Which Ethical and Social Responsibilities Do Companies Have When It Comes To Quality?

 Corporate Social Responsibility (CSR)

Social responsibility requires businesses must act in a manner benefiting society, rather than just the bottom line. It has become increasingly important to investors and consumers who seek investments that not only are profitable but also contribute to the welfare of society and the environment. Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and even the planet. 

Business Ethics

Companies usually adopt principles of corporate ethics that are imposed by legislation or by itself such as codes of conduct that apply to their employees. Business ethics is what drives that code of conduct. And it also shapes the way companies are seen by the world. Basically, it makes sure a company operates according to all applicable laws and maintains the company's respect among its peers and potential clients or customers.

Which Ethical and Social Responsibilities Do Companies Have When It Comes To Quality?

There are numerous effective quality tools have been used by industry for decades to reduce waste and improve efficiency, but they have not been widely recognized in the corporate social responsibility (CSR) space. Quality is generally based on a set of values and beliefs at its center such as zero waste and maximizing customer satisfaction. Similar to CSR, quality management also has a very strong focus on people, not just customer satisfaction, but also the quality of working life such as employee satisfaction. 

In addition to a strong link in the core values and concepts, CSR and quality management also share an interest in several common issues such as waste reduction, safety, supplier accountability, and empowerment. For CSR, waste minimization and pollution prevention address key issues related to resource use, energy, and significant environmental trends that affect a wide range of stakeholders. 

There is a strong correlation between quality and ethics as well. When leadership demonstrates its philosophy and practice of ethical behavior, it impacts the whole organization, whether in education, government, or commercial enterprises. ISO9000 and the EFQM Model both emphasize heavily on leadership. Great leaders put ethics, quality, effectiveness, and respect for people to eliminate fear in the system, and they look in the mirror often to see if their own thinking is ethical and a cause of quality throughout the system. 

The Consequences of Poor Quality

Poor quality can lead to considerable negative outcomes that are associated with customers, daily operations, or society. Obviously, poor quality can cause customers to take their business elsewhere, leading to job losses and a decrease in company productivity. For example, back in 2011, HTC was the third biggest phone manufacturer by global market share, only behind Samsung and Apple. Poor quality also has an impact on employee productivity. Employees working on products or services of poor quality may be less productive and may experience stress due to the lack of quality assurance. HTC's smartphones were the go-to Android devices and offered an extremely good price-to-performance ratio. However, it took hundreds of millions of years for dinosaurs to evolve, but it takes only a few years for a hot smartphone brand to turn into a dinosaur. That’s what happened to HTC.

Moreover, poor quality can have several adverse effects on society as a whole. These can include increased costs, decreased efficiency, and even harm to people and the environment. For example, the reason pharmaceutical drugs are inherently safer than nutritional supplements is probably due to the fact drugs produced by the pharmaceutical industry are regulated by the FDA. If all these drugs are inadequately produced, how many people will be affected? During the pandemic of COVID-19, it was difficult to ensure the supply of necessary hygiene products, including disinfectants. In many countries, therefore, the framework conditions for production and marketing were eased. The FDA's concerns for quality and safety do not only include hand disinfectants. Since the beginning of the pandemic, the disinfection of surfaces has also played a more important role than before. However, not all devices on the market offer the required safety standard for the user.

Quality, Responsibility, or Maximize Profits for Shareholders?

I reckon that all businesses have certain ethical and social responsibilities that they have to fulfill because of operating in society and using society's resources to produce their products and services. Ethical responsibility includes showing moral characteristics such as providing labor insurance and caring for the environment. Businesses have a social and ethical responsibility to maintain the quality of their products as poor quality can harm the health of the people and the environment. For example, selling expired or unhygienic food can be lethal for humans consumptions and customers can be both the shareholders and stakeholders of the company. Businesses' demand for superior quality can be considered a response to both categories of profit-making and social responsibility. In Taiwan, Ting Hsin Oil Company made illegal profits of more than 100 million NTD by importing low-quality oil products and processing them into edible oil from 2012 to 2014. Chairman Wei Yingchong was charged with violating the Food Safety and Hygiene Management Law and sentenced to four years in prison by the judge.

Reference

Consequences of poor quality. Quality Gurus. (2022, September 5). Retrieved October 23, 2022, from https://www.qualitygurus.com/consequences-of-poor-quality/ 

ECA Academy. (2022, August 30). FDA draws consequences for poor quality of hand disinfectants and UV wands. ECA Academy. Retrieved October 23, 2022, from https://www.gmp-compliance.org/gmp-news/fda-draws-consequences-for-poor-quality-of-hand-disinfectants-and-uv-wands 

Ganti, A. (2022, September 8). Social Responsibility in business: Meaning, types, examples, and criticism. Investopedia. Retrieved October 22, 2022, from https://www.investopedia.com/terms/s/socialresponsibility.asp 

Indeed Editorial Team. (n.d.). The ethics of Quality. The W. Edwards Deming Institute. Retrieved October 23, 2022, from https://deming.org/the-ethics-of-quality/ 

Sapru, R., & Schuchard, R. (n.d.). CSR and quality - home | BSR. CSR and Quality: A Powerful and Untapped Connection. Retrieved October 23, 2022, from https://www.bsr.org/reports/BSR_ASQ_CSR_and_Quality.final.pdf