What is a socially responsible business? Explain with examples.
Answer: The term sustainability in business refers to the fact how the management of the organizations are maintaining the surrounding environment and cares or it. The managements of the business organizations need to understand the fact that they are the once who can influence and change the society for the benefit of the society. It can be said that the organizations need to be socially responsible in a manner that is corporate. The advantages of corporate social responsibility are that the corporations can take smart decisions not only to enhance the profitability but also those decisions should benefit the society. It is statistically proven that in the present scenario almost 25% of the workers are against any types of social charity performed by the management of the organizations where they work. On the other hand, almost 70% of the employees stated that they will consider leaving jobs if they notice that their organizations are polluting the society or harming the community through their business operations (Cohen, 2017).
In present scenario it has been seen that the business organizations need to be socially responsible in order to create a good image or brand value of itself in the society. If the managements of the business houses take such actions, it would automatically enhance the awareness regarding the sustainability of the environment among the customers of the organizations and it would increase the overall awareness of the society regarding this issue (Christensen, Mackey & Whetten, 2014). It is seen that the Corporate social responsibility or CSR plays a significant role in making it sure that the organizations grow and develop within the society. For an example, it can be said that Google is a business organization that is known for their unique corporate social responsibility and the management of the organization takes actions that empowers the good citizenship and can be considered that they are leading the people of the society towards achieving a better living conditions (Hasan, 2016). The management of Google works on using renewable energy for the business operations and that wind is thus widely known as Green Google. Apart from Google, Xerox is another business organization whose management is renowned for taking CSR actions for the benefit of the society. An initiative taken by the management of Xerox is known as ‘Community involvement program’ that helps to boost and empower the moral of the workers of the organization as well. The management of the organization ensures that all the employees of their workforce should attend the programs so that they become motivated and gains commitment towards the organization.
Marker’s Comments: The marker will provide feedback here. Mark (5):
Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources. Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources. Demonstrates a good level of knowledge of some of the core concepts by providing some level of analysis. Utilises some current, appropriate and credible sources. Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources. Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.
Quality of writing at a very high standard. Paragraphs are coherently connected to each other. Correct grammar, spelling and punctuation. Quality of writing is of a high standard. Paragraphs are mostly well structured. Few grammar, spelling and punctuation mistakes. Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes. Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language. Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.
The assessment presents a detailed and focused summary of the ideas presented; drawing clear and well thought-out conclusions. The assessment presents a fairly detailed and focused summary of the ideas presented; drawing fairly clear and well thought-out conclusions. The assessment presents a somewhat detailed and focused summary of the ideas presented; providing some evidence of conclusions. The assessment provides limited detail with no clear summary of the ideas presented; drawing limited conclusions. The assessment fails to provide any clear evidence of the ideas presented; drawing no clear conclusions.
Answer: Bangladesh is a nation that has been prone to various natural disasters like cyclones, floods and even draughts at some point of time; and these issues has lead the majority population of the country to remain below poverty level making the socio-economy of the country losing its balance (Choi & Majumdar, 2014). The Grameen Bank was established under the supervision of Md. Yunus that provides microcredit finances to the poor citizens of Bangladesh as most of the established banks of Bangladesh do not provide necessary loans to the individuals who are below the poverty level. The Grameen Banks give loans to the poor villagers without taking any property for mortgages and the interest rates are very low so that they can repay the amount with ease. These activities were for the benefit of the poor population of the country and can be considered as a good move for the benefit of the society. The Grameen banks has been incessantly supporting the poor villagers of Bangladesh by allowing them to take out loans with which they can invest in Knitwear industry or any businesses they want. These unique programs for the society in Bangladesh initiated from the advent of Grameen Phone collaborating with the Grameen Telecom (Kumar, Hossain & Gope, 2015). Grameen bank’s activities for the benefits of the society also helped the organization to increase the revenues as on an average 99% of the loans were repaid by the villagers and in the financial year of 2014 the organization has earned almost 360 million US dollars and their expenditure was nearing 352 million US dollars (Ridley-Duff & Bull, 2015).
