Today, an increasing number of firms are recognizing the need for and importance of corporate social responsibility. These firms understand that even as they pursue profits, they need to safeguard the welfare of the stakeholders with which they conduct business. Corporate social responsibility also plays an important role in enhancing trust and collaboration between a company and its stakeholders (Malin, 2009). Paradigm Toys wishes to promote ethical conduct through corporate social responsibility. For the company to be successful, it needs to challenge its stakeholders to embrace ethics.
Purpose of corporate social responsibility
Corporate social responsibility (CSR) serves as number of key purposes. The primary purpose of CSR is to challenge businesses to be ethical in their operations (Schwartz, 2011). For example, using CSR, a firm can ensure that its operations do not cause damage to the environment. Another purpose of CSR is to enhance the wellbeing of such stakeholders as employees and communities (Schwartz, 2011). For instance, as part of CSR, a company may train its employees and offer employment opportunities to the community.
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A1. Primary and secondary stakeholders
As it develops its CSR, it is helpful for a firm to identify the stakeholders that the CSR will focus on. Paradigm Toys relies on the efforts of its primary and secondary stakeholders to conducts its operations. Primary stakeholders are the parties who have a direct state in the operations of a firm. They include employees and investors. Creditors and supplies may also be regarded as primary stakeholders. On the other hand, secondary stakeholders refer to the parties whose involvement in the operations of a company is indirect. The community in which Paradigm Toys conducts its affairs is an example of a secondary stakeholder. The environment is another secondary stakeholder.
A2. Responsibility to stakeholders
CSR provides that the leadership of an organization should honor its responsibilities to stakeholders. Some of the responsibilities that a firm has to its employees include offering fair pay, providing a safe working environment and offering avenues for personal and professional growth (Visser et al., 2010). As regards investors, firms have an obligation to provide rewards for investment. These rewards usually take the form of dividends derived from profits. Paying creditors and suppliers on time are other responsibilities that firms have. CSR also challenges companies to adopt environmentally-friendly production processes while safeguarding the welfare of communities (Visser et al., 2010). Providing employment and education opportunities are some of the measures that a firm can adopt as it seeks to honor its obligation to the community. Paradigm Toys should understand that it is obligated to honor all the responsibilities listed above.
B1. Importance of ethical culture
Ethical operations are among the fundamental pillars of responsible business. It is indeed important for a firm to create a culture that fosters ethical conduct and operations. Such a culture serves numerous crucial functions. An ethical culture has been shown to enhance trust as it challenges employees to protect the organization and its stakeholders (Visser et al., 2010). An ethical culture also pressures employees and other stakeholders to conduct themselves in an ethical fashion. For example, in an organization that has established an ethical culture, employees are under constant pressure to be honest and to comply with the ethical guidelines that have been put in place. An ethical culture also helps to lower costs (Taback & Ramanan, 2013). This culture discourages such ills as fraud. Consequently, the culture shields an organization from the cost of fraud and other ills. Enhanced brand image and lower exposure to vulnerability are other roles that an ethical culture plays in an organization.
B1A. Fostering ethical culture
Various strategies are available to the leadership of Paradigm Toys as it strives to foster an ethical culture. Some of these strategies include training and encouraging conversations about ethics (Fox et al., n.d). Communicating expectations and developing a formal code of ethics are other strategies that an organization can implement to foster an ethical culture. Leaders should take charge of the effort through ethical decision making. They should also offer their full support to the ethics program in the organization (Fox et al., n.d). As the leaders of Paradigm Toys implement these strategies, they will be able to successfully foster an ethical culture.
B2. Ethics audit
An ethics audit refers to an operation that is carried out to determine if an organization is complying with established ethical standards and guidelines (Krell, 2010). Interviewing employees is one of the measures that are usually instituted as part of the audit. The interviews should focus on the perspectives of the employees regarding compliance with ethical principles. When carrying out the audit, it is important to develop metrics against which the performance of an organization is measured (Krell, 2010).
B2A. Value of an ethics audit
An ethics audit is indeed valuable as it presents various critical benefits. Among these benefits is that the audit discourages misconduct (Krell, 2010). When employees expect that they will be audited, they are more likely to behave ethically. An ethics audit also encourages whistleblowing (Krell, 2010). During the audit, employees open up about violations of ethical standards and guidelines. Ethics audits also help to growth the ethical culture in an organization (Krell, 2010). Upon conducting an ethics audit, Paradigm Toys will be poised to enjoy these benefits.
