Knowledge Area Module (KAM) I



Global Ethical Corporate Citizenship and the Future Strategies for Success

Bruce M. Kastner

MGMT560PA – Ethics in the Global Marketplace

August 18, 2013

Arthur Smith

Southwestern College Professional Studies

Abstract

This paper contains a discussion concerning the role of global ethical corporate citizenship. Specifically the identification, description, analysis, and evaluation of best practices and strategies for success in the following areas; global ethical leadership and organizational conduct, corporate socially responsible conduct, environmentally sustainable conduct, implementing and applying the triple bottom line, as well as a summation of what knowledge has been gained from research, and its importance and relevance to achieving global ethical corporate citizenship both now and in the future. The collective research concludes that these areas can become internalized ideals that can be acted upon to positively effect ethical corporate citizenship.

Global Ethical Corporate Citizenship and the Future Strategies for Success

There is a felt need for ethical action in the world today. The news headlines depict a changing world where not everyone is acting responsibly. Child labor concerns, environmental hazards, insider stock trading, and corporate practices that undermine federal efforts are all examples of current events that relate to the ethical discussions taking place around the dinner table. With so many things going wrong, what could be going right?

There are many examples around the world of organizations working towards ethical corporate citizenship. Organizations such as Virgin Unite connect people and ideas to make positive change happen in the world (Virgin Unite Mission, 2013). Then, there are automotive manufacturers like the Toyota Motor Corporation that lists seven guiding principles tying directly into their modus of operandi for ethical actions by employees (Toyota Motor Corporation, 2006). Another positive example of good corporate citizenship is Goodwill Industries International who “enhances the dignity and quality of life of individuals and families by strengthening communities, eliminating barriers to opportunity, and helping people in need reach their full potential through learning and the power of work”(Goodwill Industries International, 2013 p.1). These are only a few of the many global organizations around the world that strive for global ethical corporate citizenship. This citizenship begins with leadership effecting organizational conduct.

Success in Global Ethical Leadership and Organizational Conduct

Being successful in the world is a high achievement. However, being successful through ethical leadership that influences organizational conduct is an achievement for all stakeholders. The proposition of a win-win situation can only come to fruition if ethical consideration is given to everyone’s position. [Any aspiration for sustainable economic growth must start from the recognition of the need for the sustainable use of resources] (Ekins, 2011). Toyota Motor Corporation is a company that strives to meet that very intent. One of the goals of the organization is to create a car that goes around the world on a single tank of fuel, never pollutes, and is affordable to everyone. This is a lofty goal and may never become reality, but it sets the stage for the way the company thinks about their responsibility to shareholders today and in the future.

Global Ethical Leadership and Organizational Conduct begins with a single person who is able to lead the rest of the organization to a way of thought that drives ethical actions. When this occurs, the ensuing perspective begins to permeate through both ends of the company. Suppliers and customers alike begin to recognize the benefits of ethical responsibility. The acceptance of high standards quickly becomes the only acceptable norm creating a benchmark for others to emulate. Global ethical corporate leadership is required to ensure fair, just, and unconditional consideration is given to all stakeholders around the world.

Organizational conduct is specifically rated by the actions of people. Since an organization is inanimate, there must be people at the helm making the daily decisions to guide the organization as a whole. These decisions should be derived with the ultimate respect for all stakeholders by acting in an ethical manner. Leadership has the ability to steer an organization by providing clear, understandable, and actionable guidance for employees. When employees know and understand what is expected, they typically strive to meet the standard. When the standards are set high, people will react with even higher motivation and appreciation for their own performance.

Success in Corporate Socially Responsible Conduct

Corporate social responsibility (CSR) is another slice in the ethical relationship pie. The social aspect of society is growing at a rapid rate. Information travels at the speed of light and can be transmitted to millions, or even billions of people all at once without regard to location. Because of this technological innovation, organizations have expended large quantities of resources in order to promote their efforts towards an ethical society. There is an argument that not all contributions towards CSR are done with honorable intent (Pavitt, 2012). When companies seek to use CSR as a profit-making tool, the effort may become misrepresented (McDaniel & Malone, 2012). Because of this, it is important for consumers to understand the real value in the organizations efforts (Maltz, Thompson, & Ringold, 2011).

One organization that demonstrates great value in regards to CSR is JCPenny. This organization has served stakeholders well in regards to internal and external CSR efforts. This company prides itself on transparency of programs that manage people, product waste streams, environmental concerns, and energy conservation. Additionally, it shares this thought process with employees while exhibiting the behaviors of positive CSR. They company has high regard for employee health, safety, and work environments. Outside the corporate walls, they have numerous charitable contributions to showcase as exhibited by their JCPenny after school round up program that aids children of all ages. The sense of community provided by JCPenny creates value that stakeholders can relate to.

Research has indicated that when employees have a positive perception through transparency of programs, high levels of value are benefited as well (Changchutoe, 2011). When organizations share their ideas with their employees and with other organizations, a powerful set of rational skills can begin to flourish. These skills affect decision-making for workers. Workers may then form a basis for which to relate their own ethical thought processes in order to promote further corporate social responsibility through new innovative ideas never realized before because of business practices being shrouded in secrecy. Open communication can spontaneously erupt into positive social responsibility.