The main motto of the management of the organization is to provide the banking facilities to the poor population of the country to improve their living conditions and to eradicate the exploitations the poor villagers face from the private money lenders.
Marker’s Comments: The marker will provide feedback here. Mark (5):
Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources. Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources. Demonstrates a good level of knowledge of some of the core concepts by providing some level of analysis. Utilises some current, appropriate and credible sources. Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources. Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.
Quality of writing at a very high standard. Paragraphs are coherently connected to each other. Correct grammar, spelling and punctuation. Quality of writing is of a high standard. Paragraphs are mostly well structured. Few grammar, spelling and punctuation mistakes. Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes. Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language. Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.
The assessment presents a detailed and focused summary of the ideas presented; drawing clear and well thought-out conclusions. The assessment presents a fairly detailed and focused summary of the ideas presented; drawing fairly clear and well thought-out conclusions. The assessment presents a somewhat detailed and focused summary of the ideas presented; providing some evidence of conclusions. The assessment provides limited detail with no clear summary of the ideas presented; drawing limited conclusions. The assessment fails to provide any clear evidence of the ideas presented; drawing no clear conclusions.
What is ethical dilemma? Discuss with real and/or hypothetical examples of ethical dilemma.
Answer: Ethical dilemma occurs because of the issues that emerge from decision making within the organization. The main reason behind the issues is the conflicts in the moral imperative, which might not be appropriate in an ambiguous way. The complexities of the circumstances might result in contravention to another issue. The paradoxes which exist in the ethical dilemma might result in emergence of the moral code so that it might help to solve the inconsistency.
There are three basic conditions that should be satisfied in order to term the circumstance as an ethical dilemma. The chief condition is that the agent has to take decision regarding the appropriate action for that particular circumstance and then there has to be various course of action in order to open a range of opinions for that particular instance (Shapiro & Stefkovich, 2016). Apart from these, at the time of ethical dilemma, the principles which are ethical must be compromised which to put it can be stated that there are no suitable solution.
The aspects that lead to ethical dilemma makes it important to distinguish between the ethics, morals, values, laws and policies. Thus, the ethics can be described as the statements which are prepositional and are used by a large group of individuals to determine the course of action that can be identified. It majorly depends on the logical and rational criteria so that the decision can be taken and that is a cognitive process. On the other hand, values are the ideas which are held on to by the individuals. It is the notion that can help the individuals in areas that are to be attained; like equality or social justice (Anderson & Anderson, 2014).
There are basically two types of ethical dilemma that takes place among more than two standards of ethics that are conflicting towards each other within a particular situation. As an example, it can be said that the work of a social worker in village areas where the services regarding mental care are inadequate. There are some other situations a swell where the decision might lead to a disagreement among the policies, values and laws (Sjöberg, 2015). These might not be regarded as ethical dilemma but can be considered as approximate dilemmas. An appropriate example of approximate dilemma is when an individual who is a social worker is expected to report a domestic abuse or a case of child abuse and show concern in relation to the breaking through of the report. This situation must be broken down in order to identify the legal problems, ethics, morals and policies that can be differentiated among the personal and professional dimensions that can help to take the necessary decisions within the workplace.
Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources. Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources. Demonstrates a good level of knowledge of some of the core concepts by providing some level of analysis. Utilises some current, appropriate and credible sources. Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources. Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.
Quality of writing at a very high standard. Paragraphs are coherently connected to each other. Correct grammar, spelling and punctuation. Quality of writing is of a high standard. Paragraphs are mostly well structured. Few grammar, spelling and punctuation mistakes. Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes. Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language. Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.
The assessment presents a detailed and focused summary of the ideas presented; drawing clear and well thought-out conclusions. The assessment presents a fairly detailed and focused summary of the ideas presented; drawing fairly clear and well thought-out conclusions. The assessment presents a somewhat detailed and focused summary of the ideas presented; providing some evidence of conclusions. The assessment provides limited detail with no clear summary of the ideas presented; drawing limited conclusions. The assessment fails to provide any clear evidence of the ideas presented; drawing no clear conclusions.
