{"id":783,"date":"2017-03-29T06:00:13","date_gmt":"2017-03-29T06:00:13","guid":{"rendered":"http:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/?p=783"},"modified":"2017-03-27T15:14:47","modified_gmt":"2017-03-27T15:14:47","slug":"mwr-why-are-businesses-becoming-so-ethically-focused","status":"publish","type":"post","link":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/making-work-real\/2017\/03\/mwr-why-are-businesses-becoming-so-ethically-focused\/","title":{"rendered":"MWR: Why Are Businesses Becoming so Ethically Focused?"},"content":{"rendered":"
\"University<\/a>
University of Southampton Business School student, James Whipp, discusses how increased CSR affects profitability.<\/figcaption><\/figure>\n

The sincerity of a business\u2019s ethical stance has always posed great doubt in my mind. We all know the main motive of any business is to generate as much profit as possible. So why over the last decade or so, have companies pumped more and more of their annual budget into corporate social responsibility?<\/p>\n

Quite simply, companies care about their corporate social responsibility because their customers do. In the new, evolving electronic age, information regarding a company\u2019s labour practises or their carbon footprint is readily available and readily tweeted and retweeted (Wharton, 2016). Companies cannot simply hide information from their consumers in this modern age. Robert Grosshandler, CEO of IGive.com, mentions that this is the case because we as consumers are now more educated. \u201cThey\u2019re no longer hidden from how their iPhones are made or how their food is produced\u201d. Therefore there is a level of transparency in today\u2019s business world that wasn\u2019t there before (Beer, 2015).<\/p>\n

Okay I get it, businesses can\u2019t hide their poor behaviour from us consumers anymore. So how do they prove to us that they\u2019re not all that bad? Corporate social responsibility is the tactic they use. CSR is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders (Financial Times, 2016). A pure example would be Daimler\u2019s fight against HIV, when Daimler South Africa issued guidelines that recognized HIV as a work related issue, investing funds in fighting the cause (Mu\u0308hle, 2010). But surely spending vast amounts of Daimlers budget on CSR dampens profits?<\/p>\n

\u00a0The relationship between corporate social responsibility and profit is an interesting one. A profit maximising business would cut back all possible expenses in order to maximise profits. Economist, Milton Friedman however does not see CSR as a cost, but actually an investment. Stating \u201cThere is one and only one social responsibility of business \u2014 to use its resources and engage in activities designed to increase its profits\u201d. A business is therefore not simply offering a kind deed to society, but rather trying to enhance long term revenues by gaining more satisfied customers (Crane and Matten, 2010).<\/p>\n

But do companies without a strong ethical stance actually see poor sales? A study from \u2018YouGov\u2019 and the Global Poverty Project revealed that 74% of those surveyed are \u2018strongly concerned\u2019 about ethical issues regarding the origin of a product (Baker, 2016), suggesting that unethical companies should fear for their sales.<\/p>\n

However, do these \u2018concerned consumers\u2019 actually stop purchasing goods and services from unethical businesses? According to a study carried out by the Guardian, only 47 % of Adults in the UK believe that their own individual efforts are worthwhile in limiting climate change. The research further shows that 40% of UK adults believe that pollution from neighbouring countries makes our effort worthwhile (Guardian, 2016).<\/p>\n

James Whipp studies Business Management (with Placement) at Southampton Business School. The views in this article are those of the author.\u00a0This article is part of the ‘Making Our Work Real’ series. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The sincerity of a business\u2019s ethical stance has always posed great doubt in my mind. We all know the main motive of any business is to generate as much profit as possible. So why over the last decade or so, have companies pumped more and more of their annual budget into corporate social responsibility? Quite simply, companies care about their …<\/p>\n","protected":false},"author":97860,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1030568],"tags":[],"class_list":["post-783","post","type-post","status-publish","format-standard","hentry","category-making-work-real","column","threecol"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/posts\/783","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/users\/97860"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/comments?post=783"}],"version-history":[{"count":4,"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/posts\/783\/revisions"}],"predecessor-version":[{"id":809,"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/posts\/783\/revisions\/809"}],"wp:attachment":[{"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/media?parent=783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/categories?post=783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.soton.ac.uk\/bscbusinessmanagement\/wp-json\/wp\/v2\/tags?post=783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}