Analysis of Premier Food`s Code of Conduct and Business Ethics - Case Study Example

? Analysis of Premier Foods’ of Conduct and Business Ethics BY YOU YOUR SCHOOL INFO HERE HERE Analysis of Premier Foods’ of Conduct and Business Ethics Introduction Premier Foods identifies its three core values: focus, belief and trust (Premier Foods 2012). These are the foundational principles that drive business development, management structure and philosophy, and ethical stance in an organisational context as well as related to external stakeholder relationship development. Premier Foods maintains a unified corporate culture devoted to fulfilment of mission and vision, established under deontological models of ethics and morality that promote equality and social justice. These values are reflected not only in the company’s code of conduct, but in Premier Foods’ annual report to shareholders which emphasise corporate social responsibility as a key business success factor. Critical analysis of Premier Foods’ Code of Conduct Premier Foods has established its code of conduct, a document illustrating the expectations of both managers and employees to satisfy demands for ethical business behaviour. The code of conduct stipulates that manager should be leading by example as well as creating a decentralised environment in which employees are allowed to express their concerns openly (Premier Foods 2012). Premier Foods identifies one of its core values as trust (Premier Foods 2012), the foundation by which employees are willing to follow leadership guidance and example. According to Farrell and Knight (2003, p.541) “trust is embodied in the regulations, rules and policies by which leaders seek to get accepted by others”. The code of conduct acts as both a reinforcement of expectations of ethical behaviour and also as a sanction by which to ensure compliance, backed by managerial role modelling of desired behaviours to gain employee commitment to achieving strategic goals. Premier Foods establishes an ethical climate by using the code of conduct to promote social justice. Under social justice theory in ethics, it is assumed that every individual in society or in the organisation maintains an inviolability of justice and human rights that cannot and should not be overridden by the broader organisational culture (Rawls 2005). The expectations of managers in promoting equality and rights in the workplace are reflected in the corporate code of conduct, emphasised under the company’s “treating people fairly” guidelines. Premier Foods ensures that fair treatment is imposed on the employee population with decisions made based on individual merit (Premier Foods 2012). The company also ensures equal opportunities for all employees through objective management systems. These aforementioned managerial responsibilities highlighted in the corporate code of conduct are designed around transformational leadership theory, one in which managers are interactive with employees, regularly impart mission and vision principles to gain commitment, and where managers utilise role modelling to promote ethics under social learning theory (Fairholm 2009; Schlosberg 2006). This is how trust is instilled into the organisation: the business does not simply promote its belief in social justice and equality, but injects a clear example of its ethical values into the philosophy of management utilised by leaders in the organisation. Premier Foods is able to maintain its tight and unified corporate culture by not deviating from management theory that promotes equality and shared decision-making. “Leaders who are ethical demonstrate a level of integrity that is important for stimulating a sense of leader trustworthiness” (Resick et al. 2006, p.348). Grieves (2010) iterates that change must be a negotiated order in order to gain employee commitment and loyalty. The conception of social justice and equality, as two components acting as the foundation of trust, are reinforced by establishing expectations for managerial behaviour under visionary or transformational leadership philosophy. Premier Foods conforms to the deontological view of business ethics, a normative ethical position where the morality of a particular act is judged against the action’s adherence to a set of rules (Waller 2005). Deontology is defined as duty-based or obligation-based form of ethics and morality, where “it is the intention behind an action rather than its consequences that make that action good” (Bowie 1999, p.3). Premier Foods’ code of conduct (2012, p.15) reflects its genuine belief in deontological ethics, establishing a set of evaluative criteria by which employees should measure the acceptability of their business-related decisions: Is the action legal or honest? Would the employee feel comfortable explaining the action to family or friends? Would the company feel comfortable if the action were published in a newspaper? By outlining the different criteria by which employees are expected to conform when considering the viability of their decision-making and tangible actions, it illustrates an ethical climate rather than simply sending the message throughout the organisation that the establishment of ethical policies is only a product of compliance to legal expectations. The ethical climate is distinct from organisational culture, where deeply held values and beliefs determine organisational direction (Denison 1996). Ethical culture is the phenomenon by which employees perceive the established norms of the organisation (Bartels et al. 1998). Premier Foods reinforces its deontological views on ethics by expressing opportunities for human capital development (Premier Foods 2012), in the annual report highlighting the ethical models utilised at the highest levels of governance, and in the code of conduct documentation clearly illustrating a zero tolerance policy for corruption