Business Ethical Challenges Associated with COVID-19
Abstract
COVID-19 has led to unprecedented impacts on all spheres of society. A significant part of 2020 has been affected, and enterprises have lost a considerable market share as consumers reduce their average spending habits. The day-to-day impacts at schools, during travel, workplaces, and social gatherings were adversely affected as nations issued travel advisories and “stay at home” directives for all people. Primarily, corporates have faced challenges in ethical considerations that guide transactions and consumer-seller relationship. Corporate assessment of critical concerns on stakeholder interests, shareholders, employees, government, and communities rely on the formulation of new engagement rules. Corporate flexibility at such a time enhances the chances of navigating the COVID-19 crisis and reduce the loss margins. The use of the digital space in business management ushers a new phase of corporate sustenance in an economically unreliable environment. However, the formulation of counter-COVID-19 business management procedures, including redrafting Corporate Social Responsibility (CSR), redefines the engagement rules for consumers and sellers. The comprehension of a short and long-term business policy guides the ethical direction a company takes in a COVID-19 prevalent society.
Contents
1.2 Background of the Study. 3
3.2 Data Collection Method: 12
3.3 Ethical Considerations in Research. 13
1.1 Introduction
2020 has been characterized by uncertainties in all spheres that affect the global economy. The public health sector was the worst-hit; however, since health affects every aspect of human life, national and international trade was interrupted. Moreover, government allocation of a vast amount of national budgets to the health sector reduced public liquidity, which plunged 2020 into a financial crisis with many nations opting to source loans from the World Bank and IMF. For most states seeking grants and loans, jumpstarting their economies was vital in averting a potential financial crisis that would render most people unemployed as industries that support the economy was subjected to a threat of potential closure. Such had a trickle-down effect on economies as nations reduced taxation rates on the basic needs as the national productivity rate dwindled. The pandemic’s unpredictable nature creates a corporate growth challenge as the dynamics of world trade remains a mystery. Therefore, the fear of a second and most-detrimental wave of COVID-19 and future pandemics means that ethical business challenges associated with epidemics will be comprehensively revised and improved to guarantee employee safety and safeguard companies’ interests, agencies, and organizations.
1.2 Background of the Study
Understanding the precepts of the impacts of COVID-19 on businesses and ethical challenges associated with the pandemic shape the formulation of new administrative policies in business management. Therefore, as businesses experience marginal losses and falling revenues based on inconsistencies in managing the epidemic, a lack of clear guidelines that benefit the healthcare sector, governments, and corporates worsen the situation (Maria). Nonetheless, COVID-19 has shifted the global focus to providing quality healthcare services as business enterprises involved in the medical industry seek to redraft their respective supply chain strategies to match the new dynamics. Addressing potential loopholes emanating from a lack of comprehensive policies to address ethical considerations must be prioritized.
Several studies have been conducted to ascertain the impact of COVID-19 on businesses. For instance, Makrygiannis stated that the most profound effects include a massive dislocation among SMEs a few weeks after governments introduced Coronavirus Aid, Relief, and Economic Security (CARES). Statistics indicate that 43% of businesses across the United States also closed to comply with the “stay at home” directive (Makrygiannis). Moreover, regrettably, a further 39% of the people employed in the United States private and public sectors lost their jobs. The worst-hit area was New York City, which accounted for 54% of its labor force lost jobs either temporarily or permanently (Makrygiannis). Various sectors of the United States economy were affected at varying levels. For example, the hospitality, business, food services, personal services, and entertainment sectors’ retrenchment rate exceeded the 50% mark (Makrygiannis). Such sectors were adversely affected after movement restrictions guidelines were released, and a lack of digital platforms to market goods and services dwindled their growth and sustainability potential. Moreover, a lack of compliance with ethical procedures in corporate management led to a further blow to the economy as many companies failed to conform to changes in the city, national, and global commerce. The most appropriate measure needed was integrating ethics into strategic planning to ensure companies retain their human resource with marginal or no losses incurred (Maria). Many companies have tried to achieve this, especially those specializing in digital commerce and marketing, including Ali Baba and Amazon, among others. The key to adopting proper corporate governance is determining a bureaucratic system that aligns itself with business growth and sustainability.
