The Cheesecake Factory’s Business Ethics

Introduction

Today, more than ever before, it is becoming increasingly impossible to overstate the assertion that there exists a business case for business ethics and corporate social responsibility (CSR) owing to their immense contribution to firm competitiveness (Vogel, 2005). Indeed, as suggested by Vitell and Hidalgo (2006), many business executives have begun to pay serious attention to ethics and CSR by conducting their businesses in ways that are more socially, ethically and environmentally sustainable. This paper uses The Cheesecake Factory’s code of ethical conduct to illuminate some underlying issues relating to ethics and CSR in business.

Code of Conduct and Significance to Business

After analyzing the company’s code of ethics for executives as well as code of ethics and code of business conduct as presented in the firm’s official website, it is evidently clear that some key components of these codes are of immense importance to the success of the business. In the code of ethics for executives (Cheesecake Factory, 2015), the standard on engaging in honest and ethical conduct is of particular importance as failure to comply may engineer the collapse of the business through bad public reputation.

The standard on dealing fairly with the company’s customers, suppliers, competitors and employees is also important as failure to comply may lead to loss of business through customer protests, loss of business opportunities through bad publicity, as well as loss of key talent to competitors. As the CEO of the company, it would be prudent to ensure compliance with these standards as available literature demonstrates that companies can lose key employees and customers to competitors due to dishonest dealings and unfair treatment (Stucke, 2014).

In the company’s code of ethics and code of business conduct, some of the key areas that are of substantial importance to the business include

  1. compliance with all applicable federal, state and local laws, rules and regulatory orders,
  2. prohibition against insider trading,
  3. protection of the company’s confidential information (Cheesecake Factory, 2015).

Failure to comply with all applicable rules and regulations may lead to loss of public confidence and hefty penalties, which in turn destroy the company’s competitive advantage (Stucke, 2014). As the company’s CEO, it is important to prioritize prohibition against insider trading to avoid corruption and bankruptcy, as the two unethical behaviors were to blame for the collapse of Enron some years ago (Vogel, 2005). Lastly, it is important for employees and all stakeholders to protect the company’s confidential information to avoid providing undue advantage to competitors.

Steps to ensure Compliance

The first step should be to undertake an orientation of the code of ethical conduct to ensure that all new employees and stakeholders are aware of the rules and standards. It is also important to provide employees and other relevant stakeholders with a copy of the code of ethical conduct (in hard or soft copy format) to facilitate reinforcement and internalization of the rules and standards. Additionally, employees should be provided with information on where to report incidences of non-compliance or raise any queries, not mentioning that a fully-fledged office should be established to help prevent, detect and punish non-compliant behavior. Lastly, training programs should be developed to help heighten awareness of ethical issues as contained in the code of ethics (Vitell & Hidalgo, 2006).

Engaging in Socially Responsive Activities

Corporate social responsibility is a concept whereby organizations “fulfill accountability to their stakeholders by integrating social and environmental concerns in their business concerns” (Rishi & Moghe, 2013, p. 18). Drawing from this description, the restaurant can be involved in (1) organizing and funding health clinics to fight against lifestyle diseases, (2) organizing and leading community cleanups to sustain the environment, and (2) organizing and sponsoring football tournaments within the community to help the youth keep fit.

Conclusion

Overall, it is becoming increasingly difficult to separate business from ethics and CSR in contemporary times. The task therefore is for business executives to continue embracing ethical business practices even as they engage in CSR for enhanced competitive advantage and increased firm performance.

References

Cheesecake Factory. (2015). Code of ethics and code of business conduct. Web.

Rishi, P., & Moghe, S. (2013). Integrating corporate social responsibility and culture as a strategy for holistic corporate success in India. Journal of Corporate Citizenship, 51(1), 17-37. Web.

Stucke, M.E. (2014). In search of effective ethics & compliance programs. Journal of Corporation Law, 39(4), 769-832. Web.

Vitell, S., & Hidalgo, E.R. (2006). The impact of corporate ethical values and enforcement of ethical values and enforcement of ethical codes on the perceived importance of ethics in business: A comparison of U.S. and Spanish managers. Journal of Business Ethics, 64(1), 31-43. Web.

Vogel, D.J. (2005). Is there a market for virtues? The business case for corporate social responsibility. California Management Review, 47(4), 19-45. Web.