Principles of Responsible Commerce

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Most businesses operate to make profit in the society. Apart from the profit-making objective, businesses should ensure that their operations bring positive changes in the society. The positive changes can be through job creation and Corporate Social Responsibility (CSR).

The latter does not exclude non-corporate businesses since any act on the environment affect all businesses irrespective of size (Supporting Corporate Social Responsibility 2012).

A business that creates wealth, offer products that satisfy the needs of customers and employs members of a society is dubbed a responsible business. Moreover, a responsible business strives to uphold the principle of equity and fairness to its entire stakeholders and the local community in general.

The essay will analyze the principles of responsible commerce in light to the utilitarianism theory and the learning trend that I have experienced in this course. In addition, the essay will analyse the Hewlett Packard Case Study and compare it to the theory of utilitarianism in an ethical dimension.

In CSR, businesses have to align their objectives with the societal requirements. For example, businesses can engage in ethical practices through participating in environmental protection in the community, which they operate.

Companies always engage in CSR as an ethical practice and not a legal requirement (Supporting Corporate Social Responsibility 2012). On the other hand, organizations can decide not to engage in CSR, but does not imply that they have gone against a legal requirement.

In the journey of learning this course, I have learnt that not all ethical practices are lawful. In essence, principles of responsible commerce involve engaging in ethical activities that may affect the stakeholders.

Another example involves a situation where a driver may notice an accident while driving and decides to drive away from the scene. Ethically, he should have stopped and offered help to the victims; however, his/her action has not violated the law.

Again, if a business decides to take care of the poor in the community by offering educational scholarship programmes, it becomes an ethical practice.

Conversely, a business that has the capability of supporting a local community, but decides not to do so has not violated the law, but its negligence results to an unethical practice. It becomes unethical since it has the potential to do so but opts to avoid it.

An ethical practice involves what is right or wrong while law deals with what is unlawful or lawful (Njoka 2012). The two terms do not have direct implications on each other. In business perspectives, businesses outline their acceptable conducts that they consider fit to guide their operations.

Responsible businesses consider the needs of all participants hence they lay their foundation on trust and confidence that forms the core of ethical practices (Njoka 2012). Social enterprises are the main practitioners of these principles as their goals and objectives gear towards social responsibility.

However, business enterprises that are profit making in nature ought to understand that their ethical practices directly affect human needs. For instance, if there are lapses in integrity on the employer or employees side, the consumers are the final group that bear the consequences.

According to Njoka 2012, such incidences of integrity lapses lower consumers’ trust and confidence in the business. Businesses should realize that the consumers that they feel should purchase their products in order to maximize profit require due attention, which only come from ethical engagements.

If businesses neglect the interests and needs of their customers, the market can become unsustainable hence leading to business failure.

Noticeably, organizations that desire to survive in this global and competitive market should instil ethical leadership in their management systems in order to attract and maintain their customers (Njoka 2012).

Therefore, it is the role of the Human Resource Management (HRM) to ensure that the employees adhere to the set out ethical procedures. Moreover, business survival in the competitive market requires a high level of morality and responsibility.

This aspect touches on giving back to the community in order to improve their living standards.

Some of the activities that support ethical behaviours include offering sponsorship programmes for needy and bright students, training the local community how to engage in agricultural practices and even subsidising the cost of farming.

Businesses that participate in these activities acquire high societal approval for their services (Corrales 2011).

Even though other businesses may view CSR as an additional expense, the benefits that arise after the process are numerous; they include increased profitability hence assurance on continuity and the sustainable economic development.

For example, activities like environmental conservation programmes assist businesses to minimize their costs of production since they can mitigate the effects of climate change. An effect of climate change like drought has a direct impact on the costs of production for organizations that rely on agricultural products.

In addition, the consumers will experience a low standard of living, which results to low purchases of goods and services that businesses offer. Moreover, environmental conservation will give the businesses opportunities to exploit their potentials in the present and even assure them of the same in future.

Sustainable economic development offers businesses potentials both at present and in the future; therefore, it ensures that businesses survive into the future (Corrales 2011). Notably, businesses are only assured of sustainable economic development if they inculcate ethical practices in their operations.

Distinctly, a responsible business should engage in CSR since the major beneficiary is the business and not the surrounding community.

The utilitarianism theory conceives that an act is moral if the results create a positive impact to several individuals (Moreland 2009). It believes that no moral act or regulation is right or wrong; one can only determine their rightness or wrongness of an act by studying the consequences.

This theory deals with the philosophy of the end justify the means. This theory analyzes all the courses of action that are available and the possible effects that can occur owing to the action before deciding on a course that is morally right and the situation that one may find himself.

The possible effects include the benefits and harms that may result from such an action. In the final part, a course of action that presents highest benefits is chosen after considering the costs (Andre & Velasquez 2010).

