Ethical Responsibility Environment - Report Example

Ethical responsibility Environment An Assignment Submitted by Fall Ethical responsibility Environment Introduction In the current business scenario, organizations’ success is being judged based not only on its profit figures, brand image, and market share, but whether they achieve it through ethical ways. To correctly frame and differentiate those ‘rights’ and ‘wrongs’, organizations formulate certain rules of conduct for its management and employees. When those rules are officially charted and aptly implemented, it constitutes business ethics. Burrow, ‎Kleindl & ‎Everard (2007, pg.41) defines ethics on those lines: “A collection of principles and rules that define right and wrong conduct for an organization is called business ethics. Any action that does not conform to these moral principles is unethical behavior”. Management’s leaders and the employees have to follow those rules in organizations’ internal and importantly in their external environment. In the external environment, organizations adopt business ethics to act responsibly towards the society and importantly natural environment. Earth is endowed with a resourceful and beneficial natural environment which is crucial for human existence. So, protecting and even replenishing natural environment is a paramount duty for not only people but also for the businesses. This is particularly applicable to the organizations which tap or utilize resources of natural environment for their raw materials and other manufacturing process. Apart from those organizations, even other types of organizations are ethically expected to do their part for the safeguarding of the environment. This ethical responsibility or inclination on the part of organizations to protect the environment also comes under Corporate Social Responsibility (CSR). So, the discussion will be about ethical responsibilities businesses have to the environment by case-studying two real companies. Background and theoretical perspective An organization’s every action is monitored by various players including its customers, governmental agencies, the mass media, customer protection groups, public, and so on. These players particularly monitor whether organization is functioning in an ethical manner in relation to the natural environment. If an organization functions in an environmentally destructive manner, it can be criticized and even punished. When that happens, an organization’s market share, image, and, profits can deteriorate leading to its failure. Considering this perspective, it is vital for an organization to take care of the environment including its key components of plants and animals. There is a common and at the same time ethical viewpoint that all living beings other than humans including animals and plants have to be respected and treated with care and dignity. An organization’s functioning can have impacts on animals and plants, when they operate in their habitat, when they expand and destroy their habitat, when they experimentally test products using them, and so on. Considering these situations, organization need to follow certain strong ethical guidelines, so it can carry on with their operations without harming animals and plants. Animals feel pain as they have a central nervous system. On the other hand, plants are also scientifically shown to experience pain. Because of this perspective, organizations, as part of ethical responsibility, have to come up with business decisions that avoid or even minimize pain for the animals and plants. In addition, animals have the cognitive capacity to possess and lead a conscious life of their own. This view implies to the organizations that they have an ethical duty “not to treat these animals as mere objects and means to their own ends” (Hartman, DesJardins & MacDonald, 2014, p.483). In addition, plants have also shown an “interest in remaining alive” and so they deserve moral consideration from the businesses for the organizations’ own ethical sake (Velasquez, 2001, p.213). This perspective of valuing and ethically treating environment and its components is in line with the stakeholder theory. The Stakeholder theory states that the purpose of any organization is to create value and benefits for all its stakeholders. So, according to Hartman, DesJardins and MacDonald (2014), focusing on all stakeholders without avoiding anyone brings in the ethical component. Organization can be ethical and successful if it involves and fulfill the goals and necessities of all its stakeholders including its owners, shareholders, employees, customers, governmental bodies, activists groups, even competitors, and importantly the natural environments. This is in contrast to the shareholder theory, which states that only the owners and the shareholders or stockholders are crucial for the organization and so their interests have to be given prominence. In the case of stakeholder theory, apart from the normative or legitimate stakeholders like owners, employees, and others, even the derivative stakeholders like the competitors, governmental agencies, activist groups, and environment are also considered because they “may exert either a beneficial or harmful influence on it” (Philips, 2004). This implies that according to the stakeholder theory, all stakeholders particularly environment have to be taken care thereby facilitating organizations to functioning ethically Businesses’ impacts on the Environment Starting from the early centuries to the middle of the 20th century, businesses in many sectors have carried out its operations that in a way destructed the natural environment, contaminated the natural resources, and many more. “Most large corporations developed in an era of abundant raw materials, cheap energy, and unconstrained waste disposal. But many of the technologies developed during this