The purpose of this essay is to analyse the role of organisations in society in a number of ways. To begin with, this essay proposes to recognise the key worldwide challenges, which will have references with the United Nations Sustainable Development Goals. Furthermore, it will then take a look at the private organisation within society and the impact those challenges have. Finally, this essay will continue onto giving a definition of Responsible Enterprise using scholars and theories and exploring the role of responsible enterprise involving the government.
Primarily, the United Nations (UN), had come forward with 17 sustainable development goals in 2016 with, universally applied to all nations who would organise efforts in order to: terminate different forms of poverty, battle inequalities and challenge climate change, while safeguarding that no one is left behind (Nino, 2017). For the goals to be achieved, the governments, industries in the private sector, the public and civil societies need to do their part and thus, hold a vitally crucial role. One of the main goals, known as number 13 – ‘Climate Change’, is held as a priority due to its continual change around the globe and the effects it has had in a number of nations. Environmental change is currently influencing each nation on every continent, where on some occasions has left devastating after effects. Consequently, it is disturbing national economies and affecting lives, costing individuals and nations, affecting them today and much more in the future (Nino,2017).
There are three pillars of sustainable development; economic, social and environmental – if these three pillars are combined together, when effectively joined, can encourage long-lasting sustainability (Sheehan, 2009). Elkington (1997) anticipated the triple main concern in connection to sustainability, instituting together the term ‘planet, profit, people.’ (Elkington, 2000). The idea of responsible enterprise has a basic issue, as individuals and organisations developed a thought the planet to have sufficient assets thus, persuading people economic extension has endless outcomes. The duty does not exclusively live with one party, however, it is added to by business, shoppers and government. If these individuals are effectively integrated, then the three pillars can shape society (Wetherly and Otter, 2014).
Economic is one of the pillars of sustainability. The requirement for a positive economic condition is critical for organisations and their capacity to develop progressively. Also, stability improves the external economic environment in a positive way for organisations as it this makes certainty (Wetherly and Otter, 2014). Nonetheless, because of the worldwide monetary crisis of 2008, vulnerability was spread worldwide, and the ripples caused nine years back are as yet dying down. Financial analysts neglected to see the ruin of the US sub-prime home loan advertise and were on the blame for beginning a worldwide monetary crisis (Pettifor, 2017). Being such a wide scale fiasco, beginning with the superpower, a domino impact continued around the world. One such impact had the International labour market depicting it as a ‘worldwide occupation emergency’s. Occupations were cut as managers couldn’t financially to keep them on, accordingly individuals cut back on spending as much cash which made organisations endure further. This caused a break in the business advertise. It likewise implied creating nations who were at long last enhancing, were thumped back again. As the emergency, caused nourishment costs rise, item costs are fuel costs to take off.
Next the environmental impact and businesses are acknowledging the environment and the impact it has upon them. A reasonable business relates to business actions for making human advantages in connection to blending their ecological angles against their standards with the society and government (Crosbie and Knight, 1995). Climate change is one of the key major challenges. Climate change includes unstable weather patterns which can develop threats of flooding resulting in increasing sea heights (United Nations, 2016). Therefore, the effect that climate change has negative impacts on the environment which can then also result in damage to the agriculture around. To control climate change, the Paris Climate Change Arrangement made it a necessity for both created and creating nations to constrain their emanations to safe levels, by consistently considering their action (United Nation, 2012). Nevertheless, as far as business it was discovered that 37% of the world’s largest organisations were detailing finished information on gas emissions harming the environment (The Climate Group, 2013).
The third aspect, completing the three pillars of sustainable development is the social aspect. The social aspect includes enabling people to thrive in the present and future. It is an idea that intends to boost community resources. One key worldwide test in connection to this, is the water crisis. Due to unfortunate financial matters and foundation, individuals are passing on, in the millions, from insufficient supplies. It influences 40% of the total population in the world and is expanding (The Water Project, 2016).