Essential service providers offer vital services in the supply chain and the labor force. In fact, based on the current circumstances, their job expectations have suddenly changed. Here the primary ethical aspect required is conformity to public health regulations that require every employee to don their PPE at all times. Majorly, this relies on the severity of the potential risk a workplace is to COVID-19 (OECD). The second phase of COVID-19 could potentially result in a catastrophic disaster to the general public and the human resource sector. Besides, the privilege of working from home for white-collar employees saves time and costs. While previously, most workplaces relied on physical workplace attendance, the “work from home” directive changed the engagement dynamics. At present, the economy slowly shifts in its ethical perspective of work output based on the availability of employees at their workplaces to digital convergence and working without walking to the offices. A lack of preparedness for a global pandemic, such as COVID-19, proves why businesses must formulate new anti-pandemic procedures at present and in the future.
1.3 Research Problem
Addressing the impacts of COVID-19 must be prioritized at the corporate level. With this unprecedented global health crisis, the essential role business plays in saving livelihoods, and international cooperation justifies the need to have a functional trade and supply chain flow. The pandemic reduced consumer confidence in global markets and trade after states introduced export and import restrictions to contain the epidemic, with most ships and aircrafts grounded (Maria). Besides, a lack of a functional and flowing supply chain on essentials paralyzes the populace’s productive nature as their productive potential, and spending power is diminished (OECD). Therefore, streamlining the productive potential of business cooperation by observing ethical conduct protocols helps avert unnecessary export restrictions that dominated in the pandemic period. Thus, creating better and well-informed decisions on efficiency in commerce crumbles business development on both physical and digital platforms of corporate governance. Addressing research problems related to the management of COVID-19 from a business perspective is the most urgent need at present. As such, research-based solutions to world pandemics and challenges take a multi-faceted ethical outlook.
1.4 Aim of the Study
The study primarily explores the ethical effects of COVID-19 that affect various business environments and other related sectors, including public health, which rely on supply chain management to deliver quality services. The investigation also focuses on the potential threat of COVID-19, primarily its second phase to SMEs and mega-corporations’ sustenance, which solely relies on the stock exchange and commerce’s stability to generate profits and stay afloat. The research will focus on formulating counter-COVID-19 strategies that offer short, intermediate, and long-term solutions to the ethical impediments encountered during the COVID-19 period. The study will use a pro-corporate social responsibility (CSR) approach in recommending the best practices to help corporates cope with the new norm. Unethical behaviors will be identified and recommendations to avert them elaborated in the findings and recommendation sections. In India, for instance, COVID-19 magnified the extent of unethical conduct for companies with a 37% drop in financial performance caused by widespread disruptions in operations (Bhattacharyya). A further 64% of respondents in India believe that unethical behaviors that do not comply with countering the COVID-19 crisis could lead to a closure of startups (Bhattacharyya). As He and Harris state, even with uncertainty surrounding the duration COVID-19 cure will be found, the pandemic also offers corporates an opportunity to shift to authentic and genuine CSR that addresses the present social and environmental challenges related to human well-being and corporate governance (176). Hence, it provides potential guidelines to maintain consumer-oriented ethical decisions that benefit corporates and consumers, creating a win-win situation. Centrally, for the procedures to hold the much-needed relevance, proper advertisement and marketing channels must guide the product and service positioning strategy (He and Harris 176). The success of incorporating ethics in business growth relies on conformity to the outlined counter COVID-19 guidelines.
1.5 Objectives
- To access the impact of COVID-19 on the ethical aspects of corporate governance
- To evaluate the impact of corporate social responsibility on ethics in corporate governance
- To identify the ethical dilemmas caused by COVID-19 to the business sector
- To identify solutions to existing ethical dilemmas affecting the corporate sector
1.6 Research Questions
- How does COVID-19 affect the ethical aspects of business governance?
- What impacts does CSR have on corporate governance?
- What ethical dilemmas have been caused by COVID-19 affecting the business sector?
- What solutions do ethical considerations offer in protecting businesses against the impacts of COVID-19?
2.0 Literature Review
The covid-19 pandemic serves as the worst pandemic to hit the world in the recent past. Undeniably, it has had an unprecedented impact affecting every aspect of life since it was first discovered in late 2019 (Bruzda par. 1). As such, businesses and economies did not know how best to react to it. They responded differently, with most being influenced by the spread of the virus and international calls for action to safeguard the lives of the citizenry of the respective countries. Donthu and Gustafsson (285) add that many investors were scared by the magnitude of the crisis, choosing to suspend any planned investments. Thus, when such a widespread and unexpected crisis arises, ethical dilemmas might be hard to resolve. The detrimental impact of COVID-19 on the business world might take a considerable amount of time to resolve.
