The Importance of Reputation in Modern Business
Ethics and social responsibility are aspects that have been seen as the supporters and boosters of organisational performance. The article has made a conclusion by stating that the ethics of a company have an effect on the performance of the company. However, the pressure has been associated with the external factors. With the use of some examples of organisations that have been involved in scandals, the article has tried to look into some of the negative factors that come along with the violation of business ethics by some organisations. The article supports the use of ethics and social responsibility in the global business environment.
The reputation of any given organisation is essential to its success in the business world. It is essential to note that the customers in the modern market are not only concerned with the products and services that are introduced in the market but they are also concerned about the ethics of the organisation that is presenting the products and services in the market (Kolk, 2016). The article supports the use of ethics and social responsibility in the modern business environment from different perspectives. The first perspective is through associating the negative results that come with the violation of the ethics and the positive results that come with the implementation of ethics and social responsibility in an organisation (Singhapakdi, Rallapalli, Kraft, & Vitell, 2015). When an article highlights different disadvantages in engaging with some behaviors, it is evident that the article supports the use of such behaviors.
The emphasis on the positive outcomes of social responsibility and ethics use in an organisation is an indication that the article comes to the full support of the use of ethics and social responsibilities. In the modern business world, ethics have been taken seriously by both organisations and customers (Vitell, 2015). The organisations have used ethics to make sure that their reputation is not tarnished. The link between ethics and reputation is evident from the perspective of believing in good (Sinnicks, 2014). The customers of many organisations have trust and believe that their organisations should have a good reputation. The aspect is promoted by the psychology of supporting the good and shunning down the evil. It is apparent that if the article did not support the use of ethics and social responsibility, it would not have emphasised on the adverse effects of violating the ethics of a company and failing to engage in social responsibility initiatives.
The article has supported the use of ethics and social responsibility by connecting the external environment and the ethics of a company. The external environment of a global business cannot be separated from the business functions and operations (Chun, Shin, Choi, & Kim, 2013). Customers are some of the essential stakeholders in any given business. Their attitude and reaction to different issues in organisations are essential and affect the performance of an organisation. For example, when the customers feel that an organisation does not do anything to make the community better, they might be convinced to purchase from another company. As a result, they affect the performance of an organisation. There are different types of performance in an organization, and each of them is essential. The internal performance of an organisation is associated with the operations. The external performance of an organisation is associated with the image that a company creates on the people. The examples that the article has used have demonstrated that the external performance of an organisation that does not engage in social responsibility or violates the ethics of the company has proven that ethical organisations perform better as opposed to non-ethical organisations (Vitell, 2015). Therefore, without fear of doubt, it is apparent that the article promotes the need for organisations to uphold high ethical standards and to be engaged in social responsibility initiates.
The Relationship between Ethics and External Environment
The relationship between an organisation and the customers is limited when an organisation fails to promote social responsibility and ethics. With the help of examples from different organisations, the article has tried to demonstrate the effects of failing to uphold ethics. Organizations that are more dedicated to maintaining a high level of ethics find themselves in the best position when it comes to their relationship with the customers (Ferrell, Harrison, Ferrell, & Hair, 2018). To add on the examples that have been provided by the article, it would be essential to look into other real-life examples from the business world. Volkswagen is one of the biggest manufacturers of cars in the world. The company has kept a clean reputation for many years until it faced the cheating scandal (Setó-Pamies & Papaoikonomou, 2016). Volkswagen management engaged in an action that lead to the installation of a cheating software in its cars and that backfired leaving the company with a tarnished image. The effects of the action led to reduced sales and also affected the relationship between some of the customers.
The article has also created a link or a relationship between ethics and the performance of the employees. Ethics in an organisation have been termed as essential drivers of good performance. The article states that the people who are engaged in misconducts are the same people who are engaged in the operations of a company. Therefore, they cannot be alienated from the effects of ethical standards (Quarshie, Salmi, & Leuschner, 2016). The case of Volkswagen can support the argument of the article. The performance of an organisation is not only looked from the perspective of units’ production, but it is also looked from the perspective of the quality of production. In Volkswagen, the failure to uphold the ethics of the company affected the performance from the perspective of quality (Vitell, 2015). The management that violated the ethics came to violate the quality by installing cheating software. When the article links ethics and the performance of an organisation, it is trying to show that upholding ethics in the global business world is likely to go a long way in making sure that a company promotes a good relationship with the customers (Reyes, Kim, & Weaver, 2016). At the same time, the focus on the negative aspects of violating ethical standards shows that the article advocates for the use of ethics and social responsibility in the modern business world.
