What is responsible enterprise PDF

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In conclusion, the presented challenges require often idealistic solutions in order to be eradicated. Certainly, the essay has discussed the interdependent nature of environmental, social and economic challenges namely; Climate change initiatives proposed by governments, their acceptance for increas...

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What is Responsible Enterprise? In order to establish further understanding and recognition of the increasingly imperative role of ‘Responsible Enterprise’ in society, this essay aims to authoritatively present insights into the various roles of government, businesses and non-profits in addressing the global sustainability issues. The three pillars of sustainability namely; Social, economic and environmental pillars will provide foundational context in which the essay will assess and suggest creative collaborative ventures between said governments, businesses and non profits with the aim of inspiring further research into the topic. The umbrella term ‘Responsible Enterprise’ merits rigorous review, and interpretation thereof will be offered by relevant academic researchers that will inform the essays conclusive synthesis of its discussion, with conclusion on further beneficial study. To begin and offer context, found by the World Economic Forum (2017) their thorough analysis of global risks report gives profound insight into the issues governing this essay. The WEF (2017) provided a multitude of specifically unexpected political landscape shifts with reference the UK’s abrupt conclusive vote to detach from the EU and the election of President Trump in the US. The report admits that surprise should not be had, as the trends pertaining to such events have been recognised for decades. The report attributes rising financial disparity between individuals and therefore growing unemployment and social instability as the leading trend and global economic challenge respectively. This is supported by Eaton et al (2011) who state that the slow economic growth experienced post 2008 financial crash has been catalytic in widening income disparity. This erosion of economic strength has also been considered a failing of Non Governmental Organizations or NGO’s also labeled non profit institutions such as the International Monetary Fund. This notion is heralded by Stiglitz (2002) who for the very observations made by WEF (2017) claims the IMF has ultimately failed to come through on its inaugural mission. Stiglitz (2002) claims that the IMF instead of providing subjective financial advice and funding to developing nations has rather worked towards achieving consensus that achieves Washington’s goals. The consensus encourages the liberalization of markets, major privatization of services and therefore places the idea of a free market ahead of everything else. The reason Stiglitz (2002) criticizes the IMF is because of the very results we see today; great and growing financial disparity aiding worldwide social instability. According to Milanovic (2016) this amalgamation of ideological polarization and inequality is a root economic causality leading to other major issues presented by the WEF (2017) such as involuntary mass migration and social polarization, to which Milanovic exhorts that in order to avert global insurrection, fresh collaborative efforts regarding relational policies between government and businesses are essential. In the social aspect of sustainability, the WEF (2017) presents that the fast development of technology as a key driver of globalisation, and within that channel has produced both business efficiency and economic growth, yet the results have been experienced disproportionately. Again referencing the work of Milanovic, evidence asserts that within the years of 2009 and 2012, income growth of 31% was experienced by the top 1% in contrast to growth of 0.5% for the 99% of earners in the US. The trailing social consequences of such disparity are seen with the rise of anti-establishment discourse in western democracy

