This is a solution of International Environment Assignment in which we discuss Developing business
A lot of changes have taken place in the way business is conducted in today’s world. These changes can be seen in all the areas and functions of any business, starting from the nature and style of management to the motive behind operating a business.
The growing concerns against the negligent behavior of the businesses environment have resulted in several changes being introduced in the last fifty years. Apart from making profits, the businesses were expected to follow certain socially acceptable practices as well as they were expected to be held morally responsible and accountable for their actions with respect to the society, environment in which they operate and the overall well-being of all those involved with the business. This growing concern has resulted in what is known as business ethics in today’s business world.
Since the last three decades, businesses have addressed business ethics in different forms, like introduction of compliance programs and managers, development of codes of conducts and also by providing training on behavioral issues. However, despite all these efforts, the issue of ethics in business is still a matter of heavy debate and lots of studies are being conducted on the various issues associated with ethics in business.
Understanding business ethics can be a difficult task. The field is very diverse and covers a lot of issues like corporate governance, morality, reputation business management, fair laborpractices etc. In fact, business ethics addresses the entire scope of responsibilities that a company has to each of its stakeholders, and it is also about the process of management, the relationships between managers and the relationships between managers and other employees (Harrison, 2005:12). Further, the concept of business ethics incorporates the issues like corporate responsibility, social responsibility, corporate compliance etc.
The ethical issues in international business are:
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Triple Bottom Line
Organizations often think about how to serve their customers and society, but their focus on business have always been on the ‘bottom line’. Lately, a new observation to the bottom line has emerged to what is known as Triple Bottom Line.
If organizations want to achieve success, they should consider the Triple Bottom Line: economic, environmental and social which is also known as 3 Ps: Profit, Planet and People.
An effective CSR must reflect the configuration of these with the organization’s business strategy, values and sustainability.
“Corporate Social Responsibility (CSR) refers to good citizenship by the firm- i.e., its obligations to society, particularly when society is affected by the firms strategies and practices” (Verbeke,2009:383)
CSR assist businesses to be like good citizens, i.e. to contribute to society in a beneficial way, by avoiding any harm and ethically relating to their stakeholders, employees, suppliers and the entire community.
Carroll’s CSR Pyramid
The components of Carroll’s CSR pyramid are:
Roles of business in society
The Shareholder Model
As a business flourishes in a society, it needs to maintain a good relationship with its stakeholders. Employees, customers and suppliers are the most influential stake holders of a business with media, local residents, trade unions, government authorities having extensive range of impact on business. Analysis of a society from a stakeholder point of view often helps business strategy to determine risk and future opportunities.
The Shareholder Model
This model focuses on the idea that the main purpose of a business is to make profit for its owners thereby increasing the wealth of the shareholders.
This model believes that excessive legal regulations are not necessary while doing business in a society and that their attempt to maximize wealth, the society at large will also be befitted.
The incorporation of CSR in businesses is generally viewed as a positive object in many companies. Apart from the benefits of increase in company transparency, a positive consumer image of being a good corporate citizen, there are also certain disadvantages to CSR.
CSR activities differ among countries. What is seen common CSR activity in one country will not be seen as important and common in another country. The most common CSR activities that companies indulge in are:
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