Change of business perspective. An ethical reflection


Scientific Study, 2013
10 Pages, Grade: 1.0

Excerpt

Objective

This paper focuses on the intrinsic motivation of businesses, why companies want to change perspectives towards more sustainability and how businesses currently integrate corporate social responsibility. Both objectives will be analyzed and evaluated on an ethical cohesion.

- CSR and sustainable business do have the same business approach, even though their definitions differ in detail[1] In this paper both terms will be used equally in regards to the “change of business perspectives”, including their motives and implementation . –

1. Actual Situation

Within the last decades, leading companies realized that focusing on a profit-based perspective by accepting a reckless dealing with environmental and social factors, is no longer enough to sustain in business and to fulfill stakeholder demands. Public pressure and an increasing awareness on ecological and societal problems forced companies to respond to new social needs[2]. As a result, in 2011, 95 percent of the 250 largest global companies (G250) reported on their corporate responsible activities[3]. Since the launch in 2000, more then 10,000 participants joined the United Nations Global Compact initiative and could prescribe an increase in 2011 of 54 percent over 2010 growth figures[4]. The rising importance of responsible management on executive and senior management level is shown in the figure, that 70 % of the CEOs and 49 % of boards were engaged in the corporate sustainable strategy of their company[5]. Additionally, the most recent Global Reporting initiative statistic shows a continuous increase of CSR reports – 114 % within three years (2008-2010)[6].

That proves, that a broad change in business perspectives has already been started and focusing on sustainable business is no longer just a niche phenomenon. It needs to be evaluated if the current change of business perspective sets the stage for a more ethical way.

2. Motivation of approaching corporate social responsibility

Seventy-seven percent of companies, which were participating in the Global Compact survey 2011, rated their key motive of engaging in sustainability issues, to increase public trust of their company[7]. (Assumption: Companies, which committed themselves to Global Compact principles, are representatives for sustainable engaged companies). Other sources verify that reputation and financial performance are strongly linked to sustainability endeavors[8] /[9] /[10]. On the other hand, ethical considerations, which where key business drivers in catalyzing CR reporting of G250 companies in 2008, are currently declining and loosing the lead (1. à 2. rank)[11]. Consequently, the motivation to engage in sustainable performance is changing and will change constantly.

Reputational, economical and ethical considerations are current key drivers for sustainable reporting, whereby a crucial gap in-between their ranking is generally not evident.

3. How companies integrate corporate social responsibility

According to the results of McKinsey’s Global Survey “The business of sustainability” (n=2,956), sixty-seven percent of the companies, which were polled, integrated sustainability in their mission and values (first place). Referring to one of the key drivers for sustainable performance – reputation –, external communications (2. - 60%), internal communications (4. - 58%) and marketing (7. - 54%) are within the Top 7 of processes where sustainability has been “completely or mostly been integrated”. More important figures for an ethical reflection are, that fifty-nine percent (3.) integrated sustainable values into their corporate culture, strategic planning (6. - 57%) and employment engagement (8. – 50%).[12] Twenty-eight percent of the surveyed companies stated that sustainability has the primacy or is within the top-three priorities of CEOs’ agenda. Another 45% of CEOs who have been interviewed, see sustainable performance as a priority, but not within the top three ranking[13].

4. Ethical reflection

From the teleological point of view, sustainable business, as per definition[14] can be evaluated as ethical, since it provides the greatest good (“… health and survival of the business and its associated economic, social, and environmental systems”) to the greatest number of people affected by the action (“all current and future stakeholders”).

To evaluate upon the deontological principle, it needs to be focused on the motivation of acting sustainably as this principle targets the origin of sustainable business. This paper focuses on the key drivers - reputational and economical considerations - as ethics should be an integrative part of all drivers and not a driver in it self. When considering these two key drivers as the “prima facie” of sustainable acting, sustainability itself would only be a means for a better economic performance and less a holistic view, including the environmental and social relations. Consequently it would lead to a self-contradiction, which alienates the purpose of sustainability. One result could be greenwashing, which should not be applied as universal rule for sustainable business and can therefore be evaluated as ethically incorrect.

Consequently, when approaching sustainability with the wrong motivation, it is more about satisfying moral callings then acting responsively and self-determined. Acting sustainable should not be motivated through external demands (nowadays principle of market economy), since without self-questioning the origin of the own re sponse and respon sibility on sustainability, CSR approaches will only endure as long as the social imperative on sustainable acting exists.

[...]


[1] See: Appendix 1

[2] Havard Business review „The link between competitive advantages and corporate social responsibility“; 2006; p. 1-2

[3] See: figure 1

[4] UN Global Compact - Anual review: http://www.unglobalcompact.org/AboutTheGC/annual_review.html

[5] Global Compact implementation survey: Annual Review of Business Policies and Actions to Advance Sustainability; 2011; p. 7

[6] See: figure 2

[7] Global Compact implementation survey: Annual Review of Business Policies and Actions to Advance Sustainability; 2011; p. 7

[8] See: figure 3

[9] Delloite: Sustainability: CFOs are coming to the table; 2012; p. 4

[10] McKinsey Global Survey results: The business of sustainability; 2011; p. 3

[11] See: figure 3

[12] See: figure 4

[13] See: figure 5

[14] See: Appendix 2

Excerpt out of 10 pages

Details

Title
Change of business perspective. An ethical reflection
College
Steinbeis University Berlin  (Responsible Management)
Course
Ethical Management
Grade
1.0
Author
Year
2013
Pages
10
Catalog Number
V232159
ISBN (eBook)
9783656482772
File size
614 KB
Language
English
Notes
Tags
change
Quote paper
Stephan Reinhold (Author), 2013, Change of business perspective. An ethical reflection, Munich, GRIN Verlag, https://www.grin.com/document/232159

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