The Dynamics of Business Ethics - Article Example

?Stakeholder Reflection Exercise and Essay Table of Contents Part A: Journal Entries of Recent Events 3 Part B: Analysis of Article Entries 5 Stakeholder Perspective of Corporate Sustainability 5 Concept of Sustainability 6 Overview of Sustainable Organizations 6 Globalization & Sustainability 6 Values and Paradigms: Framing Risk 7 Evaluating and Managing Risk 7 Reference list 9 Part A: Journal Entries of Recent Events UNIT Article 1: (Jennifer Rankin, 09 September 2013, Deloitte fined ?14m for conflict of interest over MG Rover, Source: The Guardian). DESCRIPTION: Deloitte, one of the biggest accountancy firms, has been fined for about ?14 million for a conflict of interests that occurred between Phoenix Company and MG Rover grouping in September 2013 (Rankin, 2013). The fine was imposed by the Financial Reporting Council (FRC) and is considered as one of the largest fine imposed in accounting history (Rankin, 2013). RELEVANCE: How does this relate to the class materials? A large amount of fine was imposed on Deloitte because it failed to adhere to the accounting policies and breached ethical accounting standards when it had advised the above mentioned companies for a merger, which led to catastrophic outcome (Leake, 2013). REFLECTION: What are my thoughts and opinions regarding this article or report? As per my opinion, the management not only failed to identify potential conflicts but also failed to adhere to the ethical corporate standards. UNIT Article 2: ( Marta Steeman, 27 June 2013, 8000 painters under Ecan scrutiny, Source: Business Day). DESCRIPTION: In June 2013, the management of Environment Canterbury (Ecan) imposed restrictions on the paintings of 8000 painters in Christchurch (Steeman, 2013). It was observed that the painters were using illegal disposal paint that had the potentiality of polluting and harming the environment (Steeman, 2013). Ecan has requested the paint companies to use paints, which are relevant with the quality requirements of the Environmental Regulation Authority (Steeman, 2013). RELEVANCE: The paint companies have been requested to use environment friendly paints which can be discharged directly into the wastewater without hampering or blocking the city drainage system (Steeman, 2013). Ecan has also started nationwide anti wash campaign to prevent the paint companies using illegal paints (Steeman, 2013). REFLECTION: As per the notice issued by Ecan, paint companies are requested to carry the trade license for purchase of containers of paints which are environment friendly and come in between the range of $200- $ 4500. As per my opinion, there is a huge interrelationship between personal and organizational ethics. The alignment between the two goals is necessary for the productivity of the organizations (Svensson and Wood, 2003). The employees failed to follow the ethical standards of the company. Article 3: ( Juliette Garside, 31 May 2013, Leaked: Europe probes Apple over exploitation of mobile networks, Source: The Guardian) DESCRIPTION: The European commission is investigating whether Apple Inc has performed unfair means and methods yo the mobile network companies that sell its phones. Although the management claims that it has complied with the local laws and regulations, the papers shown by the European commission reflect that the company has been using unfair means for yielding profitability. The European commission is investigating the matter related to Apple Smart phones (Garside, 2013). RELEVANCE: Although the management of Apple claims that is has complied with the local laws and regulations to continue its business operations, European Commission has showed papers which depict the leaked allegations with the signature of the regulatory authorities. REFLECTION: As per my opinion, Apple Inc tried to gain competitive advantage or profitability through unfair means or methods, which is really offensive. Unfair means like this can reduce the consumer confidence to a large extent and break the trust of the existing consumers. Part B: Analysis of Article Entries Stakeholder Perspective of Corporate Sustainability Apart for profit earning, value creation should also be one of the main objectives of the company, which can be achieved through the guidance of stakeholder sustainability management theory. A core part of the theory puts emphasis on the fact that decisions pertaining to product management can influence the quality of the products to a large extent (Aero students, n.d). In article 1, the management of Deloitte should have utilized this theory concept to provide reasonable accounting decisions to the two firms for prevention of further aggravation of matters. In articles 2 and 3, the cultural element would have helped in distinguishing between the acceptable and unacceptable business activities. Corporate ethical system would have been pivotal in the smooth functioning of the business activities of the organization. Suspension on the basis of weak grounds is illogical and irrational from the management perspective. An incident like this can lower the morale of other employees of the supermarket. Concept of Sustainability Unethical activities performed by a reputed company do not only harm its reputation, they do not provide a good example to the society