Ethical Frameworks and CSR for Barratt Development PLC: A Report

This report provides an in-depth analysis of ethical practices, Corporate Social Responsibility (CSR), and responsible management within Barratt Development PLC, a major UK housebuilding company. The report explores the importance of CSR in today's dynamic business environment, emphasizing the need for companies to align their goals with societal needs. It examines Barratt's business model, focusing on its commitment to customer satisfaction, community building, and workforce investment. The report delves into the benefits of CSR, such as enhanced brand recognition, improved market reputation, and financial performance, while also acknowledging potential disadvantages like increased costs. It then assesses two key ethical frameworks, utilitarianism and deontology, and their application in informing management decisions, particularly concerning workforce development and responsible human resource management within the housebuilding sector. The analysis highlights how ethical considerations are crucial for Barratt to achieve its organizational objectives and serve society effectively.

Ethics Organisation

Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Responsible management and CSR.............................................................................................3
Values Underpinned by Ethics....................................................................................................5
Exploring issue............................................................................................................................6
Advisory for organisation............................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The business environment is highly dynamic and requires different types of strategies as
well as polices to manage. Today, companies not just need to ensure that they are ready to face
off any challenge presented by market. But they have to also make sure that they are able to fulfil
all the requirements of society. Basically, they need to follow the dual concept which states
about the growth of social as well as corporate entities together. At present organisations need to
find a path that can enable it to cater to the needs of people as well as achieve its organisational
goals (Baur and Schmitz, 2012). There are various methods which can be used by companies to
develop capabilities that can enhance their reach and influential power. CSR is one of that
method which will allow organisation in solving issues of society while achieving their corporate
goals.
This report is based on Barratt Development PLC. It is one of the top ten housebuilders in
UK. This research work will demonstrate how following an issue of Responsible Human
Resource would impact the company and its ability to cater to needs of people. The Greenleaf
consultants will aids Barratt development plc in ensuring that it is able to ethically achieve its
own as well as social goals.
TASK
Barratt Development PLC is Britain’s largest housebuilding company which aims to develop
futuristic homes for people. The company is serving people and growing its business from last 50
years. They have been known to contribute to society as well as to the economy (Barratt
Development PLC, 2017). The organisation releases its footprints report every years and in that
it states how much it has contributed to the country welfare while developing its own
capabilities. The business model of organisation is pretty simple and clear. It is mentioned
below:
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Figure 1 Business Model.
(Source: Barratt Development PLC, 2017)
As mentioned in the image, the company aims to target land buying process and make it
efficient for reducing actual cost. The next step is to develop designs which will deliver and then
focus on ways to innovatively market the products while developing better industrial relations
(Castelló and Lozano, 2011). In its vision statement, Barratt development plc is found to focus
on customer first, development of great places as well investing in the workforce for their
prosperity as well. Basically, the company is highly focused on ensuring that its people are able
to get a better lifestyle and raise their standard of living. There are certain principles on which its
business is based and that are:
 Keeping people safe
 Becoming customer trusted partner
 Building a strong community
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 Safeguarding environment
 Ensuring financial health of business and partners.
The company is investing huge sum of money on its man power for making sure that they
are able to develop themselves and attain better level of success in life. This brings in the
question as to why business need to manage all CSR activities including being responsible
for workforce.
Responsible management and CSR
Today, it is the need that business focus on CSR and all ethical aspects, so that they are able to
develop a right image in the market. The social responsibilities do not have to be done for the
name sake but the management of organisation need to understand the value of each part as it
will impact its image in the market (Cooren and et. al., 2011). There are multiple ways the dual
concept can be adopted by company, such as researching about the issues that exist in society.
There are various reasons which forces an organisation to be socially responsible. The details are
mentioned below:
 Employee demand their firm to be socially responsible: The workers of an
organisation want their firm to be known as social contributor. This makes them
feel good and associate themselves with the company easily. This is a way an
organisation can gain better level of commitment from employees and ensure that
they are more productive. Almost 32% of workers would leave a company if it
showed no interest in charity or social work. So, it is very important for an
organisation to ensure that focuses on social work.
 The consumers wants better business practices: The end user of products and
services made by an organisation want it to deliver on social grounds too.
Basically, it’s not just the quality and innovative designs that would make loyal
consumers. It is the social contribution done by company that would make them
loyal.
