Social Corporate Responsibility Exam One 10/15/2007
1.Kohlbergs stages or moral development are divided into six stages. Kohlberg then divides those stages into three different levels. The three levels are preconventional, conventional, and post-conventional. There are two levels in each one of the stages of moral development. The first level is heteronymous morality and secondly instrumental purpose and exchange. The second level includes stages three and four. Three is mutual interpersonal expectations, relationships, and interpersonal conformity. Stage four is social system and conscience. The third level of moral development is stages five and six. Five is the social contract stage and six is the universal ethical principles stage. The pre-conventional level is the most basic of the three levels. Decisions in this stage are made in this level based purely on gaining the most pleasure and avoiding punishment and pain, which in my opinion is human nature. The first stage (heteronymous morality) is the simplest of all stages. This is when people act only to avoid punishment and gain as much for themselves as possible. The most major difference from the other stages is individuals' inability to recognize that other people have their own point of view. The second stage of the pre-conventional level is the instrumental purpose and exchange stage. In this stage people's behavior is controlled by what is most beneficial for ones self but at the same time acknowledging others points of view. The next level, the conventional level, is stages three and four. In both of these stages people judge the morality of their actions based on the norms of the
society as a whole. Stage three is mutual interpersonal expectations, relationships and interpersonal conformity stage. This stage involves doing what is expected of you by society. The golden rule, as it was taught to me consists of treating others as you would like to be treated is the most important part of this stage. The next stage is the first stage that the individual will put the rights of societies in front of their own. It is the basis for society, in this stage individual's act to do things in order to maintain a functioning society. The most advanced and final level in moral development is the postconventional level. The fifth stage is based on social contracts between all individuals. In this stage laws are seen as fair and commonly agreed upon. This stage is the bases for democracy. It also calls for a majority decision and can also result in compromise between individuals. The final stage of the moral development is the universal ethical principles stage. This stage brings us back to individual thinking and action. However the individual believes in universal equality for all human rights. Although this stage brings us back to individual thinking and action for ones self the person acts in ways that help all individuals. I feel visionary leadership begins at stage four in moral development. Stage four is the beginning of belief in our social structure. I also feel that a person cannot become a visionary person without accomplishing all six stages of moral development.
2.
When looking at leading corporate citizens, Costco, BDO Stoy Hayward and Hewlett-Packard are great examples. All three of these companies have been extremely successful and profitable while also being ethical and responsible. In our markets today it is rare for companies to be extremely profitable while also being responsible. Costco is a model company for many reasons. First off, they are in a retail line similar to that of Wal-Mart, however they are 20% of the size of the retail conglomerate. Even though Costco is a lot smaller than Wal-Mart, they have 312 stores as opposed to the Wal-Mart owned Sam's Clubs 532, Costco made 34.4 billion in comparison to Sam's Clubs 32.9, which is nearly double the revenue per retail outlet (Waddock, 154). Costco also pays its employees an average of 13,647 compared to the average yearly earnings of a Wal-Mart/Sam's Club employees average earnings of 11,039 (Waddock, 154). Costco's sales per square foot are at $795 in comparison with $516 for Wal-Mart/Sam's Club. What gives Costco the capacity to be an outstanding financial and social company is the four key policies that the company lives by: 1. Obey the law 2. Take Care of your customers 3. Take care of your employees 4. Practice intelligent loss of sales
Costco does all four of these elements because the company feels that it is better to be socially responsible than it is to be highly profitable. For example,
Costco offers health insurance to 82% of its employees as opposed to the mere 47% given to Wal-Mart employees. The reason the company does this is number three on their key policies. They feel keeping employee's happy and healthy lead to a better corporate and retail environment. In the article in Waddock on page 154 they mention an article in BusinessWeek that says "The cheap-labor model turns out to be costly in many ways. It can fuel poverty and related social issues and dump costs on other companies and taxpayers, who indirectly pick up the healthcare tab for all the workers not insured by their parsimonious employers. What's more, the low-wage approach cuts into consumer spending and, potentially, economic growth." The second company we look at in terms of doing business with good values and still turning a profit is BDO Stoy Hayward, which is a large accounting firm based out of England. BDO Stoy Hayward is an innovative type of accounting firm because it makes every account a very personal one with its customers. The company also has been claimed by the New York Sunday Times as one of the top 100 companies to work for. The values of BDO Stoy Hayward are very simple, provide clients with a personalized accounting and personal contact between the client and the accountant. What is it that makes BDO Stoy Hayward such a great company to work for? "The generous perks on offer at BDO Stoy Hayward have proved to be a benefit not only for employees, but also for the company. The result of the innovative benefits package is a satisfied workforce, illustated by low turnover rates and the fact that nearly one in five have been working for the firm for more
