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Ethics and Corporate Social Responsibility

HRM & STRATEGIC HRM

Ethics and Cooperate Social Responsibility

Introduction:

The report sheds light on how the “human resource management” makes an effective approach to make
coherent plans keeping in view cooperate ethical responsibility. HRM is used so that people can be
managed in such a way that they get an efficient and work friendly environment to work in so that the
company may also benefit from the people. HRM plays an important role in deciding whether a company
will be successful in the long run or not. If the HRM of a company is not competent, it can result in poor
handling of ethical dilemmas, lack of productivity in people and as a result the company does not get the
competitive advantage it desires to hold its ground.

Strategic HRM is a more specific term that highlights how a proper plan can be strategically devised so
that the employees and employers can thrive together. SHRM directly connects employees with the core
plans, objectives and goals of a company. This gives a competitive advantage to a company and also
ensures desired business performance.

Ethics and corporate social responsibility play a vital role in a organization because people can be more
productive and less likely to commit harmful behavior to a company’s interest if they are certain that the
company they are working for is safeguarding their interest by fulfilling the ethical criteria. This can
result in satisfaction of employees, improvement in workplace culture, improved public reputation and
compliance with legal guidelines.

Theoretical Analysis of Ethics and Corporate Social Responsibility

It has become vital for HRMs of organizations to draw attention to ethics and social responsibility.
Because there are a lot of implications associated with the absence of an ethical environment and
corporate social responsibility.
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Ethics and Corporate Social Responsibility

Ethics

Ethics usually covers the area of moral conduct and principles that directs individual or group behavior.
The main focus of HRM is to act within the codes of conduct and guidelines set by the organization when
faced with ethical dilemmas. It is the duty of HRM to ensure that the organization maintains culture for
which ethical behavior is required. In order to make sure that an ethical environment is created, it is the
responsibility of HRM to devise a plan to adopt codes of conduct that represents the ethical principles of
an organization.

The basic rules of conduct that most organizations are five:

The first one and the most important one is Compliance with Laws. This covers whether a company is
carrying out its business practices with honesty, integrity, fair dealing and full compliance with the laws
and regulations. Confidential and Proprietary Information is another code of ethics in which HRM
have to make sure that any information that is not in the public domains like production methods,
financial stats, designs and tactical secrets etc. are not leaked to the public by any source related to the
organization. Conflicts of Interest is a code which covers that during an ethical dilemma the individual
who has any gain or loss as a result of the dilemma should not take part in that decision thus avoiding any
errors in judgment. HRM should make sure that all the Company’s Assets are being used for business
purposes only and for personal gains or favors. Loss, theft and misuse can directly impact the profitability
of an organization. For example, Time theft is very common in employees and most people take it for
granted by taking extensive bathroom breaks or lunch breaks more than the decided time. This can also
result in low productivity and as a result low yield. Accepting or providing gifts or other gratuities
should also be in the radar of HRM as guidelines should be provided either no gifts or minimum value
gifts can be taken from customer, vendor, seniors or third parties. Above mentioned are the five codes of
conduct that are common in most organizations.

HRM can face a lot of challenges in the form of ethical dilemmas that can range from foul hiring
practices to privacy of employees. Making an streamlined ethical decision is a complex task which
according to Josephson School of Ethics in UC San Diego requires 3Cs Commitment, Consciousness and
Competency. The pros of focusing on the ethics includes improved public reputation, streamlined
decision making, improved workplace environment due to discipline and trust among the employees.
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Ethics and Corporate Social Responsibility

Corporate Social Responsibility

Corporate Social Responsibility or otherwise known as CSR is a self-regulating business model in which
an organization joins social policies keeping in mind the economic goals of the company. It is a way of
increasing the social impact of the company while also maintaining the revenues and growth of the
company.

CSRs can be classified into four types Economic Responsibility, Environmental Responsibility, Ethical
Responsibility and Ethical Responsibility.

