Consider the following diagram indicating the four areas in which companies have responsibilities:
Economy
Corporate
Responsibility
Workplace
Social
environment
Natural
environment
Source: Business Ethics, 6th ed
1.1 Describe at least three ways in which Dithaba Construction is neglecting its corporate responsibility
in the area of the workplace.
1.2 Briefly discuss the concerns you have with Dithaba in relation to the company’s responsibility
towards the local economy.
1.3 Explain why Dithaba cannot be considered a ‘responsible corporate citizen’ (King IV) insofar the
social environment is concerned. Your answer should also include possible consequences for
Dithaba from not being a good corporate citizen in relation to its disrespect of the social
environment.
1.4 In relation to the natural environment, comment on how Dithaba is internalising benefits and
externalising costs.
1.5 It is said that responsible corporate citizenship is gaining ground over corporate social
responsibility (CSR). Explain why this is the case and clearly indicate in your answer which of these
options is more voluntary in nature for a company to follow and which is more mandatory in nature.
Question 2
2.1 Given the information provided in Issue 1 about the behaviour of the CFO and COO, i) provide at
least 4 reasons why the economic (financial) sustainability of Dithaba Construction might be
under threat. Your answer should also include ii) an explanation of why it is important for Dithaba’s
stakeholders that the company is economically (financially) sustainable.
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2.2 Select two of the United Nation’s 17 sustainable development goals (SDGs), and, in a paragraph
each, explain how Dithaba Construction could help advance those SDGs through its business
operations as a responsible corporate citizen. The SDGs are as follows:
No Poverty, Zero Hunger, Good Health and Well-Being, Quality Education, Gender Equality,
Clean Water and Sanitation, Affordable and Clean Energy, Decent Work and Economic Growth,
Industry - Innovation - Infrastructure, Reduced Inequalities, Sustainable Cities and Communities,
Responsible Consumption and Production, Climate Action, Life Below Water, Life on Land,
Peace and Justice, Strong Institutions, Partnerships for the Goals.
1.1 Three ways in which Dithaba Construction is neglecting its corporate responsibility in the area of the workplace include:
- Poor health and safety practices leading to accidents and injuries among workers
- Lack of proper training and development opportunities for employees
- Ignoring employee grievances and not providing a conducive work environment for all staff members
1.2 In relation to the local economy, Dithaba may be neglecting its responsibility by:
- Not sourcing materials locally, thereby not contributing to the economic development of the community
- Not paying fair wages to local workers, leading to income inequality in the area
- Not engaging in local community development projects or initiatives to support the local economy
1.3 Dithaba cannot be considered a ‘responsible corporate citizen’ in terms of the social environment because of:
- Ignoring the needs and concerns of local communities where they operate
- Not engaging in social initiatives or projects to uplift the community
- Engaging in unethical practices that harm the social fabric of the community
Possible consequences for Dithaba include backlash from local communities, negative reputation, and potential legal issues from not being a good corporate citizen.
1.4 Dithaba is internalizing benefits by:
- Profiting from their construction projects without considering the negative impact on the environment
- Not investing in sustainable practices that would benefit the natural environment
- Externalizing costs by causing pollution, deforestation, and other negative effects on the natural environment without taking responsibility for it
1.5 Responsible corporate citizenship is gaining ground over corporate social responsibility because it encompasses a broader scope of ethical responsibilities and sustainability practices. Responsible corporate citizenship is more voluntary in nature as it involves actively engaging with stakeholders and the environment to make positive contributions. In contrast, corporate social responsibility may be more mandatory in nature as it focuses on meeting certain regulatory requirements and fulfilling basic ethical standards.
2.1 Reasons why the economic sustainability of Dithaba Construction might be under threat include:
- Mismanagement of funds by the CFO and COO
- Lack of financial transparency and accountability
- Engaging in fraudulent activities that could lead to legal action
- Failure to meet financial targets or deliver profitable projects
It is important for Dithaba's stakeholders that the company is economically sustainable to ensure long-term viability, job security for employees, and continued value for shareholders.
2.2 Two United Nations Sustainable Development Goals that Dithaba Construction could help advance through its business operations as a responsible corporate citizen are:
- Sustainable Cities and Communities: Dithaba can promote sustainable urban development practices in their construction projects, such as green building designs, efficient use of resources, and creating livable, inclusive communities.
- Climate Action: Dithaba can reduce its carbon footprint by implementing eco-friendly construction practices, investing in renewable energy sources, and promoting sustainability in its supply chain to help combat climate change.