Corporate Social Responsibilities & Ethics-Samples for Students

Questions: 1.Identify and briefly describe two major ethical issues from the article titled Enron Ethic. 2.Do you think that Kelloggs CSR statement is sincere, or is the company merely trying to convince stakeholders that it is a socially responsible company? 3.Fair trade can sometimes be grounded in the assumption that it helps to address slave labour and give fair returns to farmers. What other perspectives on fair trade could be considered? Do corporations have a responsibility to the global community? Answers: 1.The two major ethical issues faced by Enron were allowing the employees to be aggressive instead of being tactical and the second ethical issue caused at Enron was its false projection of its subsidiaries as its partnerships. The management of Enron led by CEO Jeffrey Skilling encouraged the employees to be aggressive and push limits of ethics. The employees started executing their business operations in unethical methods and the senior managers did not take any step against them. The apex management distorted the financial statements and misrepresented the transactions(Sims and Brinkmann 2003). Enron in order to accumulate huge wealth entered into pseudo-partnerships and started earning revenue by selling its assets and recycling it back into the capital to project misleading figures before the shareholders. The company acquired revenue from the subsidiaries to earn unethical revenue. Enron made its subsidiaries ships look like partnerships to dupe the Securities exchange commission. The company got its pseudo-partnership companies financed by bits own subsidiaries which were in reality illegal as per laws set by the Securities Exchange Commission(Simpson and Brody 2013). The discussion presents two ethical issues and they can be considered major becaue they breach stakeholders like the Securities Excahnage Commisions(SEC) trust and the shareholders interest.. The first ethical issues was following an aggressive business approach by the employees and no ethical actions taken by the apex management. The second ethical issue was forming false partnership which were in reality subsidiaries. The employees in case of the first issue distorted financial reporting and showed inflated revenue which breached the interest and trust of the shareholders(Securities and Exchange Commission 2017). The projection of false partnerships caused breach in the laws of partnership formed by SEC. Thus it can be inferred that Enron by its fraudulent and unethical business operations breached stakeholders interests and created major ethical issues. 2.Kellogs Company is merely trying to convince the stakeholders that it is a socially responsible company. Kellogs in a multinational break cereal company which is headquartered in the United States of America. The company operates in the international market and faces stiff competition from international competitors like Nestle and also from local competitors. The multinational companies often use their corporate social responsibilities to create a healthy image in the market, attract customers and partnerships and earn higher profits(Kelloggcompany.com. 2017). The discovery of high sugar content and low protein content in its food products which harm the health of the consumers clearly shows that Kellogs in reality is not socially responsible and uses its CSR to convince stakeholders about its responsible image. An assessment of the CSR statement of Kellogs against the Kantian theory shows that the company does not follow the theory. The corporate social responsibility statement of kellogs shows that the company aims to benefit its consumers by providing healthy food products. The Kantian theory states that the companys must produce products which would benefit all the users and they should not the consumers to sell their products and earn profits. An evaluation of the Kantain theory shows that Kellogs merely sells food products which are not healthy and merely appears to be healthy. Hence, it can be inferred that Kellogs breaches the Kantian theory and offers unhealthy products to earn profits(News.bbc.co.uk 2017). 3.It is assumed that Fair Trade can help the farmers get legitimate returns for their produce and deal with slavery, however fair trade can also be viewed as means to achieve sustainable economic development of the producers of raw materials. Fair Trade is a movement which promotes that the agriculturists who provide the multinational companies with their raw materials like milk, corn and cereals should get legitimate and guaranteed returns for their produce. This guaranteed return will help the agriculturists to acquire resources like high quality seeds to maximise their produce. This will help the farmers to sell the produce and earn good revenue which will contribute towards their social and overall development. Thus, Fair Trade can promote sustainable development of the producers and elevate their social conditions(Fairtrade.net 2017). Corporations are responsible to the global community because they gain all the resources from the producers who are a part of the society. They owe their financial strength to the shareholders who invest in their shares. They sell their goods to the consumers in order to generate profits and competitive advantage in the market. The companies acquire human resources who form business strategies and execute them. It can be pointed out that shareholders, consumers and employees are components of the global community. Thus, it can be inferred from the discussion that the corporations are dependent on the global community for production of goods, generation of revenue and their very sustenance. Hence, they are having responsibilities towards the global community(Cheng, Ioannou and Serafeim 2014). References: Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance.Strategic Management Journal,35(1), pp.1-23. Fairtrade.net. 2017. Fairtrade International (FLO): Child and Forced Labour. [online] Available at: https://www.fairtrade.net/programmes/child-labour.html [Accessed 25 Aug. 2017]. Kelloggcompany.com. 2017. Kellogg Company | Corporate Responsibility Report. [online] Available at: https://www.kelloggcompany.com/en_US/corporate-responsibility.html [Accessed 25 Aug. 2017]. News.bbc.co.uk. 2017. BBC News | HEALTH | Cereal bars 'unhealthy'. [online] Available at: https://news.bbc.co.uk/2/hi/health/1613141.stm [Accessed 25 Aug. 2017]. Securities and Exchange Commission. 2017. Registration of Partnership - Securities and Exchange Commission. [online] Available at: https://www.sec.gov.ph/services-2/company-2/registration/primary-registration/partnership/ [Accessed 25 Aug. 2017]. Simpson, S.V. and Brody, K., 2013. The Evolving Role of Special Committees in MA Transactions: Seeking Business Judgment Rule Protection in the Context of Controlling Shareholder Transactions and Other Corporate Transactions Involving Conflicts of Interest.Bus. Law.,69, p.1117. Sims, R.R. and Brinkmann, J., 2003. Enron ethics (or: culture matters more than codes).Journal of Business ethics,45(3), pp.243-256.