Corporate Social Responsibility and Access to Finance

This assignment requires students to analyze the relationship between corporate social responsibility (CSR) and access to finance. It involves reviewing relevant literature, including academic articles and books, as well as online sources such as news articles. The task is to summarize key findings from these sources and discuss their implications for businesses and stakeholders.

Business Ethics and CSR

INTRODUCTION
Business ethics (also known as corporate ethics) is a form of applied ethics or
professional ethics that examines ethical principles and moral or ethical problems that arise in a
business environment. In accordance with this context, this essay will present unethical activities
undertaken at Ivory Coast, Africa. Further, key stakeholders will be analysed who are affected by
such unethical practices. The evaluation of diversity in management and its impact on corporate
social responsibility in organisation will be made in this essay.
PART A
Stakeholder analysis is the process of assessing a decision's impact on relevant parties.
From the analysis of the articles it was identified that due to earning more and more profits many
organisations increased their imports of cocoa from Ivory Coast. This lead to increase in
deforestation in the country. In this context, various stakeholders were affected from this
unethical activity. These were management of chocolate industries like Mars, Nestle, Mondelez
and Ferrero. Other key stakeholders included farmers of Ivory Coast and other parts of Africa,
governmental authorities and local people of the country (Lienert, Schnetzer and Ingold, 2013).
The company in order to promulgating their profits by producing more and more chocolates,
chopped down 80% of the rain forest of Ivory Coast. From this, major transformation in the
environmental conditions of the country has been observed. The government of the country and
neighbour country formulated stricter rules and regulation which impacted on the profitability
and productivity gigantic chocolates companies like Mars, Nestle, Mondelez and Ferrero
(Maclean, 2017). Further, the farmers and natives of Ivory Coast also got affected from the
illegitimate activities conducted in the country. The deforestation in Ivory Coast led to rapid
transformations in the environment. Many scientists proposed that cocoa is a monster that
eventually eats itself. Farmers who diligently work in the fields got affected very much. They
earned very little amount of profits and also contributed in damaging their country’s
environment.
The unethical conflicts and issues found in the articles were the illegitimate activities
conducted by farmers of Ivory Coast who in order to seek little amount of profits chopped down
80 per cent of the rainforest of the country. It impacted on the growth and development of the
chocolate industries incorporating outside the boundary of Ivory Coast. It impacted on the
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suppliers who supplied the raw cocoa to the management of the chocolates industries. Due to
increase in deforestation and environmental instability the government of the country
implemented certain rules and regulations so that the remaining rainforest can be preserved and
restored effectively and efficiently. With this step the owners of chocolate organisations like
Mars, Nestle and Mondelez made decision to not to use cocoa in order to produce chocolate so
that the natural environment of the country can be maintained. This decision impacts on key
stakeholders like farmers, suppliers and government of the country (Cuppen, 2016). Majority of
national economy of Ivory Coast has been supported by export of rich cocoa cultivated in their
country. Suppliers faced heavy loss as they were unable to supply raw material which blocked
their source of income. Thus, this ethical issue affected the key stakeholders greatly. From the
analysis of article it was identified that many foreign players and industrialists pledged to end the
deforestation and forest degradation. It is the responsibility of Conseil Cafe Cacao, the state
regulator for coffee and cocoa to monitor and supervise quality of cocoa.
From the analysis it was identified that these incorporations were not paying right price to
the farmers who grow cocoa. Thus, the authority was appointed by the government of Ivory
Coast so that they can supervise and punish suppliers found in any unethical activity. The
authority determined and committed to good governance and ethics and aimed to eradicate all the
illegitimate activity taking place in the country (Kent and Zunker, 2015). Further, it was
identified that many activists have been found in smuggling cocoa out of the country without
authentic permission. This impacts on farmers and natives of the country as they were facing
huge shift in climate change due to rapid deforestation in the country. Thus, from the analysis of
the articles the key stakeholders identified was the management of chocolate industries like
Mars, Nestle, Mondelez and Ferrero, farmers of Ivory Coast, local population, government and
suppliers. Due to increase unethical practices and rapid deforestation in the country, the climatic
and environmental condition of the country became worse (Baumann-Pauly, Spence and Scherer,
2013). This led to intervention of government and formulation of specific policies and strategies
that aid in preservation and restoration of the natural environment of the country efficiently.
PART B
In the light of the statement it can be stated that gender diversity in the organisation
impacts on the productivity and profitability of the organisation. Further, it also influences the
corporate social responsibility initiated by the organisations (Hartman, DesJardins and
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MacDonald, 2014). Having more female directors can positively impact on the corporate social
responsibility of the organisation. In this context, Bassell, Fischer and Friedman, (2015) define
corporate social responsibility as the process by which organisation and business managers
promotes their products and services and also aid in growth and development of environment
simultaneously. In this they further concluded that gender diversity in the organisation improves
the perspectives of business managers towards the welfare of society (Simmons, Shafer and
Snell, 2013). Female directors visualise societies as their own family and work diligently in order
to provide ample benefits to them effectively and efficiently. On this Rupp, Aryee and Luo,
