Every organization should have a commitment to enhancing the well-being of the community through the provision of products and services that play a part in sustainable development by providing social, environmental, and economic benefits for all the stakeholders (Elegido, 2011). Therefore, every company requires good ethical standards or behavior to enhance their corporate social responsibility (CSR). In other words, the CSR of a company and their ethical standards are interrelated. This study intends to provide insight on the connection between the CSR and ethics in an organization.
Having worked in a phone accessory company as an intern, I observed an ethical issue that interfered with the consumers’ perspective and opinion of the organization. The ethical issue entailed price discrimination. Price discrimination refers to an act whereby different consumers purchase different products at different prices depending on various factors such as social status, race or the relationship of the user to the company (Bergemann, Brooks & Morris, 2015). In this case, some of the employees occasionally sold the products at a lower price to the whites, their friends, or family while the other consumers acquired the product at higher prices than normal especially if they were African Americans.
The utilitarian theory emphasizes on maximizing the amount of happiness that a customer achieves from goods and services while attempting to reduce the suffering among the recipients (Masdoor, 2011). In this case, some of the consumers were happy regarding the very low prices they acquired the products while the others suffered, as they had to work harder to obtain the products they needed due to the high prices. Two of the consumers had a discussion on the price they paid for a phone charger and realized that they purchased this product at different prices from the same organization. The feeling of inequality prompted these customers to raise complaints to the management concerning the issue.
The presented issue is ethically problematic since it brings adverse effects to both the well-being of the society and the company. The company’s image, for instance, will be tarnished. The loyalty of the customers may even shift to other competitors where they can get fair prices. The presented situation is an ethical issue because it is a wrong act that diverts the employees of the company from doing the right thing. The virtual ethical theory, for instance, emphasizes on virtues that or of good character (Slote, 2010). In this situation, the company portrayed more of vices such as dishonesty compared to the virtues.
It is crucial for the company to understand that the consumers or the customers already have their doubts regarding the prices of different products and services offered and it is up to the producers or the organizations to try to maintain the trust. Price discrimination based on aspects such as social status is legal, as it would help create a better welfare. However, once price discrimination occurs based on race and familiarity with the individuals, then it becomes both illegal and unethical (Hinz, Hann & Spann, 2011). Solving unethical issues is core to regaining the trust that the consumers once had in the organization.
The management came up with a couple of solutions to help resolve this issue. First, the company decided that it would start charging their customers differently under reasonable circumstances such as product differentiation. The company also decided that they would be careful when it comes to the communication regarding the price differences. The management also gave written warnings to the employees who took part in this unethical issue. In regards to the deontological theory of ethics, people should be able to adhere to their duties and obligations and perform their duties well (Melden, 2013). The employees, in this case, had no right to increase or reduce prices because it is not their obligation.
It was efficient and ethical for the organization to solve this issue in such a manner because, through the written warnings, the employees would start acting right immediately which would build on the corporate social responsibility. In other words, the warning would get the employees to act right for the fear that they would possibly get worse punishments such as suspension without pay if they continued unfairly performing their duties. Furthermore, when customers witness this change, they will likely regain their trust for the organization and forget about the ethical issue that took place before.
In addition, the company came up with new policies concerning the ethical labor practices. The company decided that it would treat all its customers fairly without discrimination based on race or different relationships with the employees. Furthermore, the organization volunteered to compensate all the customers who complained about purchasing the products at an abnormally high price compared to the favored customers. The organization offered free phone covers and a 20 percent discount for the customers who were unfairly served in the organization for any product they purchase within one month.
My approach to solving this issue would be to use the CSR strategies where the organization has to act right to bring back a stronger relationship with its customers. The care ethics theory stipulates that when people act right it shows care for others and it builds on relationships (Engster, 2011). This ethical issue requires rebuilding of the rapport that once existed with customers, maintaining it and even going to the extent of strengthening it. In other words, the organization needs to get back the trust that it had with its external customers.
This approach would work if put in practice because the customer satisfaction is the backbone of all businesses and the only way to find out if they are indeed satisfied is through the feedback. Rebuilding the relationship that the organization had with its customers will help the customers to feel free in regards to sharing their opinions and ideas regarding the products and services offered to them. Through the feedback, the organization can then make amends where there is the need and work towards the well-being of the society rather than creating financial suffering to the customers.
We can do it today.
Other CSR strategies would also help solve this unethical situation. For instance, the company can decide to participate in social contribution activities so that they can be able to give back to the society as a way of showing their customers that they care and own up to their mistake (Peloza & Sheng, 2015). For instance, the organization could try to raise funds for the non-governmental organizations that help the society during emergencies that occur in different disaster areas.
Philanthropy is yet another CSR strategy that this organization could use to solving the ethical problem (Griseri & Seppala, 2010). The organization could make plans on donating to both the local and the national charities. Many organizations consist of many resources that could bring about benefits to both the local community programs and the charities. Furthermore, the best thing that this organization would do regarding the ethical issue would be to show concern and care to the society as a whole.
In conclusion, undertaking the CSR initiatives could play a significant role in solving the existing ethical issues that might come up in an organization such as the price discrimination problem. Through such strategies, the organization is capable of appealing to the socially conscious employees and consumers getting them to act right and regain their trust as well (Werther & Chandler, 2010). Transparency during the CSR activities and good virtues as explained in the virtue theory such as honesty are core to earning the trust of the consumers and the society. The company should engage their employees in giving back and make them understand that the well-being of the society is important for a better organizational image and better success for the organization among other benefits. Therefore, the use of CSR strategies can effectively help in solving ethical concerns in an organization.
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