era are contributing to the destruction of ecosystems” (Bateman & Snell, 2008, pg. 215). Because of this destructive nature of the businesses, public became environmentally aware and raised objections to it. The governments in response came up with laws and regulations to protect the environment from the businesses. “In the later part of the 20th century, awareness of the damage has led society to bring pressure to bear on government to enact regulations requiring businesses to protect delicate natural resources” (Oster, n. d). So, it became necessary for the businesses to comply with those environment protection laws and regulations and accordingly carry out their operations without causing damages to the environment and its components. Catalysts for companies to exhibit their Ethical Responsibility Although, organizations follow these laws, there are occasions they might miss following it and importantly they might follow it in a superficial manner for the sake of it. Organizations tend to do that because they see ethical responsibilities in environmental issues as a no-win situation for them. Organizational leaders could think that if they protect the environment, they can hurt their business in the process, or if they develop their business, they can affect the environment. However, this perspective is undergoing major changes with the emergence of a new paradigm, under which organization are incorporating ethical environmental values into every aspect of the functioning and importantly as a competitive strategy. That is, in the current times, environmentally aware customers, general public, social activist groups, and media are particularly focusing on whether an organization is manufacturing their product or offering their service in an environmental friendly manner. With the customers themselves favoring companies that exhibit ethical responsibility towards the environment, companies are voluntarily becoming ethically correct. In addition, companies that operate in an ethical manner towards the environment are seeing their ethical and thereby their brand image getting optimized, which in a way improves their competitive advantage over their competitors. “Companies “go green” to satisfy consumer demand, to react to a competitor’s actions, to meet requests from customers or suppliers, to comply with guidelines, and to create competitive advantage” (Bateman & Snell, 2008, pg. 216). Strategies by directly impacting companies to exhibit their ethical responsibility As mentioned above, organization can be categorized under two types based on how their operations can have an environmental impact. That is, there are organizations which operate in the natural environment like the mining companies, oil and gas companies, and many more, which have a direct impact on the environment. The second type of companies does not operate in the natural environment per se like electronic companies, IT companies, and many more, but can have an indirect impact on the environment. As far as the companies that makes direct impact is concerned, it is paramount on their part to first do environmental feasibility study beforehand at the location where they are planning to establish a facility or launch ground operations. Even during their feasibility study, if it is found that their functioning can affect the environment maximally, they should consider withdrawing (Shen, Tam, Tam & Ji, 2010). However, if they find that environmental impacts can be kept at minimal levels and can be managed with apt and effective strategies, organizations can go ahead by having strong plan about those strategies. Those effective strategies to safeguard the environment have to be carried out not only before the establishment of facility or operations, but importantly during their functioning and even after their exit in some cases. In addition, companies have to follow all the government regulations regarding environmental protection completely, without finding any shortcuts or operating through corrupt means (Hosmer, 2010). So, if an organization exhibits all these ethical responsibilities in relation to its operating natural environment, then it not only carry out their functioning smoothly without any major problems but can also garner benefits. Case-Studying Anglo American This perspective can be analyzed by case-studying Anglo American, which is regarded as one of the world’s foremost mining companies with extensive operations in Africa. It carries out activities in minerals mining and agriculture. It is exhibiting optimal ethical behavior because both these activities of the company are highly interlinked with people’s habitation and natural environment. “Anglo American has to deal with many different levels of interest when setting up a new project. This includes, for example, the owners of the land and the people and services in the area” (“Anglo American,” n.d). To act ethically, Anglo American has formulated certain codes of conduct and that ethics code is called ‘Good Citizenship’. This code states that Anglo American has to carry out its mining operations without causing any damages to local population and surrounding environment. Importantly, Anglo American has imbibed in its ethical code that it can mine and develop areas only after getting the consent of local communities. It is worthy to note that ethical behavior entails certain costs. However, those costs will be minimal when compared to the benefits an organization can gain. On those lines, Anglo American acts ethically when it establishes new mines and in the process “clears” the environment. As this “clearing” could cause controversies and bad reputation to the company, Anglo American has been carrying out it effectively with the sanction of respective governments. By spending on these “clearing” and resettling processes, Anglo American can demonstrate a more caring