Importance of Ethics and Social Responsibility in Business and Society

Last Updated: 31 Mar 2023
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The primary purpose of ethics and social responsibility is imperative to the way we do business and live in society. Ethics most commonly known as rights and wrongs are principles and standards that establish what is known as acceptable conduct within an organization. Organizations have moral and legal duties to implement ethics when developing a strategic plan while considering stakeholders and consumers, they do not want to be lied to or cheated into buying a false product.

Unethical companies will use aggressive sales tactics and mischievous ways, of doing business to sell, promote, and profit from vulnerable consumers. Unethical organizations believe in these tactics not realizing that ethical and honest companies tend to be more profitable, and reputable and operate with less stress from employees to managerial positions. Social responsibilities are Just as important as ethics but pertain to a greater scale; it's an organization's obligation to make a positive impact rather than a negative one on society and the environment.

An example of a company that overstepped ethical and social responsibility boundaries s the oil and gas company BP p. l. c. In 2010, a massive oil spill broke out in the Gulf of Mexico that was caused by oil drilling conducted by this Company and its key contractors. This oil spill caused the death of eleven individuals and cost the company and its partner's tens of billions of dollars in order to contain a blowout of the well, mitigate the damages caused and compensate all the individuals and businesses impacted by the spill. As a result of this oil spill, the US Government established an Oil Spill Commission which was put in place to investigate the reasons for this disaster. The report concluded that a number of separate factors contributed to the spill which included oversights and outright mistakes from BP and its contractors, Halliburton and Transocean, however, the underlying reason was a failure from management.

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Management, in an effort to minimize the loss of returns, made concessions for a series of cost-cutting measures that included the quality of the materials used, shortcuts in testing processes, and the reliance on fewer resources which ultimately contributed to the oil spill. The Commission also concluded that the overall industry had deficiencies in its internal controls; decision-making protocols, training, and corporate culture.

As a result, the shortfalls in this disaster were a combination of oversights and negligence from multiple parties thus extending the ethical and social responsibility among internal and external stakeholders. As part of the remedy process for the disaster, BP was required to take actions to further enhance the safety of its drilling operations in the Gulf of Mexico.

These actions included improved risk management processes such as auditing and verification from third parties, improved training for its employees, and the implementation of more efficient and safer equipment for a good drilling. Additionally, the company's sustainability report for 2012 includes a letter from the Group's Chief Executive which states that the Organization's strategy going forward is to create value for its shareholders and supply energy throughout the globe in a safe and responsible manner.

The statement goes on to use other key phrases such as becoming a safety leader in the industry, a responsible corporate citizen, and a good employer. The strategy also emphasizes the need to enhance safety and risk management and earn back the trust and value of the Organization. All indications are that the Company's behavior pre-oil spill was irresponsible and negligent and was potentially driven primarily by a focus to provide strong returns on their investments while compromising the integrity and internal controls of the operations.

Post-oil spill, the Company has had to learn from the consequences of a very costly disaster in order to stay in business and thrive. The Organization appears to understand now the need for effective communication, transparency, and detailed due diligence in all their efforts. In collusion ethics and social responsibilities within an organization take on an imperative role in the success of a corporation or company. Society must also be aware and educate themselves about scams, and aggressive business tactics and do their part to prevent these unethical organizations from preying on vulnerable consumers.

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Importance of Ethics and Social Responsibility in Business and Society. (2018, Jun 14). Retrieved from https://phdessay.com/ethics-paper/

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