Business Studies

1) Is it ethical to receive philanthropic donations and/ or charitable donations from large companies that may not have environmentally conscious practices and/or manufacture products that use underpaid workers from third world countries?

ANSWER

Is it ethical to receive philanthropic donations and/ or charitable donations from large companies that may not have environmentally-conscious practices and manufacture products that use underpaid workers from third world countries?

Introduction

Businesses are expected to observe and adhere to care for the environment and meet the workforce’s interests and welfare. Environmentally friendly organizational practices help firms to build a quality brand name and image among the consumers. For instance, recycling, going paperless, and avoiding plastics are some of the common approaches that businesses use to meet environmental welfare. This helps in developing quality and sustainable relationships with the community members. Also, integrating frameworks that meet the workers’ welfare is an effective means of building a conducive working environment. Businesses should offer fair wages and salaries to its workers. The packages offered must align with their contributions in the business setting. Companies should provide adequate wages for their workers in today’s environment and adopt environmentally friendly policies to build a respected brand locally and internationally. The debate regarding accepting charitable donations from firms failing to meet environmental welfare and income equality continues to attract debate globally, with each side providing viable interpretations behind their arguments. As much as these donations are vital, there is a dire need for large companies to act as role models. Nonprofit organizations should not receive financial contributions from these companies because they lack accountability and responsibility.

Research Question

Should nonprofit and charitable organizations receive support from large companies that fail to adopt environmentally conscious policies and manufacture their products through the use of underpaid workers from third-world countries?

The Ethical Issue Presented

Receiving philanthropic and charitable donations from large companies that fail to utilize environmentally conscious practices and manufactures products that rely on underpaid workers from third world countries establishes accountability and responsibility ethical issues. Failure to recognize environmental wellbeing translates into a lack of responsibility for people’s health. Businesses have a corporate social responsibility to various stakeholders in the market. They must be committed to creating social and economic values in the local areas where they have established operations (Revathy, 2012). Firms contribute to overall societal wealth by considering areas that boost people’s lives. The inability to use environmentally conscious practices damages the ecosystem exposing the locals to poor sanitation and other adverse environmental outcomes. Also, reliance on third world workers and subsequent provision of low wages and salaries translate to a lack of responsibility and accountability. A business that fails to offer attractive benefits demean worker’s rights. In this case, the employees are from third world countries, which are deemed less productive segments. They receive limited salaries and wages. This creates pay inequality, which is portrayed as an unfair business practice (Werner & Lim, 2016). All workers have a right to receive adequate compensational benefits without any form of discrimination. Overall, firms that fail to recognize worker rights and utilize environmentally friendly policies exemplify the absence of accountability and responsibility.

Key Stakeholders in the Ethical Dilemma

The large corporations benefit from this ethical dilemma. Their financial support to charitable and philanthropic deeds attracts an attractive image in the public domain. People are less likely to remember the unfair business practices because of the positive contribution done at the community level. For example, if a large corporation donates a yearly supply of food to needy families, this action is expected to attract a positive brand name and image. The move is expected to create a positive appeal among the consumers of their products and thus further associate themselves with the company. Even though the firm might have no viable environmental policies and pays workers from third world communities low salaries, these perspectives are less likely to be remembered. The charitable action helps to boost the firm’s image locally and internationally. The nonprofit institutions receiving these charitable and philanthropic donations stand to have loose significantly. Strong ethical practices guide these organizations due to their services. Receiving resources made through dubious ways attracts public backlash. For example, the public might feel that the resources donated were slashed from the third-world employees. Thus, these institutions might receive public backlash due to their engagement with large corporations that disregard basic ethical practices.

The Two Sides of the Story

Receiving philanthropic and charitable donations from large companies with no environmentally friendly policies and reliance on cheap labor to produce their products attracts a double-sided perspective. One of these perspectives is that establishing links with such companies that disregard ethical practices is interpreted as support for unfair business practices. Non-profit establishments are held in high regard due to their agenda and vision of creating sustainable communities. A charitable organization that accepts donations from a firm that fails to integrate conscious environmental practices can be deemed as supporting its unfair business practice. As Revathy (2012), corporate social responsibilities are one of the agendas corporations are expected to fulfill in the social setting. CSR creates sustainable and balanced development. Nonprofit organizations are keen on such a concept because they believe in a sustainable and balanced community. Also, they stand for human rights, and cheap labor to manufacture products interferes with human rights. Workers must be awarded benefits that reflect their contribution. The other key perspective is that nonprofits have no means of accessing the source of the donations.

