420003175000880009408795GAONE MELINDAH SELOKA
STUDENT NUMBER: 28042815
450000GAONE MELINDAH SELOKA
STUDENT NUMBER: 28042815
420003175000175001870710Sustainable and responsible business in the 21st century 450000Sustainable and responsible business in the 21st century
The aim of this report is to determine the success of the United Nations Global Compact, focusing on human rights. The UN Global Compact is a voluntary initiative that helps approach a more humane world through recruiting businesses to follow the ten principles. When the universal declaration of human rights was approved more than 50 years ago, states were the main actors in the global arena. Today it is still seen that states continue to ensure the primary responsibility to protect the human rights of their citizens. Expectations from the public and civil society government that businesses need to do everything in their power to encourage and respect universally agreed standards grows.
As companies establish more factories and hire workers in foreign countries, this can lead to them not being considerate towards the people of these countries. Hence the Global Compact initiative which is presented for businesses and non-businesses as a universally accepted set of principles. According to Georg (2005) the Global Compact is a strategic policy initiative that aims at businesses that are dedicated to align their operations and strategies with the ten universally accepted principles in areas of human rights, environment, labour and corruption. This helps businesses ensure that market, commerce, finance and technology improve their ways that are beneficial to societies and economies everywhere. Williams (2004) emphasises that the global compact encourages all companies to not wait for governments to get it right but rather they should concentrate on the social impact in a way that builds social innovation and higher standards. Hence the principle of human rights which is essentially good to corporate citizenship and to a healthy bottom line. Tasioulas (2012) explains that human rights are rights that are intrinsic to human beings. This meaning that human rights are seen as a key indicator for all organisations across the world. Cramer (2005) goes into detail by explaining that many times companies find strength through their human rights records, while other companies deal with consequences of overlooking this essential part of their corporate lives. Therefore this is why human rights allows that everyone should be entitled to enjoy their human rights without being discriminated because of their race, sex, color, birth, status, religion and etc. The aim behind the UN Global Compacts human rights principles deals with the responsibility on the part of everyone as well as business, towards the respect of human rights and prevention of human rights violations elaborates (Montero, 2014). Unfortunately a number of companies are guilty of human rights abuses towards people within the society or the citizens of their countries of operation.
The report will explain how human rights affects businesses, also discuss the benefits and challenges for business in relation to adoption of the Global Compact concentrating on human rights. Then come up with recommendations and also the challenges that might arise in delivering those recommendations.
2.0. HOW HUMAN RIGHTS AFFECT BUSINESS ORGANISATIONS
Business and human rights are an increasingly noticeable concern going on internationally. According to Ruggie (2013) liberalization of trade, domestic deregulation and privatization extended the scope all over the world and also expanded the impact of markets. This resulting in multinational companies that operate globally to increase in number. Even so the protection of people and environment does not keep the pace of the changing economic context. Smith-Hunter and Boyd (2004) state that company’s influence individual’s human rights through its actions or its company associates. Klein (2005) elaborates further that competition among businesses will remain a challenge and would drive businesses to make decisions based on other fronts so as to attract those with a direct or indirect connection to their business in order to maintain the businesses reputation to remaining successful. This means that companies have to operate with a culture of respect so that they become successful brands, partners and top employers. A lot of cases all over the world have been seen where an unethical business can harm and affect its communities and end users. An example is South Africa and the role of diamond companies in the civil war in Sierra Leone, this shows that companies and governments work together in abusing human rights. Therefore businesses need to recognize human rights as an important factor to achieving sustainable development. This is aligned to principle 1 which explains that businesses need to guarantee human rights through their daily operations within the workplace, the community and through the use security services to protect operations. Companies must guarantee that there is respect for existing international guidelines and standards for the use of force.
As the nature and scope of business changes, the importance of human rights issues rises. It is important for businesses to be mindful of the existing factors that make human rights an organisational issue. Hancock (2006) established that in order for both society and business to succeed, they have to thrive were human rights are valued and protected, where it is also seen that there is a concern for social and the environmental well-being. Dubach and Machdo (2012) agrees by clarifying that when businesses act on human rights it helps them learn from other businesses and escape the mistakes that could be costly to them that other businesses made. But rather Ghaiben (2007) is of a different opinion that one cannot expect businesses to go against their fundamental mandate which is to maximise profit, bringing back to the stakeholders because of abiding by human rights principles. On the other hand agreeing with the two writers Hancock and Sheedy human rights allows businesses to safeguard their brand image and reputation, to be able to gain competitive advantage over their competitors, to better their recruitment and staff loyalty as well as reducing cost burdens to the business.
According Fasterling and Demuilnck (2013) the idea behind the UN Global Compacts human rights principles deals with the responsibility of individuals, businesses and prevention of human rights violations. Some business seem not to be aware of their responsibility in the promotion of human rights and the prevention of human rights violations. This means that managers then think that protection of human rights concern governments only not them and this leads to them failing to strive in this area surrounding their own capability. Schouten (2007) emphasis that some companies seem to think that their role can only be neutral within the countries they operate in, but these businesses do not show being neutral in them. Hence we see many international businesses being accused of committing human right abuses. This is associated with the human rights principle 2 which implies that companies need to be aware that they are not complicit in human rights abuses. Zenkiewicz (2016) refers to complicity as being associated to human rights abuses that were caused by other companies, governments, etc. An example is that of Burma, oil corporations’ security representatives of a pipeline were guilty of torturing and killing protesters. This shows that failing to address the human rights issues is a threat to businesses as it damages the reputation and brand of companies, also increasing the risk of litigation and of non-compliance with a growing body of legislation in the area.
Profit maximization is an essential goal for all businesses. Stockhamer (2013) elaborates that individual companies need to establish who could be their stakeholders be it employees, shareholders, business partners or customers and how to treat them. As a result it shows that a number of international businesses have drawn on the guiding principles in adapting their own business and human rights policies and standards. An example is that of Coca-Cola, that takes on human rights responsibilities because stakeholders that is the consumers and shareholders have held the company responsible for their human rights issues in the different locations their company operates. This has driven the company to protect their reputation, brand and company image. Sheedy (2011) advocates that it is essential for stakeholders to work together because it leads to reduction in risks through training, company audits and corporate initiatives. Hence it is important for businesses to make it their key factor to work with stakeholders making it their aim to take on human rights responsibilities.
3.0. RECOMMENDATIONS AND SOLUTIONS
Companies need to identify the international human rights standards that include business operations suggests (Nolan, 2005). Therefore it is recommended that businesses need to realize the kind of risk that is associated with operating business in countries that human rights issues are not well managed. This relating to the human rights principles means that companies should make it their goal to review their organizational approach to human rights in order to make sure that human rights issues are addressed in a proper manner and to avoid human right abuses. Companies for example can implement one of Coca-Cola’s strategy which is training that they used to protect and promote human rights. This means that time and resources that will be used to incorporate human rights responsibilities into the business organizational system can be underestimated. Thus companies have to improve their implementation strategies within an accurate time frame and also be honest with its stakeholders about the progress of the company. This can be done effectively if companies work hand in hand with outside companies to use the United Nations Global Compact as a source of information and how they can implement human rights responsibilities.
In conclusion, as more individuals and organs of society recognize the value of human rights this would mean that companies do not only rely on traditional business strategies. Businesses then look for new avenues and ways of moving forward based on good corporate ethics, social responsibility, governance and respect for human rights. Lastly companies having effective human rights policies and showing the correct human rights due diligence will allow them to avoid risks of being caught up in human rights violations in a way that they take every necessary step to avoid such issues.