Thomadakis investigates the impact of the covid-19 pandemic on businesses and the ensuing ethical implications they face (1). He notes that the coronavirus crisis has disrupted production, led to the loss of employment and business, and caused financial distress. In such tough times, Thmadakis found it incredibly challenging for some businesses to adhere to the best counter-COVID-19 ethical practices (1). Seetharaman notes that many firms adjusted their business models to suit their operating environment (Thmadakis 2). Such shifts did not address the ethical implications adequately. Thomadakis identifies honesty, objectivity, and competence as virtues that professionals have to hold highly, especially in adversity (1). Businesses and professionals have to ensure they adhere to them even in the harshest conditions. Professional accountants benefit from a well-developed and highly-structured ethics code that guides their behavior and judgment irrespective of the situation. Investors value truthful and reliable reporting, as well as independent auditing. The covid-19 crisis undeniably led to an unprecedented financial crisis, which requires the drafting of new protocols to counter the devastating impact of the virus on world economies. Corporates need to maintain focus on their ethical responsibilities and public interest.
During pandemics, employees and the management team need to readjust their standard operating procedures to accommodate new protocols introduced by natural calamities, including COVID-19. Thomadakis posits that professionals must exercise alertness, skepticism, and flexibility to maintain fidelity to the primary principles of work delivery and efficiency. Health and safety auditors must be prepared to conduct a re-evaluation of the threat levels and review the respective action plans needed to guarantee continuity in business and the management of any pandemic. The pandemic has necessitated the need to change the approach to work as an improvement in the standards of hygiene has been made mandatory. In their research, (Bouziri et al.) suggest that working from home should serve as the top ethical standard for corporates. Organizations have to adjust rapidly to suit the new developments by digitizing many of their functions and enabling employees to work remotely.
The authors reviewed the worst-hit sectors and identified ethical procedures required to resuscitate them. Tims delves into the conduct of airline companies following the lockdown and cancellation of flights that characterized the height of the covid-19 crisis. Many passengers who had planned to travel, and booked their tickets before the grounding of flights, are yet to receive their refunds (Tims 76). In some cases, the booking agencies have received refunds from the airline companies but failed to extend the courtesy to their customers, who continue to wait desperately. The actions of booking agencies to hoard money meant for passengers are unethical. They depict a lack of honesty. One can perceive such an act as hoarding of money to defraud the affected passengers. Ryanair has blamed agents, including Kiwi, Lastminute.com, and Opodo, for their gross misconduct by failing to reimburse cash meant for flight booking for a considerably long duration. According to Ryanair, airline companies accuse booking agencies of failing to submit passenger credit and contact details after they received complaints of delayed refunds from their loyal customers. He (Ryanair) further states that the agencies use corporate credit cards without providing the airline with precise information. Dishonesty on the part of the booking agencies extends to the selling of flights without the respective airline’s permission. Such leads to a loss in consumer satisfaction in the quality of services offered by the airline companies, a malicious act committed by the booking agencies that force customers to explore other available alternatives when they need to fly. Such an act contravenes the professional code of conduct and the legal requirements on the quality of services offered by booking agencies. According to EU aviation guidelines, passengers are eligible for direct reimbursement from airline companies for canceled flights. However, whenever passengers attempted to seek refunds directly from the airline company, they found that the payments had already been made to cards owned by the agents. The failure by the booking agents to refund their customers and the obstacle they place for the airline companies wishing to make direct refunds constitute a breach of ethical guidelines.
A lack of ethics in various sectors resulted in numerous implications. For example, McGuire et al. explore the ethical implications of covid-19 on the healthcare and corporate systems, focusing on utilizing scarce resources against the backdrop of a surge in demand for them (15). There is a considerable variation in healthcare resource endowment across countries, with the largest gaps being witnessed between the developed and underdeveloped countries. In the corporate sector, (Ryanair) believes that the cost implications associated with delayed reimbursement of booked flights by airline booking agencies could take a long for consumer confidence to be restored. A lack of compliance with ethical standard procedures in the corporate and health sectors, which are dependent on each other, impedes the efficiency required in supply chain management. New policies relating to rationing for pandemics vary depending on the jurisprudence and sector of the economy; however, quality in service delivery is paramount in retaining consumer confidence.