The traditional interpretation of organisations is that they exist principally to make revenue, therefore meaning that the actions and the idea’s created will be money-focussed, having a turnover ensures survival and can support other objectives such as increase in growth or higher market share (Economic Discussion, 2017). Whereas Friedman said, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud.” (Friedman, 1970). Business morals is additionally a piece of responsible enterprise. It is a type of connected morals including the right conduct in connection to business. Moral pride is the recognition that the best thing implies doing what is best concerning one’s own interest.
Depending on what the organisation is and what sector it operates in will depend on the role the business will have in society. There is the government, who have the public in interest. The voluntary sector, this is where non-profit organisation operates, focusing on stakeholder interests and have social purposes. There is also social enterprise which is also take into social purpose however still make a profit. Then there is the profit maximisation and shareholder interest, the more traditional business, profit focused organisations (Westall, 2001). It is the shareholder thinking is said to have a negative ethical base in society, taking no account for the people, planet or environment of private enterprise (Kapp, 1950).
German car manufactures Volkswagen were accused of cheating on their diesel cars emissions tests and then later the German car giants admitted to using a softer devise that could change the performance and improve emissions results, this all accrued whilst VW had a campaign in place whilst broadcasting their cars’ low emissions (BBC NEWS, 2015). This is an ethical matter, as it is risking lives and was proven guilty by the environmental protection agency, VW did use recourses and activities to enhance profits to sell cars with the low emissions campaign however they cheated and went against the law as their cars were 40 times over the legal emissions limit nitrogen oxide (Forbes, 2015), this can relate to the free market theory, do anything to enhance profit and not take into consideration of moral issues or the environment (Friedman, 1959). This therefore makes it difficult to establish whether businesses are implementing responsible activities for genuinely caring about the climate change and its issues or instead really have a personal gain (Grisseri and Seppala, 2010). Nevertheless, the Volkswagen case demonstrates a disappointment in terms of their approach to support climate change and in the organisations corporate social responsibility (CSR). When confronted the head of CSR denied knowing that the engines were poisoning the earth, therefore implying that he was not carrying out his job role to the best of his ability or was involved scheming, and given an indication that Volkswagen and other companies are using CSR as a marketing exercise and just maintain an image that the company is clean despite the cheating and show the businesses main objective will be to maximise profits (Forbes, 2015).
An organisation that makes profit yet however have more of a social purpose is Toms, the shoe manufactures. Toms, is famously known for its ‘one for one’, this is where the sale of a show in the developed world, would pay for a pair of shoes for somebody in the undeveloped world. Toms stated on that the business supports the global goals, and even stated “We can be the first generation to end extreme poverty, the most determined generation in history to end injustice and inequality and the last generation to be threatened by climate change” (Toms, 2017). The shoe manufactures also display the United Nations 17 sustainable develops goals on their website, raising awareness and creating awareness. Toms has had an impact on several the goals, and climate change has also been tackled, with handmade shoes, using sustainable and vegan materials and instead of using any shoe box, all shoe boxes come from recycled waste as well as incorporate environmentally friendly practices in day to day actions and in built up establishments (Toms, 2017). This demonstrates that the business is more than a profit based, takes the community into consideration and gives Toms a social value.
Responsible enterprise is a complicated wonder and has no direct definition. There are different concepts to responsible enterprise; Business Ethics, Social Enterprise, Corporate Citizenship (CC), CSR and Sustainability. Responsible enterprise allows organisations to emphasis on more than just the shareholders, and that responsible strategies ought to be carried out in all the business activities allowing the business to perform in the best of its abilities (Waddock and Rasche, 2012).
The neo-classical school of thought, trusts that organisations can thrive, if an effective situation is made, however this is just likely if the organisation works in a free market. Accordingly, individuals can pick how they carry on, without government interference (Wetherly and Otter, 2014). Friedman (1970) powerfully encourages this hypothesis, certifying that the hidden main aim is to expand revenue and whosoever tries to be ‘socially mindful’ is undermining the past progress a free society has achieved, along these lines influencing them to ignore the genuine aims of business. Nevertheless, free markets are worried about the current situation, the present time, not considering consequences for long-term ecological solidity, making the free market unsustainable (Stiglitz, 2010).
