Dominant business practices have been interpreted as driven by greed and characterized by total disregard for other people’s welfare. Business decisions are based on and defined by their profitability. Corporate managers hold as their priority the maximization of profits, and total commitment to shareholder interests. Consequently, interest parties like consumers, suppliers, employees and the local community are exploited in favor of profits for the entrepreneur.
In this regard, I strongly agree with Oxfam Australia’s definition of corporate responsibility, since it emphasizes the need for the corporate sector to contribute towards the improvement of living standards within the communities in which they operate. At the same time, the organization advocates for acceptable business practices that respect both civil and ethical codes of conduct(Butler, 2005).
The call to uphold universal human rights as outlined by the UN is the right step towards the achievement of the millennium development goals, especially those concerned with the alleviation of abject poverty, achieving sustainable development and addressing the dangers of global warming through environmental conservation. The policy to observe environmental regulations will go a long to protect the ecological systems which sustain human life. It is an effective tool to limit the exploitative nature of the shareholder model of business management which puts emphasis on economic gains, ignoring the possible effects on the other stakeholders and the society at large. The model is deeply entrenched in economical goals. Unrestricted pursuit of profits pushes it into a collision course with the law. It exploits employees, denies liability in case of harmful products or injuries to employees, and is prone to tax evasion and other malpractices. If maximization of profits is the motive, then standards are ignored as manufacturers aim to increase production at minimal cost and flood the market with cheap products. Cost-cutting measures are adopted, some in contravention of standard requirements. For instance, distillers may opt to overgo some stages necessary to lower alcohol content in alcoholic drinks.
Some might argue that the customer is at liberty to choose quality against prices, but then stipulated minimum standards should be adhered to. Profits should be made from offering the consumer value, and not varieties of cheap products. In addition, Oxfam’s position discourages the greed for profit that prompts investors to disregard the environmental implications of their ventures. It is a fact that pollution and global warming are today’s most pressing challenges facing the corporate sector. Ecosystems are destroyed and future generations threatened.
On the other hand, Oxfam reinforces the stakeholder approach, which guarantees stability and sustainable development by taking into consideration the long-term impacts of corporate activities. Corporations that adopt this model participate in environmental conservation projects
The organization’s policy on the engagement and recognition of local communities in business ventures promotes a culture of social responsibility aimed at spurring economic development at the local level, by ensuring that corporate profits trickle down to the common man. This is because society works in dynamic and complex ways, in which inter-party relations define human activities. No man is an island. In a human community, individual actions, especially those of corporate players, impact significantly the lives of people outside their circles of engagement. For this reason, there is need to collaborate with those likely to be affected by the corporation’s activities. Corporate management, therefore, ought to be guided by a sense of responsibility, respect for law and ethical considerations as defined by Oxfam Australia.
The organization’s advocacy for upholding labor rights and those concerned with occupational health avoids the possibility of unequal business relations, exploitation of workers and violation of consumer rights. More often than not, unchecked practices will allow corporate players to use the other stakeholders as means of achieving selfish ends. This is one ground for Edward Freeman’s opposition to the shareholder model of business management, in favor of the stakeholder approach which recognizes the social responsibility of corporations to society. Profits are not the driving factor, but the quest to create value for the whole of humanity. The role of business managers, in this case, is to coordinate and shape the patterns of relationships among stakeholders to meet their various interests (Freeman et al 2007).
Oxfam’s policies about adhering to transparent accounting practices offer a criterion for checking unacceptable business practices. With the pressures of competition and economic crises of the 21st century, the modern corporate world is struggling to resolve the conflicts between ethics, social responsibility, and economical goals in a complex business environment. Consequently, corporate managers are faced with the challenges of creating a balance between economic, ethical, legal and philanthropic obligations to the various stakeholder parties within the circles of their operations. Needless to say, this achievement is only possible if a proper management approach is adopted, which all narrows down to business standards. Oxfam refers to the Australian business standards as safeguards against business malpractices.
On the whole, Oxfam’s definition of corporate responsibility contributes to fostering good ethics in business practices. It advocates for the virtues of integrity, respect, fairness and the creation of value for various stakeholders. Corporations should be guided by grounded ideals. It promotes transparency in corporate management and obedience to the law. In this way, it avoids unorthodox practices and the resultant scandals. It recognizes the rights of the other stakeholders such as employees, consumers and the local community. Thus they are treated as partners in a cause rather than how the corporate profits. Similarly, it recognizes the corporate sector’s reliance on local communities, suppliers, employees, and consumers for their success.
In tandem with the Millennium Development Goals, Oxfam maintains that corporations should contribute to social development, as well as to the well-being of all stakeholder groups. In this way, business communities are involved in development projects in society, in the global drive towards a better future. In recognition of the dangers posed by depletion of the world’s natural resources, Oxfam Australia encourages environmental conservation ventures aimed at conserving non-renewable resources and reducing the environmental pollution. To this end, I assert my concurrence with Oxfam’s view on corporate social responsibility.
In Australia, EnviroMission is one of the few companies whose corporate responsibility policies are in line with the foregoing discussion regarding the social responsibility of the corporate sector. From its inception 25 years ago, EnviroMission has been involved in the generation of renewable energy in Australia and around the world. By utilizing solar and wind energy, the company’s overall contribution to environmental conservation could never be overestimated. This is due to the provision of alternate energy sources which reduce dependence on coal and oil, the two leading polluters.
In this regard, EnviroMission helps to fulfill the millennium development goals by taking initiatives to address global warming and environmental pollution by utilizing clean energy sources. In 2005, the company could generate about 2000 megawatts from a single solar tower, which provides “enough electricity to power around 200,000 households, but at a savings of more than 900,000 tons of carbon dioxide, an important greenhouse gas” (Butler, 2005). Similarly, the company’s drive to generate cheaper and sustainable energy is a great contribution to Australia’s economy, which relies 80% on coal energy.
Presently, EnviroMission is planning to maximize the utilization of renewable energy sources, by designing generation plants that combine solar and wind energy, “with acre-sized mirrors and multi-thousand-foot-tall chimneys generating turbine-spinning gusts” (Fox, 2010). In consideration of the terrain and climatic conditions of Australia and the heavy reliance on coal energy, EnviroMission is contributing greatly to sustainable development.
Nonetheless, some of Oxfam Australia’s policies are a pinch too tight, such as the one demanding that companies abide by local regulations, regardless of how unfavorable they might be. Accordingly, the social responsibilities on the part of corporations should not be generalized to bind investors into literally bowing down to external pressures, particularly when such pressures hinder profitable investment. The ethical theory recognizes the principle of autonomy, and therefore investors should not be bullied by public opinion as far as managing their businesses is concerned. In this regard, measures should be put in place to protect investors from unrealistic demands for corporate responsibility.
Finally, it should be noted that shareholders incur costs by injecting capital into investments. All other subsidiary elements, including employees and the local community gain from the stockholder’s investment through employment opportunities and the development of infrastructure. In this regard, the investor should also be enabled to realize profits on their investment, but within acceptable business practices. It is at this point that John Boatright argues that profits should be sought in moderation, giving surplus chunks for communal ventures (Boatright, 1999).
References
Boatright, J R., 1999. Ethics in finance. New York: Wiley-Blackwell.
Butler, R., 2005. Australian industry embraces green energy while government fights emissions cuts. Web.
Fox, S., 2010. 2, 400 Foot-Tall Solar Turbines to Power Arizona. Popular Science. Web.
Freeman, E R., Harrison, J S., Wicks, A C.2007. Managing for stakeholders: Survival, reputation and success. Chicago: Yale University Press.