Sustainability is the ability of a system or organization for maintaining its existence over a longer period by doing various efforts. Simply, sustainable business is also known as a green business which is having a minimum negative influence on global, local surroundings, society and economy. These businesses always try to meet the triple bottom line by making a group under distinct alliances to become sustainable as well as an ethical business too (Garavan and McGuire, 2010). Therefore, this project is going to highlight the importance of ethics in business and CSR activities by considering the example of multinational organizations. This report reveals the key implication of the CSR and sustainability issues which helps in strengthen the overall outcomes. Moreover, the report will outline some CSR practices of the company by showing a case related to a firm. Additionally, it also throws some lights on ethical issues as well as theories that are used by a firm for enhancing the business decision making process.
1. Literature review around business ethics and CSR of multinational business
Ethics is a word that signifies the rules or principles which are followed by an organization for accomplishing business activities in a corrective manner. Simply, it’s a code of conduct that every firm whether small or multinational corporations need to follow for minimizing the probabilities of wrongful acts. However, ethics help an entity in establishing a set of the standard at the workplace for regulating the behavior of employees by making a difference between wrong and right. Interestingly, principles, rules, and regulation which are formed by businesses are not a kind of rocket science as it’s entirely based on the creation of the human mind. Apart from this Sestini, 2012 states that code of conduct is another term that is utilized extensively in the corporate world for describing the ethical provisions of an entity that needs to follow by the overall team while performing business activities.
Commonwealth Bank of Australia is known as an Australian multinational bank across New Zealand, Asia, the United States, and the United Kingdom. Their main objective is to offer numerous financial services which include; retail, institutional banking, funds management, and superannuation, insurance, and broking services. It shows that this firm is involved in the development of the public by offering capital support but in an ethical manner. Simply, it’s an added dimension for a company when it’s become a multinational enterprise but somehow ethical standards are varying from country to country due to which Commonwealth Bank is weighing values of their home country in place of foreign (Becker, 2011). Some of the essential ethics that need to follow by a multinational enterprise are-
Generally, corporate social responsibility is all about practices which enhance society by taking major steps and initiatives. Thus, the main vision of a business is to provide security and improve the financial well-being of common people, enterprises, and societies. Additionally, the key requirement of an enterprise is to attain things by maintaining professional standards with integrity during business activities. Social responsibility is all about the activities and practices which is a design by an organization for the growth of the entire community. As a result, multinational corporations are involving are conducting various awareness programs for upgrading the knowledge of societies for minimizing the possibilities of major errors (Crane and et. Al., 2019).
In every business organization ethics plays an eminent role managing their business operation effectively. It consists of moral principles as well as standards that are associated with the guided behaviour in the entire nation. The Corporate social responsibility is also considered as integrative management concept that determines reliable behaviour within Common wealth bank Australia. It happens to be utmost crucial issues that has been seen in the companies in order to take make decision that can provide maximum benefits to the economy. Simply, it is associated with the code of practices and regulation that are focus on doing best for their shareholders so that they are attain their specific goals effectively (Armand, 2012).
According to the report published by Commonwealth Bank regarding the Corporate responsibility which contain specific deeds regarding advancing gender equity in their employment policies, promoting ethical as well as transparent business practices as well as support environmental friendly capitalization in order to increase the economy growth. In the easy manner, the banks with a social conscience is not been considered as a core business aspects of bans. However, social perspective cannot represent the intrinsic capability of banks and no matter its occasional occupation to the contrary. Nonetheless, ethics help an entity in establishing a set of the standard at the workplace for regulating the behavior of employees by making a difference between wrong and right. This helps in aligning the interest of the business with the social and economic development at large.
According to the Jenkins, 2013 in order to increase the value of the contribution Commonwealth Bank reviews on regular basis and consider emerging problems to ensure that material issues could be avoided. The management board has held responsible for supporting a group vision and regular effectiveness of the strategy that has been used to high quality standards. On continuous basis, they are planning to make positive changes to their financial well-being among the people, business as well as within the community. They further look after all the savings and investments that can assist people in managing their risk and prepare for effective long-term plan. In fact, the Commonwealth Bank has decided to create shareholder value by organizing their business by a balance lens that consists of economic, social and environmental aspects. However, there are so many other CSR activity plans are given maximum importance such as education level need to be enhanced more by providing digital literacy programs so that people can make use their skills in the development of the nation. Innovation can also assist in empowering people businesses and society with the aim to improve social results and financial well-beings. It strengthen the overall outcomes and increasing the CSR activities alignment with the business objectives.
In the viewpoint of Wright and Bennett, 2011 financial planning decision has become growing drastically in assisting Australian to fulfil their economic gaol. However, most of the evidence suggested that there are end numbers of ethical risk associated to the provision of financial decision. In fact, certain ethical dilemma that has face by CBA is related to the individual behaviour of rogue financial planners that acted unethically by placing mature retiree saving high investment risk. Another important unethical issues have impact the CBA is related to the incentives provided in the form of bonuses and international sales. It has created negative impacts on the reputation of financial planners as well as the CBA because they have failed to deal with the issues (Schaltegger and Burritt, 2018).
In a series of allegations against successful of Australia which is a commonwealth; the initial one is that disregarding specific laws related to the monitoring of transactions for ensuring that criminals cannot able to use the systems for laundering ill-gotten gains. It’s a major ethical issue which is influencing the goodwill of an organization because of its an expectation of Australians that financial institution ensuring a proper flow of money via systems by the on-going monitoring process. As a result, Commonwealth Bank has conducted a risk assessment policy for identifying the problems to solve it as soon as possible but till that nine billion dollars’ worth of money had already flowed via machines. As per the viewpoint of Friedman’s individualism which is also known as the economic theory states that it’s important for a business to generate maximum range profits but perform within the confines of legitimate bodies otherwise that action will be considered unethical (Commonwealth Bank: Transactions Monitoring Law Violations (2017).
Decision making is defined as a study of determining and selecting best from various alternatives for attaining set targets in a defined manner. Simply, it mainly considered as a cognitive study because requisite mental and logical reasoning. There are various theories which is used by company for making effective decision of firm (Bottery, 2014).
Decision making model- Every individual requisite to make judgment from time to time. It means that firm are having specific duration for formulating policies and addressing the issues related to public.
Rational decision making mode- It consist of almost 8 steps in which decision makers required to take optimal judgment for attaining preferred goals. As per this approach, firm needs to design a list of criterion for evaluating the different choices so that best alternative has been taken place.
Figure 1- An Overview of Decision-Making Models
From the above diagrammatic representation, it has been understood that all the above factors need to consider by Commonwealth Bank of Australia for making effective decisions and select best alternative from larger pool (An Overview of Decision-Making Models, 2019). It is considered that to attain things by maintaining professional standards with integrity during business activities. Social responsibility is all about the activities and practices which is a design by an organization for the growth of the entire community
From the above report, it has been summarized that ethical norms are playing a crucial role in managing business activities as it helps an entity in directing every employee towards a corrective path for attaining set targets in a right way. Moreover, the project shows that multinational corporations are involved in various societal activities for protecting common people from getting exploited from fraudulent activities. Along with this, CSR practices ensure the growth of an association by providing development opportunities to the entire society. Apart from this, ethics are important for business as it reduces the probabilities of conflicting situations, errors, exploitative activities and so on. Therefore, it could be inferred that the CSR activities undertaken by the organization is one of the step which helps in paying back to the society by the organization what is taken while operating the business.
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