Introduction: Ethical Decision Scenario
Early this year I was attached to a company as an intern, which is believed to have the best corporate social responsibilities in our state. Vistafee Inc., the company, has been importing coffee from Brazil and processing it before distributing it to retailers in the state. At the time, the company management found itself in a major ethical dilemma. Vistafee Inc. is only rivaled by another company in our state, Lonax Coffee which had a fire accident during that time. Lonax Coffee was struggling financially, and its fighting power with Vistafee Inc. had waned due to the accident. At the same period, our CEO got a new business deal from an African country to source coffee for our country. The deal had potential to lower the coffee prices produced by Vistafee Inc. by half which had the potential to drive the Lonax Coffee out of competition especially at this time it was struggling to stabilize. The management had to make an ethical decision when determining the new coffee prices to enable Lonax Coffee to continue with its business operation and ensure its employees do not lose their jobs when the factory closes.
Potential Ethical Implications of Vistafee Inc. Decision
Vistafee Inc. was faced with an ethical dilemma. The company felt it could lower its coffee prices to the retailers to increase its sales and consequently profits. However, the decision would have sunk its rival company Lonax Coffee which was barely surviving on the little profits it was getting after the fire accident that had burnt its entire stock. The company had employees similar to Vistafee Inc., and the move would lead to their sacking which was the major ethical implication. Secondly lowering the prices would have also led the company to halt its operations which would make it difficult to pay their debts and consequently lead to auctioning off their firm equipment.
Effects on the Decision Making Process
Ethical situations and dilemmas in business situations have a lot of challenges to the management and other decision-makers in the organization. In the above situation, Vistafee Inc. faced an issue that had a large impact in the company (Fafaliou & Donaldson, 2015). The management of the firm often emphasized on placing the welfare of others than self. In hard times in the firm, the management would plead with the workers to accept salary cuts to keep the company in business and compensate them later. The situation put the company now in the position of minding the issues of its rival company and its employees. Vistafee Inc. felt its decision will ruin their rival investments and its employees. The decision making process had to consider the ethical principle of the common good. The management made the decision not to lower their prices to save their competitors from running out of business and also ensure their employees do not lose their jobs.
Corporate Social Responsibility of Vistafee Inc
Corporate social responsibility involves the idea of companies involving themselves in the environment that surround them. Most of them are engaging in various non-profit activities to cater for the environment or social issues in the public sector. Vistafee Inc. has also been involved in such activities throughout the state the reason it has become a household name in the region. One of the social responsibilities the company has holding is sponsoring football tournaments to young people while campaigning against drug abuse. This annual activity widely attracts a lot of people, and the company is known to use millions of dollars to invite renowned football stars to come and mentor the young stars as they sensitize young people against drugs and substance abuse.
Vistafee also holds annual environmental week where the company workers move from town to town cleaning the streets. A lot of resources is used by the company is used in the process that also involves the planting of trees to reduce the carbon print. The company also has been sponsoring top three kids to universities of the workers who are in the company. These corporate social responsibility activities by Vistafee Inc. involve a lot of money from the company but have led to the company becoming popular and also attracting the top talent.
Influence of Corporate Social Responsibility on the Organization
Vistafee Inc. had engaged in the community and environmental affairs for eight years when the current CEO took office. Ever since then, the company has made huge strides from being a start-up company to the leading coffee processor and distributor in the whole state and even extended in the neighboring states. The following are some of the visible benefits the organization has reaped from the corporate social responsibility.
- a) Enhanced Relationship with Clients
The social activities the company has engaged in the community makes many people love the company and its products. Clients feel free to engage the company since on the firm’s environmental week as the company invites its clients in thee activity. This cooperation makes the clients feel like part of the company and also extend that loyalty to purchasing the firm’s products.
- b) It Enhances Productivity among the Employees
The act of sponsoring top kids from the company staff and also engaging the young people in developing their talents and sensitizing them against drugs and substance abuse has made employees more committed to the company. Unlike other firms where they usually fell exploited, the employees at Vistafee Inc. are always motivated to work hard to support the management in meeting its objectives.
- c) High Reputation at Low Cost
The community engagement has made the Vistafee Inc. a household name in the region. Many consumers of coffee get to know about the company, not from advertising activities but through the charity activities. Consequently, the advertising budget in the company is slashed as the reputation of the company grows. Usually, the local media stations often cover the companies activities especially football tournaments and environment conservation activities thus raising the company’s popularity.
Application of Critical Thinking to Corporate Social Responsibility
Critical thinking involves setting ones based on rational thinking and systematic evaluation of issues. Taking part in corporate social responsibility involves engaging in critical thinking to ensure the activities will not hurt the business operations or strain the employees.
First, in engaging in CSR activities the company needs to critically think about the activities, it is engaging in and whether they have been engaged by other organizations (Carroll & Shabana, 2010). This will help the company in engaging in activities that will help it develop its name and also contribute positively to the community without duplicating other companies’ activities.
Secondly, before engaging in the CSR activity, the company needs to critically figure how it will manage and sustain the activity without putting too much pressure on its core business. Some activities can easily draw the attention of the whole company which can be dangerous to the company operations.
The third way to engage in critical thinking on CSR issues involves convincing the employees in the firm to support the CSR project (Hartman, DesJardins & MacDonald, 2014). Some of the activities need employees to volunteer their services or resources. Critical thinking is required to rally them behind the organizations CSR activities.
Ethics and corporate social responsibility are major pillars of the business today. Companies are engaging in ethical decisions nowadays to ensure their public image remains intact and prevent crises. Corporate social responsibility also has helped companies develop a good company image and organization culture. The paper has discussed various applications of business ethics and corporate social responsibility in the today’s world.