Ethics, Values, and Social Responsibility
Introduction
In any business and levels of management, ethics is highly regarded and considered everybody’s business. Ethics involves conducting the most significant social challenges in an acceptable manner in terms of ethical and moral values. In the current business environment the issues that draw most attention include integrity and trust, conflict of interest, managing workforce diversity, workplace safety and legal liability. These issues touch on all the stakeholders of any business organization in terms of what is expected of the management and employees. These values must be taken seriously and given priority over any human weakness, rationalization, personal fault and ego. Their impact can be felt by both the current and future stakeholders and thus management and employee must place high regard on them. An economy that is increasingly globalized a high diverse workforce and the public that is more alert to existing and emerging ethical issues has brought about a more complex business landscape.
Review and ranking
Integrity and trust
Trust reinforce and influences the quality of each connection, affiliation and project that a business engages in and is the basic aspect on which the other authentic business accomplishment depends (Audi, Loughran & McDonald, 2016). Integrity on the other hand is the basis for business trust and a culture that upholds workplace environment is founded on trustworthiness of management and employees. In the business, integrity relates to the culture, management and leadership principles where a culture that upholds integrity should start at the top and should be perceived in the activities and conduct of management (Pirson, Martin & Parmar, 2017). A business leadership should have an accord associated with mutual values. Establishment of shared values enhances environment and productivity of the workplace by strengthening individual effectiveness and corporate loyalty based on ethical behavior (Pirson, Martin & Parmar, 2017). Through this, an organization is able to meet the expectations of the shareholders while not ignoring the interests of other stakeholders in the society.
Integrity as an ethical value enables management and employees to look for various ways in which they can change the organizational culture in respect to any wrongdoing occurrences. Across all the departments, employees seek out individuals who might assist them to withstand the pressure while carrying out their functions including accounting, HR and production functions. Integrity entails preventing and mitigating misconduct and corporate fraud issues which can lead to a great loss of public trust when discovered (Pirson, Martin & Parmar, 2017). The management and employees should be able to withstand the pressure to whatever they can to meet the goals that have been set in the organization. A decision making process that is integrity based should start with management who sets an ethical tone and then clarifies to employees that their behavior and actions must be based on ethical policies and standards (Singh & Singh, 2013). A culture of integrity means that the organization will achieve high regard in terms of public image not only presently but in future.
Conflict of interest
Conflict of interest has been a common threat underlying ethical lapses in the many organizations including businesses. The issues have brought about a large number of problems in many areas and have caused great financial harm and injury to the stakeholders of businesses. Conflicts of interest have been major issues in organizations’ boardrooms, accounting firms, Investment Banking Firms and even in the stock markets (Bell, Friedman & Friedman, 2005). It is possible for the most ethical individuals to fail if the potential to gain is big. Hence, it can be impossible to do away with all conflicts of interest in the businesses but a significant reduction can surely improve the chances of management and employees doing the right thing. Businesses that have a real concern about ethics should first make sure that conflicts of interests are not existent or are as minimal as possible. Business managers have been taking various measures aimed at preventing cases of conflicts of interest occurring or to mitigate the impact of such cases on the organization’s public image.
The conduct of business managers and employees is guided by established codes that aim to check their actions and to ensure that they primarily serve the interests of shareholders without antagonizing other stakeholders (Davis, 2015). For instance, a compensation committee is established to determine the CEO’s compensation. Where the members of the committees have established ties with the CEO, the individual is in most cases involved in the process of determining the board members’ compensation. The resulting conflict of interests has in the past led to huge compensations. In accounting firms, there are many cases that have led to financial scandals where the firms have earned significantly higher fees from consulting services than from the auditing services. The conflict of interest arises when auditors are not objective especially where their firms are poised to lose a lot of money in consulting fees (Bell, Friedman & Friedman, 2005). The scandals may also involve misrepresentation of financial information that is shrouded in fraud and theft with an aim of personal financial gains. The management in business organization have resulted to ethical codes and upholding the accounting standards to prevent such cases or stem out the negative of effects on the organizational image (Bryce, 2017).