There are uniform policies in some states, while in others, no policies exist. For instance, Maria states that a lack of compliance with WHO- recommended counter COVID-19 safety and ethical procedures led to the closure of a considerable number of enterprises. UNESCO, through its agencies that include the International Bioethics Committee (IBC) and the World Commission on the Ethics of Scientific Knowledge and Technology (COMEST), suggests that corporate-level ethics, during this COVID-19 period, must adhere to the basic provisions of human rights and freedoms. UNESCO states that mutual respect between service providers and consumers promotes continuity in business. El-Jardali and Fadlallah state that where policies on quality service delivery exist, compliance to remains a challenge. There is a general agreement that the ability of a patient to access treatment and recover are first-order considerations. However, a debate rages over the kind of quality management standards required to guide the service provision protocols, with some agencies opting for ISO standardized protocols as ideal while others are exploring alternatives. Disagreement also abounds over other factors appropriate to consider from an ethical perspective. In their research, McGuire et al. focus on resource allocation and other accompanying ethical issues to the healthcare system and community (16). Due to the influx of patients following the pandemic, some healthcare facilities have chosen to provide patients with services based on their ability to meet the costs associated with them. Such an approach disproportionately impacts low-income earners who are compelled to rely on subsidized care, which has proven difficult to access. Resolving this issue remains a dilemma given the shortage of critical resources needed to attend to patients.
Another primary ethical concern is the massive job loss and reduced income worldwide as businesses seek to cut costs. ILO (International Labor Organization) expects the covid-19 pandemic to result in the loss of 6.7% of work hours globally, equating to 195 million people who work full-time (par. 1). Such development will result in huge losses across various income groups, with the upper-middle-income countries experiencing the most significant impact. The sectors of the economy that are most affected risk include services, food and accommodation, business and administrative activities, retail, and manufacturing. According to ILO, the increase in unemployment worldwide will depend significantly on policy developments and measures (par. 12). There are fears that the unemployment figures by the close of the year will be higher than projected. Businesses are faced with the dilemma of having to choose between survival and retaining employees. Some have opted for a middle-ground by requesting full-time employees to work part-time at a lower salary. Businesses that lay off workers without considering their plight need to reconsider their approach to the issue since their action is not ethically sound. The pandemic calls for innovative ways of retaining workers until the covid-19 pandemic is over.
3.0 Research Methodology
3.1 Introduction: In research, the methodology section provides the research the opportunity to convince readers of the vital role the study plays in providing solutions to an existing research gap. Based on the research topic, secondary data will comprehensively address the issue under investigation: business ethics and corporate social responsibility during the COVID-19 crisis. The reason to use mixed is based on the researcher’s desire to produce credible and verifiable data, save time and costs (Aspers and Ugo 140). Presently, secondary sources of information have published adequate studies that comprehensively address the research question without necessarily conducting primary research. Centrally, addressing gaps identified in the research question and objective sections determine the methodological approach appropriate (Gentles et al.). Since a flawless research methodology distinguishes good and average researchers, the investigation will keenly ensure the objectives link with the results and findings sections, which, when combined, shape the types of recommendations presented.
3.2 Data Collection Method: The study will rely on previously conducted researches as a source of information. Such references will include peer-reviewed journals, publications, credible websites, and other scholarly sources of information. Trends and consistency in data collection and presentation will guide the researcher in determining the detrimental impact of COVID-19 on the business world’s ethical aspects. There will be no need for sample size for this research since no primary data will be collected (Aspers and Ugo 140). However, the researcher will explore a wide range of sources to create a present well-researched trend on findings that address ethical concerns related to COVID-19. Regarding data analysis, there will be no need to use either SPSS or R software as secondary data renders them irrelevant. Other irrelevant aspects of primary research include observations and the administration of questionnaires. Overall, the choice of data collection relied on a detailed assessment of the cost-benefit part of the study, time, and the availability of credible data that could practically guarantee quality in the presented data.
