Introduction
Oman Arab Bank is a leading bank based in Oman and is considered one of the most important financial organization working since 1984 when it was first established. It is an institution that has many clients who receive financial services such as keeping their money in the bank, doing bank transfer, investing in the bank, taking loans and other various activities. The bank is privileged with strong organizational structure which has good human resources that are considered among the bank's basic assets that the bank is investing in. The bank is established for serving Omani and non Omani people who live in Oman, it has many branches with a headquarter in Muscat city. The bank has a vision and goals that tend to provide its customers with all available services that can meet and satisfy their needs of financial service. The bank's policy is based on innovation as the bank is coping international banking system with the modern technologies of banking operations such as online services and ATM services as the machines of the bank are found everywhere in Oman to serve the public. The current assignment is discussing the role of corporate social responsibility (CSR) according to Oman Arab Bank towards stakeholders and how the organization is applying CSR roles. The assignment will have an evaluation for the challenges of business ethics and its implications to Oman Arab Bank stakeholders in addition to providing a discussion for the theories of business ethics in relation to employees, consumers and government and how the theories are applied to the challenges. (Urip, 2010)
Corporate Social Responsibility (CSR) and its roles towards shareholders
CSR is a mechanism related to organizations and it is self regulated and relevant to how the organization considers society, global ethics, environmental principles, legal standards and customers' compliance. It gives due care for both primary and secondary stakeholders. CSR importance has been understood by today's companies as a major means of enhancing the value of shareholders. Shareholders are major stakeholders in any business organization. CSR is the constant interest of a business organization to keep ethics and rights and quality of life to all stakeholders including the whole society. Yet this should be done with keeping CSR roles towards the business shareholders who are among the most important stakeholders of the business. There are some roles involved with CSR towards shareholders such as:
- The economic responsibility towards shareholders
Shareholders needs are basically the company's revenue and good returns that should be kept and not reduced. CSR has a role in keeping the company's economics are stable through giving due care to what customers really need, maintain a high level of quality, monitor the hygienic measurements of the company's products, ensuring safety and security in all operations of the business and keeping an adequate level of legal background in all the business processes. All these factors help raise customers' confidence in the business services and products which in turn raises their activities with the organization and this in turn raises profits and revenues of the company which is a main goal of shareholders and one of the CSR responsibilities to be achieved towards shareholders.
- Providing shareholders with a space of decision making
Most companies shareholders consider CSR as a constraint against their freedom to take decisions related with labors, workforce, funds or other relevant matters but this is not true as CSR is giving shareholders their usual rights of taking the decisions they think are good to their business and can increase its successfulness and achieve the goals of the business but at the same time shareholders should do all this without causing any harm to employees, the environment, ethics of the business and society rules. CSR is not meant to stop shareholders from sharing in the business operation methodologies but they provide them with the right way used to take decisions with having all the freedom regarding the business. (Mullerat, 2010)
- Being business oriented
This means that CSR works hard to reach a synergetic result through turning corporate resources to be suitable for issues and problems of the society that are coping with the business core values and mission so as not to let CSR affect the business movement and reduce revenues or profits of the company.
- Being understood and trustworthy
Some shareholders of companies complain from the CSR being vague, difficult to be realized by them, having no clear goals, wasting the company's resources and is not deserving their trust. Among the responsibilities of corporate social responsibility is to have a clear corporation approach and is able to engage shareholders in its activities in order not to put pressure over management that tries hard to make shareholders realize the vision and goals of CSR and how it can help the business upgrade. (Strauss, 2015).
Evaluation of the organization's application of CRS principles and practice and their implications for the organization's stakeholders
Basic CSR Principles of Oman Arab Bank and how they are implemented by the bank's practices with the bank's stakeholders
Respecting Human Rights
Oman Arab Bank respects human rights according to the Universal Declaration of Human Rights as the bank's stakeholders' rights are well maintained through the practices of the bank as for example, the customers' personal data are well preserved and secured, their rights in receiving respect and good care and in complaining are ensured by the bank's management. Other stakeholders such as shareholders have also their full rights of decision making, participating in the business operations and receiving their profits clearly. The bank also care for the society, people and environment rights that are related also to human rights through sharing in charity associations and social events and provide Omani society with aids. Employees rights are all ensured with good salaries, respect, health care and suitable environment.
Maintaining Sustainability
The bank is developing its business to be profitable and participating in local communities' events in order to achieve the bank's goals of organizational success along with social development. For example, in 2014, Oman Arab Bank was the sponsor of Salah Tourism Festival and this is done yearly by the bank to affirm its believe in CSR. This strategy is based upon the deep knowledge of CSR management in the bank as all about Oman society is discussed and realized through consultants and authorities and the social information is being available to the bank's staff in order to arrange for important events. (Observer, 2014)
Keeping Diversity
Oman Arab Bank doesn't make any discrimination of any level in all its processes, operations and events as there aren't any discriminations between any people on bases of religion, sex, nationality, ethnic origin, race, disability, education or any other discrimination can occur to its stakeholders whatever they are. Respect is shown to all people and equity is ensured, for example, the bank is providing its services for all people from all nationalities with the same level and the bank is having an Indian service as being tied up with an Indian banking service to provide easy access to the bank by Indian resident in Oman and also other nationalities. (Omanarabbank, 2015)
Dialogue
This is basically based on letting the company enter into an open dialogue with all stakeholders in order to reach a general overview of the needs and requirements of stakeholders and work hard to meet them. Managers of OAB tend to use this with employees and customers as well through discussing the problems and complaints of them and reaching solutions for them.
