Something has lately emerged as an important issue in Korean society. It was associated with CSR (Corporate Social Responsibility) and ethical management. Ethical management means that business ethics is thought to be a top priority in business management and business activities. And CSR is more inclusive concept.
Not only Korea but also other countries emphasize the importance of CSR. For example, an executive manager of POSCO Energy's surprised news spread out rapidly via the internet throughout the nation. As a result, POSCO was terribly damaged in its long-accumulated reputation and lost countless financial losses. Another example was Prime Bakery. Because of the incident, Prime Bakery went bankrupt. Of many unsavory cases occurred in these days, the most shocking one was NamYang Dairy's unethical behavior to its local agents.
On the other hand, the Body Shop is a good example of pursuing ethical management. They made 5-value and strive to promote it. They prohibit animal testing, give fair cost, and give back some part of profits to local workers or suppliers in order to promote their welfare.
Although ethical management within enterprise becomes increasingly important, some problems still occur due to the lack of employees' morality. According to a survey carried out by Heungsadan Transparent Social Movement, 44% of high school students have intention of going to prison if they are compensated with 10billion. This survey's result implies that higher education does not improve students' ethicality. To solve these problems, ethical campaign and educations for employees are required within the organization.
Some would say "In the era of free competition, our goal is profit-seeking. Then, why should our company take social responsibility and do ethical management?" But, we do not sell just our product to consumers, but sell brand, image, and culture. We may sell even culduct (product+culture) in the near future.
As we live in the transparent society, CSR and ethical management is not matter of choice, but it is our obligation. As consumers intend to buy the goods based on a firm's market reputation, image, and morality, all members of organization need to improve their consciousness of ethic. This approach may create a firm's ultimate competitiveness in the markets.
Hwang Seo Jeong
(Department of Business Administration)