Company Q – Social Responsibility

1 Case Study on Social Responsibility – Company Q For over forty years, the subject of business ethics has continued to evolve and one aspect in particular, social responsibility has become more of a focus. A company’s attitude on social responsibility is evaluated in how they maximize positive impacts on stakeholders while minimizing the negative impacts. Stakeholders include employees, customers, investors and the communities in which they operate. Over time, examples from the world of business have shown ethical standards and social responsibility have a positive impact, not only in terms of reputation management, but long-­‐term organizational success. Based on the information provided about Company Q’s actions, it appears that the primary driver for their business decisions is short-­‐term economic responsibility without evaluating impacts to all of their stakeholders. Three business decisions are noted which if evaluated independently would not be enough for an adequate evaluation of their attitude on social responsibility, however, combined they point to a trend that is not reflective of a company with a focus on being socially responsible. With three simple recommendations, Company Q could easily shift their attitude and long-­‐term stakeholder support and set themselves up for long-­‐term success. The first action noted, closing stores in high crime areas due to loss is a reasonable business decision, and taken alone would not trigger any question of ethics or responsibility. Organizations need to remain profitable in order to stay in business and satisfy their stakeholders. However, it does not mention any evaluations done prior to closing that would take into account the impact on the

Company Q – Social Responsibility

2 employees or customers in the community, nor did they evaluate if there was anything they might be able to implement that could positively affect the losses. While there are a number of actions that could have been taken before the stores closed, post-­‐closure there are still things Company Q could do that would be both socially responsible and economically responsible. The recommendation would be to update their employment policies. Company Q could offer a bridge of service to employees that are out of work due to the closures. Even though it may be less convenient to work in one of the other stores, in a major metropolitan area there is likely good public transportation and allowing past employees in these areas the ability to apply for positions in other stores and retain their seniority and salary levels. From a social responsibility standpoint this would minimize the negative impact on the employee and community stakeholders in the areas where stores closed, as well as maximize the positive impact to stakeholders and investors as it provides long term solutions for employees that may be impacted in the future as well as the company’s expenses related to employee turnover and training. The second item noted, offering limited amounts of healthy and organic food items after years of requests from customers, indicates that Company Q has some interest in social responsibility; however, they are really just skimming the surface in this area. Offering items requested by customers is not only a sound business decision, financially, however it also indicates that they are listening to their customer stakeholder. The fact that they are only offering a few high margin items indicates that again the economics are driving the decision.

Company Q – Social Responsibility

3 The recommendation for Company Q to demonstrate a more socially responsible attitude would be to source a moderate supply of these items, based on customer requests rather than solely providing high margin items. Further, they can implement a sustainable procurement process for these items, working with local providers to decrease the environmental impact of obtaining items from far-­‐away and further supporting providers in local communities. The third item noted, declining the request to donate day-­‐old items to the local food bank for fear of employee fraud and theft is the most troubling indication of Company Q’s attitude for social responsibility. For a company to make a decision to waste food rather than risk employee fraud indicates that not only a lack of commitment to the community stakeholders, but a lack of trust and commitment to their employees. Because Company Q is based in a major metropolitan area and has had to close stores in high crime rate areas, it is a clear indication that the communities in which they operate could use the added support to the food banks which could in turn decrease crime in these areas. The recommendation for Company Q would be to develop and implement an ethics program as well as social programs. Employees who understand the ethics and see goodwill on behalf of their employer for their communities and employees have more loyalty and commitment to support the organizational objectives. Creating and communicating an ethics program would allow for the company to commit to the food bank program with less fear of fraud. Coupled with social programs, such as volunteer activities for the food bank, would not only increase employee loyalty, but also have a positive effect in the communities where they do

Company Q – Social Responsibility

4 business. It could, in fact, even help crime rates if the communities are better supported. Based on the given information, the above illustrates that Company Q is currently focused on the economic responsibility to their shareholders. With the recommendations given, Company Q can enhance their attitude on social responsibility which will enhance their reputation across all stakeholders and increase chances of long-­‐term success, overall.