Good Business = Good Ethics
In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions have grown. Companies like Nike and Gap have received mass media attention and heavy criticisms for their use of child labor. Even food companies have faced a backlash over growing obesity (economist). As a result, corporate social responsibility (CSR) has increasingly been integrated into many firm’s business models. As a current or future leader of a company, you must understand that virtuous behavior and profits cannot only coexist in the business world, but can also allow firms to make a difference in the world, grow to new heights, and achieve consistent profits.
“Doing well by doing good” has become a fashionable mantra. In 2007, 95% of CEOs surveyed by McKinsey, a consulting company, said that society now has higher expectations of business taking on public responsibilities than it did five years ago (Franklin). In one year alone, 360 different CSR-related shareholder resolutions were filed on issues ranging anywhere from labor conditions to global warming. More government regulation has been imposed in recent years requiring transparency and even mandates social responsibility reporting (Porter, Kramer). These increased pressures exemplify the extent to which external stakeholders are seeking to hold companies accountable for social issues.
In response to societies strict expectations, $1 out of every $9 under professional management in America now involves an element of “socially responsible investment”. Many of these businesses have also started “embedding” CSR into the core of their operations and making it “part of the corporate DNA” so that it influences decisions across the company (Franklin). People respond positively towards companies who appear to be making sacrifices for the sake of the greater good and are even willing to pay more for their products. Firms have begun to...