The Role of Ethics
The concept of social responsibility or corporate social responsibility (CSR) is not new within the corporate world but has garnered much press and public awareness in recent years due to a number of firms overlooking ethical behaviors as actions that should be placed at the core. Instead some firms have seen value in disregarding the role of ethics and seeking strategies based upon stakeholder greed for profit and larger market share. This lack of ethics and social responsibility only leads to a great downfall and loss to the community. For example a firm that is no longer doing business because it failed to include the role of ethics in strategic decision-making is Countrywide Financial. The firm simply disregarded
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This serves to create strategies based upon ethical choices but also benefits the firm in branding, image and success in sales or services. The role of ethics for many firms also translates to how they want the outside to see them as a leader and important to the environment. To suggest unethical behavior also suggests to the public a poor placement in the market but also negative implications, investigation of behavior and poor social accountability. This also impacts the firm’s sustainability and profits in terms of consumer trust. If the consumer sees the firm as a negative presence, they will seek other substitute brands. This does not allow the strategy to align for resource allocation or capabilities of capital assets so many stakeholders are harmed by unethical choices. In terms of social responsibility, these actions can have many detrimental, long-term repercussions that impact business activity but also have a trickledown effect, as the firm is no longer sustainable and forced to close its doors. The employees are out of work and the community suffers economic weakness when people cannot spend money or pay bills on time.
Lecker (2011) surmises leaders make poor choices in strategic management of social responsibility because they become blinded by the concept of sustaining the profit margins within limits that define market success.