Business Ethics in a Corportation

1. Introduction

Social corporate responsibility (CSR) is an individual business model which helps a firm, its

stakeholders and society to be socially responsible. Organizations become aware of the

influence they have on all elements of society, including economic, social and environmental

factors, through their practice of social responsibility programs, which sometimes are also

termed as corporate citizenship. CSR indicates that a firm operates in a manner that improves

society and the environment, rather than making a negative contribution from their typical
 and regular routine of business operations. Through CSR initiatives, philanthropy and

voluntary activities, companies may strengthen their branding while benefiting society as

well. This is equally essential for a corporation as CSR is for the community. CSR initiatives

may assist to build better connections between workers and companies, promote moral

standards and help workers and management to feel more linked to their community. To be

socially responsible, an enterprise must primarily be willing to take responsibility of itself

and its stakeholders. Often, firms that implement CSR initiatives have reached a stage of

business growth that they are then able to give back to the society. Therefore it can be said

that CSR is a strategy of large companies.

Corporate Social Responsibility (CSR) represents an undertaking that is answerable and in

accordance with government expecations to manage its activities' with regard to their

societal, environmental and economic impacts.

Activities of CSR may include:

 Organization policies insisting on dealing with businesses following ethics practice

 Health and safety or environmental reinvestment programs

 Support charities in the communities

 Encourage gender equality at the management level

CSR has several advantages. Businesses get a reputation, favorable attention, monetary

efficiency, minimizing the effect of the environment, attracting the best people and inspiring

innovation. In their annual general meetings and non-financial reports, public corporations

typically report about their Csr activities. CSR is important to corporations as they may lose

consumers or suffer from an image if the local communities does not accept how they are doing
business. News and activist groups typically closely monitor corporations and publish

inappropriate instances of conducting business promptly.

2. Caroll’s Pyramid of CSR

Since 1950s, the concept of corporate social responsibility has been explored. However, it wasn't

long before people began to comprehend the meaning and influence of this concept. In the form

as we know now, CSR became widespread following its 1991 definition of the "Corporate Social

Responsibility Pyramid" by Archie Carroll. Its simplicity, but also its capacity to express the

principle of four domains of CSR have made the pyramid one of CSR's most widely recognized

theories. (Carroll, 2016)

Carroll's pyramid argues that the company must fulfill four degrees of duty - Philanthropic,

Ethical, Legal and Economic.

1. Philanthropic Aspect

Philanthropy takes place at the top of the this hirerchical pyramid. Organizations have

indeed been widely criticized, utilizing the scarce natural resources and others, for

their environmental impact and specifially their role in pollution. They should "give

back" to the society they extract from, to counteract those disadvantages. As this is

the highest degree of CSR, many individuals don't like to do business with firms that

do not give back to the community. Philanthropic responsibility is much more than

simply performing the right things, but to return back to the society is something

which is genuine to the principles of the firm.

Although corporate motive is occasionally altruistic, philanthropic is the practical

approach for most firms to display social responsibility. This is done to increase or
 improve the reputation of the firm and not always for noble or sacrificial motives.

The main distinction between ethics and philanthropy is that businesses giving back is

not always required in a moral or ethical way in the four-part model.The society can

always expect such donations, but they do not label companies as "unethical" because

of their giving back pattern, or if they are giving at all. Therefore Philanthropic

elements for a business is solely dependant on the organziation if and when they

decide to act in this category.

2. Ethical Aspect

The pyramid's ethical component is characterized as doing the right thing and also being

equitable in all circumstances. A firm should not just follow the law, but also ethically

execute its business. In contrast to the first level, a firm does not have to conduct this as

this is solely related to morals. However, an enterprise should be ethical since it

demonstrates not only that it is fair and just to its stakeholders, but that consumers would

also feel better in buying the firm products and services. Suppliers and employees who

are environmentally responsible are some evidences of their ethical responsibility.

Important business requirements include fulfilling these ethical duties

 Action according to society expectations and ethical standards

 Recognition and observance of new or developing ethical/moral standards

 Preventing the compromise of ethical standards in order to accomplish business

objectives

 Be good business people by performing morally or ethically what is expected

  Recognizing that the integrity of business and ethics go beyond simple

compliance with rules and regulations

3. Legal Aspect

The third level of the pyramid is the legal duty of the company to comply with the laws

and standards. This is arguably the most significant of the four levels, as this shows how

businesses operate on the market. Employment legislation, rivalry with other firms, fiscal

restrictions, and workplace safety are some examples of a company's legal duties.

