MGT498

1. Running head: ETHICS IN THE WORLD OF BUSINESS 1
Ethics in the World of Business
Mohamed Maghraoui
MGT/498
April 4, 2014
PAUL KRAMER

2. ETHICS IN THE WORLD OF BUSINESS 2
Ethics in the World of Business
Strong business ethics, which include honesty, integrity, and fairness to all, play a critical
role in running a successful organization as this function of a business operation allows today’s
businesses to characterize the differences between correct and incorrect ethical behavior.
Additionally, strong ethical values also help businesses gain a competitive advantage (Johnson,
2008), and it allows them to ensure that every employee is following the ethical standards that
have been established by the leaders of his or her organization.
To gain a better understanding of the importance of strong ethical value, this paper will a)
explain the role of ethics, social responsibility, and sustainability in relation to organizational
strategy. B) Examine the various types of shareholders that influence’s a company strategy. C)
Identify at least one (or more) examples of a company that exemplifies sustainability and social
responsibility in their operation.
Role of Ethics, Social Responsibility, and Sustainability on Strategy
Ethics, social responsibility, and sustainability are one of several factors that historically
have an effect (either positive or negative) on an organization’s strategy. For example, a
company ethical value can have a far-reaching affect on the following areas of an organization:
 Public Image (or credibility level): Public image is how a company is viewed by
the people or entities in their market environment. A lack of trust and credibility
can place doubt in the minds and hearts of consumers, distributors, and suppliers
causing a business to lose potential profits, resources, and partnerships.

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 Business Policies (or code of ethics): This aspect of a company implements
policies or procedures regarding things, such as the promotion of diversity and the
prevention of discrimination among the consumers and employees of their
organization. Ensuring a diverse and unbiased organization will allow businesses
to increase the odds of attracting a wider variety of future consumers, investors,
and employees to their organization, regardless of his or her race, gender, or
religion preference. Additionally, maintain a diverse workplace can also have a
positive effect on a company’s credibility and ability to become more creative and
innovative with their ideas as they will have a larger foundation of people to pick-
and-choose from.
 Short-term and Long-term Strategy Measurements: Today’s businesses use
measuring tools, such as metrics to evaluate if they are achieving ethical
standards, and other business goals or objectives.
Effects of Social Responsibility on Strategy
Corporate social responsibility is a very important to an organization’s economic and
social strategy as this aspect of business “is concerned with treating the stakeholders of a
company or institution ethically or in a responsible manner” (Hopkins, 2011, para 2).
Additionally, social responsibility is also is also important to a company’s success as it helps
businesses develop different ideas and policies that will improve the quality of life and service to
an organization’s workforce (and their families) and the community in general. To maintain high
levels of social responsibility, business managers must continue to take their employees,
shareholders, consumers, and business community voice and opinion into consideration when
developing and implementing their business strategy.

4. ETHICS IN THE WORLD OF BUSINESS 4
Effects of Sustainability on Strategy
Sustainability is a concept that consists of both social and economic components and
those social and economic components of this concept can have an influence on the value of
organization’s products and services to their consumers. Additionally, the concept of
sustainability can also have effect an organization’s strategy by influencing things, such as a) the
way a company identify their internal issues. B) The way a company gathers their research and
classifies them into individual categories. C) The way an organization ranks and implements its
priorities and policies into their business strategy (Bansal, & Laughland, 2011).
Some of the main obstacles that businesses must overcome when considering the effects
of sustainability on their business strategy include obstacles, such as 1) far too many
sustainability metrics that measure (some effective, some ineffective) sustainability and its effect
on strategy. 2) Government policies and its effect on short-term and long-term sustainability
efforts. 3) Categorizing and prioritizing the more immediate short-term and long-term threats or
opportunities that could have the most affect (positive or negative) on the organization.
Types of Shareholders and their Influence
As today’s corporations continue to expand and globalize their business operations into
overseas markets, the more influence that shareholders have in the daily business decisions
(customer service, types of product and logistics, prices, ethical values, policies, etc.) and
activities of an organization. Employees, customers, investors, communities, and business
partners represent several types of shareholders that carry major weight in a company business
decisions and activities.

5. ETHICS IN THE WORLD OF BUSINESS 5
Corporation that Exemplifies Sustainability and Social Responsibility
With growing public awareness and consumer demand for acting in a fiscally and
socially responsible manner has become very important for today’s businesses (small and large)
to exemplify high levels of sustainability and social responsibility in their present and future
business operations. Starbucks Coffee is a prime example of an organization that exemplifies
high levels of sustainability and social responsibility.
One of the main sustainability efforts that Starbucks have implemented is their
organization’s emphasis on introducing more green coffee items on their Starbucks menus
around the world. To support this move into the 21st
Century, the leaders of Starbucks created a
guideline called C.A.F.E. Practices, which helps Starbucks companies around the world, achieve
benchmarks, such as social responsibility, product quality, economic accountability, and
environmental leadership (Loidice, 2010). In addition to their green coffee movement, Starbucks
leaders also decided to support a product called Ethos Water. Ethos Water is a clean water
product that helps more than one billion people around the world gain access to clean, and safe
drinking water (Loidice, 2010).
Conclusion
Many businesses have continued to research and implement different ethical strategies
into his or her organization so that he or she can identify the most effective evaluation methods
to gauge the importance of implementing and sustaining a strong ethical organization. What this
paper has discovered is that strong ethical values have been and will continue to play a critical
role in the short-term and long-term success of an organization.

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References
Wheelen, T. L., & Hunger, J. D. (2010). Concepts in strategic management and business policy:
Achieving sustainability (12th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.
Bansal, T., & Laughland, P. (2011). The top ten reasons businesses aren’t more sustainable.
Retrieved October 28, 2012 from, http://www.iveybusinessjournal.com/topics/social-
responsibility/the-top-ten-reasons-why-businesses-aren%E2%80%99t-more-
sustainable#.UI2T8WcXu2V
Hopkins, M. (2011). Definition of corporate responsibility. Retrieved October 28, 2012 from,
http://mhcinternational.com/articles/definition-of-csr
Johnson, A. (2008, March, 2). Practicing good ethics gives competitive advantage. Retrieved
October 28, 2012 from,
http://www.bizjournals.com/denver/stories/2008/03/03/smallb6.html?page=all
Loidice, B. (2010). 10 companies with social responsibility at the core. Retrieved October 28,
2012 from, http://adage.com/article/cmo-strategy/10-companies-social-responsibility-
core/143323/