or bribery (Premier Foods 2012). Compared to other companies that have established codes of conducts, Premier Foods takes into consideration broader concerns that influence establishment and sustainability of an ethical climate. Den Hartog et al. (1999) iterate that different cultural groups will vary in their perception and evaluation of what constitutes effective ethical leadership. In some business cultures, individuals may consider strong, decisive managerial action to be necessary for an effective leader. In another culture, consultation and democratic management philosophy are deemed appropriate (Den Hartog et al. 1999). There is a theory in business ethics referred to as moral relativism, the belief that there is no singular model of right versus wrong that can serve as a judgment template to either criticize or congratulate a specific action or behaviour (Swoyer 2003). Moral relativists believe that since widely-varying social connotations and beliefs within a culture or organisation forbid establishment of a singular model of morality and ethics, we should simply tolerate the behaviours of others even if they conflict with our own inherent moral and ethical principles (Blackford 2010). Ethical relativism is important for assessing the viability of the Premier Foods code of conduct, as it was previously identified that this business utilises effective transformational leadership models to elicit trust throughout the organisation. This serves as the foundation for not only the establishment of an ethical climate, but also creation of a dedicated corporate culture with pride in the business and their roles within the organisational structure. Other organisations with established codes of conduct do not utilise decentralised models that promote shared decision-making, empowerment or focus on human resources imperatives. These organisations will, instead, utilise transactional leadership models, one where rewards are aligned with performance with much less emphasis on shared decision-making (Antonakis, Avolio and Sivasubramaniam 2003). This type of model in a centralised environment does not provide opportunities for cultural development or establishment of trust, thus not building an effective ethical climate necessary to gain commitment and long-term loyalty toward achievement of corporate goals. Using models other than transformational models provide opportunities for diversity of individual beliefs in ethics and morality to be present in the organisation rather than establishing the foundation of a cohesive ethical and moral norm (Antonakis et al. 2003). Premier Foods excels in establishing a singular model of ethics and morality that is consistently reinforced in the company’s corporate reports and code of conduct and supported by management that openly role model these normative values and beliefs in ethical behaviour and ethical business development. The Premier Foods code of conduct further illustrates an inclusive ethical policy and set of beliefs, illustrating how the ethical norms established in the business can be found in procurement, external stakeholder relationship sustainability, in individual job roles, the human resources function, and in areas of safety. Premier Foods openly expresses its satisfaction in establishing what is referred to as a safety culture, defined as: “the set of beliefs, norms, attitudes, roles, and social and technical practices that are concerned with minimizing the exposure of employees, managers, customers, and members of the public to conditions considered dangerous or injurious” (McDonald and Ryan 1992, p.274). The code of conduct expressing the importance of watching out for colleague safety, as only one example of the ethical climate at this business, illustrates a type of empowerment associated with peer relationship development, again fuelling the relevance of the transformational model that promotes human capital growth and shared decision-making. Premier Foods does not deviate from its ethical stance or deliver inconsistent messages to the internal staff and management teams, which forbids the pervasion of ethical relativism in the organisation that can conflict, long-term, the establishment of an appropriate ethical culture. The business focuses on trust-building, belief in job roles and the business’ direction in the market, as well as maintaining focus (such as promoting colleague safety) to gain competitive advantage. The business stays consistent, which is a strength in its ethical and managerial philosophies, in promoting its deontological view of moral and ethical good. The code of conduct, and other associated corporate documents, consistently reinforce a singular set of values and ethical principles that leave little opportunities for misconceptions to develop in the organisation about the importance of integrity and morality as an employee of the business. The most critical components to leading in an ethical manner is the character and publicised integrity of management to gain employee commitment (Bonner 2007). Premier Foods makes it clear that the role of management and leadership in promoting ethical values are imperative to ensuring ethical and moral behaviours from employees. Three Components Illustrating Premier Foods’ Values As identified previously, the company’s three values are focus, belief and trust. Focus is consistently reinforced throughout the company code of conduct. Premier Foods expects employees to “act with honesty, deliver on commitments, and ensure courtesy and respect is shown for colleagues and superiors” (Premier Foods 2012, p.14). Fair treatment stemming from peers and not just management iterate the foundation of ethical norms that exist at the business. “We strive to create an environment where people can be their best – and that means treating people fairly at all times” (Premier Foods 