Explain the ethical dilemma considering the accusations of a financial impropriety and so claimed highest interest rates charged by Grameen Bank.
Answer: the financial impropriety indicates that the issues regarding the finances or money. Individuals engaged in managing credit or money has to ensure the specific rules and regulations that are to be followed and that can help a business concern or an individual to not perform any sort of forgery. The financial impropriety involves any sort of fraudulent activities regarding the legal documents that concern any types of financial transactions. Thus the banks need to make sure that these fraudulent activities do not harm the reputation of the banks. It can be stated that because of the enhanced rate of fraudulent activities most of the banks are intending to create a Board of Standards to address the ethical needs at the same time as working in a bank. It is must for any bank to act as fiduciary and not on the benefits of only the customers or clients (Carter & Padgett-Walsh, 2016). Fiduciary standard of care can be broken down into various standards which can highlight the numerous areas of banking sector. In the specified case of Grameen Bank it can be observed that the banks provide micro-finance for providing better living conditions for the poor individuals and this initiative has made hundreds of people self dependent and immensely gave a boost to the economy of Bangladesh. There are somehow some ethical dilemmas present which are to be considered after providing the micro credits (Dembinski, 2017). The biggest confusion in this regard is on the reliability and validity of the micro-finance as a valid way of eliminating poverty. It can be perceived that the micro-finance has neither developed nor it is always ethically correct. The deficiency of the financial resources is the major reason behind the presence of poverty in Bangladesh. It can also be said that the microcredit can invoke higher interest rates to be paid back to the banking sector. Thus the banking institutions need to be restrained from such activities to make sure that the ethical norms are not infringed. The higher rate of interests should be lowered after giving the micro credits. The management of the banks can perceive this as the flexibility they provide to their customers might be a form of the issue, as the bank employees have to select from a method of compensation over the other and due to this the banking institutions may incur loss (Boatright, 2013). It is seen that the managers of Grameen banks always have to be aware of the ethical norms that are present in the program of compensation. The banks run as a private sector makes it more vital for it to make it sure that all the ethical dilemmas are alleviated. Standing by this philosophy, it can be said that the ethical problems faced by the management of Grameen bankis the documentation of the micro credit. Without the existence of such documents, it would have been difficult for the banks to obtain interests from the clients. It can be said that because of the financial impropriety in the banking sector, the public demanded the government to run the operations of the bank.
Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources. Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources. Demonstrates a good level of knowledge of some of the core concepts by providing some level of analysis. Utilises some current, appropriate and credible sources. Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources. Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.
Quality of writing at a very high standard. Paragraphs are coherently connected to each other. Correct grammar, spelling and punctuation. Quality of writing is of a high standard. Paragraphs are mostly well structured. Few grammar, spelling and punctuation mistakes. Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes. Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language. Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.
The assessment presents a detailed and focused summary of the ideas presented; drawing clear and well thought-out conclusions. The assessment presents a fairly detailed and focused summary of the ideas presented; drawing fairly clear and well thought-out conclusions. The assessment presents a somewhat detailed and focused summary of the ideas presented; providing some evidence of conclusions. The assessment provides limited detail with no clear summary of the ideas presented; drawing limited conclusions. The assessment fails to provide any clear evidence of the ideas presented; drawing no clear conclusions.
Outline the political governance system in Bangladesh and then assess how it impacted on the institutional governance of Grameen Bank after the spate of ethical dilemma as discussed in Part A.
Answer: The political system that exists in Bangladesh helps to assess as well as understand the ethical issues that exist in Bangladesh. It is seen that the welfare of the country and the responsibilities of the people are headed by the Prime Minister. The Prime Minister is considered as the most powerful citizen in the country as she takes every decision of the State. In the words of de Barros et al. (2015), due to the existence of political power, Bangladesh shows symptoms to an underdeveloped country in terms of political scenarios. The wealth of the people dominates the results of the political parties and its existence drives the major progress of the country.