Economic Responsibility is that the company should try to maximize profits whilst investing in projects
that may make an impact of the company environmentally, ethically and philanthropically. This can be
done by financial investments and donations in research and development to develop a product that
ensures sustainability. Company can also fund employee trainings regarding social awareness or
environmental concerns like climate change. Environmental responsibility of an organization should be
focused on preserving the Mother Nature. It is necessary to analyze whether the processes that are taking
place in the company have any adverse effects on the environment. If so, then preventive actions should
be taken to reduce any negative impact on the environment while maintaining the productivity.
Companies should be committed to reduce their carbon footprint and take measures to mitigate the effects
of global warming. Recycling, Reducing and Reusing are the ways to go in order to be eco-friendly.
Emissions or by products should be carefully disposed and environment friendly energy resources should
be used. Ethical responsibility means that the business practices performed by the company should
follow the ethical criteria like fair treatment of all customers, vendors or employees regardless of their
color, race or sexual orientation. Philanthropic responsibility is very vital as it represents how a
company is truly contributing to the society and its people. This responsibility also includes how a certain
organization uses its resources to make the world a better place. This can be done through contributions,
charities and fundraising events.

These HRM issues are one of the most important aspects of an organization. Every organization needs to
have a grip on how to properly structure and apply above mentioned HRM issues. There are three broad
categories of HRM issues which include the structure of an organization, process of hiring and
compensation. The structure of an organization means the framework of its department and how these
departments are interlinked and how they are being managed. If we factor in the ethic aspect, HRM
should make sure that all the departments should get fair resources and fair treatment and the inter
department issues should be solved without biasness. Hiring process should also be handled ethically.
Everyone should be given fair chance regardless of color, race, nationality or sexual orientation.
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Ethics and Corporate Social Responsibility

Nepotism should not get in the way of hiring a talented person rather than an undeserving one.
Compensation usually covers the salaries, raises, bonuses and other work related prizes (Employee of the
month) that the organization provides. It is the social responsibility of the organization to deal fair and
square. Salaries should be revised according to the policies fairly. For all these issues mentioned above
specialized personnel become part of the HR Team like recruiters, labor management team and benefit
specialist.

As we can conclude, all of the above cannot be covered just by HRM. So SHRM needs to be linked in
order to cover all the sub issues of an organization in the long term by talking these issues in account with
the overall strategic plan of the organization. How HRM and SHRM can be applied side by side using a
well-balanced structure is discussed below.

Twin Concepts of HRM and Strategic HRM

The twin concept of HRM and SHRM is very important as both are needed to properly execute

management plans. HRM follows a fragmented approach, which stresses on applying management
principles while managing people in an organization. As against this, SHRM tracks an integrated
approach, which includes lining up of business strategy with the company’s HR practices. This strategy
should be aligned with the organization’s overall business strategy and be designed to help it achieve its
business goals. The Human Capital Strategy should include several different elements, including a plan
for recruiting and retaining the best talent, developing and managing employee skills, and motivating and
rewarding employees. Another critical element of Strategic HRM is the development of an HRM
organizational structure that supports the implementation of the Human Capital Strategy. This structure
should be designed to ensure that the HRM functions are integrated with the rest of the organization and
that they can work together to achieve its business goals.

Strategic human resource management aims to recruit, manage, and develop workers to assist the
organization accomplish its long-term goals. When successfully executed, it guarantees that all aspects of
people management shape the culture and environment needed to produce value and meet productivity
targets. Structure, quality, culture, values, and devotion on a grand scale and people concerns with a
longer time horizon are prioritized.
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Ethics and Corporate Social Responsibility

Ethics and Corporate Social Responsibility implemented in Nestle

Ethics and corporate social responsibility has garnered the interest of a many organizations of the world
due to business growths in short period of time. Many firms have grown from 20 percent to a whopping
82 percent between the years of 2013 to 2019 (Flash Report 2019). This is due to the reason that more and
more companies are investing their time and effort in CSR related programs. This has hiked the interest of
shareholders and market realist and they are working on creating proper strategies to align CSR with their
business strategies by SHRM. Nestle is a leading company in implementing ethics and CSR plans in their
whole business strategy. Nestle is a leading health, nutrition and well-being company and it is operating
in more than 80 nations worldwide. There is a reason why Nestle has safeguarded the trust of its
stakeholders which is its firm principles. The principles of the company are structured in such a way that
sustainable links are built through connections with customers, investors, employees, human rights and
the environment keep the company grounded and trustworthy. Nestle has used a distinct model that
incorporated CSR in their business plan coherently. This is the reason the company has had exponential
growth in the past years. This organization follows the Carroll’s CSR pyramid which has four main
objectives i.e. be a good corporate citizen, be ethical, comply with the law and make a profit. By
following this plan, Nestle has come a long way since its humble start.