Another belief is CC, corporations have responsibilities that go above maximising profits, and can be beneficial in shaping society (Greenfield, 2014). ought to be related with the organisations activity towards representing the social, political and civil equality towards residents (Crane and Matten, 2010). Corporate Citizenship demonstrated as a way in which a business gives back into the society.
Then there is Carroll’s (1991) model of CSR, this claims the definition of CSR should include four different levels; economic, legal, ethical and philanthropic responsibilities (Carrol, 1991). Generally, Carroll’s definition unites a scope of interpretations, trusting organisations ought to be directed considering the four components. Be that as it may, the phases of the pyramid are not sequential and dynamic, since it is conceivable to fulfil the moral significance while neglecting to meet the legitimate commitments. The CSR model can lead you to believe having a various levelled nature, in this manner persuading, the higher you go on the pyramid, the more vital the stage is, nevertheless Carroll “stipulates that the economic and legal domains are the most fundamental, while philanthropic responsibilities are considered less important.” (Schwartz, 2011:90).
Having a good CSR strategy can reduce an organisations production of greenhouse gases and inspiring “responsible” usage of assets can likewise mean decreasing waste and saving capital. Whether it is disheartening the usage of plastic bags in a store or turning off an offices computer in evening, only small improvements but encourages responsible enterprise (The Economist, 2008). An example of CSR being used by an organisation is Coca-cola ad their collaboration with WWF and their water conservation project, in 2007 the two organisations launched a partnership to conserve freshwater resources, tackle climate change and sustainable sourcing to list a few (Coca-Cola, 2012). Organisations that comply with their CSR plans can be rewarded with awards and global recognition for being a sustainable organisation.
The government is important to organisations, the governments interventions can include dealing with divergent intertest and set rules so that every organisation has an equal chance to succeed. There interventions include tax’s, regulations and government incentives. The government can intervene; internationally, regionally, nationally and locally.
The UK government’s approach, “The government is committed to sustainable development. This means making the necessary decisions now to realise our vision of stimulating economic growth and tackling the deficit, maximising wellbeing and protecting our environment, without affecting the ability of future generations to do the same” (Defra, 2010). An example of local intervention is Greater Manchester Waste Disposal Authority (GMWDA) have come forward with an initiative in becoming more responsible and have set objects such as saving resources, supporting businesses, protecting the environment and connecting with the community. The goal is ‘ZERO Waste’ (GMWDA, 2015). Since 2009 GMWDA have built 43 waste management also recycling services, dealing with over 1 million tons of waste each year across Greater Manchester.
Governments should see communities comprehensively and institute choices that are commonly useful to the health of society, environment and economy. Anticipating the world interest for sustainability enables governments to adjust by progressing into an economy that is more proficient. In this manner, enabling them to take a lead and turn out in a solid position to pay special mind to their communities and business. As of late, the significance of tending to the difficulties of manageability is being perceived by governments at each level (Bell, 2002).
Concerning Non-Profit Organisations and Government, mindfulness has expanded that governments who act without help can’t accomplish the progressions required for sustainability to an extraordinary impact. Therefore, governments need to actualise activities to expand investment by all parts of society (Bell, 2002). Therefore, associations between the three divisions are required. Throughout the years it has turned out to be progressively evident that associations need to work in combination with each other. Partnerships are when associations cooperate to address errands by sharing assets, skill and hazard. Moreover, prominent accomplices of non-legislative associations have remained with the UN and Government offices (Grisseri and Sepala, 2010).
To conclude, there are different ideas of what establishes Responsible Enterprise. In due course, driving CSR and sustainability activities are critical with a specific end goal to go under the extent of being responsible. If financial, social and ecological issues can be recognised and arrangements can be made to be more sustainable then the life of the Earth can be broadened, then rise overall social welfare and drive financial development, ready for ages to come.