Responsible business practices include dealing fairly with employees and the community, using non-renewable natural resources carefully and avoiding environmental damage.
At a global level, the ethical issues facing businesses include reducing poverty, fighting corruption and adopting sustainable business models while they go about their main role of making money. Institutions like the World Bank are encouraging and equipping the private sector in corporate social responsibility and care for environment and the community.
Why Bother with Responsible Business Practices?
Irresponsible business practices lead to social instability and even damages the prospects of business itself. Businesses prosper when they can sell increasing volumes of products and services. This can happen only if the buyers can afford to buy what is offered.
Irresponsible business practices that lead to reduction of employment opportunities tends to reduce the volume of demand by concentrating wealth in the hands of a few and reducing the purchasing power of the majority.
Unethical business practices such as using bribery to get orders or to get out of trouble lead to distortions. They reduce the competitiveness of industry, lead to lower quality products and services, and also to an environment where rule of law is the exception rather than the rule.
Irresponsible businesses also damage our environment by polluting it and exhausting non-renewable resources. These lead to lower quality life in the present with polluted air, waterways and new kinds of diseases. Indiscriminate exploitation of non-renewable energy and other resources is equivalent to robbing future generations.
The Responsible Business Movement
With increasing awareness about the consequences outlined above, the public is becoming more assertive. They try to punish irresponsible businesses by boycotting their products and refusing to buy their shares. Highly skilled and talented employees, who can find employment where they want, tend to join companies with a reputation for responsible behavior.
The public also constitute the voters and governments have to bow to their wishes. The increasing reach and complexity of government business regulations seek to prevent irresponsible business practices.
In such an environment, businesses that do not adopt responsible practices tend to lose business and also run foul of the law. Instead of running the business, they have to fight the public and government regulators.
Just as working conditions and compensation of workers have improved dramatically over the centuries, responsible and ethical business practices are also likely to be adopted by more and more businesses as time goes along. They will be the winners in the long run because they will get greater public support and business.
This tendency will be strengthened by the increasing levels of public communication in the forms of blogs, social networking and other such forums. Programs like the World Bank’s sustainable and equitable business development campaigns also support this trend.
Businesses that are aware of their social and environmental responsibilities, and implement good governance and accountability, will get increasing public support and their orders. On a global scale, responsibility will also involve poverty reduction and creating health awareness. Gender equality, fighting corruption, job creation and preventing climate change will become part of accepted corporate responsibility.