Workforce diversity – managing people
Market globalization has brought demographic characteristics changes in what and has been an issue to management and decision makers in business organizations. A diverse workforce comprises of people from unique cultures and with different expectations and aspirations (Hunt & Hansen, 2007). Managers in organizations have placed much focus on equality at the workplace by adopting diversity and equality policy as a form of diversity management and offering equal opportunities. This relates to ethical diversity in organizations where there are various beliefs among managers, employees and even executives and businesses have been considering the courses of actions that are seen as ethically appropriate or inappropriate. For instance, in regard organizational downsizing, managers may hold different views, where some take performance-only focus as ethically right and others perceive it ethically appropriate to consider employee personal welfare and corporate initiatives. Other than different cultural backgrounds ethical judgment among management and employee can diverge due to great personal moral codes diversity (Hunt & Hansen, 2007). Managers perceives ethical and effective management of diversity workforce as needing an all-inclusive culture , and an environment in which cohesiveness, participation and team work are nurtured and enhanced. Ethics begins with the basic assumption that all employees abide with the established moral guidelines while behaving according in the workplace (Hunt & Hansen, 2007). Regardless of the business’s size, unethical behavior wrought with discrimination and inequality can cripple the ability of the company to uphold a positive public image that will attract more customers, less litigations and even maintain a good business partnership.
Mot business managers have established policies that aim at making everyone to feel comfortable working in an organization regardless of their socio-economic backgrounds (Sharma, 2016). Such policies aim at promoting equal opportunities for all employees or prospective workers to be employed and promoted on the basis of merit. Diversity programs in the businesses have been adopted to ensure non-discrimination standards while enforcing penalties for cases of non-complaint. The human resource management functions are tasked with ensuring that ethical practices in regard to managing cultural diversity are upheld (Sharma, 2016). Management of human resources needs a thorough analysis and understanding of the internal and external environments that are likely to shape the ethical culture of the organization. It enables the development of a cultural fit model which addresses the power distance, masculinity, individualism and uncertainty prevention. These issues are important because they determine the effectiveness of diverse workforce management in the organization while placing much consideration on barriers relating to gender, language and religion that defines the diversity. Currently, organizational management experience problems while managing diversity at both personal level and group level more so when workers are from diverse religions (Sharma, 2016). The employees from different religious backgrounds may have different views of the colleagues’ actions or behavior, so that while some consider them unethical others have no problem at all. It is the work of management to establish commonly agreed ethical standards.
Workplace safety issues
In business leadership, the motivation for organizations’ leaders to enhance safety includes human compassion, establishing a performance platform and improving profitability. The predominant motivation that should drive safety concern among business leaders is a clear sense that it is the appropriate thing to do (Nahrgang, Morgeson & Hofmann, 2011). The issue in this case is the role of safety in assisting managers to achieve the expectations that the shareholders, regulations and legislations, and the general public have placed on them in respect to greater oversight and responsibility in the organization. Workplace safety is important because it provides a platform for building an ethical business, once the managers have acknowledged the principles that relates to ethical culture and leadership. In relation to corporate social responsibility, ethics relates to what managers owe customers, employees and shareholders, and the larger community and how meeting such obligations ensure the organization’s long-term sustainability (Nahrgang, Morgeson & Hofmann, 2011). Today many managers are motivated by a strong sense of commitment to ethical values and principles which include human life, integrity, justice and the overall common good rather than what is good for one person.
A fundamental premise is the need for excellence, emphasized by the belief that regardless of the safety level or integrity attained, there is always room for improvement (James & Carpenter, 2017). However, an unsafe workplace exposes the organization to much litigation as injured workers seek redress or compensation in law courts which not only discredit the management but hurts the overall public image of the organization. It can also lead to a culture where the value of human life is held with low regard which is quite unethical in the current and future business environment. The unethical culture may be entrenched into the organizational culture which can affect the future wellbeing of the shareholders and other stakeholders due to reduced performance (James & Carpenter, 2017). A culture in which safety as is upheld as an ethical behavior appeals to the various ethical ideals held by the society in which an organization operates in.
