Ethics and social responsibility play an important part in the value belief system of individual. In the business sector there has been a steady diet of corporate scandal and criminal behavior that has rocked customer confidence. The collapse of the banking industry sent shock waves through-out the economy and mortgage lenders, such as Freddie and Fannie Mack have cost the taxpayer billions. Then considering the impact of unethical behavior it would suggest that companies should embrace ethics and social responsibility as a part of their strategic planning. According to strategic management outline, the term ethic “refers to the moral principles that reflect society beliefs about an action (Pearce, Robinson 2011, pg.74). Ethics are derived from morals, which define behavior viewed as acceptable. In general, ethics refer to beliefs direct to individual’s standards or behavior expected by the group they are associated with. Typically, there are times when corporations must make a difficult decision that will impact not only the corporation employees but the various stakeholders and the community. The decisions made are expected to be an ethical and socially responsible and also strategically plan by management. In the U.S., there are numerous regulations to monitor business activity so to ensure companies are not operating in an unethical way. This includes the fair treatment of worker and the ethical production of products.
Corporations currently are highly motivated to find the cheapest way to manufacture a product, and this particularly true when it comes to locating labor. U.S. companies have fondness for paying workers from other countries' extremely low wages to make their products. According to Labor and Work Life, it is stated that “ J.C. Penney and Wal-Mart” and other U.S. companies used child labor to make their product (law.harvard.edu, 2013). The outcry from the public for social responsibility and fairness has led to serious changes in sourcing of products abroad. This shows the concept of social responsibility extends far beyond private corporation earnings but leads to the care of its surrounding communities. The role of ethics and social responsibility An essential aspect of a strategic plan is to