Ethics and CSR
President Barack Obama
Dear Mr. President:
First, let me congratulate you on your recent stance regarding both the U.S. Budget and your healthcare package. Indeed, both of these issues speak to the reason for my letter today. In general, I am concerned that the 21st century, while certainly improving organizational opportunities at home and abroad through technology and globalization, have not been as robust within the area of business and organizational ethics as both expected by 21st century stakeholders, or necessary to proactively and positively interact in a global environment.
Much like the First Lady’s initiatives for movement and health, I would like to encourage you to form a bipartisan Congressional Committee to examine ways in which the government can assist and encourage within the American business and organizational community.
There are numerous ways we have all noted how organizations have changed in the 21st century: new technologies, new methods of delivering messages, new expectations, greater educational demand and opportunities, shifts in delivery of government information (e-Gov., etc.), and new products and services. Organizations have also undergone a change in their overall philosophy — not just moving toward entrepreneurial thought as a way to change the operational paradigm, but through consumer and corporate expectations of marketing in a more ethical and sustainable manner — regardless of the business or service (ASHE-ERIC, 2002). For organizations, this translates out as Corporate Social Responsibility (CSR), or the idea that any organization now has a responsibility to not only produce products in a sustainable manner, but to ensure that they market those products in the same way, treat employees ethically, and are generally transparent and working in a utilitarian manner for the common good (Jahdi, K., et al., 2009). 21st century consumers are individuals, but also groups — and to market successfully in the 21st century, organizations need to go beyond broad segmentation and ask, listen and implement both CSR principles and anticipate individual behaviors.
One of the reasons this may be important both for your administration and the needs of the American people focuses on the gradual erosion of trust in government and institutions over the last several years. Within the public sector, there seems to have always been a view towards the nature of public institutions and the psychological means of trust. Within the context of society and culture, trust has several connotations. Typically, definitions of trust focus on situations in which one party or group believes that they can relinquish control over a situation because they have faith (trust) in another group’s willingness to act in the best interests of all parties to come to a positive solution. There is uncertainty, and particularly over centuries of governmental paradigms, a tendency for citizens to hold varying degrees of trust to both elected public officials and governments in general (Mayer, R.C., et al., 1995).
When dealing with the ethical responsibility of qualitative research, one must also look into the issues of corporate social responsibility (CSR), which is a more self-regulated approach that integrates strategic and tactical business paradigms that comply with the spirit, ethics and standards of the law. CSR encourages actions and functions so that it does not become necessary for governmental regulations to force compliance. CSR does this by looking at issues before they happen so that they encourage morality within the community and negative practices that may be of potential harm — legal or not. The basic thrust is doing what is right — in the public interest while still maintaining corporate growth and profitability. There is historical and philosophical precedent for this in the Social Contract Theories of Locke, Rousseau and Jefferson — if one acts in a moral and ethical way for the individual, this will translate into societal and organizational behaviors as well (Corporate Social Responsibility and Ethics, 2012).
In many ways, this forms the basis of trust in government — the notion of how humans interact with social institutions and explains the manner in which individuals, by necessity, must therefore trust and hand over a varying degree of power to either elected representatives, empowered rulers, or a combination of governing bodies to ensure a better and more organized society (Lewis & Gilman, 2005). For more ethical behavior to exist in organizations there must be trust both bottom up and top down. We can see, too, that the trust factor between individuals and government is part of the ethics of the stakeholder and the organization; and has evolved and intensified into citizen/stakeholder trust — with the concepts of utilitarianism and deontology backing up CSR.
In this environment, the impact of behavior, values and ethics on achieving an organization’s strategic vision represents a timely and valuable undertaking. This behavior is a new focus on ethical and social issues (Sen & Bhattacharya, 2001). CSR leads organizations to the notion of both global and stakeholder responsibility, and an organizational system that begs for sustainability — not just to outlast the competition, but also to , presence in the global market, and a stronger unification with the political bureaucracies. There is a clear integrative framework involved that impacts the idea of sustainable and active organizational mandates (Maignan & Ferrell 2004).