 Business is able to develop a competitive immunity: The Company which is
contributing to social causes and serving society well is able to develop a
competitive edge over market forces (Crane, Matten and Spence, 2013). This
ensures that organisation is sustainably able to grow. The long term existence can
be made sure if the company is following the concept of dual growth.
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 Aligns business evolution with society: Even the investor’s pulls from the business
that does not invest more in society. For example, many of the prime entities pulled
their money from BP expedition in Alaska due to its arrogance on issues related to
society. So it is very important to align business with the society, so that better
position can be gained.
Morally imperative: No governments or a single individual can change a lot which business can
do easily (Dhaliwal and et. al., 2011). So the management has to be responsible for every activity
that take place in the organisation.
But for making it more clear there are certain benefits of undertaking CSR activities
seriously. The benefits are stated below:
 Brand recognition is boosted
 Business is able to develop a better reputation in market
 The sales of organisation are enhanced.
 Company is able to access capital more easily.
 There is a better financial performance
The company can get more benefits than the actual cost that would be spent on the
activities directed towards social benefits. But Fulfilling Corporate Social responsibility is not
all that can benefit the business. The managers need to identify the disadvantages that comes
with it. There are various issues that can generate over time if all the activities are not managed
properly. The main problems or di-advantages are mentioned below:
 Increases the cost of production
 Legal issues
 Reduces shareholders and stakeholders share of income.
 Not very extensive reach
It is important to understand that better planning and a policy framework will allow a
company in getting best results out of CSR. If this is not done in a right manner then the above
mentioned disadvantages would be there (Dhaliwal and et. al., 2012). For Barratt Development
PLC, there is requirement of a better ethical approach to be developed for making sure that they
are able to cater to the needs of people as well as company. They need to develop and adopt an
ethical theory for informing their management regarding issues and actions required to be taken.
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Values Underpinned by Ethics
The business house has to ensure that they are able to underpin ethical framework so that it keep
their management informed regarding changes in the dynamics of market. This can be done by
using an ethical theoretical framework. There are different types of theories which were
developed by researchers and business entrepreneurs to help others in finding out the best way to
take strategic decision when it comes of corporate social responsibility (El Ghoul and et. al.,
2011). The managers need to take right decisions for ensuring that each task is completed in a set
period of time. There are various issues that might hamper the activities outcome if they are not
conducted as per the requirements. Today, companies and their management has to understand
the requirement of theoretical approach for assisting them in boosting their decision making. The
TWO theories which need to be assessed and used are stated below:
 Utilitarianism: These are the theories which are based on individual ability to forecast the
potential actions of a person. A person who follows utilitarian approach, always tend to
select an opportunity that would yield the best results for most of the people involved in
the business activities. He discards his own personal feelings and looks at the things
which would be beneficial for most of the beings. There are two type of utilitarian, Act
and rule.
o Act utilitarian is the one which actually justifies the concept of this theory. As the
person who follows this chooses an activity that would be provide best results to
all the people and associated parties (Fassin, Van Rossem and Buelens, 2011). As
here personal requirements would be discarded or side-lined.
o Rule Utilitarian is concerned with the rules and regulations prevalent in the
country and always tries to find the best thing that would be fair for people. Here,
managers would like to look at the value that would be received if an activity is
run.
o Both of these types have their own certain disadvantages. As people can use their
experience to predict outcomes that will be there if something is done but no one
can be certain if their decision will be accurate. There is another challenge that is
there in front of the managers. The variables are not always acting same as before.
This makes predicting for a certain result impossible. The changes in the dynamic
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variables can lead to loss or damage to company image. This theory would assist
in taking right decision that would be beneficial for masses.
 Deontology: These are the theories which describes people need to stick to their duties
and responsibilities when they are engaged in decision making. Basically, a manager has
to uphold his duties as a priority as they are considered ethically correct. For example a
company that follows this type of code of ethic will always keep up with its promise and
deliver results as per the desired laws (Godos-Díez, Fernández-Gago and Martínez-
Campillo, 2011). But there are different flaws in this theoretical framework. One of them
is that it contains no rationale and logical basis that describes individual duties. The
theory will assist managers in sticking to their role of guidance provider as well as
complete all the task that are assigned to them.
