Business Ethics and Corporate Social Responsibility - Essay Example

BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY Introduction Business ethics evaluate moral and ethical principles of a company which influences its business environment. The ethics of a business guides organizational behavior. When a business works in an ethical way then it differentiate in right or wrong activities and tends to perform right activities for benefiting its stakeholders and the society. For performing its social responsibilities a company needs to perform ethical activities. Corporate social responsibility (CSR) of a company involves in benefiting and developing environment and community. By this process companies try to improve the society and to reduce environmental damages. Business ethics and corporate social responsibility are closely linked with each other. Companies believing in high values and moral principles tend to perform many CSR activities. In this case study, business ethics and CSR activities of TideeKleen Waste Management Inc have been discussed in a detailed way. Presently the company is facing financial and reputational problem. For this reason a particular option is suggested to the company for enhancing their position in the market. Discussion As a CSR and business ethics consultant of Halo, I am responsible to choose an appropriate option for improving the business condition of TK Waste Management Inc. Halo Ethical Fund is one of the largest shareholders of TK. TideeKleen Waste Management Inc deals in waste recycling and developing electronic devices and florescent tubes from waste products. The company holds a leadership position in corporate citizenship. It provides many facilities and benefits to its employees. But present the company is experiencing reputational and financial crisis for some strong reasons. It stock price are falling rapidly. As a result Halo is also facing loss for this. Therefore TK needs to select a particular option among the three options that are recommended. As per my analysis every option has some benefits and disadvantages. TK should choose an option which will help the company to increase its stock price and to continue its business in an ethical way. Options analysis Option A According to option A TK will be to restructure its business. In this case restructuring the company means splitting up the company into two parts. Presently the company entirely deals with recycling solid waste and manufacturing fluorescent tubes and electrical device from those materials. The company has also incorporated many new facilities like largely automated, state-of –the –art, high tech etc for enhancing its work process and increasing its profit. There are many old functions which are still continued by the company in its work process. As per the option A TK needs to separate its old and new functions. For this reason the organization has to open a new corporation as NewKleen (NK). In this corporation the company should operate its new facilities which are more environments friendly and will improve its profitability. The company should employee skilled and efficient employees in NewKleen and will provide them various benefits and pensions for maintaining the ethical standard of business. The old facilities and functions of the company will be continued in TK. This corporation will operate all the obsolete, old, less profitable facilities of the business. The employees working in this corporation will also get the various facilities and pensions. This will help to highlight ethical values of the company. Each shareholder of TK will be given one share on NK (Neil, 2010). With advanced technology and profitable facilities NK will grow its business at a faster rate, in an ethical way and it can be expected that NK will trade each share at $50. But with old and obsolete facilities TK’s share price will fall down rapidly and the company can face bankruptcy. But the share holder of the company will not face loss for this as they will have equal number of shares in NK which are of high value. Benefits and disadvantages of option A The important benefit of this option is the company increase its share value by using its new facilities in an efficient way. It just only needs to restructure its organizational structure. The company is famous for its business ethics and corporate responsibilities. By implementing this option TK will be able to continue benefiting its employees. New facilities used by the firms will help to reduce negative impact on the employee’s health and also on environment. By implementing this option the company doesn’t have to fire any of its employees directly. It can shut down its business process naturally. Therefore it can increase stock price by following ethical ways. TK will lose its brand name if it restructures the organizational structure. This is because the company will form a new corporation as NK which will occupy maximum market share. The company will focus more on NK Corporation. It will not take measures to improve the facilities of TK. As a result TK’S share value will fall and this corporation will be forced to shut down its business. Option B As per of B there is no needs of TK to restructure its business. It can improve its business condition by entering into an agreement with Freedom Coast Venture (FC). By this process the company will get the facility to extract expensive materials from various electronic wastes. But the company has to follow labor intensive program for implementing this option. TK will use low tech methods which will expose its community members and employees to toxic hazards. There is a chance that the employees can have cancer by performing this type of job. This option will be profitable for the company because it will lower the labor cost. By implementing this option the company will damage the environment and the society. Various diseases and other problems will rise in the society. Benefits and disadvantages of option B This option will facilitate TK to reduce its labor cost and to increase its profit. These will help the company to increase its share price. But the workers of this company will face serious health problems if the company follows this option. Business ethics of the company get hampered. For lowering its cost company cannot provide benefits to its employees. As a result business ethics and value of the company will deteriorate (Kotler and Keller. 2011). Option C In option C TK can improve its business condition by taking advantage of incentive programs implemented by government and the low rate of interest. This will help the company to expand its business process and enhance the capacity of its new facilities. TK can improve its financial condition with the help of this option. It can gradually obsolete its old facilities and improve the new ones. As a result the old workers of the company can retire in an ethical way. But this option will increase the debt of TK in the short run. The company will experience little increase in its stock price. Benefits and disadvantages of option C By implementing this option the company will get the benefit of expanding its business operations. This option will help the company to improve the capacity of its new technology. The company can slowly obsolete its old technology and the employees working on that technology can retire in an ethical way. TK won’t have to lay off any one. It can continue its environmental and social responsibilities (Henry, 2011). But this option will cause huge debt for the company. The company will be bound to lower the salary of its employees. The share price of the company will rise at a low rate. Recommendations I would recommend Halo to discuss on option A in the upcoming TK Annual General Meeting. This is because this option provides more advantages than disadvantages to TK. The company can continue its ethical values by implementing this option. The organization needs to implement this option by redesigning its organizational structure. The company has to train its skilled workers for transferring them in its new corporation. The employees who will be working in the new corporation must be motivated by TK. The company also needs to support the employees working in its old corporation for continuing its ethical practices. Stakeholder theory According to this theory business values and morals contribute a lot in managing an organization. Business ethics helps the company to perform its corporate responsibilities towards the stakeholders and the society. By implementing option A the company will benefit the society by reducing the damages caused by its work process. It will also benefit the stakeholders by protecting them from loss. Option A will also facilitate to increase the stock price of the company. As a result the ethical values of the company will be highlighted when its stakeholders will be benefited for holding the shares of this organization. Option B and C will not help the company to continue its business process ethically. To some extent these option will help to increase the stock price of the company but it will be unable to perform its social responsibilities. Conclusion This case study deals with detail analysis of three options which will help TK to increase its stock price in an ethical way. As a CSR consultant of Halo I have advised my company to discuss option A in TK’s Annual General Meeting. Halo is holding huge amount of shares of TK. With the fall of TK’s share price the company is facing loss. Therefore TK needs to implement the most effective option which will help the company to increase its share price along with maintaining its ethical values and social responsibilities. References Henry, A. (2011). Understanding Strategic Management. New York: Oxford University Press. Kotler, P. and Keller. L.K. (2011). Marketing Management, Fourteenth Edition. New Jersey: Pearson Education, Inc. Neil, B. O. (2010). Acting as a business: strategies for success. New York: Random House LLC. Read More