(Hanley & Sikk 2014). Interestingly, 5 months before the 2008 financial crisis, Geishecker & Görg (2008) concluded the real losers of globalization are those low skilled workers who are losing out to cheaper priced outsource options. They determined that high skilled workers were real gainers and sparked debate on how policy makers can ease the costs of globalization. This insight has become more pronounced in the years following the crash with the populism of anti establishment culture featuring as proponent of widening social polarization (Hanley & Sikk 2014). They also emphasise that the opposite is true, that low skilled migrants become vulnerable targets for low cost labour employment and therefore saturating the domestic job market. Furthermore, Inglehart, & Welzel (2005) determine that mainstream political entities are experiencing diminished support, due to mass social shifts in norms and attitudes surrounding ideas of community and solidarity. The claims are even more relevant today with such social inequality rising and financial disparity being the core driver of changes in political affinity and public opinion. Therefore, the key social challenge is cultural polarization, as explained by Hodgson (2006), the core values and attitudes construct fundamental parameters within which personages cultivate ambitions and goals, the aggregation of such aspirations providing the capacity to which society can innovate entrepreneurially. Currently, the United Nations Environment Programme or UNEP (2016) presented the Emissions Gap Report that has provided critical insight into our current state of battle with climate change. The results determined that WEF (2017) still labelled climate change as a front running challenge for society. According to UNEP (2016) note was made that climate change has slowed down marginally due to such initiatives as the Paris Agreement, but that it is still not adequate to reduce the projected 3.4 degrees celcius global temperature increase by 2030. The WEF (2017) detaila the current legal action being taken worldwide against governmants such as the US, UK and the netherlands. It even reports that a group of teenagers are opposing the US government for failing to protect them and their future families from the effects of climate change. The BBC also reported that India experiencing widespread suffering caused by climate change induced drought which affected over 300 million people (BBC 2017). The heat reached temperatures of upto 42 degrees celcius which cause an eleven-year-old girl to lose her life due to heatstroke. These case are causing businesses to develop new forms of clean energy. Energy that does not come at the cost of future generations years being shortened. This requires the embodiment of what Fisher and Lovell (2006) determine as Utilitarian thinking which takes into context and makes decisions based on the most benefits experienced by the most people, today and in a hundred years time. This presents the reasoning behind the global problem that resources are finite but financial aspirations are not.

In response to the challenges presented, collaborative and creative responsible business ventures can and already have proved effective in addressing them. Ridley-Duff and Bull (2016) state that diversion from typical profit and a financial dividend yielding machine that places shareholders affluence as its paramount goal, the business of a social enterprise involves reinvesting profits into positive community and socially driven objectives. Commonly referred to as corporate social responsibility, responsible enterprise according to Capron & Quairel-Lanoizelée (2007), is the strategic response of SME’s and corporations in

dealing with the rising scrutiny society places on its operations regarding stakeholders social and environmental concerns. Therefore, such responses can be wide ranging and totally subjective to demands and most importantly dependant on financial and organisational resources available, namely; quality of managers and ability to incorporate new strategy across the firm. This is furthered in an observation by Palmer (1995), the claim was made that enterprises must asses the practical implications of aligning with a corporate social responsibility as there is history of financial trade off when gearing operations towards the needs of stakeholders. This approach has been documented previously by Carroll (1996), the model itself originating in the 1950’s, Carroll asserts that firms must first assert profitability, secondly submit to legal requirements, third is to project ethically sound behavior even when a lack of integrity will not prove damaging and lastly to be philanthropically responsible – to allocate resources towards social, educational and environmental development. This sequential approach has been represented throughout the lifespan of many corporations however, in recent years the model has been reversed with firms using philanthropic efforts as the spearhead of their business. For example, certain (SRB’s) Social and responsible business’s such as ‘TOMs’ are absolutely defined by their unwavering commitment to sustainable growth and focus upon ethical trading. Online, TOMS 2017 exhibit their corporate responsibility to increase the quality of peoples lives through business. They establish that great attention has been placed particularly upon supply chain management with relevant training programs offered to employees that aim to increase efficiency in eradicating human trafficking and prevention of slavery. This as well as their doctrine of ‘One for one’ shoe sales to donations respectively, is the kind of business that elicits appraisal from government and institutions as it projects ‘win-win’ scenarios for all stakeholders involved (Covey, 1989). According to Fisher & Lovell (2006) this approach would be deemed as ‘Utilitarian’ as TOMs goals are to benefit all stakeholders and not serve ‘Egoistic’ intentions. Yet, claims could be made that fulfilling the goals of the directors whilst being utilitarian is inherently egoistic despite being heavily influenced by high moral values or in Fisher & Lovell’s (2006) words deontological ethics. Organisations are viewed by Sandford (2011) as malleable, transformative living entities that adapt to new habitats and environments through the development of advanced stakeholder relationships. In Sandfords model – The Stakeholder Pentad framework the directive arrow used describes the nature of hierarchy in terms of consideration of each index upon the other. Particularly, the model places the role of ‘Co creators’ simply referring to supply chain and the role of ‘customer’ before ‘earth’, ‘community’ and ‘investors’. Profoundly this places great emphasis on the type of customer a firm market towards, and in Sandford’s (2011) perspective, business must aim to serve consumers and work with producers that are fundamentally committed to achieving better quality results for all stakeholders involved in the operation. Firms have to be creative and assertive in developing this within all five areas of the model and in ascertaining a responsible enterprise of which Sandford (2011) defines as being the result of thorough consideration of the investment and resultant experiential quality of all stakeholders. Despite these insights, Freidman (1970/1993) claims boldly that the platitudes of responsible enterprise and the responsibity to define such activity is not placed upon the shoulders of individual firms but rather upon the heads of governments and institutions. They are the entities whom determine and are able enforce law upon individual firms. The responsibility of SME’s and corporations therefore according to Friedman (1970/1993) is to operate within the bounds set by such groups, as successfully and resourcefully as possible.

