.x