Having analysed the scenario of the political parties it can be said that Grameen Bank follows a more institutional governance system. Moloney (2016) stated that institutional governance is an evolved form of governing that gives education as well as training required for improvement. Grameen Bank provides similar opportunities to the people and the employees try to improve their performance by learning from the mistakes. The ownership of the private sectors acts as instigation as political influence is absent in the bank. The financial impropriety causes an ethical dilemma for the bank and there exist demands for making the bank into a public sector. However, with the existing culture in the bank, Grameen Bank can mitigate such dilemmas and demands by maintaining its culture.
Frølich and Caspersen (2015) stated that the ethical issues were the main result for the demand of making the bank into a public sector. One form of consolidation of the bank is the fact that it is not considered by the World Bank. This provides opportunities to Grameen Bank with the freedom to continue with the socially responsible activities such as providing micro-finance to the customers. This is a huge contribution to the society, as it helps in the eradication of poverty from the country. One of the biggest advantages of Grameen Bank is that it exists in over 81,000 villages located all over the country. Thus, it covers a huge area of space and contributes strongly to maintaining the social responsibility that is expected from the bank.
Hence, it can be said that the major difference between institutional governance and the political system of Bangladesh is that the Prime Minister controls every proceeding that takes place in the country. The similarity exists in the fact that the both the Prime Minister as well as Grameen Bank take into account the interests of the local people (Ostrom, 2015). Hence, the ethical dilemma can be mitigated with the cooperation between the Governance body and the institutional governance that exists in the bank.
Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources. Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources. Demonstrates a good level of knowledge of some of the core concepts by providing some level of analysis. Utilises some current, appropriate and credible sources. Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources. Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.
Quality of writing at a very high standard. Paragraphs are coherently connected to each other. Correct grammar, spelling and punctuation. Quality of writing is of a high standard. Paragraphs are mostly well structured. Few grammar, spelling and punctuation mistakes. Quality of writing is of a good standard. Few grammar, spelling and punctuation mistakes. Some problems with sentence structure and presentation Frequent grammar, punctuation and spelling mistakes. Use of inappropriate language. Quality of writing is at a very poor standard so barely understandable. Many spelling mistakes. Little or no evidence of proof reading.
The assessment presents a detailed and focused summary of the ideas presented; drawing clear and well thought-out conclusions. The assessment presents a fairly detailed and focused summary of the ideas presented; drawing fairly clear and well thought-out conclusions. The assessment presents a somewhat detailed and focused summary of the ideas presented; providing some evidence of conclusions. The assessment provides limited detail with no clear summary of the ideas presented; drawing limited conclusions. The assessment fails to provide any clear evidence of the ideas presented; drawing no clear conclusions.
Applying your knowledge of corporate governance principles and ethics, what would you suggest for improvement of the political governance systems in Bangladesh and institutional governance in Grameen Bank?
Answer: Tricker and Tricker (2015) stated that corporate governance is a system that consists of rules and policies that is required for a successful business. The interests of the stakeholders of a company are considered and balanced to fulfil the demands of every stakeholder. An organisation is controlled and directed by the rules and procedures set by the stakeholders particularly the shareholders of a company. These rules and policies prevent a company from any type of unethical practice that a company may follow. It is an important aspect that the Government of Bangladesh and Grameen Bank need to follow for the welfare of the country and the people. A corporate governance framework can be followed that outlines the fair marketing policies that are needed for the success of the business.
According to Du Plessis, Hargovan and Harris (2018), a proper governance framework is required for the welfare and the development of an economy. The common factor of interest among the Government and Grameen Bank is the fact that both the sectors take into account the interests of the local people. This is an important aspect as it is evidenced that the interests of the stakeholders need to be considered for the ownership functions. Without proper support from the stakeholders, it may be difficult for the bank to continue its work in the field of social activities. Hence, it is important to uphold the interests of the stakeholders to prevent the bank from committing more unethical practice. However, Gitman, Juchau and Flanagan (2015) are of the opinion that communication is the most important form of corporate governance.
