Table of contents:
2. Responsible Management and Corporate social responsibility (CSR)
3. Values Underpinned by Ethics
4. Exploring the issue
5. Recommendation for Bellway
This report is written by an Ethics and CSR consultant of Greenleaf consultants company on behalf of Bellway to examine the actions of the organisation and to inform them about the effects of their construction on the environment to present and future generations. In 2015, Bellway has provided a house to a customer with few problems such as the use of substandard mortar, roof tiles were incorrectly fitted and gaps throughout inadequately measured windows (The Guardian, 2017). All these issues produce heat loss through the walls, roof, and windows leading to a cold house which might have affected the energy use of the house owner and engender environmental issues like global warming or climate change (The greenage, 2016). Therefore, Bellway could follow the effort and commitment of big companies such as Apple or Google to tackle global warming by using renewable energy and sustainable development in its operation in order to improve air quality, to avoid extreme weather events which could improve the lifestyle of future generations and vulnerable people like old people (The Verge, 2017) (Parker, 2011).
An ethical issue of global warming discussion revolves around the problem of justice and the duty of companies concerning the distribution of costs and benefits of greenhouse gas emissions now and to future generations (Yotova, 2009). So, Bellway might have social responsibilities and obligations to satisfy the needs of all of its stakeholders in its business operations and to guarantee the sustainability of their activities (Crowther and Capaldi, 2008). Moreover, a great application of corporate social responsibilities could show that Bellway contributes to wider society through the protection of the environment, employees commitment to the company, customers satisfaction or the reduction of social problems such as global warming (Ibid). Although the energy efficient and renewable energy are part of Bellway approach, these areas are not well covered by them (Bellway, 2017). Their responsibility approach is more focused on other topics such as the development of their employees through education and training or the creation of sustainable new communities (Ibid). So, this report will recommend Bellway to emphasise on the energy efficient and renewable energy as a solution to reduce their impact on global warming or climate change.
2. Responsible Management and Corporate social responsibility (CSR)
Organisations should not only focus on being profitable tools, they might also have responsibility and obligation to society in their actions called corporate social responsibility (Crowther and Capaldi, 2008). A relevant management of social responsibility could help Bellway to have a positive influence through its operations on the government, employees, customers, shareholders or communities (Tai and Chuang, 2014). Bellway could apply Carroll’s CSR pyramid as a component of its business strategy and it could be a great approach for the company to understand the relative importance of CSR through its four levels which are economic, legal, ethical and philanthropic responsibilities (Huniche and Pedersen, 2006). The first stage of the pyramid is economic responsibilities, this stage is the basis for all the responsibilities of a company (Crane and Matten, 2007). The key role of a business is to provide an acceptable return on investments to its shareholders, to create goods and services that customers need and want at a fair price or to provide safe and reasonably paid jobs to its employees (Carroll, 1991). Therefore, economic responsibilities could help Bellway to be dedicated to being as profitable as possible, to keep an important competitive position or to continue a high level of performing efficiency (Ibid). Legal responsibilities are the second stage of the pyramid which represents the obligation of a company to realise its economic activity within the confines of laws and regulations implemented by the state or government (Ibid). Moreover, Laws and regulations are the codification of society’s moral opinions establishing the rules by which companies should perform with regards to different areas as employment, human rights, product safety or environmental protection (Blowfield and Murray, 2011). For example, Adidas had legal problems at two of its Indonesian factories for employing child labours, giving poor wages to its employees and being brutal during long hours shift which lead to fines and the damage to its reputation since the company did not respect the international laws of human rights and employment (The Guardian, 2000). So, legal responsibilities would allow Bellway to be a law-abiding corporate citizen, to design buildings that satisfy legal obligations, to avoid fines or the damage to its reputation (Carroll, 1991). The third level of the pyramid is ethical responsibilities, these responsibilities oblige companies to do what is right and fair for consumers, employees, shareholders or the community (Ibid). There are several relevant ethical theories like the principle of social justice, egoism, utilitarian or Kant ethics of duty that Bellway could use to decide what is right and just for its stakeholders (Crane and Matten, 2007). So, ethical responsibilities would help Bellway to operate with significant societal mores, to identify and respect new ethical norms embraced by society or to understand that corporate integrity and ethical performance are connected to laws and regulations (Carroll, 1991). The last stage of the pyramid is the philanthropic responsibilities of corporations, this level represents the contribution of a company financial resources or time to improve the quality of life of its employees, community or the society (Crane and Matten, 2007). For instance, Bellway could sponsor art and sports events, finance disease treatment, support schools in poor countries or develop recreation facilities for their employees which could be a great contribution in the society in order to be an exemplary corporate citizen (Ibid). Despite the philanthropic is voluntary on the role of businesses compared to the three other responsibilities, there is consistently the societal assumption that businesses provide it (Carroll, 1991).
