Ethical and Socially Responsive Business essay

The Cheesecake Factory, Inc. is a restaurant company and a nationwide distributor of cheesecakes. The company operates a chain of 175 full-service restaurants, several facilities for producing bakery and offers bakery-based menus under licensing conditions to other restaurants and food service operators. The company was founded in 1978 by David Overton, and went public in 1993. In 2011, the Cheesecake Factory, Inc. started its international expansion. Currently the company’s restaurants are located in Dubai, in the UAE, in Kuwait and in Saudi Arabia. However, the major part of the company’s restaurants are located in the United States.

Ethics, compliance and corporate social responsibility are highly important for Cheesecake Factory, Inc. The company’s viability strongly depends on customer satisfaction and engagement, and therefore it is essential for the Cheesecake Factory, Inc. to have a clear code of conduct for all employees. It is essential that the code of conduct is shared and that employees consistently adhere to this code. Furthermore, being an international company, the Cheesecake Factory, Inc. should pay attention to being sustainable and to being socially responsible. CSR is nowadays a critically important component of a business model (Asongu, 2007) and therefore the Cheesecake Factory, Inc. should incorporate CSR into its strategy in order to remain competitive.

  1. Key areas of the code of conduct that are of significant importance to business

The Cheesecake Factory, Inc. has two documents formulating the company’s values and rules of conduct. The Code of Ethics and Code of Business Conduct is a document that applies to all company employees, affiliates, subsidiaries and members of the Board of Directors. There is one more document named the Code of Ethics for Executive Officers, Senior Financial Officers and Directors which applies to the respective positions.

The former document covers areas that are of significant important to Cheesecake’s Factory business. First of all, there is legal compliance which is essential for the company’s normal functioning, financial well-being and reputation. The code of conduct also describes the cases when conflicts of interests might emerge; the situations with potential conflicts of interest might have an impact on the company’s relationships with stakeholders, financial position (e.g. in the case when business interests are conflicting) or reputation. An essential aspect is working with external parties such as contractors and suppliers in accordance with the company’s ethical principles.

One more important aspect is non-solicitation of non-company related services or goods by employees of the Cheesecake Factory, Inc. Any attempts of such solicitation will have an impact on the company’s atmosphere, might cause dissatisfaction among customers and lead to financial losses and reputation damages. Critically important aspects of the code of conduct are  protection of confidential information, protection of the company’s stock against insider trading and protection of corporate assets. Key reasons for including these sections are financial reasons  and protecting the company’s stock.

There are many sections devoted to protecting the company’s image and reputation against improper actions, e.g. protection against employees making statements on behalf of the company. Reputation is very important for restaurants, so it is necessary to include measures supporting reputation and customer satisfaction in the code of conduct. Furthermore, the code openly states that employees are expected and obliged to help enforce this code, and explains what is expected from managers and supervisors. These sections help ensure that employees follow and respect the code of conduct.

In the second document, the aspects of interest conflicts, non-disclosure of confidential information and compliance with company procedures specific for senior executives are considered. Furthermore, the procedures of reporting violations and consequences of non-compliance are considered in this document. Senior executives have more power and more responsibility, and their actions have a greater impact on the company, so there is a need to highlight special conduct aspects in a separate document.

  1. Key steps for the company to ensure that employees follow the code of conduct

Firstly, there should be a system for getting employees familiar with the code of conduct. The code of conduct and basic ethics training should be included in the information set for new employees. Furthermore, it will be best to offer a short ethical review with discussion of practical situations after presenting the code of conduct and learning materials.

The second method for ensuring that employees follow the code of conduct is the availability of comprehensive and confidential ethics reporting. It might be helpful to organize a system for reporting the potential violations without disclosing identity and to make ethical investigations without disclosing information about the person who requested the investigation. This system would prevent retaliation attempts and would protect the well-being of responsible employees. The Corporate Ethics Officer and restaurant managers responsible for ethics and compliance should maintain this system.

Thirdly, it is necessary to organize semi-annual or annual ethical training sessions for employees. In these sessions, actual compliance cases should be reviewed along with methods of reporting. The importance of ethical behaviors and compliance should be shown during the training sessions in order to increase employee motivation to adhere to the code of conduct.

  1. Ways of engaging in socially responsible activities in the community

As a global company, the Cheesecake Factory, Inc. should contribute to the communities in which it operates and act in a socially responsible way. In general, it is possible to identify three types of corporate social responsibility: environmentally responsible activities (also referred to as sustainability), ethical labor practices and philanthropic activities (investing into local communities and nonprofits) (Sims, 2013). Each of these categories of CSR can be used to benefit local communities.

For the Cheesecake Factory, Inc., the following types of socially responsible activities are recommended. In terms of sustainability, the company could practice organic sourcing and purchase ingredients from local farmers and communities producing organic food. In terms of ethical labor practices, the company could provide better working conditions for its employees, cover their healthcare insurance and offer additional benefits allowing them to keep work-life balance such as flexible schedule, baby care facilities, etc. Such changes will improve well-being of employees of Cheesecake Factory, Inc. and will have positive impact on the communities.

In terms of philanthropic activities, the Cheesecake Factory, Inc. might collaborate with community organizations striving for healthier life, sponsor projects and activities of such organizations. For example, the company might offer healthy menus, sponsor runs and fitness activities in the community and market healthy way of living to its customers. All above-mentioned activities will help make the company more efficient and will improve its reputation and popularity, therefore making the company more financially viable as well.

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