Sexual harassment
Sexual harassment has been illegal for over a half a century and in the workplace it has been an ethical dilemma especially career guidance. Despite the long prohibition of the practice, it remains the most persistent practice of violence meted on women at the workplace, which has great impact not only on the victim but the overall public perception of the company (Fitzgerald, 2017). It constitutes a gender based discrimination that relates to workplace integrity and safety, and which every management in an organization has to thoroughly handle. An ethical dilemma arises due to different perceptions of sexual harassment. Therefore, a behavior may persist without the victim plainly informing the perpetrator that such behavior is offensive. The reasonability test is normally applied by courts in evaluating such behavior has the threshold of what is referred to as sexual harassment (Hunt et al. 2010). However, it is the responsibility of management to prevent sexual harassment at the workplace by taking the right action before it occurs. An organization with a culture that seems to accommodate sexual harassment can have its public image stained, with an overall effect on its performance (Hunt et al. 2010). Manages have developed policies of preventing and handling the vice, with an aim that such policies will have future implications of an environment that is not sexually hostile.
Recommendations
Considering the ethical challenges presented by above issues, management should past and present experience to remove obstacles and even contradictions that have been known to have the greatest effect in the capacity to act ethically. The management should adopt cultural transformation programs and other initiatives that will improve the ethical environment in their business organizations (McLaverty, McKee, 2016). Managers should ensure that they do not push too much for results and change which can make employees to engage in activities innately lead to conflict of interests. Employees should not be driven to act counter to their personal and group ethical values while trying to meet the set expectations. Since many leaders and employees are rewarded for achieving the set standards, many can be driven to disregard the integrity and trust bestowed on them for the sake of rewards and fear of dismissal. This lure of rewards and incentives can be a problem at all levels of management including the boardroom. Cross –cultural differences due to diverse workforce can be problematic in regard to ethical issues (McLaverty, McKee, 2016). Since rules and standards may fail to apply in all cases, each manager has to understand what matters to their organization. Organizational awareness ensures that managers identify the specific forces in the culture and processes that can motivate others to engage in wrong behavior and activities. The culture should also encourage employees to speak up about various ethical issues thy encounter and which they consider to have impact on organizational performance (McLaverty, McKee, 2016). The management has to consider why people are acting in certain ways and take steps to prevent ethical risks’ impacts.
Conclusion
Ethics involves conducting the most significant social challenges in an acceptable manner in terms of ethical and moral values. The management has to understand the major ethical affecting business organizations including integrity and trust, conflict of interest, managing workforce diversity, workplace safety and legal liability. Organizations’ management should adopt cultural transformation programs and other initiatives that will improve the ethical environment in their business organizations.
References
Audi, R., Loughran, T., & McDonald, B. (2016). Trust, but verify: MD&A language and the role of trust in corporate culture. Journal of business ethics, 139(3), 551-561.
Pirson, M., Martin, K., & Parmar, B. (2017). Formation of stakeholder trust in business and the role of personal values. Journal of Business Ethics, 145(1), 1-20.
Singh, K. T., & Singh, M. S. (2013). Ethics in corporate social responsibility. DC Business School, DCSMAT, Pullikkanam PO Idukki District, Kerala, 107.
Davis, M. (2015). Conflict of interest. Wiley Encyclopedia of Management, 1-3.
Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de Gruyter GmbH & Co KG.
Bell, R. I., Friedman, H. H., & Friedman, L. W. (2005). Conflict of interest: The common thread underlying ethical lapses.
Hunt, S. D., & Hansen, J. M. (2007). Understanding ethical diversity in organizations. Organizational dynamics, 36(2), 202-216.
Sharma, A. (2016). Managing diversity and equality in the workplace. Cogent Business & Management, 3(1), 1212682.
Nahrgang, J. D., Morgeson, F. P., & Hofmann, D. A. (2011). Safety at work: a meta-analytic investigation of the link between job demands, job resources, burnout, engagement, and safety outcomes. Journal of Applied Psychology, 96(1), 71.
James, C., & Carpenter, D. (2017). Moral Intensity and Individual State Constructs: Maturing Safety Culture through an Ethical Lens.
Hunt, C. M., Davidson, M. J., Fielden, S. L., & Hoel, H. (2010). Reviewing sexual harassment in the workplace–an intervention model. Personnel Review, 39(5), 655-673.
Fitzgerald, L. F. (2017). Still the last great open secret: Sexual harassment as systemic trauma. 483-489.
McLaverty, C., McKee, A., and (2016) .What you can do to Improve Ethics at Your Company. Harvard Business Review. Retrieved from: https://hbr.org/2016/12/what-you-can-do-to-improve-ethics-at-your-company