Charitable organizations have no adequate means of assessing the source of the support offered by large companies. These institutions manage their operations through donations and other philanthropic actions. They highly welcome any form of support because it goes a long way in boosting their activities. Notably, their operations do not in any way correlate with those of these large companies deemed to utilize unfair environmental practices and discriminate against some of the workers in line with their ethnic and racial backgrounds. In most cases, nonprofits have no idea about the existence of these issues since they can occur after a donation is made. A study by Dunn (2010) shows that scandals have nothing to do with a contribution or the recipient. Thus, the recipients should not carry the blame burden because scandals that emerge after donations should never be used as an aspect to judge their links with the donor unfairly. However, scandals cannot be undermined in determining the suitability of a business to venture into philanthropy.

Analysis using Theoretical Perspectives

The action as an ethical practice

Non-profit-based organizations can accept donations from large companies deemed unfriendly environmental practices and rely on cheap labor to manufacture their products. It is an ethical practice because it stands to change needy people’s lives in the social setting. In contemporary society, there is a massive number of individuals in dire need to care and attention. For example, many people continue living in abject poverty, have no homes, live on the streets, and face a threat of distinct illnesses and associated conditions. They depend on the abled community members to offer any form of support. Nonprofit establishments come in handy to offer these segments with food, accommodation, and other support forms. Community members must protect and safeguard the health and welfare of needy people. Their actions should not be examined in line with their duty fulfillment. One of the key theoretical perspectives that apply in this case is the Kantianism model. It supports corporate social responsibilities that businesses have in the local and global sphere. Kant argues that actions are deemed suitable when they fulfill the expected duty (Tapek, 2018). Actions that are based on duty derives moral values based on the principles as opposed to the results. Large corporations have CSR as part of their corporate activities, and the obligation to meet and fulfill the community’s needs act as a key motivation behind charitable and philanthropic donations. Thus, receiving contributions from negatively tainted large companies is not an unethical practice.

The Enlightened Self-Interest theory also supports the move to accept these donations because it serves to meet personal interest and that of others. These provisions go a long way to help needy people. Businesses, as part of their CSR agenda, must respect human rights. As Cragg (2012) reveals, corporations are responsible for protecting, respecting human rights, and actively enforcing them. Their day-to-day operations must be based on corporate self-interest. The deployment of a firm’s financial resources to help community members eliminate prevailing challenges exists as a viable tactic that reflects a collective responsibility and interest towards others’ welfare. Donating to charitable organizations reflects service for other people, and nonprofit businesses are right to accept these donations no matter the image that a firm has acquired in the market. These corporations are fulfilling their duty to humanity and protecting their rights. Notably, the ethical relativism theory informs the ethicality behind the decision to accept donations.

Morals are deemed as relative elements across cultures. Ethical norms and morals are guided by actions and moral thinking (Hayry, 2005). Individuals, others, and the objectivity behind an approach are the key motivations that drive distinct ethical behaviors. While some people might hold the idea that accepting donations from large companies with a tainted image is unethical, others highly appreciate the idea because of its potential to transform lives. For instance, if one nonprofit establishment deems the move inappropriate, others support it depending on their societal norms. If an institution decides to work with such establishments, then the acceptance aligns with their culture.

The action as an unethical practice

Receiving charitable donations from firms with no environmentally conscious policies and reliance on cheap labor to manufacture their products is unethical. Firms adopting these practices have no consideration of the interests and welfare of key stakeholders. For instance, they fail to recognize the health of the community members and the wellbeing of the workers. Such organizations do not stand the opportunity to effectively associate with others because they have already undermined basic human needs and requirements. The absolutist theory supports the unethical perspective of donation acceptance. This approach works on the idea that universal ethical standards apply in all situations. The absolutism theory encompasses a universal principle of morality (Wiest, 2016). It views principles as equally applicable across all settings. For example, the principle of justice calls for equal treatment of all workers. The case study revolves around large companies that are relying on cheap labor to produce their products. Workers from third world countries are offered lower packages. This highlights income inequalities between these workers and those from advanced countries. Thus, offering financial support to charitable organizations fails to correlate with their organizational practices. Also, as par the Enlightened Self-Interest Theory, these companies create a gap in human rights achievement.