These theories will assist in informing management regarding various issues that would have
hampered organisation capability to serve society. A right set of decisions would allow them in
getting better results and improves benefits to all parties. The managers need to behave as per the
stated guidelines of their job profile. They need to stick to their duties and fulfil them. But
choosing something that would bring the best results for all has to be adopted too. This will bring
more flexibility in organisation and maximise the effectiveness of policies that are implemented.
The client will be able to get better quality product at a reasonable price range. Especially
in construction business the margins are too narrow if efficiency is not maintained. With
adoption of better ethical theoretical framework, organisation will be able to attain its objectives
while serving society.
Exploring issue
The outlined issue is related to development of workforce or Responsible human resource.
Barratt Development PLC is operating in a housebuilding industry and requires huge number of
people to accomplish task on ground (Kaptein, 2011). It is the mix of manufacturing and Service
Company that has to follow all environmental standards while providing good environment to
employees and serve the consumers with a higher quality of products and services. It has to focus
on building on the abilities of the people that are working in the company. As they are the one
who will achieve the rate of efficiency that is needed in the system. This is the very reason
because of which Barratt has to invest more on its Human Resource.
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Today, all the companies and top executives understand that they need to develop their
manpower so that they can attain a better market position. It is the people who boost organisation
capabilities, productivity and profitability. If a company is not able to maintain its workforce
than it will lose out on achieving its goals (Lawrence and Weber, 2014). This makes it more
important for an organisation to provide right environment to people so that they can attain a
better market capability. There are various reasons which states that human resource is
important, below are few of the things which describe why developing people might be good for
company:
 Improves value for organisation: If people are trained and ready then they will generate
higher level of value for the organisation.
 Brings in higher level of efficiency and budget control: Boost in motivational level of
employees will result in increased level of efficiency which is required by a construction
organisation.
 Less conflicts: When company is focusing on people then they will be satisfied as they
won’t have any issue.
 Satisfied workforce is loyal: A motivated and satisfied workforce is more loyal and
committed towards organisation.
 Performance enhancement: When people know that their company cares about them, then
they tend to perform better which is a booster for business.
 Boost to corporate image of organisation: The Company is able to enhance its image in
the market as the employees are happy and it is visible to other people.
 Sustainable business: With a motivated, committed, loyal and highly efficient workforce
any company would achieve its objectives and gain competitive immunity (Orlitzky,
Siegel and Waldman, 2011). As well as it will be able to sustain all activities for future.
The main concern for Barratt Development Plc is:
How the company respect and diversify (people from different background and gender)
their workforce while focusing on their holistic development?
The company is having a hard time in managing a highly diversified workforce at it peril.
Today, England has a very highly diversified population and the organisation manpower
comes from within the population. Also, the increase in number of women taking
construction as their career has changed the scenario. As known, there are certain regulations
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that have to be followed by organisation for making sure that it is able to cater to the needs of
its own workers so that they stay motivated and perform as per requirement.
The managers have defined certain ways which they can use for managing the diversified
staff. They will be using the methods that are used by TESCO a retailing giant in UK. The
known grocery provider has a standardised policy for each and every individual. As well as, it
follows the legislations that are stated by the government, such as maternity and paternity leaves,
set parameter for conflict resolution, etc. This can be used in construction business as well. The
workforce is highly diversified and there has to be standardised way to deal with all of the people
who poses their own capabilities (Schneider and Schmidpeter, 2012). The managers also need a
framework which they can use for managing people in an effective manner. For this they can use
the basis of Equality Act 2010 which states that nobody should be discriminated while all people
need to fulfil their duties.
Second Factor- At present almost 12.8% of industry workforce is made up of women.
This is pretty low when the whole sector needs hundreds of thousands of people in next five
years. The companies are not able to attract women to the industry as it is considered to have
many barriers in their career progression. There are two main issues which are identified behind
this:
 Lack of impartial information: There is very less knowledge in the population regarding
making construction business as their career. Women rather go into service sector than
the cited business and this is all due to lack of information.
 Gender pay gap: This is the second prime reason which hinders women active
participation in the industry. There is significant gap between women and men salaries
which stope them to join the sector as a career.
The resolution to this issue to invest more while giving out equal opportunity to all. There is
requirement of face that can attract women to the industry as well as elimination of gender pay
gap has to be done (Symon and Cassell, 2012). This is what all major companies have done.
There are different stakeholders who are impacted by these issues. The stakeholder map below
will highlight this:
Keeping informed completely
They need to be informed constantly, in current
situation it is going to be:
Thoroughly informed
They need to be informed thoroughly and not
irritated by information.