Success in Environmentally Sustainable Conduct

The active environmentalist grows within each child as they lay witness to polluted streams and airways. Children today are taught the benefits of being environmentally conscious so that future generations may benefit from their care for the environmental surroundings. Environmentally sustainable conduct is the base for this action. An increasingly important element in the failure or success of much broader efforts towards environmental sustainability is the rapid acceleration of urbanization (Pearsall & Pierce, 2010, p. 569). New laws are being developed by politicians to combat these issues. There are however businesses such as the soy bean industry that have taken matters into their own hands by providing self regulatory practices to promote environmental stability around the world.

U.S. soy organizations around the world purchase soybeans that are grown with the utmost respect for the land and its people (U.S. Soy Organizations Demonstrate Commitment to Sustainability With Assurance Protocol, 2013). To provide assurances to stakeholders, the U.S. soy industry has put a “Soybean Sustainability Protocol” in place to regulate itself without governmental constraints levied upon them. The protocol regulates processes and management practices to reassure international customers that soybeans are produced, harvested, packaged, and shipped with the environmental considerations at the forefront of their operations. This protocol is a certified approach that is audited by a third party to add viability to the program (U.S. Soy Organizations Demonstrate Commitment to Sustainability With Assurance Protocol, 2013). Current needs must be met without compromising the ability of future generations to meet the needs of their time (Schulte, McKernan, Heidel, Okun, Dotson, Lentz, Branche, 2013 p.1).

The future of environmental sustainability depends on how the planet is treated today. Steps must be taken to overcome mistakes from the past, often done in ignorance but sometimes in spite. Never the less, everyone has a responsibility to do the ethically correct thing to preserve the planet and its inhabitants.

Success in Implementing and Applying the Triple Bottom Line

The triple bottom line (TBL) relates to three key areas. First, is the economic performance, second, the social performance, and third is the environmental performance. These three principles comprise the ethical considerations that should be made when deciding a course of action. This idea does not insist that one of the elements are more important than the others. In fact, it suggests that they are all weighed equally so organizations can use them as a guide to promote positive global ethical corporate citizenship. In fact, it is an essential part of organizations Balanced Scorecard when looking for efficient and efficient organizations.

The Balanced Scorecard is a tool used by organizations to measure performance across linked perspectives that derive from their mission, vision, and strategy. Every organization should have a stated purpose that meets their customer demands both now, and in the future. The Balanced Scorecard will help an organization align every level of hierarchy from factory worker to customer so they are working as a harmonious team to accomplish organizational goals. This collection of performance measures ties directly into the TBL.

A company that practices the TBL is First Solar. First Solar is the leading global provider of comprehensive photovoltaic solar energy solutions. With vertically integrated capabilities improving every aspect of the solar value chain, First Solar delivers power plant solutions that maximize value and mitigate risk for customers worldwide. First Solar’s mission is to create enduring value by enabling a world powered by clean, affordable solar electricity. By providing an economically attractive alternative to fossil-fuel electricity generation today, First Solar is integrating solar power into the global energy mix (First Solar 2013). The vision at First Solar is clear, a world powered by clean, affordable energy. Its strategy to propel this vision is to target homes and businesses that have limited space such as rooftops, to produce solar energy (Fahey 2013). This is an organization that has linked itself to the economic, social, and environmental performance for the triple bottom line.

Summary of Knowledge Gained

The review and summation of; the identification, description, analysis, and evaluation of best practices and strategies for success in global ethical leadership and organizational conduct, corporate socially responsible conduct, environmentally sustainable conduct, implementation and application of the triple bottom line and the cumulative importance and relevance to achieving global ethical corporate citizenship both now and in the future have lead to a deep appreciation for details that may have been otherwise overlooked. Having an ethical framework is important for everyone. Parents include ethical lessons into the upbringing of their children whether they realizer it or not. It is inherent in the daily interactions of human beings. Everyone is a corporate citizen and should take the obligation seriously.

Contributions to ethical behavior are the responsibility of everyone capable of performing such acts. Capability in this context refers to those able, regardless of will. Leaders have emerged throughout the world as exhibited by the examples contained in this paper. What everyone needs to recognize is that it all starts with one “able” person. Ethical decisions lead to ethical actions. Ethical action by one person influences ethical action by many. The more people that come under positive influence the faster the ideas and actions spread across the globe.

The thought that corporations are capable of acting in unethical manners eludes some scholars. In fact, the argument can be made that corporations are comprised of people. Only people can be ethical or unethical. After all, it is these people who make the organization hum along in the global economy. The people of the organization have the responsibility to take ethical action. The action can come in many different forms, CSR, environmental sustainability, or the triple bottom line; all these concepts feed into global ethical corporate citizenship and the strategies for success. Remember, it all starts with each and every person on this planet!

Conclusion

These core concepts can be learned and internalized within. By internalizing an ethical basis upon which to derive our decisions and ultimately forge our actions, it becomes simple to build a foundation for others to follow and increase upon. When a solid base is used to form decisions the world become smaller in a sense. Suddenly, the ability to positively affect thousands upon thousands does not seem too far-fetched. This idea can be related to the concept of the website, “LinkedIn”. With only a few personal contacts, hundreds of thousand of ideas can be shared. Ethical behavior is no different in this respect. The entire planet can be consumed by it, but it all starts with the decision and actions of one person. The call to act is upon everyone, everyday.

References

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