as well. Corporate sustainability conceptual theory from the stakeholders’ view point requires the employers of the organization to view the impact of managerial decision making on the corporate stakeholder relationships with the management (Sarikaya and Oruc, 2011). As per this theory, the actions and the personal choices of an individual are governed by their personal values, beliefs and assumptions (Gray, n.d.). The personal values are deeply influenced by the environment and the culture of an individual. As per the theory, the sustainability concerns need to be identified in order to assess the key sustainability impact of a particular decision making (Jones, 2000). Overview of Sustainable Organizations Sustainable Organizations are those which comply with the environmental regulations and guidelines and develop products or services for the betterment of the entire society, community and environment. Sustainable organizations not only develop environment friendly products, but also focus on their business process considerably. This contributes to the overall sustainable developmental and eventually increases the organizational outcome. Globalization & Sustainability The corporate sustainable theory puts emphasis on certain specific corporate characteristics which could not only lead to the betterment of the company but also improve the environmental contribution by the organization (Gray, n.d.). The connection between these two elements is very strong because accomplishment of traditional corporate objectives is an instrumental aspect for the welfare of the employees, organization and the society itself (Maas, 2013). As per this theory, along with yielding high profits the corporate sustainability practice makes the manager realize his opportunities. The theory also revolves around the judgment of the moral actions behind the wrong and right action while performing the business activities. The ethical and unethical actions can be determined easily. Values and Paradigms: Framing Risk The value added paradigm framework helps in the strategic creation of goods and services of the organization. This framework helps in identification of several attributes like choices, actions, issues, responsibility and action. This framework gives emphasis on the fact that organization should encompass variety of approaches including advocacy, argumentation and persuasion. It is moreover an approach which focuses on the formulation of framework which helps the managers to draw inferences and connect it with the psychological process of the customers. This helps the corporate to understand their requirement and then develop products and process accordingly. These sustainability decision making abilities help in improvement of the existing production process and also serve purposeful to act as guidance for the overall improvement of the economic, social and environmental performance of the company (Mainardes, Alves and Raposo, 2011). Evaluating and Managing Risk Evaluation of managing risk will help the companies to understand the impact of the business activities on the environment. The corporate requires a guidance theory which helps in evaluation of managerial capabilities and their contributions to the society and community. The companies mentioned in the articles 1, 2 and 3 should have analyzed their corporate and environmental practices thoroughly and looked up the value and paradigm framework for guidance. This framework would have helped them in evaluation of the current risk caused by not adhering to the environmental and sustainable development guidelines. Reference list Aero students, n.d. Ethical Theories. [pdf] Available at: [Accessed 11 September 2013]. Garside, J., 2013. Leaked: Europe probes Apple over exploitation of mobile networks. The Guardian. [online] Available at: [Accessed 11 September 2013]. Gray, R.H., n.d. Business ethics and organizational change. Managerial Auditing Journal, 5(2), pp.01-13. Jones, T., 2000. Instrumental stakeholder theory: A synthesis of ethics and economics. Managerial Auditing Journal, 20(2), pp.404-437. Leake, J., 2013. Thousands of TB cows sold as food. The Sunday Times. [online] Available at: < http://www.thesundaytimes.co.uk/sto/news/uk_news/Health/article1281338.ece?CMP=OTH-gnws-standard-2013_06_29 > [Accessed 11 September 2013]. Maas, A., 2013. Restaurant workers paid $4 an hour. Business Day. [online] Available at: [Accessed 11 September 2013]. Mainardes, E.W., Alves, H. and Raposo, M., 2011. Stakeholder theory: Issues to resolve. Management Decision, 49(2), pp.226-252. Rankin, J., 2013. Deloitte fined ?14m for conflict of interest over MG Rover. The Guardian. [online] Available at: < http://www.theguardian.com/business/2013/sep/09/deloitte-record-fine-mg-rover-deal > [Accessed 11 September 2013]. Sarikaya, M. and Oruc, L., 2011. Normative stakeholder theory in relation to ethics of care. Social Responsibility Journal, 7(3), pp.381-392. Steeman, M., 2013. 8000 painters under Ecan scrutiny. Business Day. [online] Available at: < http://www.stuff.co.nz/business/industries/8850045/5000-painters-under-Ecan-scrutiny?cid=edm:businessday:dailybrief > [Accessed 11 September 2013]. Svensson, G. and Wood, G., 2003. The Dynamics of Business ethics: A function of time and culture. Management Decision, 41(4), 350-361. Read More