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Workforce/Employees
Shareholders
Suppliers
Government
Minimal contact
Yearly statement are enough
Community
Anticipating and meeting requirements
Providing things when required.
Individual consumer
This stakeholder map will allow managers in understanding as why it is important to address
issues and what impact will be there on certain stakeholder.
Advisory for organisation
Though, all the advices have been given above with the issues. But the company has to engage
itself on the CSR front so that it can deliver higher level of quality to end users (El Ghoul and et.
al., 2011). There are certain recommendations that would be made for better focus on issues and
social responsibility while thriving to achieve organisational goals.
Recommendations:
Barratt Development Plc need to focus on ensuring that they are able to adopt a mixed
framework of utilitarian and deontologist theory. As this will allow the managers in taking
right decisions. As well as if there is something which would benefits more people then he
will be able to do so. Basically, the issue with diversity has to be sorted out in a proper
manner (Fassin, Van Rossem and Buelens, 2011). There are various benefits of CSR as well
as responsible management. But the cons needs to be analysed as well. This will ensure that
there are no loses for organisation and it is able to achieve its targets in a set time period.
The best course of action for the firm will be a balanced plan that will optimally use
resources while focusing on the concept of dual growth.
CONCLUSION
In the report above, various issue are highlighted that can impact organisation and its ability
to serve market in a right manner. Today, it is very important for companies to engage itself in
CSR activities as it is a way which enables it in establishing a positive image in the eye of
consumer. As well as it is only the business that can actually make a difference. The present
report was about Barratt Development PLC which needs to understand the value of becoming
Ethical organisation. It has certain issues which were analysed and suggestions were given to fix
them.
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REFERENCES
Books and journals
Baur, D. and Schmitz, H. P., 2012. Corporations and NGOs: When accountability leads to co-
optation. Journal of Business Ethics. 106(1). pp.9-21.
Castelló, I. and Lozano, J. M., 2011. Searching for new forms of legitimacy through corporate
responsibility rhetoric. Journal of Business Ethics, 100(1), pp.11-29.
Cooren, F. ad et. al., 2011. Communication, organizing and organization: An overview and
introduction to the special issue. Organization Studies, 32(9), pp.1149-1170.
Crane, A., Matten, D. and Spence, L. J., 2013. Corporate social responsibility in a global context.
Dhaliwal, D. S. and et. al., 2011. Voluntary nonfinancial disclosure and the cost of equity capital:
The initiation of corporate social responsibility reporting. The accounting review. 86(1).
pp.59-100.
Dhaliwal, D. S. and et. al., 2012. Nonfinancial disclosure and analyst forecast accuracy:
International evidence on corporate social responsibility disclosure. The Accounting
Review. 87(3). pp.723-759.
El Ghoul, S. and et. al., 2011. Does corporate social responsibility affect the cost of
capital?. Journal of Banking & Finance, 35(9), pp.2388-2406.
Fassin, Y., Van Rossem, A. and Buelens, M., 2011. Small-business owner-managers’
perceptions of business ethics and CSR-related concepts. Journal of Business ethics. 98(3).
pp.425-453.
Godos-Díez, J.L ., Fernández-Gago, R. and Martínez-Campillo, A., 2011. How important are
CEOs to CSR practices? An analysis of the mediating effect of the perceived role of ethics
and social responsibility. Journal of Business Ethics. 98(4). pp.531-548.
Kaptein, M., 2011. From inaction to external whistleblowing: The influence of the ethical culture
of organizations on employee responses to observed wrongdoing. Journal of Business
Ethics. 98(3). pp.513-530.
Lawrence, A. T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy.
Tata McGraw-Hill Education.
Orlitzky, M., Siegel, D. S. and Waldman, D. A., 2011. Strategic corporate social responsibility
and environmental sustainability. Business & society. 50(1). pp.6-27.
Schneider, A. and Schmidpeter, R., 2012. Corporate social responsibility. Verantwortliche
Unternehmensführung in der Praxis, Berlin ua.
Symon, G. and Cassell, C. eds., 2012. Qualitative organizational research: core methods and
current challenges. Sage.
Online
Barratt Development Plc, 2017. Business Model. [Online]. Available through: <
http://www.barrattdevelopments.co.uk/about-us/what-we-do/business-model>. [Accessed on 5th
November 2017].
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