2012, p.14). Illustrating that Premier Foods believes that fair and equal treatment are desired characteristics moves far beyond simply legal and regulatory compliance, but teaches employees and managers that they must maintain focus on their actions and quality of relationship development to achieve corporate goals. Focus is also iterated in the code of conduct document when describing relationships with stakeholders in the external environment. The creation of sustainable relationships with vendors along the supply chain is iterated as well as the need for collaboration to develop better business strategies and plans (Premier Foods 2012). The company seeks out win-win, or mutually beneficial relationships, which will require sacrifice on behalf of internal staff members and promoting trust with a variety of business partners and vendors. Not all companies seek this type of ethical construct, utilising game theory or other methods to gain a market advantage over suppliers and remove their leveraging power within the value network. Instead, Premier Foods promotes its deontological belief in ethics and morality where equality is an imperative of ethical values and promotes employees to expand this cultural and ethical set of norms into the external stakeholder market. This not only illustrates how to achieve focus as a value, but also to instil trust in the Premier Foods brand and the competencies of its internal staff members working with external partners. Trust as an ethical value is iterated in the code of conduct in the message directly from Michael Clarke, the company’s Chief Executive Officer. The CEO strongly iterates the importance of trust in this business model, supported with a rather pragmatic view of trust in which he believes such trust can be easily damaged (Premier Foods 2012). Trust is defined as “a willingness to be vulnerable” (Mayer, Davis and Schoorman 1995, p.711). This is yet another example of where the emphasis on social learning theory and managerial role modelling is consistent and true to the existing ethical norms and culture at the business. The CEO builds trust as a competitive advantage by reinforcing his role as a transformational leader visible within the organisation and also emphasising a willingness to be vulnerable by recognising that sustainability of trust is an executive-level imperative. Rather than trying to use balance of power appeals to gain support or operating under models with high power distance, the CEO infuses more cultural support for ethical behaviour by being more overt in communications with lower-level employees. Under deontological models of ethics, the CEO promotes equality and flexibility which is required to make employees believe they are following a leader with honour and integrity. There is no duplicity in sending the message that trust is a vital factor under the company’s model of ethics which serves to improve team function and conviction in the company and its leadership. The visibility and honesty of the CEO about the dimensions of trust and risks of sustaining its presence also build belief, one of the foundational values of Premier Foods. Corporate social responsibility is not only about managing and improving external stakeholder beliefs, it is also about promoting the utility of internal employees. By having the CEO discernible in the organisational context and promoting the removal of thick layers of bureaucracy, the business reinforces belief in the ethical integrity of the organisation. Resick et al. (2006) reinforced the importance of trustworthiness and integrity to gain employee followership and by opening lines of communication with a transformational chief executive, social learning theory occurs and employees are more willing to follow when they believe in management credibility, attractiveness and reliability. The open door policy described in the corporate code of conduct also firms up any potential misconceptions about the ethical norms and culture at Premier Foods, again injecting trust and belief into the organisational environment. Conclusion As illustrated through the research, Premier Foods maintains a deontological ethical approach to business, one that is supported by ethical leadership willing to role model its values and principles. The code of conduct continues to reinforce the company’s three main values associated with ethical business, including trust, belief and focus to gain competitive advantage. The business does not allow for ethical relativism to exist in the organisational structure, which can in the long-term disrupt the establishment of an ethical climate and culture. Instead, the company stays absolutely consistent in its communications strategies and role modelling activities occurring at the executive or managerial level. This business excels over other companies with established codes of conduct as transformational leadership design, social justice, equality and shared decision-making are routinely expressed in many corporate documents and the employment website. Premier Foods should be considered a benchmark in establishment of an ethical climate and maintaining integrity to maintain ethical consistency. References Antonakis, J., Avolio, B. and Sivasubramaniam, N. (2003). Context and leadership: An examination of the nine factor full-range leadership theory using the multifactor leadership questionnaire, The Leadership Quarterly, 14(2), pp.261-295. Bartles, L.K. et al. (1998). The relationship between ethical climate and ethical problems within human resource management, Journal of Business Ethics, 17(1), pp.799-804. Blackford, R. (2010). Sam Harris’ The Moral Landscape, Journal of Evolution and Technology, 21(2), pp.53-62. Bonner, W. (2007). 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Consider Ethics: Theory, Readings and Contemporary Issues. New York: Pearson Longman. Read More