Corporate Responsibility and Governance: Ethical Frameworks Analysis

This essay delves into the critical aspects of corporate responsibility and governance, emphasizing the significance of ethical frameworks in organizational decision-making. It begins by defining ethical frameworks as a cornerstone for business success, highlighting how these frameworks guide actions and ensure adherence to regulations. The essay uses the Enron Corporation's collapse as a case study, illustrating the consequences of neglecting ethical considerations. It then explores specific ethical approaches, such as the rights approach, emphasizing fair pricing, truthful advertising, and quality products. Fairness, common good, and social responsibility are also discussed as vital components of ethical governance. The essay concludes by underscoring the importance of a clear ethical framework in fostering a positive workplace culture, enhancing public image, and effectively addressing regulatory issues, ultimately contributing to the long-term sustainability and profitability of businesses.

Running head: CORPORATE RESPONSIBILITY AND GOVERNANCE 1
Corporate responsibility and governance
Name
Institution

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Abstract
The thesis of the term paper presented entails different corporate framework that a business can
apply in its decision making through the management board to ensure continuity and success of
the business. The discussion on the ethical framework is closely linked to the collapse of the
Enron Corporation in the USA which happened nearly two decades ago which was due to the
failure of effective ethical framework in the decision-making process.
Different ethical framework and corporate responsibility in governing most of the profit-making
organization are discussed in the context below as their impacts on the decision and running of
the organization are also highlighted. The identified ethical issue which can be applied in the
decision-making process within the organization for the smooth running of its production process
and management of the entire firm is discussed in the paper.

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Ethical framework in governance
Ethics and values in the business are considered as a determinant for the success and
continuity of every profit-making organization since it spells out most of the rules and
regulations which will govern the activities of the organization. Therefore, ethical framework can
be defined as the systems of principles, rules or standards by which the actions of the business or
organization are judged as right or wrong. In decision making for every profit-making
organization, ethical issues play a bigger role since ethics in business will ensure profitability
and compliance of the business with the set government policies which regulate operations of the
business, therefore, the management board should base their decision on the ethical perspectives.
The collapse of Enron Corporation in the United States of America has been closely linked to
the lack of ethical consideration in their decisions which is believed to be the pillar for the
success of every organization or business. Ethical consideration is necessary to every
organization since it will control or shape the organization to operate according to the rule of the
land where the business is situated and also to avoid loosing their customers due to unethical
practices, for instance, fairness within the organization, rights observation, utilitarian, common
good and virtue (Van den Bulcke, et al, 2018).
Rights approach
Rights approach as an ethical framework to be considered in decision making by the
management of the business entails various ways of protecting the rights and morals of anyone
working within the firm or being served by the organization like employees and customers. The
intention of this approach is for people to be treated with dignity and respect.

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In the decision-making process, the organization through its management body can maintain
the rights of the customers or the market in which they intend to serve through the following
ways; by setting fair prices for their products, avoiding misleading advertisement, production of
quality products as discussed in the context below.
Setting fair prices. The decision on the prices of the company products should be based upon
the financial status of the market they intend to serve since the setting of higher prices will be
termed as the exploitation of customers which is against the rights of the consumers or the
market. The setting of fair prices by the management of the business will help to stop consumer
exploitation which is considered the unethical practice. From the case study provided on the
collapse of the Enron Corporation in the United States of America can be linked to customers’
exploitation through the setting of high prices which made most of the customers to boycott their
products hence the corporation could not operate due to low customers’ turnout (Stewart, 2018).
Avoiding misleading advertisement. In making advertisement decision and channel, the
management should take into account some of the ethical issues related to the advertisement
program like avoiding misleading information about the product so as to lure customers to prefer
your products since this is termed as unethical practices which are against the rights of the
consumer.
Production of quality products. It’s the right of every consumer to be served with the quality
products and services upon the purchase therefore low quality or defective products are against
the rights of consumers. In the decision-making process concerning the production process, the
management should consider the purchase of quality production machines and the use of updated
production technology so as to meet the market taste and preferences (Slade, 2017).

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Fairness
One of the ethical practice management should take into consideration in decision making is
fairness within the organization. This implies treating employees equally by giving equal
opportunities to express themselves and also fairness in promotion and ranking. Fairness within
the organization will contribute greatly to the success and continuity of the business since the
working force will be motivated with the fair treatment by the management hence each employee
will work to their best, therefore, ensuring the profitability of the business. Fairness will also
build up the teamwork within the organization so as to meet the set operational goals by the
management hence consideration of fairness as an ethical issue will be more profitable to the
organization and the staff as a whole (Shaw, Shiu & Clarke, 2015).
Common good
Common good expect leaders to protect the wellbeing of those around them. It is ethical to
protect the people around you more so to employees within the organization since it will ensure
the spirit of common gain from both parties as none will feel like being exploited. The
organization can ensure common good by providing medical insurance cover for the staff
members. Through this, employees will be protected against any injury which might befall them
in their line of duty hence will work to their best in achieving the set organizational goals
(Shapiro & Stefkovich, 2016).

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Social responsibility
It is ethical for the organization to be involved in the social responsibility within the
community in which the firm is situated. Social responsibility should be considered by the board
members during decision making since it’s the members of that particular community which
gave them the charter to operate among them.
Involvement in the social responsibility like organizing youth games and participating in other
community activities like fundraising programs will earn the organization good brand name
which in return attract many investors, suppliers and shareholders to the organization hence the
board members should be considered social responsibility as an ethical framework in their
decision-making the process (Martinez & Wueste, 2016).
Importance of having a clear ethical framework
The clear ethical framework has various impacts on the organization be it a profit-making
organization or non-profit making organization since it gives a clear way on how the activities of
the organization should be conducted for the continuity and profitability of the organization. An
ethical framework is beneficial to both the organization and customers as a whole since it applies
to the common good of both parties.

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It creates a better workplace culture
A clear ethical framework within the organization is believed to create a better working
relationship between employees and the management body in terms of service delivery and
production process of the firm. Lack of strong workplace culture in every organization can lead
to the collapse of that particular firm since there will be no teamwork among the employees and
the good relationship between the employees and the management. From the case study provided
about the Enron Corporation, its collapse might have been due to poor workplace culture thus
employees’ lack motivation to work to their best (Lehnert, et al, 2016).
Better public image
The clear ethical framework within the organization will contribute greatly to the public
image of the organization to its targeted customers. Ethical practice like production of quality
goods and services, fairness in pricing will better the image of the organization as most of the
consumers will prefer their products due to fair prices and quality of the products they offer to
the market hence maximizes the profitability of the firm. Better public image will keep away
some of the government intervention on the activities of the firm since there is less complains
from the consumers about the products they offer to the market. Due to profits maximization and
limited government intervention on the organization, there will be continuity of the business
without collapsing as in the Enron Corporation’s case (Coleman, 2018).

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Handling regulatory issues
Clear ethical, the framework will help the management body the organization to handle most
of the regulatory issues related to the mode of production, quality of products, observation of
human rights and pricing of their products which should not be exploitative. when the
management considers some of the ethical frameworks in their decision-making process, for
instances, human right approach, fairness and also social responsibility, the organization will
avoid regulatory issues based on the mentioned ethical framework which might arise due to poor
quality of products offered to the market or consumer exploitation through pricing hence the firm
will able to smoothly hand such regulatory issues associated with its operations (Casali & Day,
2015).

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