than 10 years. Staff are excited about where the business is going and the 81% positive score in this area ranks BDO in the top 10 nationally." (http://business.timesonline.co.uk/tol/business/specials/best_100_2006/article10 82246.ece) BDO Stoy Hayward has a long list of benefits for their employees including free yoga classes, a bonus scheme for new mothers returning to work, free breakfast before 8.30am, extra days off for religious holidays, an interestfree gym loan, access to free financial advice and free fruit in many offices. Having benefits such as these make the work environment productive and keep employees happy. If employees are happy, they are retained and become fully involved in trying to make the company as successful as possible. The company also gives employees flexible work schedules which makes being a successful parent and successful employee synonymous. Hewlett-Packard is another company whose social values are reflected in profits as well as being socially responsible. On the Hewlett-Packard website they outline how they are socially responsible and why it is important. "CSR (corporate social responsibility), in our opinion, starts with a companies own employees and expands outward to our business partners and suppliers. Our company is guided by a core set of ethics and drives progressive work-life programs, competitive pay and other programs internally and good citizenship externally. We expect all of HP's business partners, including our suppliers, to comply with all applicable laws and regulations as well as basic international principles relating to labor standards, occupational health and safety requirements and environmental protection..."
(http://www.hp.com/hpinfo/globalcitizenship/csr/commitment.html) HP gives preference to those suppliers who are environmentally friendly. The company stays informed about the practices of the companies they do business with and only work with companies who have the same environmental views that they do. HP also is looking to bring technology to the world, especially the world that currently is far behind in its technological advancements. This program, called e-inclusion, is trying to bridge the gap between the countries that are technologically advanced and third world countries. This is another plan that HP has in order to be socially responsible and at the same time turning profits for their investors and being able to be a good employer to their employees. The core values that HP defines are: -We are passionate about our customers -We have trust and respect for individuals -We perform at a high level of achievement and contribution -We achieve our results through teamwork -We act with speed and agility -We deliver meaningful innovation These values for all three of these companies make the companies very profitable as well as great corporate citizens. If more companies acted the way that Costco, BDO Stoy Hayward and Hewlett-Packard acted then the world would be a better place. The emphasis on being a better company socially has added a lot to the community that these companies serve as well as making them all leaders in their field.
3. In order to fully understand the at situation the Jackson Springs Coal Mine we have to look at the facts of the situation. There is a significant health problem that needs to taken care of, this however is unreasonable because it is very expensive to immediately fix a situation it needs to be done over time. The first course of action needs to be the coal mine funding a clean-up effort of the towns drinking water or fund the purchase safe drinking water for members of the town if the cleanup cannot be done immediately. The second thing that needs to be done is to stop the pollution if it has not been stopped already. After the first year of cleanup the coal mine needs to continue the clean up effort until it is finished but at a slower rate in order to make profit and keep the mine in business. The town relies on the mine for its economic growth so there is no way the company can realistically shut down its production efforts. I feel that the first two things that need to be done could also be done in reverse order, whichever is more financially suitable for the company, because all in all this mine needs to stay open. Does the Jackson Springs Coal Mine follow the flow diagram of ethical decision making? Does the policy follow the four ethical norms? For utility I feel that in this situation it will satisfy all of the people involved even though it may hurt the profits during the first year, which hopefully we can keep to a minimum. This plan of action would be best because it will keep the mine alive and profiting for years to come. The rights and duties of all individuals involved have been considered and this is the best way to respect them all including the
townspeople. Clean-up efforts will take a long time and it also may take time to stop the contamination. However this mine needs to stay open for the people of the town to even have a place to live. Although the company may have messed up in terms of polluting the environment and exposing the people of the town to contamination, this coal mine is what keeps Jackson Springs alive and economically satisfied. We have two options here; to work at fixing the pollution and get everybody clean water and stay open, or two shut down and everybody loses their job and this becomes a ghost town. Personally I prefer option one over two.