In order to promote healthy life styles and energetic activities at young age, Nestle has organized a kid
programs whose main objective is to go to different schools and give awareness to children. The
preservation of water and environment has also been a big part of this corporation and a project named
“RiLeaf” was dedicated for this purpose in Malaysia. This project was initiated to plant as many
plantations as possible along the River Kinabatangan. Nestle was taking most of its Palm Oil from
Indonesia but ever since it has been come into light that Indonesia has been unsuccessful in controlling
deforestation of its lands, Nestle is rethinking its strategy to avoid being the root cause of deforestation.
Nestle has also thrived in the ethics department as it has equal opportunities, fair compensation and
thriving work environment by using the basic HRM strategy discussed in the following paragraph.

To make it possible, ensuring that you have a clear and concise HRM strategy in place is essential. This
strategy should be aligned with the overall business strategy and developed with input from all levels of
the organization. Once you have a clear strategy, you can start looking at ways to implement best practice
approaches. One way to do this is to review your current HRM practices . This review should identify any
areas where best practice needs to be followed and should also identify any areas where best-fit
approaches could be adopted. After this review, you should look at ways to improve your current HRM
practices. This may involve changing your recruitment and selection processes, performance management
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Ethics and Corporate Social Responsibility

system, or training and development programs. Another way to ensure that your organization is following
best practice approaches to HRM is to invest in HRM research. This research can help you identify areas
where best practice needs to be followed and can also help you identify areas where best-fit approaches
could be adopted. This research can be carried out internally or externally, but it is essential to ensure that
an independent body carries it out. Finally, it is also worth considering the role of HRM in your
organization’s culture. In conclusion, HRM and SHRM need to be interlinked in order for an organization
to thrive in dealing with the HRM issues.

Reflection
This paper concludes that there is no single correct way to manage a corporation. Both HRM and SHRM
have their own merits and need to be integrated in aspects where they deem suitable. HRM should be
given a say while designing business strategies from the get go.
Companies have always been reluctant to give HR a seat at the table of business strategy. HR is
considered only the support function of a company and is often taken for granted but their strategic input
is also very vital while designing business plans. HRM should be included from the start while making a
long term business strategy. By taking HR in the decision making circle, we have to make sure that the
people are given value because if people are not engaged the company is unlikely to flourish. That is why
SHRM always puts the people first when there is a issue that is affecting the commertial objectives of the
company.
There should be clarity in communication and integrating HRM in the strategy of the company will help
clear the gap between employees of the company and the establishment. Employees will not feel
disconnected from the company during big organizational changes because HR will be there to effectively
communicate with the entire work force. HR should help analyze how the new strategy made by the
organization can affect the wider aspect of the organization like the processes and strategies that are
already in function should not be affected by the new strategy in a drastic way otherwise there would be
losses due to incoherent business plan. HRM should also help the organization in clearing the skills gap
by talent management plans and succession planning. HR’s role in developing organizational structures
and implementing new training and development systems is invaluable. To make their work even more
effective, having them at the table during strategic growth discussions is vital. This way they’re able to
understand the organizations growth goals and align employees with those goals whilst maintaining a
good company culture. 
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Ethics and Corporate Social Responsibility

The overall goals of any organization are also the goals of HR. The HR team contributes heavily to the
likelihood of reaching those goals by ensuring the best people are in place to do the work. With that in
mind, it is good business sense to have HR involved in early strategy discussions. By ensuring HR’s
involvement early on you reduce the possibility of people problems further down the line which could
slow progress and cost the business financially.

For the HR team this provides them with a clear picture of what the company aims to achieve and where
their contribution is going to be required. With a deeper understanding of what needs to be achieved HR’s
ability to aid the process is far greater.
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Ethics and Corporate Social Responsibility

References
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theory, and practice. Human Resource Management Review.
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