(2015) argued that diversification in an organisation leads to chaos and conflicts between
employers and employees. Leadership style followed by female directors impacts on fellow
employees which affects their performance and growth. Further, both diversity and corporate
social responsibility impacts on stakeholders of the company simultaneously.
According to Quarshie, Salmi and Leuschner, (2016) greater diversity in management
teams of organisation lead to better ethical decision making. The code of conduct and corporate
governance of the organisation formulates certain rules and policies which enables the ethical
framework in the organisation. In lieu of this context Fafaliou and Donaldson, (2015) added that
more female directors can impact on corporate social responsibility policy of the organisation
and management can increase their thought process and perspectives effectively and efficiently.
Both the diversity and corporate social responsibility works abreast so that the growth and
development of the organisation can be attained. Zheng, Luo and Wang, (2014) argued that more
and more diversification in the organisation impacts on unethical practices in organisation. Many
a time there were issues evolved regarding unfair and gender discrimination followed in the
corporate culture of the organisation.
This leads to increase in conflicts and disputes and further, degrade the reputation and
goodwill of the organisation and business corporations. From this Cheng, Ioannou and Serafeim,
(2014) added that gender diversity impacts on corporate social responsibility activities conducted
by the organisation periodically. From the research conducted in diversified organisation
researchers found that employees were not able to work properly and effectively and with female
directors on top positions, employees resist taking part in corporate social responsibility. From
this, researchers implied that mix diversity in organisation not every time leads to growth and
sustainable development.
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Crane, Matten and Spence, (2013) contends that it is not diversity that impacts the
organisation, it is the mentality and psychology of members of the organisation that impacts and
influences the working of the business corporations. They added that there are several
organisations which are presently incorporating their business activities in the world and which
are governed by the female director and entrepreneur. These organisations are known for their
quality of products and services and their contribution towards environment by initiating
corporate social responsibility effectively (Trevino and Nelson, 2016). From this it can be
understood that diversity in the organisation not only promotes growth and development of the
organisation, but also increases the profitability and productivity of the organisation.
Diversity executives have the accountability to influence the building of the right
environment to attract diverse talent necessary to help the company grow a profitable business
(Saeidi, Saeidi and Saaeidi, 2015). Both of these lead to a stronger company and connecting the
two allows an organization to have a collective conversation as they build their strategic business
imperatives.
CONCLUSION
From the above essay, it can be concluded that business ethics are very important for the
organisation to follow in order to sustain in the economy of the country. In this context, the
unethical practices conducted in Ivory Coast have been examined in this essay. Further, the
diversity in the organisation can impact on its productivity and corporate social responsibility
greatly. From this it can be concluded that both male or female directors can sensitise the
initiative of corporate social responsibility.
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REFERENCES
Books and Journals
Bassell, M., Fischer, D. and Friedman, H.H., 2015. The Importance of Business Ethics and
Corporate Social Responsibility: A Course Module.
Baumann-Pauly, D., Spence, L.J. and Scherer, A.G., 2013. Organizing corporate social
responsibility in small and large firms: Size matters. Journal of Business Ethics, 115(4),
pp.693-705.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to
finance. Strategic Management Journal, 35(1), pp.1-23.
Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.
Cuppen, E., 2016. 15 Stakeholder Analysis. Foresight in Organizations: Methods and Tools,
p.208.
Fafaliou, I. and Donaldson, J., 2015. Business Ethics, Corporate Social Responsibility and
Corporate Governance: a Review and Summary Critique.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for
personal integrity and social responsibility. New York: McGraw-Hill.
Kent, P. and Zunker, T., 2015. A stakeholder analysis of employee disclosures in annual
reports. Accounting & Finance.
Lienert, J., Schnetzer, F. and Ingold, K., 2013. Stakeholder analysis combined with social
network analysis provides fine-grained insights into water infrastructure planning
processes. Journal of environmental management, 125, pp.134-148.
Quarshie, A.M., Salmi, A. and Leuschner, R., 2016. Sustainability and corporate social
responsibility in supply chains: The state of research in supply chain management and
business ethics journals. Journal of Purchasing and Supply Management, 22(2), pp.82-
97.
Rupp, D.E., Aryee, S. and Luo, Y., 2015. Organizational justice, behavioral ethics, and corporate
social responsibility: Finally, the three shall merge. Management and Organization
Review, 11(1), pp.15-24.
Saeidi, S.P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility
contribute to firm financial performance? The mediating role of competitive advantage,
reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-350.
Simmons, R.S., Shafer, W.E. and Snell, R.S., 2013. Effects of a business ethics elective on Hong
Kong undergraduates’ attitudes toward corporate ethics and social
responsibility. Business & Society, 52(4), pp.558-591.
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Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Zheng, Q., Luo, Y. and Wang, S.L., 2014. Moral degradation, business ethics, and corporate
social responsibility in a transitional economy. Journal of Business Ethics, 120(3),
pp.405-421.
Online
Maclean. R., 2017. Chocolate industry drives rainforest disaster in Ivory Coast. [Online].
Available through:<https://www.theguardian.com/environment/2017/sep/13/chocolate-
industry-drives-rainforest-disaster-in-ivory-coast> [Accessed on 8th November 2017].
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