Indeed, the primary models of utilitarian ethics must be part of all strategic and tactical issues surrounding CSR. Particularly in this era of transparency, the organization must “walk the talk” of its mission and value statement — regardless of profit issues. Actions have quantitative outcomes and the ethical choices that lead to the “greatest good for the greatest number” are the appropriate decisions, even if that means subsuming the rights of certain individuals. It is considered to be a consequential outlook in the sense that while outcomes cannot be predicted the judgment of an action is based on the outcome — or, “the ends justify the means” (Robinson and Groves, 2003). Deontology, of course, is comparable, but alternative paradigm of thinking. With deontology, the actions themselves must be ethical, or the outcome is a moot point and can never be moral. Deontology tells us that there indeed norms and truths that may be divine in nature; actions may be moral or immoral, right or wrong, and by predisposition we are more wired to those actions that have kept humanity alive for millennia — the utilitarian actions of sacrifice and obligation. Moral obligation is based on rationalism, then, and is the way most humans innately wish to head, and wish to respect. Deontology then, is “the means justify the ends” (Kamm, 2007).
I would respectfully suggest that you meet with the appropriate members of Congress to establish a program that will become known as the Ethic and Corporate Social Responsibility Inititaitve. There will be three phases of the rollout of this initiative: 1) Adaptation by all government offices nationwide; 2) Adaptation by all businesses and organizations that do business with the government; and 3) Roll out for corporations and organizations of over 50 employees or those that participate in any governmental contract, grant or additional relationship, regardless of the size of the organization. For issues 1 and 2 above there will be annual audits to ensure that the organizations maintain the minimum standards of the five major points listed below:
1. CSR standards must be a part of every major strategic plan and/or contract and specifically reflect what the business does and how it does it to meet a social purpose.
a. Major question: How does CSR reinforce the organization’s purpose?
2. There must be a clearly articulated theory of change within all corporate plans and contracts.
a. Major question: What is our proprietary approach to CSR?
3. CSR standards must go beyond merely defined, and instead must identify specific programs and/or social groups that target the need for CSR.
a. Major question: What specific project do we sponsor/offer, etc. that meets the needs of x (identify) social need?
4. Organizations must be specific about their CSR agenda and focus on 1-2 major issues.
a. Major question: How does our business plan (planning process, etc.) address a specific CSR initiative?
5. Organizations should lead through partnerships. Each organization must reach out and dialog, network, and/or consult with a recognized expert in the social issue being sponsored in #1-4 above.
a. Major question: Justify which expert the organization will use during the fiscal year planning process that will address the social need of the identified issue: who, what, when, where, why, and how.
Thus, Mr. President, when we combine the ideas of CSR, utilitarianism and deontology, we see a strategic vision and initiative that will aid the administration’s standing while helping American organizations increase competitiveness from the rapidly emerging economies globally. The idea that the government might require an ethical component, beginning with organizations that do business with the government and then expanding, might may appear to be a luxury that some companies cannot afford, yet it is something expected by more and more stakeholders, as well as the general public. Achieving and sustaining a competitive advantage in an increasingly globalized marketplace demands that companies of all sizes and types take advantage of every opportunity to reduce costs and add value. Organizations of all sizes and types require effective leadership in order to formulate a corporate vision and make informed day-to-day decisions as well as strategically oriented ethical planning (Sussan, 2006). Finally, I thank you for your attention in this important matter and hope that you will keep the following in mind as you work with legislation and initiatives over the next few months. We must all remember that the new need for organizations to integrate values and ethics in their by these three trends, which I also encourage you to integrate into your own planning:
1. Effective leaders in the modern area are transformation and envision action which begins with ethics and values;
2. All organizations — private and governmental, must become more robustly ethical in word and deed, and,
3. Ethics as a practice has a strong, persistent voice in the world’s communication channels (Burke, 1999).
Thank you in advance.
ASHE-ERIC. (2002). Understaning and Facilitating Organizational Change in the 21st Century. ASHE-ERIC Higher Education Report, 28(4), 1-162.
Burke, F. (1999). Ethical Decision-Making: Global Concerns, Frameworks and Approaches. Public Personnel Management, 28(4), 529-31.
Jahdi, K., et al. (2009). Marketing Communications and CSR. Journal of Business Ethics, 88(1), 103-13.
Kamm, F. (2007). Intricate Ethics: Rights, Responsibilities and Permissible Harm. New York: Oxford University press.
Lewis, C., & Gilman, S. (2005). The Ethics Challenge in Public Service (2nd ed.). New York: Wiley.
Maignan, I., & Ferrell, O. (2004). Corporate Social Responsibility and Marketing: An Integrative Framework. Journal of the Academy of Marketing Science, 32(1), 3-19.
Mayer, R.C., et al. (1995). An integrative model of organizational trust. Academy of Management Review, 20(3), 709-34.
Robinson, R., & Groves, H. (2003). Introducing Political Philosophy. New York: Icon Books.
Sen, S., & Bhattacharya, C. (2001). Does doing good always lead to doing better? Journal of Marketing Research, 38(2), 225-43.