“Companies today are under intense pressure to rebuild public trust and stay competitive in a global economy.” Organization is established with various motive which can be ethical based or unethical based, but has many obligations towards the people and society. And in this modern competitive era, organization has to face various challenges in terms of profit making, achieving organizational goals and operating business in the society responsibly. Though business are meant to be profit oriented but any organizations whether it’s a profit based or non-profit based has an obligations towards the community or society where they are running their business. And many large MNEs are also growing in numerous societies which are plays vital role in economic life and are often active forces in governance. So, all these companies or organizations have positive as well as negative impacts in the society. And some are gaining benefits from it and some have raised ethical criticisms. It might look like ethics have been disappeared in some cases but on the other hand some organization are also running smoothy by earning profit by making people employee, following government tax polices and without degrading environment which can be said as ethically, So, in the global context, different types of organizations are facing different challenges.
Company has a perpetual existence, it is an artificial person or juridical person by law. Due to limited liability, generally people are not liable for the debts. But sometimes during fraud case or in wrong activities done by the company, directors are blamed and actions are taken against them which is not ethical. And but on the other hand, there is also a chances of directors doing wrong things and company has to bear the loss. So, many challenges comes to the organization while doing business or making profits. Such unethical acts can harm company’s reputation and may have impact on profit.
It has also been experienced that It can often be a challenge to balance the financial demands of stockholders and the need to enhance profits, with the well-being of employees and the environment. For example, many production companies that produces products like plastic products, rubber products or even medicines may find that the byproduct can be pollution, damage the surrounding environment, or present potential danger to employees and even residents. Many people thinks that businesses should not only look for a profit but also consider the social implications of their activities. Some businesses have begun to behave in a more socially responsible manner, partly because their managers want to do so, and partly because of fear of environmentalist and consumer pressure groups and the media, and concern for their public image. It is argued that socially responsible behaviour can pay off in the long run, even where it involves some short-term sacrifice of profit.
Organizational goal is the main aim of all the working employees in an organization. People working in an organization from top level to bottom level, work really hard to achieve organization goal. But when the employees do not perform well then there will be a high chances of having negative impact on achieving common goals. So, this can be another challenges for the company.
Many employees lie in order to reach goals, avoid assignments or negative issues; however, sacrificing honesty in order to gain status or reap rewards poses potential problems for the overall ethical culture organization, and puts organizational goals into high risk in the long run. “From a 2009 National Business Ethics survey, it was found that types of employee-observed ethical misconduct included abusive behavior (at a rate of 22 percent), discrimination (at a rate of 14 percent), improper hiring practices (at a rate of 10 percent), and company resource abuse (at a rate of percent).”
The term corporate social responsibility, or sustainability, refers to the organization or corporation’s relationship with society. It can also be said as a business’s obligation to maximize its positive impact and minimize its negative impact on society. Organization faces various challenges in this era. When it comes to values and social responsibility, businesses and corporations should also be able to benefit society in some way rather than only taking care of their stockholders. In some cases, companies do so because consequences of ignoring rules and regulations, or causing damage to the environment, may prove to be more damaging than agreeing to follow them in the first place. A famous example of CSR involves the pharmaceutical company Merck. In the late 1970s, Merck was developing a drug to treat parasites in livestock, and it was discovered that a version of the drug might be used treat River Blindness, a disease that causes debilitating itching, pain, and eventually blindness. The problem was that the drug would cost millions of dollars to develop, and would generate little or no revenue for Merck, since the people afflicted with River Blindness—millions of sub-Saharan Africans—were too poor to afford it. In the end, Merck decided to develop the drug. As expected, it was effective in treating River Blindness, but Merck made no money from it. As of this writing in 2016, Merck, now in concert with several nongovernmental organizations, continues to manufacture and distribute the drug for free throughout the developing world. CSR requires a balanced approach that encompasses the economic, social and legal pillars of business operations.
Sustainability is a strategy of social development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainability can be regarded as comprising three components – environmental, economic and social. So, since it deals with the long term maintenance of systems, it can be also said as that it represents a specific goal to be achieved.
A business that is concerned about society as well as earning profits is likely to invest voluntarily in socially responsible activities. For example, some companies, such as Canadian Tire through the Foundation for Families and Honda Motors Canada, support numerous social initiatives. Such businesses win the trust and respect of their employees, customers, and society by implementing socially responsible pro- grams and, in the long run, increase profits. Irresponsible companies risk losing consumers as well as encouraging the public and government to take action to constrict their activities.
For example, an ordinary citizen who does not buy a company’s product or its shares can still be a stakeholder because the business’s actions affect his community. By employing people and paying taxes, the business’s presence could indirectly benefit the citizen. If the business pollutes the community’s water supply, the citizen could be harmed. So despite a lack of a formal relationship, it is still possible for an individual to be a stakeholder in an organization.
Earning profits is the economic foundation of the pyramid and complying with the law is the next step. A business whose sole objective is to maximize profits is not likely to consider its social responsibility, although its activities will probably be legal. Finally, voluntary responsibilities are additional activities that may not be required but which promote human welfare or goodwill. Legal and economic concerns have long been acknowledged in business, but voluntary and ethical issues are more recent concerns. There are three emerging alternatives or competitors to responsibility: (1) an economic conception of responsibility; (2) global corporate citizenship; and (3) stakeholder management practices.
So, in the global context, organizations have to face various challenges while doing the business in an ethical way so that it can also earn profit keeping in mind that it should not have negative impact in the society to achieve their goal. Organizations have obligations to the government as they have to pay taxes and follow various policies of the government, they also have to treat employees equally and in good way so that they can work in way that company can achieve its goal, earn profit and do better things for the society as well.