Therefore, the benefits of Carroll’s CSR pyramid is that it could allow Bellway to be as profitable as possible, respect the law, be ethical and be a great corporate citizen (Carroll, 1991). It would help them for business reasons as the satisfaction of customers and the attraction of employees since they will be perceived as being socially responsible or their commitment to social operations could forestall legislation and guarantee greater corporate independence from the government (Turker, 2008). Furthermore, the pyramid could also benefit Bellway for moral reasons through a responsible application of their power and resources in society or the reduction of environmental problems as global warming (Crane and Matten, 2007). There is a natural connection between the concept of CSR and stakeholders of a company (Freeman, 2010). So, Bellway could also apply a stakeholder approach in its company since it would help them to determine which stakeholders should deserve and receive consideration in the decision-making procedure, to draw a clear picture of its company or to integrate the interests of its main stakeholders into the key purpose of the company (Ibid). Although Carroll’s CSR pyramid is a great method for Bellway to apply social responsibilities in its business strategy, this approach has limitations for its vagueness and lack of rigor (The New York Times, 1970).
The CSR method strongly emphasises on the company and its responsibilities whereas corporations also have responsibilities to its stakeholders (Freeman, 2010). Moreover, the economist Milton Friedman has criticised social responsibilities arguing that only people have responsibilities and that business are not moral persons so they may not have responsibilities (Zimmerli et al, 2007). Therefore, people who have to be responsible are businessmen as a manager or corporate executives (The New York Times, 1970). Furthermore, he argued that social actions are not the problem of business people so companies should focus on maximising the profits of its shareholders in the law while following the basic requirements of society in ethical practice (Carroll, 1991). So, Friedman considers that profits, the respect of the law and ethical practice embrace three elements of Carroll’s CSR pyramid which are economic, legal and ethical responsibilities without including the philanthropic component as part of a business responsibility (Ibid). Moreover, the CSR approach does not tackle the issues of what should occur if two or more responsibilities are in conflicts (Crane and Matten, 2007). For instance, the threat of plant closures which is part of economic responsibilities and the guarantee of jobs to employees being part of ethical responsibilities (Ibid). Therefore, the commitment of Bellway in CSR could have potential benefits for them as the creation of a favourable company image, customer loyalty or the reduction of social issues but they will have to manage carefully the limitations of CSR in order to get a great outcome from it (Yoon et al, 2006).
3. Values Underpinned by Ethics
A manager or corporate executives are the connection between employees, shareholders, suppliers, consumers or the community so the ethical operation of managers could directly influence the ethical direction or values of a company (Premeaux and Money, 1993). Ethical theories are the rules and principles that regulate right and wrong for any given case (Crane and Matten, 2016). Therefore, managers of Bellway could use two theories to guide their ethical thinking which are Kantian ethics of duty and the theory of justice (Fisher and Lovell, 2009). The implementation of ethical theories could allow managers of Bellway to establish a code of ethics in the company in order to fulfil the needs of its stockholders, to make fair and accurate decisions to its stakeholders, to comply with governmental laws or regulations, to reduce the damage of the environment or to include an ethical management for any conflicts of interest between the stakeholders (Fleege and Adrian, 2004). Moreover, ethical theories could help to consider the interests of all stakeholders and to find the equitable balance among these interests if these interests are in opposition so managers of Bellway will be obligated to reasonably sacrifice the interests of the stockholders to those of the other stakeholders (Ibid). For example, the conflict of interest between shareholders and the community since shareholders often want to increase their profits but it costs a lot of money to save the environment (Independent, 2016).
Kantian ethics of duty
Kantian ethics of duty claims that actions must be led by universalisable ideas that use irrespective of the consequences of the actions (Fisher and Lovell, 2009). Moreover, an action may only be morally right when it is conducted as a duty and not as an expectation of a reward (Ibid). So, Kant created « the categorical imperatives » including three main ideas which are consistency, human dignity, and universality for a better understanding of the theory (Fisher and Lovell, 2009). Consistency means that an action may only be right if the rule regulating that action is followed consistently by everyone in all situations without opposition, Human dignity is the action to treat other people as an end and never as a means only and Universality is that the rules conducting our actions should be universally lawgiving (Messerly, 1995). Therefore, Kantian ethics of duty would suggest managers of Bellway to determine what is right and wrong to do in their management from consistency, human dignity and universality principles. Looking at the concept of consistency, managers of Bellway Plc should guarantee the protection of the environment in the company operations so all the stakeholders could act according to the ideas of their actions in all situations. This could be a principle that is consistently used in the company and could be considered as moral on the basis of consistency (Crane and Matten, 2016). According to the idea of human dignity, managers of Bellway Plc should ensure that they do not use the environment as a means to make a profit for the shareholders. So, they should not only satisfy the goals of the company since they also have the duty to reduce their greenhouse gas emissions in their building design. Regarding the principle of universality, managers of Bellway Plc should evaluate if they would like their friends and family to implement the same rule on the environment. Therefore, Kantian ethics of duty will implicate Bellway to build houses with zero greenhouse gas emissions by utilising renewable energy, sustainable development or green technologies in its activities to improve air quality, to avoid global warming or to improve the lifestyle of actual and future generations (Lombard et al, 2008). However, Kantian ethics of duty has some limitations such as it involves a certain degree of theoretical thinking despite the notion of ‘a right and wrong’ thing to do seem simple to realise or the outcome of the decision might not be worth the cost (Crane and Matten, 2016). Although Kantian ethics of duty is a great method to guide managers of Bellway, they could also apply the theory of justice in their ethical thinking.
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