4. There are five disciplines of a learning organization. The first discipline of a learning organization is "personal mastery". Personal mastery is continually clarifying and deepening ones personal vision. Personal mastery starts with a person who has a path or goal in mind. Personal mastery goes along with innovation. An individual must achieve personal mastery in order to be innovative. Innovation however can be a very difficult process that results in a lot of failure, and that failure is one of the biggest struggles in the effort to become innovative. One can achieve this personal mastery by being persistent and not always following the path that is already paved. A lot of self control and self motivation is needed to achieve personal mastery. (P.T. Ng, The learning organization and the innovative organization, p. 95)
The second discipline of a learning organization is "mental models". Mental models are ingrained assumptions, generalizations and images that impact how an individual conceptualizes the world and how that person takes action. This starts with making a mental picture of how a person sees the world, and then to scrutinize it heavily. The problem with mental models is that many people get trapped in them. People can easily get fixated on one way of thinking and that hinders innovation. "Thinking outside the box" as it is often referenced and challenging your own and other mental models is the second step on the path to innovation. (P.T. Ng, The learning organization and the innovative organization, p. 95-6) The third discipline of a learning organization is shared vision. Shared vision is very important for an innovative organization. It includes working together in order to search for new and innovative products or ways to improve the company structure, etc. Without the support of everyone involved in an organization, many large scale and fundamental innovations are likely to fail. If everyone works together to have a shared vision in being innovative it is more likely new ideas and concepts that work will be developed. The shared vision in being innovative needs to come from all levels of a business, not just the upper executive level. (P.T. Ng, The learning organization and the innovative organization, p. 96-7) The fourth discipline of a learning organization is team learning. Business in our modern society is far too complex for one individual to develop ideas on their own. Teams are essential to the learning organization because the more
minds working on a common goal, the faster and better the innovation can be. Teams working together not only develop better ideas but also develop personal relationships to develop more ideas in the future. If members of a team become closer they start to be able to understand each others thinking process and therefore become more innovative as time goes on. (P.T. Ng, The learning organization and the innovative organization, p. 98) The fifth and final discipline of a learning organization is systems thinking. Systems thinking is a body of knowledge and tools that enable people to manage complexity. Systems thinking advocates looking beyond the symptoms to see the underlying interaction between the different parts of the system. This is used to find the root of a problem. Systems' thinking emphasizes focusing on one part of innovation and ideas rather than multiple. It makes sure that everyone stays on the same track so that more can get done and more ideas can be developed by the teams. (P.T. Ng, The learning organization and the innovative organization, p. 98-9) In Epstein's writings about organizational well-being he touches on some of the five steps of the innovative organization. The shared vision concept and the team learning concepts are the ones he speaks of the most. He says that teams are the best way to share ideas because all members of these teams will have different fields of knowledge. When those different fields of knowledge are combined, that is when the highest level of productivity is reached. The five steps to an innovative organization is important because of today's markets. Today, society is filled with businesses and entrepreneurs who constantly need
to become innovative in the way they do business in order to compete. If these businesses do not create new ideas and become more innovative they have no way to compete.
5. "Citizenship is more than just a legal term, it is a political term. As a political term citizenship means active commitment. It means responsibility. It means making a difference in one's community, one's society, one's country." (Drucker. P. (1993) Post Capitalist Society (Oxford, Butterworth-Heinemann)) Drucker feels that companies need to be on the same page as the rest of society in terms of being active in community and within society. Drucker says an organization needs to make an impact on the community it is in. This can be making new jobs for the people or helping keep the environment clean. A company is socially responsible when it does not disturb, or even better improves the community it is in. Figure one written by Marsden and Andriof shows the dramatic effect that a company has on the world around it. Every action a company makes affects someone. The diagram shows the ripple effect starting with the company and moving outwards to the environment, then it travels to the primary stakeholders, from there it moves to the societal stakeholders. Under the topic of the primary stakeholders there is the community, the employees and the customers. Each group of people is directly affected by what the company does to their environment. The biggest environmental affect a company can have on the sounding community is pollution. Companies can
easily ruin the air and water of an area. Where I live in Providence, Rhode Island there is a large power plant that for years just dumped its waste into the Narragansett Bay. They did this because it was very expensive for them to clean up their waste and dispose of it properly. The next primary stakeholder affected by the environment is the employees. Employees are usually part of the community around the company so if pollution is happening it affects them on a personal level. Another large issue for companies in today's society is workplace safety and pollution (or workplace environment). For years companies took advantage of employees by cutting corners on safety procedures and materials. Now a company is only a good corporate citizen if it takes good care of its employees work environments. The final primary stakeholders are the customers, they can play a huge role in what kind of environmental affects a company has. The customers can be affected by the amount of pollution the product makes, ex. Cars. Many people in today's society will not be a consumer of a good if it is bad for the environment. The same thing goes for companies because they know the large emphasis in today's society on health and environmentally friendly goods. So therefore it would be beneficial for a company to be as ecologically sound as possible to appeal to the ever growing market on environmentally friendly goods and services.