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Bus 101 Principles of Responsible Business

  • Each answer is worth 25 marks (totalling 100 available marks).
  • Each of your FOUR answers should be between 400 to 500 typed words (excluding the reference list).

Q.1 “One way a large corporation might steal from society is by not meeting the conditions of its social contract.” Outline and discuss what the term social contract is and how it relates to the business model in 2022. 3

Reference list 4

Q.2 After Occupy, customers now recognise just how powerful their purchasing decisions can be in driving companies to do better.” Discuss to what extent this statement is an adequate reflection of the power of modern consumers. In your response outline the difference between consumer sovereignty and consumer dependence. 5

Reference list 6

Q.3 “Yet without continued consumer and government pressure, there is a risk that these corporate moves become nothing more than ethics‐washing.” Discuss to what extent you agree with this statement, given the existence of asymmetric information. 8

Reference list 9

Q.6 What is responsible leadership? Explain three ways in which leaders can lead businesses responsibly. 10

Reference list 11

Answers:

Q.1 “One way a large corporation might steal from society is by not meeting the conditions of its social contract.” Outline and discuss what the term social contract is and how it relates to the business model in 2022.

The quote represented in this question emerged with the concept of social contract which is the major point of debate in terms of the business model in 2022. The renowned philosophers coin the term social contract namely Thomas Hobbes and Jean-Jacques Rousseau. According to the philosophers, social contract has been defined as the policy or action developed by an organization or an individual to discontinue some freedoms in order to support the social benefit from the order of a society (Theconversation.com, 2022). According to the case study provided, social contract is defined by the well-maintained relation between an individual as well as the society to gain a mutual benefit. For example, it is observed that the COVID-19 situation and their severe impact on the private sector realm the collaboration of the state to attain financial support, which in term kept promises to return a value of social benefit. Social existence of an organization is encouraged by the moral principles by developing effective guidelines to the concerned organizational responsibilities. However, the question of stealing in the case of various corporations has been encouraged through maintaining ethics in terms of defining the issues of social contract. The approach of social contract and their relation to the business has been determined through the evaluation of business ethics incorporated with the issue of social contract. The context of value and principles in relation to the well-being of social factors has been mentioned through the business model, which requires to maintain the reliability of the rules and regulation developed by an organization.

The business model 2022 has been evaluated through the incorporation of personal and social responsibilities to determine the concept of relationship between stealing of corporations from society. The idea to steal from society by a corporation has been involved with the personal responsibilities of a business leader by arising a question of positive and negative consequences of their actions. However, corporate social responsibilities by adjusting with corporate steal has been mentioned from the social responsibility defined by an organizational ethics. The condition of business model 2022 has provided the idea of effective business strategy based on the wellbeing of society and positive return policy to the social construction as well as the environment.  Leading organizations such as Unilever, NatWest, and Hermes Investment have been incorporated with the B-Corp Movement to promote the idea “make business a force for good” (Theconversation.com, 2022). Ethics washing is another example involved with the area of describing the concept of “culture Fear” as a context of maintaining social contract. It is evident to understand that the concept of stealing from corporations has been majorly involved with the business model 2022 based on securing and understanding the importance of our future. Ethical and moral context have supported the evolution of the idea regarding social benefits.

 Reference list

Theconversation.com, 2022, Is it wrong to steal from large corporations? A philosopher debates the ethics, viewed on 03/11/2022 <https://theconversation.com/is-it-wrong-to-steal-from-large-corporations-a-philosopher-debates-the-ethics-182193>

Q.2 After Occupy, customers now recognise just how powerful their purchasing decisions can be in driving companies to do better.” Discuss to what extent this statement is an adequate reflection of the power of modern consumers. In your response outline the difference between consumer sovereignty and consumer dependence.

The process of business development and growth is directly associated with the actions defined by the consumers. The target group of population as the potential customer of a business is involved with the prospect of growth of the business in terms of purchasing pattern (Theconversation.com, 2022). The statement above is the reflection of power of a buyer in the case of explaining growth of a business. Companies across the world for a long time have been adopting the Dynamics of a customer-centric approach as a measure to improve their products in services. Companies are not doing this out of concern for their customers but because it acts as a medium of increasing sales which will increase the profit-making ability of the company. Satisfied customers are a great source of promotion for a brand or product considering the effectiveness of word-of-mouth promotion. A satisfied customer is also likely to repurchase the same commodity in bulk quantity for a long period (Yulius et al. 2022).

