When an entrepreneur is initiating an enterprise he or she has an aim in the mind. A certain profit percentage in a stipulate period, or an expansion plan or a diversification plan etc. The goal of an enterprise s different depending on the future plans and the business models of the company. In the process of reaching the larger goal the company sets short-term aims which are achieved with the help of the management and the employees together. Weather it is a small scale or a large scale industry this is basically how a business organization works. In order to get to the larger goal there has to be some guidelines and some principles that should be followed by the institution to be able to operate in the society and also earn goodwill which is going to increase the business in the long run. Creating and maintaining goodwill is very important for a company to be able to create contacts in the line of business and also to hire new employees (Allan, 2012).
An entrepreneur is expected to recognize the fact that the society and the environment have offered limitless resource for the business to boom and hence it is a cardinal duty of the organization to give back whatever is possible by the company to the society and the environment. Much like an individual an organization along with enjoying rights that the society is offering has some civic duties to fulfill as well so that the actions of the organization benefits the society at large without asking anything in return. In following this order, there will be an equilibrium created in between economic growth and the welfare of the society as well as the environment (Batstone, 2003).
Sustainable business can be defined as the process by which a business organization conserve and preserve the natural resources available and the environment. It also means to create a societal equity, promote the well-being of the people working for the organization and initiate and support the policy of fair trade. It is the strategic planning and coordination of social and environmental requirements keeping in mind and the concerns to ensure responsible, ethical and ongoing success (Ferrell, Hirt& Ferrell, 2016).
The concept of triple bottom line suggests that there are three fundamental bases or pillars of an organization; economic, environment and society. From a broader perspective if the operations of the business are analyzed, it has the influence and revolves around the three Ps: planets, people and profit. This is a considerably new idea and concept, which is in contrast with the traditional business culture. According to the traditions, environment and societal duties were considered to be in contradiction with each other, as they were seen and speculated as liability. The goal of the companies previously used to be just surface around the economic and financial growth of the company itself that explains why the social and environmental responsibilities were regarded as liabilities to the company (Glac, 2015). For example: companies that use non-renewable resources extensively for the production and manufacture of the products or services offer to the customers did not think about moving into an eco friendly option as theta would mean a huge investment and the cost of this investment was considered to be in conflict with the profit making or expansion goals of the company. The return on investment of the sustainable project has a longer deadline and hence there is a lot of skeptic view regarding the success or failure of sustainable ventures (Milne & Gray, 2013). The concept and the idea of free cooling explains the situation a lot of cash is invested in implementing the neutrally cooling device in the office space or the area of operation and it also requires time to effectively start working by the effort is worth it and is recognized by many entrepreneurs who are trying to make a change (Henriques& Richardson, 2013).
Encouragement of innovation is the key to develop a sustainable business, new and improved ideas of dealing with the well being of the employees and making arrangements for exhausting lesser amounts of non renewable resources. In order to be innovative the organization also has to have a wide mind set and be dynamic in nature to follow an adaptive path of operation (Halpern et al. 2013).
As stated by the World Council for Economic Development (WCED), sustainable development is the process by which the organization gathers the requirements of the current position of the working of the organization without negotiating the prospects of future requirements of the company. Therefore, in order to have an organizational development to be sustainable, it must cater to some of the significant problems of the society at the macro level, such as: economic development (following the path of creativity, incurring wealth, and increasing productivity) followed by social equity (wellbeing, health, poverty and human rights, community) and environmental accountability (catering to the weather and climate change, land use, biodiversity) (Gold, Hahn &Seuring, 2013).
Some of the challenges faced by the companies’ who have a sustainable business models are: first of the cash flow in the investment to install the projects related to sustainability is huge. Most of the time these projects are non-profit seeking and do not have a positive cash flow from the investment. The profit of the business has to play a large role in order to have a sustainable business model. Next, if a company has a narrow outlook and refuses to take up the mantel of change and cannot be dynamic in the operation then it is difficult to implement any kind of sustainable business model in such an organization. In order to have a sustainable business the company has to understand that the traditional business model is not effective. The third challenge faced by the organization is, is the fact that it is important to gather the right resources at the right time for developing sustainable business ideas. It is difficult to gather people who think alike and will strive for sustainability (Savitz, 2013).
In simple words global ethics is the theory of ethics, principles and guidelines which is accepted by the global forum to be followed by an institution, individual and also a government so that there is equilibrium in between the various aspects of the society. It can be defined as amoral point of view according to which there are important a several ethical relations between the society and between individual, institution or government living or operating in the society.
