Ethics and Social Responsibility in Business Strategic Planning
June 20, 2014
Company stakeholders may not only be investors in a company they may also have voting power that can influence the social and financial impact of a company. With this voting power comes a social responsibility to the employees, customers and anyone associated with the company. The company's bottom line is not the only thing that must be considered when using their influence to shape company goals.
Ethics, social responsibility and planning
Strategic planning is the process of creating a mission statement, vision statement, policies, ...view middle of the document...
The needs and desires of stakeholders may not align with those of the consumers for which the company produces products. An example for this would be a company that produces high-optioned vehicles for low prices might be able to squeeze more profit out of customers by charging for the options, but it would alienate its customers. Stakeholders must consider the social impact of their segmentation, targeting and positioning (STP) in the marketplace. (Schiffman, Kanuk, Wisenblit 2010). The company's STP is the type of customer to which it sells products (segment), the advertising method it uses to reach that customer (targeting) and the current marketing advantage it has among competitors in the industry (positioning).
Monitoring and auditing is critical to ensure that a company is socially responsible. A company can significantly limit its tax burden by storing profits in off-shore bank accounts. However, this practice might put the company in a legal gray area that could make potential investors stay away. Stakeholders have to insist on company transparency and adherence to industry norms to avoid breaking their unwritten social contract to consumers. Employee pay, safety, health quality and job security might sometimes rest in the hands of stakeholders. It is the social responsibility of the stakeholder to ensure that the employees of the company work under the best conditions available. A company could potentially increase its profits by working employees harder for less pay, but the effects on the employees would be negative. Stakeholders must push for profits and employee satisfaction, simultaneously.
An example of an unethical behavior for a company or individual was when ImClone's stock price dropped...