and sustainable perspective and thereby gain a strong competitive advantage and differentiation over its rival mining companies. In addition, it makes the company “the partner of choice for many governments and communities in the developing world” (“Anglo American,” n.d). This ethical act also elevates Anglo American’s image in the stock market, which indirectly elicits more investments for it. In addition, Anglo American as part of ethical responsibility has developed a Socio-Economic Assessment Toolbox or SEAT process. This toolbox helps it to better understand the perspectives and priorities of external groups like the communities, environmental groups, and others, who may be affected by its activities and thereby incorporate those perspectives during their decision-making. “It also helps to improve a mine’s contribution to development through, for example, using its supply chain needs to generate new businesses or to improve the water or electricity infrastructure” (“Anglo American,” n.d). So, it is possible to state that Anglo American, despite facing controversies, have been exhibiting ethical responsibility in its operations in natural environment. Strategies by indirectly impacting companies to exhibit ethical responsibility When it comes to the second type of companies which make in-direct impact on the environment, they can show their ethical responsibility to the environment by acting in a sustainable manner. Sustainability refers to the ability of organizations to act in a healthy, environmental friendly and thereby ethical manner, so it not only avoids contributing to negative environmental impacts but also positively impacts the environment. That is, as part of sustainability, organizations have to carry out steps in energy efficiency, generation of renewable energy, pollution control, and renewable control (Lubin & Esty, 2010). Many organizations are carrying out these sustainable actions in order to exhibit their ethical responsibility to the environment. For example, web search giant Google is implementing a three-pronged strategy with the intention to reduce its “carbon footprint”, which refers to the output of carbon dioxide and other greenhouse gases. Inside Google’s offices and other facilities, environment affecting gases are mainly emitted because of electricity consumption by the facility and by the computers used there. So, Google is implementing strategies to make its facilities and its computers more energy-efficient. In that direction, it is using energy-efficiency lighting options and by installing power management software in its servers, computers, and other hardwares (Naumann, Dick, Kern & Johann, 2011). Google is also practicing one of the key sustainable actions, which is generating electricity through renewable sources such as solar power. It has installed a large solar power system at its facility in Mountain View, California. Conclusion Based on the above analysis, it is possible to state that organizations operating in any sector have to exhibit their ethical responsibility to the environment not only to function smoothly without problems, but also to garner number of benefits. It is common and ethical viewpoint that nature and its components have to be treated in a humane manner and that is particularly applicable to businesses. Companies in line with the stakeholder theory have to not only take care of the interests of their shareholders, customers, and so on, but also protect and even replenish the environment. When companies exhibit ethical responsibility, it can retain its customer base, entice new or prospective customers, enhance their brand image, optimize their competitive advantage, and so on. Companies that directly operate in natural environment like Anglo American are carrying out number of constructive actions as part of their ethical responsibility to protect the environment. On the other hand, companies like Google also carry out certain sustainable actions to positively impact the environment. However, the fact is that organizations have to exhibit this ethical responsibility in a long-term manner without doing it with short-term gains, then only they can operate ethically and successfully in apt complementation with the environment. References Anglo American. (n.d). In The Times 100. Retrieved from: http://www.thetimes100.co.uk/new-downloads-pop.php?getFile=YW5nbG9fYW1lcmljYW4vYW5nbG9fYW1lcmljYW5fMTNfZnVsbC5wZGY= Bateman, T. S & Snell, S. A. (2008). Management. New York: McGraw-Hill Burrow, ‎J., Kleindl, B & ‎Everard, K. E. (2007). Business principles and management. London: Business Principles and Management Hartman, L. P., DesJardins, J & MacDonald, C. (2014). Business ethics: decision | making for personal integrity & social responsibility (3rd ed.). New York: McGraw-Hill Irwin. Hosmer, L. R. (2010). The ethics of management. 7th ed. McGraw-Hill/Irwin. Naumann, S., Dick, M., Kern, E & Johann, T. (2011). The Greensoft model: A reference model for green and sustainable software and its engineering. Sustainable Computing: Informatics and Systems 1 (4), 294–304 Oster, K. V. (n. d). Environmental Business Ethics. Retrieved from http://smallbusiness.chron.com/environmental-business-ethics-64692.html Philips, R. (2004, March/April). Some key questions about stakeholder theory. Ivey Business Journal. Retrieved from http://iveybusinessjournal.com/topics/the- workplace/some-key-questions-about-stakeholder- theory#.VEuTv2eruKw Shen, L., Tam, V. W. Y, Tam, L & Ji, Y. (2010). Project feasibility study: the key to successful implementation of sustainable and socially responsible construction management practice. Journal of Cleaner Production 18 (3), 254–259 Velasquez, M. G. (2001). Ethics and the environment. In A. R. Malachowski (Eds.), Business ethics: critical perspectives on business and management (pp.191- 247). New York: Routledge Read More