The concept of global ethics is a combination of some of the claims about the existence of universal values and norms along with the claims about the responsibilities or obligations that are also universal in nature (Widdows, 2014).
Principles, values and ethics set guideline for the daily operation of any organization. It is one the basis of these ethics that the future of an organization depends. It helps create company goodwill among the customers and also among the business world and in the industry of operation which in turn helps the company to garner reputation and make a name for the organization. Ethics are known to be the backbone of the organization as it has a long term effect and shapes the image of the organization. An ethical method of operation does not depend on the scale of the business or the nature of the industry the business is operating in. it is basically the values that the company follows from the time of inception. But overall ethics is just not doing what is right but is also doing it in a smart way (Gibson, 2007).
There are evidences found that reveal that due to moral and value based decision-making and policy making process boosts and encourages the morale of the employee promotes the reputation of the company and helps the company garner goodwill which later on transfers into an assets of the company, values and ethics of the company also bestows a significant amount of trust and crates loyalty among the customers as well as the employees of the organizationand also in the long run ethics also serves as a benefit for the long run achievement of the goal of the company (Monin, 1999).
There are some aspects and scenarios in which values and ethics are being incorporated in the daily operations of the business:
Diversified values: the values and principles that a company follows have a direct relation with the cultural and ethical background of the owner and the founder of the business. A Hindu entrepreneur from India will have different values from that of a Jewish entrepreneur form Europe. The principles followed by the company offer a crucial reinforcement for constructive dialogue, harmonious building, and leadership (Henriques& Richardson, 2013).
Ethical decision making: it is the process by which the principles and the values followed by the management of an organization guide the decision making process of the organization. It is always backed up with what is right and what is necessary to operate on a smart basis.
Work Culture: job satisfaction, gender equality, quality working environment and support from the management in terms of compliance and grievances are some of the most important aspects that an organization must take into consideration while making the policies of operation. The productivity and the full capacity of any employee has a lot do with the environment the staff is working in, along with that job satisfaction is also a mode of motivation for the employee hence that also has to be kept in mind to get the optimum productivity of the. High performing resources of an organization is always in search of a good environment to work in as mental peace and an understanding circumstance affects a lot of in the productivity of a person.
Inducing motivation: the work force is the support system of a business organization and every now and then a little boost of the morale is very necessary for the smooth running of the business operation (Crane &Matten, 2016).
Following ethics is like following a rule book and a guideline that is accepted by all and the consequence of identifying the importance of global ethics helps any institution or organization to work in a smooth way. But there are some of the global ethics issues that have been identified are as follows:
Employment issues: for a multinational company this problem is very significant and prevalent. Especially the difference in the wages of the employees, wages are dependent on the location of the business operation and hence there will be a difference to maintain equilibrium in the economy but then the level of the wages should be fair and honest in respect to the location and the post of the employee (Sarkis, Koo, & Watson, 2013). For example: a person working a manager at Amazon in India will relative get a much lesser price for his service than a person working in America in the same position. Organizations should come to a unanimous decision to set a standard that should be applied to the place of origin and also for the international offices or places of operation. The employment policies of the company should understand the fact that the culture and the ethical background of any other international nation state are different from the home country and hence the holidays and the bonuses and the incentive should be planned in sync with the background of the company. There should also be some standards set by the organization to safeguard the preliminary rights and honor of employees (Gibson, 2007). For example: celebration or observation of national holidays in the country of operation can be a way for multinational enterprises to support culture and ethnicity.
Human Rights: Some of the human rights are globally accepted like the freedom of association, freedom of speech, freedom of assembly, freedom of movement, and many more. A company has no rights over these basic human rights even if an individual is an employee of the company. An employee is an individual who is working for the company to earn a livelihood, the organization has no rights over the personal life of the employee unless that affects the business, and in that case there are other legal issues which have to be discussed. In no way an employee or a customer should feel violated by the company and the policies of the company (Halpern et al. 2013). For example: if there is a situation where the senior is oppressing the perspectives and the view points of the subordinates to an extent that they feel neglected and start developing an unsatisfied take on the job. This is a case which may also lead to higher employee turnover and hence it is very essential for every organization to observe the globally accepted human rights.