C1. Ethical dilemma
Every day, firms encounter dilemmas that force them to consult their ethical principles. How to discard products that are expired is one such dilemma. In this dilemma, the firm is confronted with two situations. It may choose to destroy the products and incur losses. Alternatively, the company can repackage the products and sell them. This option will see the company threaten the health of its customers while betraying their trust. However, it will allow the company to avoid losses.
C2. Potential solutions
No dilemma is without a solution. There are various solutions that can be applied to the dilemma described above. The first solution involves dumping the expired products. This solution will enable the company to protect the health of its customers. However, it will be costly. The second solution lies in repackaging the products and availing them to customers. While this solution threatens customer health and confidence, it will enable the company to recoup the costs of production.
C3. Explanation of choice
The two solutions offered above present key promises while possessing drawbacks. After a review of ethical principles that guide business operations, the firm should recognize that dumping the products is the best solution. It is the best solution because it allows the firm to honor its mandate to its customers. CSR stipulates that firms should endeavor to protect its customers even if it means incurring costs (Mullerat, 2010). This solution will enable the company to maintain the trust of its customers.
D1. Key components
In an earlier discussion, training was identified as among the strategies that enables organizations to foster an ethical culture. Paradigm Toys needs to train its employees on the importance of ethical operations. The firm should include a number of key components in the training program. These components are: the importance of ethical operations, the dangers of violating ethical guidelines and the actions that employees can take to promote ethics.
D1A. Explanation of key components
The components to be included in the training program have not been selected randomly. Their inclusion stems from the fact that they are vital for the successful training of the employees. It is important to train the employees on the importance of ethical operations so that they recognize the need for ethics. As Paradigm Toys highlights the benefits of ethics, it will be able to convince its employees to fully support ethical operations. The company should also warn its employees about the dangers of flouting ethical guidelines. As it does this, it will provide its employees with reason to uphold ethics at all times. The actions that the employees can take to promote ethics have been included in the training program to ensure that the program is practical and useful.
D2. Delivery method
Different delivery methods are available to train employees. Using web-based technologies is among these methods. Essentially, this method involves using such devices as computers to communicate with employees. Paradigm Toys could develop a training program that is delivered using computers and mobile phones. Alternatively, the company could join forces with an institution that offers online courses. Through this collaboration, the firm will be able to challenge its employees to embrace ethics.
D2A. Justification
Web-based technologies have been recommended because of the many benefits that they present. One of the benefits concerns their reach and effectiveness. Using web-based technologies, a firm can deliver training to many people (Mantyla, 2009). This is as opposed to traditional instruction which is very limited in its reach. Another benefit that web-based technologies present is cost-effectiveness. Paradigm Toys is set to enjoy cost-savings especially if it partners with an institution that already delivers training on ethics.
In conclusion, ethics is the primary factor that drives corporate social responsibility. Ethics challenges businesses to do more to improve the lives of stakeholders. Thanks to ethics, businesses invest in the wellbeing of their employees, customers, creditors, suppliers and many other stakeholders. Organizations need to exhaust all resources as they foster a culture of ethical conduct. Training employees is among the strategies that allow for the creation of such a culture. Paradigm Toys should remain committed to promoting ethical conduct and operations.
References
Fox, E., Crigger, B., Bottrell, M. & Bauck, P. (n.d). Integrated Ethics. Improving Ethics
Quality in Health Care. Retrieved 30 th January 2018 from
https://www.ethics.va.gov/elprimer.pdf
Krell, E. (2010). How to Conduct an Ethics Audit. Retrieved 30 th January 2018 from
https://www.shrm.org/hr-today/news/hr-magazine/pages/0410agenda_social.aspx
Malin, C. A. (2009). Corporate Social Responsibility: A Case Study Approach. Cheltenham:
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Mullerat, R. (2010). International Corporate Social Responsibility: The Role of Corporations in
The Economic Order of the 21 st Century. Alphen aan den Rijn : Kluwer Law International.
Schwartz, M. S. (2011). Corporate Social Responsibility: An Ethical Approach. Peterborough:
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For Environmental Professionals. Boca Raton, FL: CRC Press.
Visser, W., Matten, D., Pohl, M. & Tolhurst, N. (2010). The A to Z to Corporate Social
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