3.3 Ethical Considerations in Research: Ethics in data collection enhances the quality of research. For most studies employing the primary data collection model, ethical considerations must be paramount for respondents to willingly provide true and accurate information regarding their view on ethics in business growth and COVID-19. In fact, most demand that the researcher signs the non-disclosure agreement that makes the researcher liable if their personal or corporate views leak. The researcher must keenly consider such factors during the data collection process. As for the secondary data collection approach, the researcher will seek consent for the university, the public, and private sectors and clarify the results and inferences will be used exclusively for educational purposes (Abutabenjeh and Jaradat). Adherence to ethical considerations is a core principle in research that the researcher must observe. Professionalism in protecting respondents’ identities is vital during the data collection, analysis, and presentation phases.
Conclusion
COVID-19 subverted the traditional forms of commerce, which led to a catastrophic meltdown of stock markets, with corporates incurring tremendous losses ranging from business closure to downsizing of staff. While the pandemic rages, the uncertainties involved in finding the cure to the viral disease means that flexibility in formulating new policies that align with changing times is a necessity for all enterprises. Centrally, developing marketing strategies that are aligned with solving ethical considerations caused by COVID-19 is necessary. The key to such a new perspective is the actualization of CSR policies that value the interests of all within the supply chain. Since the supply chain serves all cadres of the economy, even the most critical sectors, including nursing and public health, will benefit. Unlike other researches, this study will use secondary sources of information to guide data collection methods, which shape the course findings and recommendations will take. The research questions and objective sections will guide the subsequent sections in terms of reporting and analysis. The research’s choice of relying on secondary data is also based on time and financial constraints. Moreover, ethical considerations necessary in research will be adhered to to ensure high levels of confidentiality are observed.
Research Results
Introduction of the Chapter
Markedly, the wake of COVID-19 in the United States constantly affects different firms and companies in the different sectors of the country’s economy. The impacts are experienced both in the public and private sectors. As a matter of fact, most firms and companies all over the country have strived to ensure that their processes and systems remain operating and running as they struggle to fight the challenges that have emanated due to the pandemic. While it is apparent that corporate governance might not be a major concern during the current situation, it is apparent that the tempting period requires testing of the different management and leadership structures. Such modalities require an understanding of the strengths and flaws that companies experience as a result of COVID-19. Poor governance structures, on the other hand, have the probability of exposing organizations during the pandemic. Nonetheless, it is obvious that well-governed companies are likely to act more decisively in order to contain the impacts of the crisis and restore the needed principles such as consistency and transparency of the stakeholders. Overall, the results of the study are provided based on the fact that corporate governance relates to the processes and systems that are applied with the aim of ensuring effective management and control of firms or companies. Markedly, the achievement of the company’s mandate or purpose often requires effective management and control. Therefore, corporate governance should be pegged on the principles, guidelines, regulations, and ethical practices applied in the management and control of the firm.
The Impact of COVID-19 on the Ethical Aspects of Corporate Governance
Notably, the occurrence of COVI-19 may have high or low impacts. The impacts can be related to the level of vulnerability, which could be of low or high liquidity when relating to the management and control of finances. As illustrated in the figure below, the impacts of COVID-19 can be considered as high in cases of repositioning or turnaround practices. That is, due to the occurrence of the pandemic, a given company may decide to reposition its market or undertake a complete overhaul of its strategies. The qualitative study found out that one instance of repositioning could relate to close monitoring and reduction of the organizational expenses. The findings also support the argument by Han et al. COVID-19 has caused many companies to reassess their products and services in order to elicit short-term gains (1267). Due to the uncertainty of getting the vaccine for the pandemic, many businesses in the USA and other parts of the world are just striving to look for short-term gains. Therefore, the majority of businesses are inclined to develop new growth strategies and refocus on their downside scenarios. However, the COVID-19 might have low impacts on certain companies, especially when they are highly-established. As highlighted in the table below, the pandemic might strengthen the position of the organization. As Mohideen et al. supported, strengthening the business may entail the management and assessment of the supplier risks and third-party credit (12). Besides, the pandemic might create an opportunity where a firm gains the ability to assess its own operations in order to meet the new demands. However, the low impact of the disease results in low organizational liquidity.
