Posts Tagged ‘Corporate Social Responsibility’
Ethics and Corporate Social Responsibility
The allegations surrounding the News of the World’s (NoW) phone-hacking wrongdoings have swirled around on-and-off for many years now in the UK. However, in the last week these allegations have taken a more sinister turn. There are suggestions that the NoW has interfered in criminal investigations and bribed public officials for information. This all culminated in the end of the News of the World last Sunday.
This turn of events inspired me to dig out my copies of The Strategy Reader and Managing Innovation and Change to find Hosmer’s (1994) article Strategic Planning as if Ethics Mattered and Knox and Maklan’s (2004) article Corporate Social Responsibility: Moving beyond Investment towards Measuring Outcomes.
Hosmer outlines 10 ethical principles that struck me as rather pertinent in the current environment. I particularly liked the following: “never take action that is not in the long-term self-interests of yourself and/or of the organisation to which you belong”; “never take any action which is not honest, open and truthful, and which you would not be proud to see reported widely in national newspapers and on network news programmes”; and “never take any action that violates the law, for the law represents the minimal moral standards in our society”.
In practice, however, how can a company monitor the moral leanings of its members? Hosmer’s ethical checklist here is aimed at individual alignment to the principles, but not everyone in the same company will subscribe to the same moral compass. News Corporation had a mission statement, but it seems a few people paid lip service to it in pursuit of the next juicy story. Nonetheless, I think one could argue that British Society was happy for underhand journalism to continue because celebrities and politicians are fair game in most people’s eyes.
But when the News of the World stepped over the unwritten moral line and into the private lives of ordinary citizens, this became an untenable situation. Society’s value judgements have been tested by the fact an unelected newspaper has been interfering with the democratic rights of the ordinary citizen, for example the right to a fair trial and interfering with due process.
It is a shame that unethical journalistic actions of a few at the News of the World have resulted in the end of the paper after a staggering 168-year run, and the loss of several hundred jobs. But even if this situation has paved the way for a Sunday Sun to rise out of the ashes at some point in the future, the News International/Corporation’s brand has been tarnished and revenues diminished.
A good reputation is hard to value, but research by Weigelt and Camerer (1988), mentioned by Hosmer (1991), states that a firm’s reputation is an asset which can generate future rents. Right now, I suspect that large institutional shareholders are all rather jittery.
References:
Hosmer, L.T. (1994) “Strategic Planning as if Ethics Mattered”, from Strategic Management Journal, Vol.15, Special Issue, Summer: 17-34 cited in Segal-Horn, S (2004), 2nd Edition, “The Strategy Reader”, Open University, Black Well Publishing, pp 86-106.
Knox, S and Maklan, S (2004) “Corporate Social Responsibility: Moving Beyond Investment Towards Measuring Outcomes” from European Management Journal, 22 (5): 508-16, cited in Mayle, D. (2006) 3rd Edition, “Managing Innovation and Change”, Open University, Milton Keynes, Sage Publications, pp23-35.
