There is some controversy about the importance of ethics and social responsibility in organizations and their relevance to organizational effectiveness. This series of statements will help you to better understand your beliefs about the role eth- ics and social responsibility should play in companies. Please use the following scale in responding to the ten statements below. When you are finished, follow the scoring instructions at the bottom to calculate your score. Then read more about what your score means.
___ 1. It is more important for a company to be ethical and socially responsible than anything else. ___ 2. Businesses have a responsibility to do more than
just make a profit.
___ 3. Organizations must be ethical and socially respon- sible if they are to survive.
___ 4. A company will be more profitable in the long term if it is ethical and socially responsible.
___ 5. Being ethical improves the overall effectiveness of a business
___ 6. Being socially responsible improves the overall ef- fectiveness of a business.
___ 7. Being ethical improves a company’s global competitiveness.
___ 8. Being socially responsible improves a company’s global competitiveness.
___ 9. In a crisis, survival should more important to a com- pany than ethics or social responsibility.
___ 10. Stockholders are a company’s most important stakeholders.
Scoring: Add up your responses to identify your perceived importance of ethics and social responsibility score.
Interpretation: If your score is between 10 and 20, you tend to place a higher value on financial performance than on social responsibility and business ethics. This could present challenges for you in balancing what is right with what you feel you need to do to succeed. Following a company’s code of conduct and code of ethics will be important to your future success.
If your score is between 21 and 35, you tend to strike a balance between performance and social responsibility and business ethics. This is not inherently good or bad, but it is important for you to think about your ethical principles and fully evaluate the impacts of your decisions.
If your score is between 36 and 50, you tend to put ethics and social responsibility before making a profit. This is clearly the moral “high road” and the one least likely to get you into legal trouble, but do not forget that profits and shareholders matter too.
5 4
3 2
1
strongly disagree neutral agree strongly disagree agree
To have lasting effects, social responsibility efforts should be integrated into the culture of the organization.57 Corporate social responsibility has
the biggest impact when it is integrated with business priorities, relevant to achieving business objectives, inclusive of both internal and external stake- holder needs, and consistent with the firm’s cultural values and brand iden- tity.58 Serving stockholders as well as the larger population of stakeholders,
which includes workers, customers, the community, and even the planet, are not mutually exclusive.
Supermarket Trader Joe’s has long urged shoppers to bring their own bags to promote recycling. Two Costco warehouses in Palm Springs, California, send their waste produce to a worm farm, where it is composted into mulch.59 Star-
bucks Shared Planet initiative has a goal of obtaining LEED third-party green certification for all new company-operated stores worldwide. Starbucks states, “Starbucks™ Shared Planet™ is our commitment to do business in ways that are good for people and the planet.”60
Corporate sustainability initiatives can be top-down, with someone in a position of authority dictating to managers and employees what to do. Corpo- rate sustainability efforts can also be grassroots, with employees identifying projects and taking the initiative to organize their own activities. For example, Google’s employee shuttle system was created by an employee, and employees in two of its offices decided to eliminate water bottles.61 Whereas the support
of top management is critical to the success of any initiative, the involvement of employees creates a lasting culture change.
Socially responsible programs and policies being implemented by U.S. cor- porations include:
• Workplace diversity
• Favorable working conditions
• Nonexploitation of workers, including discrimination and harassment
• Work-life balance initiatives
• Community volunteerism and charitable giving programs
• Environmental “green” programs including recycling and resource conservation
• Reducing carbon emissions
• Partnering with environmentally friendly suppliers and companies Employee participation in social responsibility initiatives not only can mo- tivate employees, but also can generate some good ideas. When a major print- ing company set a goal to reduce its waste by 20 percent over five years, its executive team naturally focused on finding ways to streamline its printing operations to reduce paper waste. After a series of brainstorms, a reception- ist pointed out that the number of individual lunches delivered to the office every day created a significant amount of food packaging waste. By invest- ing in a small café and encouraging employees to eat a buffet-style lunch, the printer reduced twice as much waste as it did by streamlining its printing operations.62 Google calculates that it takes over 2,000 cars off the road every
day through its free electric car charging stations, its electric car-sharing pro- gram for employees, and its employee shuttle.63 Nearly 50 percent of Walmart
employees signed up for the company’s personal sustainability project, which encourages employees to live more sustainable lives by educating them on ways to conserve resources and reduce energy consumption at home.64
The International Organization for Standardization (ISO) has created a variety of standards that help organizations gain international acceptance of their practices and outcomes.65 In addition to environmentally related stan-
dards such as sustainability and carbon emissions, the ISO publishes manage- ment standards including those for leadership, customer focus, involvement of
so what
Social responsibility initiatives can motivate employees and improve organizational performance.
people, and continual improvement. These standards can help managers meet their environmental and social responsibility objectives.
Managers have a great deal of influence over the execution of corporate responsibility programs, and need to be aware of any likely challenges to suc- cessful implementation. A Grant Thorton Corporate Responsibility Survey reported the four greatest obstacles to successful execution of corporate re- sponsibility programs are:66
1. A focus on quarterly earnings or other short-term targets 2. The cost of implementation
3. Difficulty in measuring and quantifying return on investment 4. An unsupportive corporate culture
Each of these obstacles can be reduced through the application of OB con- cepts including goal setting, feedback, decision making, influence, and organi- zational culture.