The absence of environmental laws and guidelines within these companies fails to communicate their plan to create a safe and healthy environment. The Self-Enlightened Self-Interest Theory supports the respect and protection of human rights (Cragg, 2012). The health and wellbeing of critical stakeholders such as the workers and the community members should be a primary concern for businesses. Unconscious environmental practices do not support a healthy environment. This exposes workers and the community at large to healthcare risks and threats. Their participation in charitable donations fails to align with its organizational practices.

The right approach to take

Nonprofit organizations should not receive charitable donations from companies that may not have environmentally-conscious practices and those using cheap labor for manufacturing their products. These businesses lack a sense of accountability and responsibility. They should lead by example so that others can believe and trust in them. However, their inability to develop and implement suitable environmental policies informs their little consideration of its significant stakeholders’ health and welfare. Also, workers from third-world countries are offered limited wages and salaries, indicating income inequalities and lack of human rights observance. The Enlightened Self-Interest theory shows that these large companies have no quality moral interests for the workforce and the community. Their organizational actions communicate limited efforts on their part in boosting community outcomes. Cragg (2012) believes that respect and protection of human rights is the foundation behind organizational approaches and processes as defined by their CSR protocols. However, these donors make little or no efforts to cater to their stakeholders’ needs and concerns. The absolutism framework also applies where it calls for organizations to observe morality across all settings. These businesses cannot claim to care for the less fortunate’s needs in society but fail to handle their workforce appropriately. Illingworth (2019) argues that charitable organizations’ efforts leave people wondering the rationale behind philanthropy since these businesses fail to make similar efforts in their workplaces. Thus, nonprofit organizations should resist from taking donations until these large companies create better environmental management and viable compensation systems.

Conclusion

Receiving charitable donations from large companies with no friendly environmental policies and disregarding equality in the workplace should be deemed an unethical action. These businesses are expected to act as role models in the local and global sphere. Nonprofit organizations operate in line with vital ethical practices that have a crucial consideration of respect and value for humans. The donations received plays an essential role in changing lives. Donors cannot claim to be keen about humanity if they fail to replicate similar treatments in their workplace. The lack of conscious environmental practices and cheap labor to manufacture products communicates the inconsideration of health, welfare, and equality in the workplace. These companies have not laid down suitable structures and systems that help changes the lives of their workers, the community, and other major stakeholders. There is a dire need for them to change their institutions before venturing into donations because this provides them with an opportunity to boost their brand. Thus, acceptance of donations amidst claims of environmental neglect and unfair treatment of workers is an unethical move.

References

Cragg, W. (2012). Ethics, enlightened self-interest, and the corporate responsibility to respect human rights: A critical look at the UN framework’s justificatory foundations. Business Ethics Quarterly, 9-36. https://www.jstor.org/stable/23223697

Dunn, P. (2010). Strategic responses by a nonprofit when a donor becomes tainted. Nonprofit and Voluntary Sector Quarterly, 39(1), 102-123.

Häyry, M. (2005). A defense of ethical relativism. Cambridge Quarterly of Healthcare Ethics, 14(1), 7-12.

Illingworth, P. (2019). An ethicist explains why philanthropy is no license to do bad stuff. Retrieved 14 November 2020, from https://theconversation.com/an-ethicist-explains-why-philanthropy-is-no-license-to-do-bad-stuff-127426

Revathy, B. (2012). Corporate social responsibility–an implementation guide for business. Far East Journal of Psychology and Business, 6(2), 15-31.

Tapek, K. (2018). Corporate social responsibility in the light of Kant’s categorical imperative. Annales. Etyka w życiu gospodarczym, 21(7), 85-96.

Weist, D. (2016). Classification: Absolutism vs. relativism (Doctoral dissertation).

Werner, A., & Lim, M. (2016). The Ethics of the Living Wage: A review and research agenda. Journal of Business Ethics, 137(3), 433-447.