It does not matter whether the means that one uses is right or wrong provided the results are beneficial to many people. For example, a person can break into a chemist and steal a drug that can assist a patient to recover if they cannot afford to purchase the drug.

According to the utilitarianism theory, the whole process is ethical since the drug helped in saving life. Clearly, the theory oversees the unethical behaviour of stealing. In this aspect, the theory may encourage some acts, which are unethical in the business environment since they may result to positive feedbacks.

As a result, the theory analyzes the morality of any effect. If the effect is good, the process is acceptable. From the above scenario, stealing produced a good and not an evil effect-rescuing life. The theory supports some acts that the societal norms consider as unethical practices.

However, the theory does not consider whether the doctor has received justice for the act that made him lose his drug and experience destruction of property or not.

In the business point of view, the benefits that the utilitarianism theory defines are the satisfaction levels and the number of stakeholders that will receive the benefits. The theory expects managers to make decisions that have greatest benefits to the majority of the stakeholders in order to ensure their satisfaction.

Human Resource Managers should treat consumers as ends not as means; they should not involve consumers in the whole process of management, but must ensure that the results of the management process benefit a majority of them (Andre & Velasquez 2010).

From the above example of rescuing life, responsible businesses should consider the life of a human being as the most important parameter. For instance, if a business realizes that it will spend heavily in order to produce healthy products, it should do so since unhealthy products will negatively affect the lives of consumers.

Even if the action of producing healthy products will result into losses, human dignity still overrides it. It is the responsibility of a business to provide high quality products to its customers and not for purposes of making profit.

A responsible business will view apt employees’ remuneration as its responsibility and not a means of attracting skilful employees (Moreland 2009).

The Hewlett Packard Case involved pretexting where a person pretended to be the owner of some information. This action made the private investigator access phone records of different individuals within the company.

The act reveals information leakage to third parties, which were putting the company at risk of stakeholders’ withdrawal hence creating low trade values for their shares. Moreover, other drivers were leaking vital personal information to the press. Some board members could access data of the company’s customers at will.

The company after investigating the issue had to reconstitute the Board of Directors in order to salvage the company’s reputation from other stakeholders (Sebastian 2011). In this manner, the company made a risky decision, which proved to be best alternative after analysing the overall costs and benefits of the consequences.

This incident saw most board members resign from their posts as others tarnished their reputations. On the issue of legality, the issue of pretexting was presumed not illegal (Sebastian 2011). However, this does not imply that the act is ethical.

The board members presumed that the legality of pretexting was all that could affect the operations of the company hence neglecting the ethical dimension. Despite the fact that the board members did not break any law, their acts could have affected the entire group of shareholders, stakeholders, and employees.

In this dimension, the board members failed to analyse the effects of this deceptive practice in relation to the interests of the stakeholders. The pretexting ethical dilemma discloses a management system that is short-sighted, unprofessional, and egocentric in their operations.

In relating the HP case and the utilitarianism theory, the decision by the company to lay-off some board members was an option that saved the reputation of the company as it considered the majority beneficiaries in the whole aspect.

The interests of the stakeholders, shareholders, and employees overrode that of the few board members. The consequences of the company’s action on the pretexting incident affected the few board members negatively but benefited the stakeholders of the company.

Hewlett Packard was experiencing organisational challenges at the time when the incident took place thereby giving loopholes on the ethical practices.

During this time, the company’s shares had fluctuated in the market. Therefore, the case study supports the need for applying the principles of responsible commerce in all business operations irrespective of the legality.

Businesses ought to act ethically when making decisions on their course of actions since the consequences may either protect or destroy the image of the businesses.

This reflective essay has revealed that businesses that adhere to their ethical practices in order to improve their reputation among their stakeholders and shareholders hence obtaining the survival assurance in the present dynamic market.

Businesses have to consider their decisions in a longsighted and humane manner. For example, they must include the interests of the local community since the community offers both social and operational security to the business (Corrales 2011).

A responsible business should strive to prevent pollution and use proper waste disposal techniques. The Hewlett Packard case study and the utilitarianism theory have also analysed the need for businesses to make professional and long-sighted decisions that benefit the majority in the mix.

References

Andre, C. & Velasquez, M. 2010, Calculating Consequences: The Utilitarian Approach to Ethics, Santa Clara University -Welcome. Web

Corrales, M. E. 2011, Caux Round Table – Principles for Responsible Business, Slideshare. Web.

Moreland, J. 2009, Ethics Theories: Utilitarianism Vs. Deontological Ethics, Christian Research Institute. Web.

Njoka, F. 2012, Principles of Business, Scribd. Web.

Sebastian, E. R. 2011, The Ethical Problem of Pretexting: The Hewlett Packard Case Study, Yahoo Voices. Web.

Supporting Corporate Social Responsibility 2012, Human Resources and Skills Development Canada (HRSDC). Web.

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Principles of Responsible Commerce

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