Moreover, the control and management of organizational finances and other corporate governance might be affected by the turnaround. That is, the occurrence of the pandemic might force a particular company to conduct a complete overhaul of the operations. As a matter of fact, COVID-19 might force companies, especially the small and medium enterprises, with lower competitive edges, to adopt new plans and strategies. Besides, the disease sometimes confines enterprises to optimize their working capital and over-strain the limited resources and staff. Also, some companies are forced to reforecast on their liquidity, coupled with the struggle to secure finances and call for government aid. While such impacts of COVID-19 are seen to show low liquidity, certain organizations experience low impacts and high liquidity. Markedly, the low liquidity effects are often cash focused, where a company strives to manage and assess supplier risk and third-party credit. At the same time, businesses might be forced to evaluate their ability in terms of operations and meeting the demands of the restrictions.
Figure 1. How COVID-19 affects corporate governance
Source (Robert 56)
Notably, COVID-19 is undeniably a global pandemic, but it is still unclear when the problem will end. As many countries strive to adjust to the different restrictions and changes in the social life of people, businesses are suffering from different economic aspects. Besides, the uncertainty around when will the problem end also increases the complexity of managing and controlling different companies. As Smereka mentioned, businesses should adopt proactive measures to assess their vulnerability and risk from both a financial and operational viewpoint (69). Besides, the persistence of businesses demands decisive actions to mitigate the negative forces that act both in the internal and external environments. At the same time, the firms should make plans for slow and rapid scenarios that relate to the effects of the liquidity. Due to the limitations created by the global pandemic, many organizations are struggling to comply with the ethical practice known as corporate social responsibility.
COVID-19 and Corporate Social Responsibility
COVID-19 has forced many businesses to evaluate or review their social responsibility. Markedly, it is apparent that corporate social responsibility has taken a backseat through the present pandemic. Prioritization of CSR is considered as a sound business decision, with customers and employees showing having more interest in spending with and showing for firms that portray good social responsibility credentials. Han et al. mentioned that virtuous CSR is a company’s self-regulation that shows that a business is socially accountable (1268). With the notion that many businesses strive to build their reputation, many companies always struggle to contribute positively to the economy, public, and the local environment. Importantly, the global pandemic has made many business operations to naturally suspend their CSR initiatives due to the fact that the future is uncertain. A survey conducted by Sperling showed that the present COVID-19 has led to the postponement of community programs such as enhancing sustainability and energy efficiency, among others (37). The study further showed that majority of companies in the United States
The success of any corporate entity relies on how ethical considerations are incorporated into the corporate social responsibility. A balance between the pursuit of market opportunities and maintaining how levels of ethical standards and accountability may be a challenge, primarily when most employees do not report to their respective place of work in the current COVID-19 period. Failures in the formulation of water-tight policies that protect the interests of the company and its employees may be a contributing factor that impacts CSR’s role in the ethical management of corporate entities. Most failures in corporate governance and business ethics are caused by an increased urgency in searching ethical guidelines and frameworks that coincide with changes in market and consumer trends. In recent times, the growing materiality and a more informed public on aspects of ethics in service delivery mean that corporates must train employees on the importance of respecting consumer decisions and choices. Moreover, the growth in popularity of most social media sites forms a critical aspect of corporate evaluation on all aspects of leadership and management, including ethics as customer reviews determine if it will either lose or gain customers. Thus, a well-drafted CSR on ethics contributes to the success or failure of a corporate entity.
As illustrated in the figure below, many companies are struggling to respond, recover, and thrive through the development of better CSR programs that can match with the present situation.
Figure 2: The way companies use corporate social responsibility to respond to COVID-19
Source (Sperling 37)
Ethical Dilemmas caused by COVID-19
While it is true that any business should respect the morals of others, the present pandemic has elicited ethical dilemmas. For instance, it is the responsibility of any organization to adhere to ethical principles such as transparency, accountability, honesty, and respect, among others. The situation is more evident when considering how companies are forced to deal with employees. While it is true that COVID-19 requires social distancing and other measures such as wearing masks that for some workers have been laid off, or working at home. There are situations that people have that separate the home and work environment. Therefore, confining people to work at home might have an immense impact on their social life and responsibility. As such, many businesses are considering various issues through research to unveil the needs, needs to be met, the definition of such needs, and their priorities. The dilemmas mainly arise as businesses think about how to distribute the burdens and benefits to ensure equitably and ensure that all aspects are transparent and inclusive. Ideally, organizations are striving to help in reducing suffering, enhancing fairness, and ensuring equal respect. The various attributes of dilemmas are illustrated in the figure below.