Adhering laws and being unaccountable legally may be highly harmful for enterprises.

Important business expectations include fulfilling these legal duties

 Activities compatible with government and legal expectations

 Compliance with different federal, state and municipal rules

 Being legally-compliant corporate citizens

 Compliance with all their legal duties to society

 To supply products and services that satisfy minimum legal standards at least

4. Economic Aspect

The bottom level in the hierarchy is the first obligation of a company to make profit.

Without profit, the firm could not pay its employees, employees would lose their

employment even before the company starts operating in CSR. profitability is the only

way a firm can thrive and help society on a long-term basis. This also indicates that a

firm has the obligation, at a fair market price, to create products and services that

consumers need or desire. Profits are needed both to recompense investors and to expand

the business if profits are reinvested. The critical basic relevance of profitability and
 return on investment as drivers for company success will be attested to by CEOs,

managers and entrepreneurs. Practically all the world's economic systems recognize the

fundamental role of profit-making companies to society. Various organizational concepts

aimed at financial efficiency — revenue, cost-effectiveness, investment, marketing,

strategies, businesses, and a variety of professional concepts focusing on increasing the

organisation's long-term financial performance.

Economic growth and sustainability have become important issues in today's highly

competitive global corporate environment. Those companies that do not succeed in their

economic and financial spheres are forced to shut down business and other related duties.

Economic responsibility is therefore a prerequisite for fulfillment in a competitive

business environment, and hence economic responsibility is a vital element of corporate

social responsibility.

In brief, the four component definition of the CSR provides a conceptual framework that covers

the economic, legal, ethical, philanthropic or discretionary obligations that companies have at a

certain moment. regarding understanding every type of responsibility, it can also be said that the

company is required to adhere to the economic responsibility for businesses, the company is also

required to carry out the legal responsibility for businesses the ethical responsibility of

businesses is expected to be done as well as the company is expected to carry out their

philanthropic responsibility. Moreover the integration of these 4 individual elements of corporate

social responsibility leads to the formation of a new form of CSR, called Total Corporate Social

Responsibility.

3. Purpose, importance and challenges in the case of Walmart

With regard to the chosen company, Walmart, Walmart Inc. is an American origin multinational

retail organization that operates as chain of hypermarts, grocery and departmental stores.

Arguably, Walmart can be considered as the largest firm operating in this industry than it’s

global competitors such as 7-Eleven, Tesco etc. Corporate Social responsibility as discussed

above is a practice that is used by Large firms, making Walmart a perfect example. Walmart

being firm Of such caliber And level, has some necessary responsibilities. These responsibilities

come in the domain of corporate social responsibility. Even though Walmart has incorporated

corporate social responsibility in its business model, there were some instances and

circumstances where Walmart faced difficulties and challenges That can be linked to corporate

social responsibility.

There was a perception among critics Of various nature Ranging from employees to consumers

the Cheap prices Of Walmart products. FCWA ( Food Chain Workers Association), an

independent advocacy group had tracked the supply chain of Walmart and exposed breaches at

each connection in their so called 'ethical supply' system of the retailer. In this way, FCWA had

revealed the true amount of their low cost food. The Department of Human Rightsof the

organisation was also seemingly behind schedule. Walmart had come under criticism because of

its behaviour with their supply chain employees and store associates, which became a bigger

issue ass these employees were outsourced and were not directly hired under the company.

The FCWA accuses Walmart of being engaged in the continuous degrading of migrant workers

both inside and outside the country. Then at the end of the supply chain, Walmart's huge market

in farming shrimp had ties to abusive and exploitive fishing boats. Walmart indirectly profits

from tortured and grossly oppressed immigrant laborers, which are employed to collect feed fish

for the booming aquaculture sector. Walmart's savings in prodcution cost is also passed down to
their US supply chain. Many Walmart vendors have been shown to be engaged in questionable

practices concerning immigrant workers. No overtime, minimum wages, and many more were

included. There was yet another occurrence In 2012 that Walmart was bound to cut business

relations with the scandalized CJ marine manufacturer, after workers were forced to peel

crawfish 24 hours a day and faced 80-hour working weeks, wage theft, and the threats of staffers

who sponsored their visas for foreign workers. (bartleby)

Walmart's exaggerated "heritage agriculture" initiative is the mix of pressure and monopolistic

tendencies for farmers in the US as well as for "developing markets" in China and India. In 2010,

Walmart announced a five-year strategy "selling $1 billion in local food from 1 million small and

medium-sized farmers" and potentially generating 10 to 15 per cent increase in farmers' incomes.

