Ethics and social responsibility are a part of everyday life around the globe. From the time a business begins, ethics and social responsibility play an important role in deciding what direction that business will take, and how the company will turn a profit. Ethical behavior is critical to strategic planning for businesses. In order to be successful, businesses must consider themselves a part of the business community, as well as society. Making money is not unethical; however, money cannot be the driving force of ethical thinking within a business (ethics.org, 2008).
This paper will discuss the statement “strict government regulations are necessary to make companies behave ethically”. An examination of this statement in accordance of ethics and social responsibility, as well as the impact government regulations have on these responsibilities will be discussed. Why I agree or do not agree with the thesis or premise behind the chosen statement will conclude the paper.
Before the Enron scandal at the turn of the century, social responsibility, and ethical behavior were, for the most part, more for show. If a shareholder or potential investor saw these guidelines in place, they were more apt to go along with that company, rather than go with one which had no guidelines in place. The world learned a hard lesson after the fall of Enron, and other large corporations, that appearances are not everything (Johnson, K., 2002). However, what exactly is ethical behavior and social responsibility? Why does society feel these are so important?Ethical behavior is that which is morally accepted as good and right as opposed to bad or wrong in a particular setting (Merriam-webster.com, 2008).
To whose standards the good and right, or bad and wrong are compared to, have yet to be determined. Each individual who enters a company brings his or her own enculturated ethical behavior. This behavior may be ethical to some, but not all. Having a corporate guideline on expected ethical behavior is what assists employees in determining exactly where the line is in the ethical sand. Those who choose to stretch the interpretation of these characteristics within the ethical guidelines are the ones who find themselves out of work. A company who is not enforcing its own guidelines can find themselves facing a wounded, and not so forgiving, public.
Social responsibility “occurs when a retailer acts in the best interests of society — as well as itself. The challenge is to balance corporate citizenship with a fair level of profits” (Prenhall.com, n.d.). Here is where tricky situations occur. How does a business balance the best interest of society while creating a fair level of profits? One answer is through philanthropic efforts. Sure a company may have a slow start, and the feasibility of philanthropy may not enter the financial picture until later, but creating a business on a solid foundation of social responsibility can certainly pave the way to success. Many small businesses volunteer their efforts until such time when they can afford to give back to society and make the world, or even their own society, a better place to live (Green, M. 1997).
Examining the statement “strict government regulations are necessary to make companies behave ethically” invokes concerns regarding why certain regulations were not already in place, and how companies could, and still can, get away with unethical practices. As of this year, poor ethical practices within the business world are still making headlines. For instance, the head of the Smithsonian Latino Center in Washington, D.C. was reported as violating 14 ethical and conflict-of-interest policies (ethics.org, 2008).
With the enactment of the Sarbanes-Oxley Act on July 30, 2002, society breathed a weighted sigh of relief knowing that there was now a provision in place to hold companies accountable for unethical monetary practices (Lander, G.P. 2004). However, looking at the Smithsonian situation, did we take that sigh too quickly? I believe the Sarbanes-Oxley Act was a step in the right direction, but also feel it came a little too late. Government intervention puts those who have the visceral fortitude to behave unethically and immoral in the spotlight. Gone are the days of hiding behind corporate ignorance.
Still questions remain. Should further government regulations be pushed onto businesses, or should the ones already in place be revisited and updated? Should the government put more restrictions on businesses to make them behave properly, or should society as a whole be more demanding when it comes to corporate responsibility and ethical behavior? When is society going to stop relying so heavily on the government do the dirty work? Commitment to corporate social responsibility activities is largely driven by market and stockholder expectations, so as a society with vested interests, I say we make a stand (Green, M. 1997).
Government regulations are necessary to counteract the unethical and socially immoral people our society has created. However, since our society has assisted in creating the problems we see today then society must be held to the same accountability as the government. Right now I believe the business world must continue to have the government provide strict regulations in order encourage companies to behave ethically; however, these regulations need to be updated in order to fit with today’s societal standards.
This paper discussed the statement “strict government regulations are necessary to make companies behave ethically”. An examination of this statement in accordance of ethics and social responsibility, as well as the impact government regulations have on these responsibilities were visited. Why I agree or do not agree with the thesis or premise behind the chosen statement will conclude the paper.
Ethics.org. (2008). The ROI on ethical culture. Retrieved on May 12, 2008 from website http://www.ethics.org/ethics-today/0408/pat-column.aspGreen, M. (1997). Corporate social responsibility. Retrieved on May 12, 2008 from website http://www.ziplink.net/~mikegree/career/social.htmJohnson, K. (2002). Reflections on ethics and values on policy. Retrieved on May 12, 2008 from website http://www.ethicaledge.com/enron.htmlLander, G.P. (2004). Sarbanes-oxley act. McGraw-Hill, Two Penn Plaza, New York, NY.
Mirriam-Webster.com, (2008). Ethics. Retrieved on May 12, 2008 from website http://www.merriam-webster.com/dictionary/ethicsPrennhall.com. (n.d.). Social responsibility. Retrieved on May 12, 2008 from website http://www.prenhall.com/rm_student/html/glossary/s_gloss.html