These factors motivate contemporary businesses to seriously consider customer demand, therefore, studying purchasing decisions of customers. Hence customers can derive power through their purchasing decisions indirectly or directly driving companies to do better with the aim of customer retention (Theconversation.com, 2022). Another source of power that customers derive is their ability to negotiate or bargain prices, especially in saturated or competitive markets. The presence of identical products indicates that every brand is replaceable which pushes them to reduce their prices. This again gives power to modern consumers. Even in monopolistic markets that has to be a buyer for the products or services that the Monopoly market is offering (Zhang and Zhang, 2022). There may not be competitors but buyers need to be present. Monopoly markets are fundamentally catering to a niche segment in the market which is again an example of the power of modern consumers.

The niche items are produced keeping in mind the demand and purchasing decisions of customers. Consumer Sovereignty is the condition within a market or economy where the requirements and Expectations of consumers are responsible for controlling the output of companies or producers (Wiryawan, 2022). It can also be referred to as the economic power that consumers enjoy through their preferences within a free market condition (Theconversation.com, 2022). However, at the same time consumers are also dependent on the value a company can offer to its customers as well as its advertising. This can be described as consumer dependence where purchasing decisions of modern consumers are somewhat driven by the advertisement and the potential value that companies offer. For instance, when a company launches a new product or new form of Technology it also develops an urge among its audience to buy it which is one way of influencing the purchasing power of modern consumers (Wiranudirja et al. 2022).

The line that is distinguishing consumer sovereignty from consumer depends is that the former empowers consumer decisions there for impacting the output of production while the latter does the reverse. It can be stated that both these elements coexist in the modern economy, influencing both purchasing power and output of production.

Reference list

Theconversation.com, 2022, Is it wrong to steal from large corporations? A philosopher debates the ethics, viewed on 03/11/2022 <https://theconversation.com/is-it-wrong-to-steal-from-large-corporations-a-philosopher-debates-the-ethics-182193>

Wiranudirja, O., Salim, U. and Indrctwati, N.K., 2022. The effect of social responsibility and managerial ability on firm valuemediated profitability. International Journal of Research in Business and Social Science, 11(6), pp. 116-126.

Wiryawan, I.W., 2022. The corporate social responsibility policy in the fulfillment of facilities for workers with disability. International Journal of Research in Business and Social Science, 11(1), pp. 340-349.

Yulius, K.S., Rudyanto, A. and Deasy, A.R., 2022. Redefining the Concept of Local Wisdom-Based CSR and Its Practice. Sustainability, 14(19), pp. 12069.

Zhang, Y. and Zhang, X., 2022. The Threshold Effect of Executive Compensation on Corporate Environmental Responsibility: Based on the Moderating Effect of Industry Competition. Sustainability, 14(14), pp. 8711.

Q.3 “Yet without continued consumer and government pressure, there is a risk that these corporate moves become nothing more than ethics‐washing.” Discuss to what extent you agree with this statement, given the existence of asymmetric information.

The statement related to ethics washing can be accurate and acceptable however it does to apply to every organisation. Brand image is a factor that is responsible for determining business growth and profit maximisation. Brand image is directly linked to the perceptions of consumers and their willingness to associate with the brand. One of the major factors influencing brand image is the maintenance of ethical standards which has been mentioned as ethics washing in this scenario. Ethics standards are implemented by the government which is further followed by organisations through their corporate social responsibility (Theconversation.com, 2022). For most organisations, corporate social responsibility is no longer a medium of developing welfare but has become a major component that contributes to their brand development and image (Thao and Velencei, 2018). Best on this analogy it can be agreed that in the absence of pressure from the government and consumers, the Corporation will shift to ethics washing instead of working for it.

The ethical practices carried out by a company are identified as its corporate social responsibility which involves various elements such as improved waste management, reduction of carbon footprint, employee welfare and contribution to the community. As understood from the weekly lectures and materials of the module the fundamental purpose of a business organisation or private corporation is profit-making. Business factors that do not allow the corporation to establish its economic responsibilities lead to the corporation declining to follow ethical standards, therefore, leading to ethics washing. Carroll’s CSR pyramid is a framework that identifies the various responsibilities of an organisation as part of its CSR (Kusyk, 2021). First, it includes the economic responsibilities of the business indicating that the priority of any business organisation must be profit-making and being profitable as it directly impacts employees and shareholders of the company. It is the foundation of a private organisation upon which the rest depends.

After achieving this aspect, the business moves on to fulfilling its legal responsibilities which are obeying the law and following the codifications provided by the government. This involves ethical responsibilities which are obligatory for fair practices. At last, philanthropic responsibilities require the Corporation to contribute to society and the community in order to become a good corporate citizen that can improve the quality of life of those directly or indirectly related to the business. Other than pressure from consumers government corporations will also resort to ethics washing when they are unable to accomplish their economic responsibilities. Nevertheless, some companies and corporations follow various sustainable development goals like Tesco and John Lewis (He et al. 2022). Tesco supports its staff and community extensively for example during the pandemic and the lockdown in the UK the company supplied its surplus items to communities that were struggling to survive. Similarly, John Lewis is the largest partnership-based Organisation in the UK and upholds its employee’s welfare. On the other hand, there are also companies like NatWest that emphasise social responsibility but later are caught in money laundering scandals (Theconversation.com, 2022).