Corporate social responsibility and ethics have been seen as ways that promote business and therefore it is evident that the article has supported their implementation. The article looks at some of the essential factors that come to affect the relationship between a customer and the organisation. Customers are not only interested in buying, but they also like being associated with the organisations they purchase from (Beltramini, 2016). It is for this reason that some customers would rather buy a product at a higher price from an organisation with a good reputation rather than buy a product at a relatively lower price from an organisation that has a bad reputation. Upholding the ethics of an organisation is seen as the way of an organisation demonstrating that it is committed to ethical standards and that proves that it can be committed to meeting the needs of the customers (Ogbari, Oke, Ibukunoluwa, Ajagbe, & Ologbo, 2016). The interest to serve customers is seen in the engagement of the different functions that are supposed to meet the needs of the customers. It is apparent that the internal functions cannot be alienated from organisational operations (Vitell, 2015). Considering that the same organisation that engages in the internal function is the same organisation that delivers services to the customers, it is apparent that if the organisation does not engage in corporate social responsibility, it has no greater interest to giving back to the community.
Ethics and Employee Performance
When an organisation creates a gap between the organisation and the members of the society, the members of the society who might be among the customers might choose to purchase from other organizations. Social responsibility is termed as the essential tool that comes in place to make sure that the gap is closed (Chell, Spence, Perrini, & Harris, 2016). It is therefore apparent that social responsibility is an essential tool in creating a link between an organisation and the customers. On the other hand, customers are attracted to organisations that demonstrate their need to be part and parcel of an initiative. For example, when organisations come up with initiatives of giving back to the society, they get support from their customers. The aspect of the customers coming to the rescue of the needy through the organisation is an indication of how social responsibility can affect the performance of an organisation. The performance of an organisation is not only affected by the internal factors but it is also affected by the external factors, and the satisfaction of the customers is one of the factors. Therefore, because the social responsibility aspect has been termed as a motivator of a good relationship between an organisation and the customers, it is apparent that the article has supported the use of ethics and social responsibility in the modern world of business (Vitell, 2015). When something is focused on from a positive perspective, it is evident that the main aim is to show its significance.
Managers have an essential role to play in making sure that an organisation observes all ethical standards. It is the obligation of the managers to therefore make sure that social responsibility and ethics in an organisation are observed by every employee and the management. When the managers take the initiative into their hands, they promote ethical behaviours and this is because they are seen as mentors by most of the employees (Chell et al. 2016). Therefore, the managers in the global business platform are the backbone of promoting ethics and social responsibility in an organisation. Their essential role is to draft the best code of ethics and make sure that it is implemented to the letter.
References
Beltramini, R. F. (2016). What do students think of business ethics? Three decades of research. Persuasion Ethics Today, 280-285.
Chell, E., Spence, L. J., Perrini, F., & Harris, J. D. (2016). Social entrepreneurship and business ethics: Does social equal ethical? Journal of business ethics, 133(4), 619-625.
Chun, J. S., Shin, Y., Choi, J.N., & Kim, M.S. (2013). How does corporate ethics contribute to firm financial performance? Journal of Management, 39(4), 853-877. Doi: 10.1177/0149206311419662
Ferrell, O. C., Harrison, D. E., Ferrell, L., & Hair, J. F. (2018). Business ethics, corporate social responsibility, and brand attitudes: An exploratory study. Journal of Business Research, 1(32), 13-23
Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), 23 34.
Ogbari, M. E., Oke, A. O., Ibukunoluwa, A. A., Ajagbe, M. A., & Ologbo, A. C. (2016). Entrepreneurship and business ethics: Implications on corporate performance. International Journal of Economics and Financial Issues, 6(3S), 50-58.
Quarshie, A. M., Salmi, A., & Leuschner, R. (2016). Sustainability and corporate social responsibility in supply chains: The state of research in supply chain management and business ethics journals. Journal of Purchasing and Supply Management, 22(2), 82-97.
Reyes, I. G., Kim, W. T., & Weaver, G. (2016). Teaching ethics in business schools: A conversation on disciplinary differences, academic provincialism, and the case for integrated pedagogy. Acad manag learn edu. doi, 10.
Setó-Pamies, D., & Papaoikonomou, E. (2016). A multi-level perspective for the integration of ethics, corporate social responsibility and sustainability (ECSRS) in management education. Journal of Business Ethics, 136(3), 523-538.
Singhapakdi, A., Rallapalli, K. C., Kraft, K. L., & Vitell, S. J. (2015). The Perceived Role of Ethics and Social Responsibility: A Scale Development. In Proceedings of the 1994 Academy of Marketing Science (AMS) Annual Conference (pp. 328-328). Springer, Cham.
Sinnicks, M. (2014). Practices, governance, and politics: Applying MacIntyre’s ethics to business. Business Ethics Quarterly, 24(2), 229-249.
Vitell, S. J. (2015). A case for consumer social responsibility (CnSR): Including a selected review of consumer ethics/social responsibility research. Journal of Business Ethics, 130(4), 767-774.
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