Corporate citizenship is defined as a contract between business and society. Furthermore, this means aligning profitable companies with healthy communities. Because what happens to societies happens to the business. And this we know from current affairs in the world.
What does corporate citizenship include?
This contract includes taking responsibility for the impact of activities on stakeholders and the environment. Secondly, it goes beyond legal obligations. This is to say that it makes sure that the company is taking voluntary steps to improve quality of life. Four main principles of corporate citizenship:
- Minimize harm/negative consequences
- Maximize benefit
- Be accountable and responsive to key stakeholders
- Support strong financial results
This topic covers three broad issues. Namely, ethics, sustainability, and social responsibility. Ethics is a set of values and rules that define right and wrong behaviour. Furthermore, moral principles describe acceptable behaviour. Social responsibility is a duty. This means that one makes decisions that promote the welfare of stakeholders and society. Lastly, sustainability takes into account societal and environmental concerns. While in the same vein, progressing economically.
Importance of Ethics and Social Responsibility
Businesses should be led by more than economic interests. Certainly, personal and societal values should guide actions. As a result of increased global competitiveness, businesses should be in step with societal expectations. When the needs of society change, the business should change.
In addition, employees and customers are more attracted to businesses with high ethical values. This means that they are protecting society. Therefore, it is better to forsake short-term profits for the long-term goodwill of society. Moreover, adherence to ethical standards can be an important source of competitive advantage. THis means that it will attract investors. And more importantly, improve staff morale.
Forces shaping ethical conduct in corporate citizenship
There are many different forces that shape one’s conduct. And the origin of ethics is unique to each person. But generally, there are four main sources. Namely, societal norms and culture. This is the behaviour that is reflected in the values and beliefs of team members. For example, it can be an anti-smoking campaign. Secondly, the laws and regulations. In other words, society’s values and standards. For instance, BBBEE legislation.
Thirdly, organisational practices and culture. This enforces that top management behaviour shows what the ethical principles are. For example, the way they give feedback and communicate. In addition, the policy statements and type of reward system. And lastly, individual perspectives. That is to say that each person has their own value system. What they believe is right and wrong. For example, showing respect and doing your duty.
Approaches to ethical judgments
There are a few ways ethical behaviours are judged. In this article, only three will be discussed. Firstly, the utilitarian model. This focuses on actions and behaviour. It does not focus on motives. Furthermore, this model argues that when making a decision, you must choose the option that benefits the greatest number of people. For instance, achieving organisational goals. This means you growing your people and with that, achieving goals. Secondly, is the moral rights model. This model suggests that decisions are made through consistency of fundamental rights. Therefore, being in accordance with life, safety, freedom of speech.
Lastly, the justice model. This means decisions are made based on how equitable and fair it is. Meaning, individuals should not be treated differently on basis of characteristics (e.g. race, gender; HIV status). Furthermore, with justice, one must include fairness. And lastly, the justice model supports the natural duty principle. This means taking part in universal principles. Such as helping those in need. And not harming other people.
Organisational practices that support ethics
- Legal protection, policies and practices to protect whistle-blowers
- Signal importance of ethics in vision and values
- Appoint designated ethics officer and ethics committee
- Use integrity tests when screening applicants
- Ethics hot-line
- Strict disciplinary procedures
- Written code of ethics
- Emphasise importance of ethics in training programmes
- Conduct ethical audits
- Communicate ethical standards using all possible channels