Figure 3: The various aspects of dilemma that affects businesses
Source (Han et al., 1267)
Discussion and Recommendations
COVID-19 and Corporate Responsibility
Corporate social responsibility is considered as a strategy for many firms and a way in which organizations engage with internal and external stakeholders. The concept idea supports the argument by Sperling that CSR is a management concept where firms integrate environmental and social concerns in their interactions and operations with their shareholders and stakeholders (37). However, the COVID-19 era has introduced a new definition of CSR. That is, it is seen as a continuing commitment by organizations to behave responsibly and fairly and enhance economic development while improving the lives of workers and their families. As a social obligation, CSR enables corporations to engage in a socially responsible manner as they pursue profit within the confines of the law. According to Thomadakis, since the society supports companies by allowing them to exist, the same businesses have the social obligation to repay the society (1). However, this study proves that during this current pandemic, corporate leaders face immense pressure from shareholders and investors to reduce spending reduction in profits and continuous losses. While there are several things that can make a business to lose, COVID-19 has proved to affect all firms and companies in the United States. However, companies still have the moral obligation to build on their reputation. The study proves that a moral obligation is like a duty, where companies need to be responsible to the local community. The stance augurs with the argument by Sperling that the COVID-19 pandemic is a test for businesses with regard to CSR (37). Therefore, companies are inclined to pull resources in order to ensure they comply with the imperativeness of giving back to the society.
COVID-19 and CSR
Since CSR affects all corporates, the intricacy involved in formulating short and long-term ethical standards also vary. Messarra states that while corporate governance has gained enormous popularity in recent years, so has been the case for ethics. She identifies responsibility, accountability, and transparency as core principles that guide the management of employees. Primarily, drafting well-defined employee roles, responsibilities, and scope of work determine the quality of services they offer. Companies that lack well-laid structures that limit the powers of respective posts are more likely to lack ethics in serving consumers. Although most people link corporate governance to corporate social responsibility, personal traits, and morals dictate the type and quality of service an employee provides. Therefore, the human resource department must strictly vet and recruit employees that respect consumer service and respect. The formulation of an international guideline on CSR that specifically addresses ethical concerns is vital. Such could be implemented through the introduction of ISO standards that address multi-sectoral aspects of management. Central to implementing such guidelines is the incorporation of cultural and religious aspects in ethics, corporate governance, and institutional management. For instance, for most Middle East and North Africa (MENA) states, 85% of the corporate and individual enterprises are small to medium-sized enterprises (SMEs). Hence, ethical standards that match the scope of such businesses improve the quality of services offered (Messarra). Overall, understanding the cultural, social, and religious aspects of corporate governance improves the ethical standards in the type of services offered at workplaces.
Ethics and CSR are key to economic growth and business expansion. When corporates observe ethics in providing services, the profit margin and volume of sales increase since customers are likely to make referrals. One significant aspect of CSR is by occasionally conducting cleanups within the local community and showing that they value the community and understand that by participating in community programs, they benefit the consumers and themselves too. Such a tactical and psychological aspect requires understanding the urgent need of the people and participating in formulating solutions to such challenges that do not directly benefit the enterprise. Although charity and occasional clean-ups dent the credit side of a company, the psychological impact it creates among consumers creates a loyal fanbase among them as they feel that the company is a part of them.
Strong enforcement of ethics in drafting corporate CSR is a necessity. Companies must first train employees on ethical conduct before being confirmed as full-time staff. Primary to the success of such an initiative is the introduction of an equality and fairness policy in the distribution of roles. Blending corporate to national development goals helps improve the levels of satisfaction in terms of ethics in CSR. in Qatar, for instance, corporates redraft their respective CSR guidelines to match the National Vision 2030. The same applies to the King of Saudi Arabia, who currently works at actualizing vision 2030 through investment diversification and efficiency in CSR. Both KSA and Qatar offer valid opportunities for the private and public sectors to match internationally accepted standards of ethical service delivery. Doha Bank, for example, elevates its CSR and ethical dimension by fronting the sustainability campaign by promoting sustainable development and investment in the green economy. Thus, by raising awareness on climate change and global warming issues, the bank introduced the “green banking and Go Green” banking and credit cards respectively to show its ethical commitment to manage the impacts of climate change through a well-drafted CSR that consistently matches Qatar’s National Vision 2030, the Paris Accord of 2015 on Global Warming and Climate Change, and the global sustainable development goals (SDGs). Other CSR projects introduced by the financial institution targeting schools include Eco-Schooling and Green Run charity project. Undeniably, comprehensive CSR policies determine a company’s ethical relevance to changes dynamics in world trade, governance, and consumer preferences and tastes.