This is because it is the duty of the managers of the bank to ensure that there is no communication gap between the customers and the employees. Communication gap may lead to misunderstanding, which may cause the loss of reputation of the bank. In this regard, the preferred form of communication is the oral communication so that customers can come up with any queries about bank schemes. Apart from this advertisement and emails can be considered for the welfare of the bank.
In the words of McAlister, Marcos and Ferrell (2016) in order to maintain a perfect governance system, Grameen Bank as well the Government cannot indulge in any type of bureaucracy. This is mainly because of the fact that high control of the affairs of the bank can help in diverting from the ethical issues that exist. Hence, the changes that have been recommended can help Grameen Bank mitigate any ethical dilemma that it may face. The common interest of the Government and the bank need to be taken into consideration and based on these changes can be made. The rules of the country and the company need to be followed strictly.
References:
Du Plessis, J.J., Hargovan, A. & Harris, J., 2018. Principles of contemporary corporate governance. Cambridge University Press.
Gitman, L.J., Juchau, R. & Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.
McAlister, D.T., Marcos, S. & Ferrell, O.C., 2016. Corporate governance and ethical leadership. Business Ethics: New Challenges for Business Schools and Corporate Leaders: New Challenges for Business Schools and Corporate Leaders, p.56.
Tricker, R.B. & Tricker, R.I., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Christensen, L.J., Mackey, A. & Whetten, D., 2014. Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of Management Perspectives, 28(2), pp.164-178.
Cohen, E., 2017. CSR for HR: A necessary partnership for advancing responsible business practices. Routledge.
Hasan, M.N., 2016. Measuring and understanding the engagement of Bangladeshi SMEs with sustainable and socially responsible business practices: an ISO 26000 perspective. Social Responsibility Journal, 12(3), pp.584-610.
de Barros, F.B., Goedegebuure, L., Meek, V.L. & Pettigrew, A., 2015. Institutional governance, leadership and management of research for innovation and development. In The Palgrave International Handbook of Higher Education Policy and Governance (pp. 261-280). Palgrave Macmillan, London.
Frølich, N. & Caspersen, J., 2015. Institutional governance structures. In The Palgrave International Handbook of Higher Education Policy and Governance (pp. 379-397). Palgrave Macmillan, London.
Moloney, N., 2016. Institutional governance and capital markets union: incrementalism or a ‘big bang’?. European Company and Financial Law Review, 13(2), pp.376-423.
Ostrom, E., 2015. Governing the commons. Cambridge university press.
Boatright, J.R., 2013. Ethics in finance. John Wiley & Sons.
Carter, W.H. & Padgett-Walsh, K., 2016. Introduction: On the ethics of debt. Finance and Society, 2(1), p.1.
Dembinski, P.H., 2017. Ethics and Responsibility in Finance(Vol. 2). Taylor & Francis.
Iqbal, Z. & Mirakhor, A., 2017. Ethics and Finance. In Ethical Dimensions of Islamic Finance (pp. 1-24). Palgrave Macmillan, Cham.
Anderson, M. & Anderson, S.L., 2014, July. GenEth: A General Ethical Dilemma Analyzer. In AAAI (pp. 253-261).
Bennett, J., 2017. Editorial The insufficient integration of medicine into clinical dental education: a missed opportunity or an ethical dilemma?.
Shapiro, J.P. & Stefkovich, J.A., 2016. Ethical leadership and decision making in education: Applying theoretical perspectives to complex dilemmas. Routledge.
Sjöberg, I., 2015. Medical consequences of whipping. Ethical dilemma for physicians. Lakartidningen, 112.
Choi, N. & Majumdar, S., 2014. Social entrepreneurship as an essentially contested concept: Opening a new avenue for systematic future research. Journal of business venturing, 29(3), pp.363-376.
Kumar, D., Hossain, A. & Gope, M.C., 2015. Role of micro credit program in empowering rural women in Bangladesh: A study on Grameen Bank Bangladesh Limited. Asian Business Review, 3(4), pp.114-120.
Ridley-Duff, R. & Bull, M., 2015. Understanding social enterprise: Theory and practice. Sage.
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