Integrity
Integrity is maintained on all levels of the bank through honesty and fairness in the bank's dealings as bribery or corruption is not found and the bank is enjoying a good reputation. Selectivity is a principle to be practiced with all operations of the bank as the best quality services are only used and provided to customers and the best HRM policies are used with all employees in addition to shareholders' care. This is implemented through the bank's works with government and with the civil society as well. (Smith, 2011)
Discussion on the theories of business ethics
Descriptive theory with relation to employees, consumers and government
Business ethics can be discussed according to many theories such as the descriptive theory which refers to the ethical phenomenon, describe it and tell how people behave and why judge things to be good or bad. The descriptive theory of business ethics refers to employees and how they react to business situations in a good or bad way. It discusses the methods used by employees to deal with customers, their demands and how they attract those customers to purchase a good or a service. Descriptive theories also describes how consumers' behaviors can affect the business and lead to its failure or success according to different measurements of the market and different conditions. These descriptive theories discusses the role of governments and how they can affect the business, their laws, legislations and attitudes that can also improve or worsen a business. (McDonald, 2014)
Normative theory with relation to employees, consumers and government
The normative theories of business ethics are those theories that provide general principles and rules of business behaviors and relate them to many reasons. They include are the stockholder theory, the stakeholder theory, and the social contract theory. The shareholder theory discusses the social responsibilities through enquiries about people's well being, charity or social activities. It investigates how the company can share in such activities and in improving people's well being in order to attract more consumers as the major goal of any company is profit. It also discusses the nature of products and what consumers prefer, what the nature of consumers is and what are their demands. It discusses employees' needs and demands and methods to meet them and motivate employees in order to make them bring more profit for the business as profit is very important to the business. The theory provides an idea of how managers can be tools for inspiration for all employees in order to raise the business success and value. It also provides means of dealing with the government such as trying to reduce taxations by reducing activities that take lots of money from shareholders and are not increasing profits such as social events that are not important or famous enough to bring spent money back to the business. It supposes that governments should be the responsible for helping the public not shareholders and that the government duty is to help peoples of the community and when the business does this, there should be increase in its reputation and fame that may increase success and profits. (Hasnas, 1998)The stakeholder theory addresses all values and morals relevant to organizations' management. It deals with all stakeholders such as employees who are the corporation stakeholders and how they should be cared for by management through motivation and recognition. It provides an idea about the employees and the behaviors they should follow to get the best of the business. It also shows how consumers think and how the company can consider them, provide them with services and extra care through meeting their needs when producing a product or launching a service. The social contract theory is very old as it is a philosophical prospective assumes that there is an agreement between people and society about how to care for each other. As a business ethics theory, it regards business as a monitor for people's and society's norms, traditions and values. It sees employees as a part of the whole community and society where consumers is another part and government is a third part and all these parts should co operate. The business with its employees should follow regulations and governmental rules and employees should interact with the consumers as being a part of one society.(Fernando, 2009).
Applications of the theories with the challenges
Banks are usually facing challenges related to business ethics such as providing clients with loans that the bank cannot afford, corruption issues, stealing, malpractice, embezzlement or other financial problems related to ethics. Oman Arab Bank is applying many principles of the pre mentioned theories in order to face and avoid such problems which are considered scandals. The bank follows the normative ethics theory of the stakeholders theory and the bank depends on a strong business model in order to face problems of risk taking. As managers and employees are both stakeholders, the bank develops a model of relationship between all stakeholders that is build on an open dialogue which declares all matters and reveal everything to the banks' shareholders. The bank is also employing the shareholder theory by revealing all the banks' operations to the shareholders and putting them on great responsibility in front of managers in order not to let them or some of them be involved in a fraud action without the knowledge of others shareholders. The bank puts consumers in an advanced priority with regard to following all governmental rules and laws which can control the bank's transactions, load systems and all other financial processes. The bank has a very strong management that is able to understand and evaluate the market, its size, needs of consumers, the banking and financial services they need and all relevant matters that reduce the risks of choosing wrong customers to get into big investments or important projects. Cost benefit analysis are made by the bank to know all circumstances of the business and measure it according to its costs and benefits. The bank also considers itself as an integrated unit within the society and realizes the risks that may affect the business as being related to worldwide ethical problems or local ethics. This helps the bank reach a good level of quality, trust and confidence to all its clients and among other banks in Oman and in the area as a whole. (Wehinger, 2013)
Conclusion
To conclude, it is important to refer to how the business management of today developed to include intelligent strategies and modify them to suit the world conditions and the new technologies and concepts to be applied in business such as corporate social responsibility and how it can be applied. CSR is related to all the entity's stakeholders and to shareholders as a segment of those stakeholders. CRS has main principles that can be practiced and applied through a wise management system that understands the nature of all stakeholders and never neglects each of them. Business management also cares for the business ethics and how employees deal with the work and the customers so there are many theories to be applied on the business ethics in order to reach an acceptable level of ethics implementation within the business organization. Oman Arab Bank is a model of the business organization that knows the Corporate Social Responsibility as well as the business ethics as being shown above. The bank applies CSR within its business model in order to reach a good level of consumer satisfaction and a good level of profits that the bank's shareholders are seeking.
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