However, five years later, collaborating farmers hadn't seen the promised surplus and complain

of unfair contracts were seen. In a corporate milk market that destroys small producers and

farmers, Walmart also dominates, which leads to significant industry consolidation and price

reductions for farmers to such a level that continuing business is not possible. (Chen, 2015)

With regard to pressure from the community, Walmart has created guidelines on sustainable and

responsible sourcing and undertook to comply completely with all national and local rules and

policies pertaining to labor, immigration and safety and the environment. The Guidelines are in

line with public pressure. In particular, the firm demands suppliers to adopt measures of air and

water pollution reduction, efficient energy and water use and waste as well as follow legal

protection for worker health and security. A fancy "sustainable product fair" was recently opened

by the firm and revised animal welfare rules were developed. (Chen, 2015)

In brief, it can be argued that earlier, Walmart was putting little efforts and concern towards

carrying out corporate social responsibility activities. As discussed above, the untheical practices
regarding the wages of labours had been going on for a long time. This is a complete violation of

ethical factors when linked with Carolls model of Coprortate Social Responsibility. However

with the corrective measures or the intent to make things right by the company, it can be seen

that the Organization is finally starting to shift it’s focus towards Corporate Social

Responsibility. The formation of guidelines by the top level management, to be followed by the

all internal associatied individuals of the oganizations global supply chain is a measure to

improve the legal factors as per Caroll’s model. Other measures such as changing business

practices that previously were contributing to polluition and wastage of resources can be seen as

in line with the Environmental aspects of Caroll’s model.

4. Recommendations for Walmart

By increasing the hourly basic salary for its staff, Walmart should disperse resources across

the supply chain. Similiar minimum salaries for US workers in the supplier companies of

Walmart and equivalent living wages in other countries with basic benefits like paid sick

leave can then extend these values. Walmart should also support all employees' ability to

organize and negotiate collectively, which has long been blocked by the business, even in

their own outlets.

Another thing to do is to offer the current workforce with essential training and skills, which

may enhance their efficiency and increase the earning potential of their employees. Overtime,

this can lead to higher profits for the organization as well as achieve employee fulfillment

and satisfaction at their global locations.

5. Conclusion
More than ever, the focus on social liability is becoming important for corporations. 'Social

responsibility' simply implies a company's duty to achieve better and viable long-term

objectives for its workers and the whole planet. As corporate social responsibility is not

mandatory, many firms may not feel that they need to do so. However, it is vital to promote

social responsibility for corporations, for a number of reasons. The significance of social

responsibility is becoming increasingly conscious of the customers and they are actively

pursuing items from ethically engaged firms. CSR shows that an organization which

participates in broader societal problems instead of those affecting its profit margins attracts

consumers with the same ideals. It makes excellent sense for company to work in a

sustainable manner. Corporations that are socially responsible build positive brands, boost

consumer loyalty, and recruit top merit personnel. The essential factor to increasing

profitability and long-term economic success are factors, all which come in the domain of

Corporate Social Resposibility.

In the case of Walmart, the company had faced many serious challenges with regard to

Corporate Social Responsibility. Since the company has such a vast global supply chain, it

may have been difficult to monitor the practices being used in the business. However, with

the change in executive level management, a more focused approach towards Corporate

Social Responsibility was seen. Along with actually indulging in CSR activities, which were

implemented in their supply chain such as revised worker’s health and safety laws,

environemtally friendly practices and ethical sourcing in true privciple which benefits all, the

company also indulged in notifying their consumers about their approach towards Corporate

Social Responsibility. This was done by including their CSR activities in the company’s

annual non-financial reports. In short, Walmart did face many challenges regarding social
responsibililty, however the company now is following social responsibility in true principle

and setting standards for others to follow.

6. References

 Chen, M. (2015, June 29). Here Are All the Reasons Walmart's Business Is Not

Sustainable. The Nation. https://www.thenation.com/article/archive/here-are-all-reasons-

walmarts-business-not-sustainable/.

 CSR Issues in Walmart. (n.d.). Retrieved from https://www.bartleby.com/essay/CSR-

Issues-in-Walmart-PK7PJY8KD6VS

 Carroll, A. B. (2016, July 05). Carroll's pyramid of CSR: Taking another look. Retrieved

from https://jcsr.springeropen.com/articles/10.1186/s40991-016-0004-6