Reference list

He, H., Zhang, Y. and Ding, Y., 2022. When Does CSR Fail to Incentive Employees’ Affective Organizational Commitment? Exploring the Moderating Effects Based on the C-S-R Concerns Model. Sustainability, 14(13), pp. 8115.

Kusyk, S., 2021. Carroll’s CSR Pyramid: An Empirical Investigation of SME CSR Orientation. Journal of Leadership, Accountability and Ethics, 18(4), pp. 100-115.

Thao, L.H.N. and Velencei, J., 2018. Literature review: the impact of corporate social responsibilty on firm performance. Management, Enterprise and Benchmarking in the 21st Century, , pp. 333-342.

Theconversation.com, 2022, Is it wrong to steal from large corporations? A philosopher debates the ethics, viewed on 03/11/2022 <https://theconversation.com/is-it-wrong-to-steal-from-large-corporations-a-philosopher-debates-the-ethics-182193>

Q.6 What is responsible leadership? Explain three ways in which leaders can lead businesses responsibly.

Responsible leadership includes the rules of ethics while achieving business goals. With responsible leadership corporations do not have to choose between ethical behaviour and economic responsibilities instead they can achieve both. Responsible leadership is a Theory that can distinguish between the relationships that corporations have with others and the responsibility it owes to others. Responsible leadership involves the external as well as internal organisation indicating its business environment from within and outside. Responsible leadership also involves the stakeholders of the Corporation (Ha and Nguyen, 2020). Unlike other forms of leadership, this theory is not limited to a relationship between leader and their followers. The approach embraced by responsible leadership is therefore more holistic and important in contemporary business organisations in order to fulfil the requirements of a social contract. The primary characteristic of responsible leaders is their responsible mindset and their ability to offer benefit to those around them. Responsible leaders are contributing to solution development which is essential for building a sustainable future for a company.

There are three ways through which a leader can drive a company responsibly. The first approach involves focusing on the organisation of subjects which require the stakeholders to take responsibility for. These matters include ethical decision-making, the development of trust and creating accountability. Responsible leadership is therefore able to create awareness of the importance of responsibility within an organisation. This makes every internal stakeholder take their role and duties more seriously while evaluating the outcome of their mistakes (Barić et al. 2021). This acts as a prevention mechanism for the stakeholders to repeat historic mistakes and make new ones as they understand the seriousness of their job role. The second way of leading businesses responsibly using the ethics-driven organisation of principles for conducting business practices and operations. This phenomenon can create a value-based culture across the organisation thereby developing a sense of unity and integrity among the stakeholders.

This is further responsible for increasing the levels of commitment and motivation among the internal stakeholders. The economic, as well as sustainable values of the corporation, can therefore be achieved ethically and responsibly. The third approach to leading an organisation responsibly is by motivating individuals to embrace effectiveness as a key performance indicator. This is a great promoter of corporate social responsibility hence improving the output of the organisation externally as well as internally (Ames et al. 2022). The stakeholders become more considerate towards each other and conduct their operations with more responsibility considering the impact it will have on those around them. It also promotes active citizenship further improving the ability of an organisation to conduct itself responsibly. Therefore, by following these three approaches leaders of a corporation will be able to achieve business objectives while giving back to the community.

Reference list

Ames, M.C.F.D.C., Serafim, M.C. and Martins, F.F., 2022. Analysis of Scales and Measures of Moral Virtues: A Systematic Review. Revista de Administração Contemporânea, 26(6), pp. 1-18,I,1A-18A.

Barić, A., Mislav Ante Omazić and Aleksić, A., 2021. Corporate Social Responsibility of Export Organizations: Relation between Strategy, Activities and Communication on Foreign Markets. Interdisciplinary Description of Complex Systems, 19(1), pp. 120-131.

Ha, N.T.L. and Nguyen, T.T., 2020. A PRELIMINARY STUDY ON CORPORATE SOCIAL RESPONSIBILITY AND BRAND REPUTATION OF FAST FOOD FIRMS IN VIETNAM. International Journal of Information, Business and Management, 12(4), pp. 9-17.

Theconversation.com, 2022, Is it wrong to steal from large corporations? A philosopher debates the ethics, viewed on 03/11/2022 <https://theconversation.com/is-it-wrong-to-steal-from-large-corporations-a-philosopher-debates-the-ethics-182193>

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