Environmental issues: There are organizations that are heavily dependent on non renewable natural resources, there are also organizations that omit a lot of air pollutant to the environment and also produce water pollutant as well as noise in the environment. For example oil and gas companies have a bad reputation in terms of being environment friendly. Oil spills, land pollution, water pollution are some of the issues apart from depletion of non-renewable resources are some of the issues with the industry. There are authorities and checks on such companies by the government of the country and also by the UN to adapt more sustainable procedures to reduce the pollutants expelled by the production process of the company. Due to industrialization and urbanization the forests and the natural habitat of a lot of flora and fauna is being destroyed to set up manufacturing units and factories of organizations. It is the duty for such organizations to give the environment something in return. Global warming is no more a threat it is reality and is going to affect each and everyone on the plant. Hence, the organizations should stop thinking about just profits and take up new ideas like the triple bottom line concept into the business model (Stables &Keirl, 2015).
Corruption: showcasing false documents such as annual report or of policies and falsifying statements of business are some of the regular corruption charges on a business organization. Corruption is the dishonest conduct of a person in power by misusing the power bestowed upon him or her. Giving or taking of bribe is one of the most common examples of corruption that is prevalent in the society. To get a work done people may offer monetary aid illegally to someone of power within the organization, corruption breaks all the concepts of ethics and values in an organization. Reputation and goodwill are at stake if the dishonesty is disclosed, which in turn affects the profit of the company (Knapp, 2007). For example: Enron case of falsified annual report and other important statements of the business is a classic example of the consequence a company can face due to corruption and lack of ethics.
It is just not the idea of being sustainable and environment friendly that is going to help the situation. Implementation of the ideas in an efficient and effective manner is also very important. Companies face a lot of challenges in implementation especially the SMEs. Mostly choosing the eco-friendly path take on a lot of profit of the company and it becomes difficult for organization to pursue that path.
Implementation of an idea: Most of the time a particular piece of idea is so vast and farfetched that the company loves it but it is nearly impossible for the management to implement that in a stipulated period which in turn reduces the effectiveness of the idea. Innovation is welcome with a plan of execution. The challenge is to come up with a plan that has a desired outcome and a plan of action to execute the project.
Policies of the government: sometimes the policies of the government become hindrance to a project even if there is sustainable idea behind the project. There can be issues with the land or the community can also raise conflict in the idea and hence the company has to be ready to combat such situations. Sometimes the government end up rewarding and in turn encouraging the wrong type of activities without realizing the adverse effect these activities may have on the environment. For example: the agricultural subsidies for the farmers even for them who are still implementing the worst farming methods. There are a lot of products that farmers grow because toxicity in the waters and the soil it has been growing, this practice in turn stops the market place and hold monetary allowances that could be supporting sustainable practices (Turnheim et al., 2015).
The generation of cash flow: For a business organization to suddenly change the business model to a sustainable one requires a lot of cash investments. At the initial level these investments has to be from the cash flow of the existing model. Most of the time the investment id large and the profit percent is low or the project is itself non-profit seeking. For example: if a company has decided to curb the air pollution created by the product manufacturing process, filters will have to be installed and this installation will not fetch any kind of profit to the company but the investment in the installation will cost the company a hefty amount (Schlosberg & Coles, 2016).
Infrastructure: this is one of the main issues with a company who is about to change the traditional business model to a sustainable business model. There is lack of physical space for the company to implement any kind of changes or installation to make the output of the production eco friendly. This is mostly in the case of old medium scale business organizations that lack scope of expansion but their output has an adverse effect on the environment (Sarkis, Koo, & Watson, 2013).
Considering the environmental situation that is observed globally it is the duty of all to be more and more environment conscious on a day to day basis. Business organizations have a duty towards the society and the environment as the two has offered the business resources to operate, hence organizations should prioritize planet over profit. New businesses should not follow the traditional business model from the beginning of the establishment and should focus on the triple bottom line. Organizations should engage in more and more paperless work and contribute the least they can do for the betterment of the environment.
Conclusion
The consequences that are faced by the company or the society for the lack of Ethical values and principles are very significant and effect adversely on the future as well as the current operations of the business. A lack in the trusts form the employees or the customers can affect the turnover of the business and also can affect badly on the future plans of the business. In the corporate world the contacts and the business partners are also affected by the reputation of a business and being associated with a company who has a bad name in the industry. Business Organizations should realize their role in the development of the society at large and also in the betterment of the environment as it is getting a lot from the environment.
Every company has a vision and mission of expansion and growth, ethical business practices and sustainable business model are comparatively new concepts, with the globalization of industries and modernization of technology it has never been more imperative to have an ethical business environment. The goals of the company remain the same only the pillar which support the growth and expansion has extended to a sustainable pillar. Values and ethics set guide lines for the company to operate and these guidelines help the company build reputation and image in the industry which in turn becomes an asset in the long run.
Reference List:
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