In furthering Friedmans claims, Buchholtz & Carroll (2012) establish the perceived conflict of interest between governments and businesses. They present that fundamentally, governments are collectivist and considers needs of the many and that businesses are individualist and consider the needs of the few. The model by Buchholtz & Carroll (2012) sweepingly disregards the employment of Sandford’s (2011) pentad of which many modern firms are investing effort in and instead portray the relationship between government and business as futile and antagonising. At the governments disposal in enforcing desires upon firms are tools such as; specific taxes, regulations, incentives and carbon trading. They also have ability to employ non negotiable training programs, legislation, permits and funded research of related issues. For example in the regional facet of government (continent based), the European Commission website (2017) presents The renewable Energy Directive (2009) is a policy aimed at increasing efforts to move towards clean, renewable energy sources. The directive sets out a standard that by 2020 European Union energy requirements must attribute a minimum of 20% being fulfilled by renewable energy sources. This type of government intervention allows firms to set attainable goals and gradually transition to more responsible entities of business. This is an effective practical example of governments addressing the environmental challenged stated earlier of climate change and denotes collaborative awareness and efforts to innovate without businesses losing competitive edge. Non-profits such as Oxfam and WWF serve global businesses, sometimes controversially by demanding greater levels of accountability and transparency from SME’s and corporations. They also make such entities aware of that social and environmental impact, they implore greater governance within firms and market their claims in a way that convinces firms that there is major risk in in action. This is a fundamental role of Non Profits and serves societies often unheard voices Weidenbaum (2009). According the Murphy and Bendell (2001) the efforts of such non profits as Greenpeace can often cause more harm than benefits. In their attempt to change attitudes by force they often simplify diversely complex global issues which sometimes thwarts public efforts to become educated upon such challenges. They may also base claims upon theoretical assumptions without the backing of adequate empirical research. This flippant approach presents a cultural divide between non profits and corporations, such fleeting rhetoric showcased by firms such as Greenpeace would only serve to discredit other serious claims from effective non profits as it creates a negative stereotype within the mindsets of corporate elites. In conclusion, the presented challenges require often idealistic solutions in order to be eradicated. Certainly, the essay has discussed the interdependent nature of environmental, social and economic challenges namely; Climate change initiatives proposed by governments, their acceptance for increasingly polarized social groups and governmental institutions efforts in stabilizing income disparity. The essay ascertains that further research into the values of all stakeholders surrounding responsible business with application of cross cultural management theorist such as Trompenaars & Hampden (1997) would be an appropriate journal of study. This would give greater insight into the motives fueling pioneers of responsible enterprise and those reluctant to align. Poetically, Milanovic (2007) envisages the creation of robin hood type global agency that tax’s the affluent within developed nations and directly fuel resources toward the poor in undeveloped societies and as opposed to reliance upon previously wasteful governments, collaboration should be

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