COVID-19 and Ethical Dilemmas
Undeniably, the world has experienced extreme anxiousness due to the uncertainty of when the problem will end. As a matter of fact, many businesses are striving to adapt to the new situation that is accompanied by unforeseen future prospects. For instance, many corporations have sent their employees to work from home. While the move is imperative in the attempt to reduce the spread of the virus, many people and families are forced to change their social lives. Working from home has various repercussions since some tasks are intricate, coupled with the demands on home. Markedly, businesses are inclined to adhere to the ethical principles such as honesty, transparency, fairness, and accountability, among others. However, with the separation of employees from the workplace, and sometimes laying off other workers has both direct and indirect implications on the ethical stances. Therefore, the current situation is a true revelation of how organizations are forced to change their operations that implicates the need to comply with the necessary ethical issues.
Notably, there are various readjustments that businesses and employees have to make, if not to mention the overall society. During pandemics, employees and the management team need to readjust their standard operating procedures to accommodate new protocols introduced by natural calamities, including COVID-19. Such protocols are related to the social interactions and the overall wellbeing of people. Thomadakis posits that professionals must exercise alertness, skepticism, and flexibility to maintain fidelity to the primary principles of work delivery and efficiency. Health and safety auditors must be prepared to conduct a re-evaluation of the threat levels and review the respective action plans needed to guarantee continuity in business and the management of any pandemic. The pandemic has necessitated the need to change the approach to work as an improvement in the standards of hygiene has been made mandatory. In their research, (Bouziri et al.) suggest that working from home should serve as the top ethical standard for corporates. Organizations have to adjust rapidly to suit the new developments by digitizing many of their functions and enabling employees to work remotely.
Recommendations to Solve the Ethical Issues
- The government and businesses should spearhead the attempt to solve the central ethical dilemma. As Thomadakis recommended, the relevant stakeholders, including but not limited to business shareholders and stakeholders, should respect the individual liberties and freedoms. Importantly, the government should strive to provide all citizens with proper; in fact, sufficient health protection.
- The government and businesses must fight to ensure effectiveness. As a government obligation, it should protect the health of the population; however, the adopted measures must have the potential to achieve the goal of protecting the health of the overall public and curb the spread of COVID-19.
- The federal and state governments of the United States should engage in prospective public deliberations related to ethical considerations of the potential measures that meet the criteria of human rights and ethics.
- Despite the hurdles of balancing the work and home life, companies should incorporate strategies such as work shifts and other measures to ensure that employees are not strained too much to affect their social wellbeing. At the same time, as companies are forced to lay off some workers, due remunerations should be given to the employees.
Conclusion
COVID-19 is a current global problem that causes extraordinary health issues. The pandemic has also affected the economic aspect of the United States, which trickles down to the operations of businesses. For instance, the study revealed that the disease influences the corporate governance of firms and companies. As explained, the impacts might be of high or low liquidity when considering the extent of vulnerability. The study noted that the high impacts relate to the repositioning of business operations, such as changing the market focus. At the same time, the company might decide to turnaround its planning or strategies. However, there are low impacts that relate to cash focus and strengthening of position. Overall, the impact of COVID-19 on the organizational corporate governance can be evaluated based on the magnitude or vulnerability. Furthermore, the study revealed that the global pandemic has an impact on the corporate social responsibility. The study revealed that the society allows businesses to exist, which means that the firms also have a responsibility to reciprocate. However, the current situation of COVID-19 has introduced a new definition of CSR since many corporate leaders are pressuring the managers to reduce their spending and costs. Despite the pressures that businesses face in the present hard times, they still have the social obligation to help the local community, economy, and the environment. Furthermore, the research found out that there are ethical issues that businesses have to consider despite the challenges that they face. For instance, it is the responsibility of companies to comply with the ethical principles such as transparency, honesty, fairness, integrity, and accountability, among others. Besides, as many employees work from home, it essential for firms to ensure that they attain the necessity of work-home balance.
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And I just, I don’t know, if it’s just the experience of being in the school setting, you can kind of just figure it out. But you don’t really get, going to school, you don’t really get the real learning you need to learn to work with students, you kind of figure it out as you go.