Organizational Ethics - Essay Example

? Topic: Lecturer: Presentation: Introduction Leaders in managing the organizations are faced with numerous changes and have to make very important decisions that affect the business. The organization has a strategy to achieve among other competing interests and the insistence on businesses to operate ethically only serves to make matters worse. Businesses that operate ethically are assumed to have a lot of gains but it is not as simple as it sounds especially in an ever increasingly competitive environment. The leader has to make sure all the stockholder’s interests are taken care of and at the same time ensure all laws are adhered to and also act according to moral principles. The problem is; does the leader do what is right according to his or her opinion or what is right according to the moral standards of society? Sometimes these two views conflict and the leader have to make this important decision. This becomes more complex as the company becomes global due to diversity of cultures. Morality according to Fieser and Moseley (2012) guides what is permitted and what is not or what is “right” and what is “wrong”. However, it all depends on what moral theory one is applying. Understanding business ethics is important and as such this paper will focus on how various companies solve their ethical dilemmas. This will be accomplished by using an example of a profit organization (Google) and a non-profit organization (United Service Organizations). First, the paper will give the profiles of both companies and the ethical issues they faced or are currently facing. Secondly, personal reflections on the ethical actions taken by the companies will be evaluated. This will be followed by a critique of these actions taken based on philosophical theories. Lastly, a brief summary of the main issues will be given. Company Profile: Google Google Inc is a global leader in the technology sector specializing in the search engine industry. It was founded and incorporated in 1998 by Larry Page and his co-founder Sergy Brin. It is a profit making organization whose mission is “to organize the world’s information and make it universally accessible and useful” (Google.com, 2013). It operates more than 70 offices situated in more than 60 countries and an employee base of more than 30,000 employees worldwide. Its headquarters are situated in Mountain View, California with various branches in the US, Asia Pacific, Africa, Europe, Latin America, United Arab Emirates, and Canada. It is a global company that offers services to both people and businesses. It is involved in offering search services, advertising, and cloud computing for businesses by offering products such as AdWords, AdSense, Google maps, blog searches, Gmail, scholarly papers, books, mobile content, chrome and translation. It started as a small company in a garage but through the years it has developed to become a dominant player in the search engine industry. This is through its aggressive acquisition strategy and new product developments (Google.com, 2013). The company derives its revenue mainly from advertising, websites, and hardware products. All these revenues are acquired through hard work as entailed in the company’s value statement “don’t be evil” (Google.com). It has been experiencing a revenue and profit growth over the years as shown in the table 1 below. USD 2009 2010 2011 2012 Total Revenue 23650.56 29321.00 37905.00 50175.00 Gross profit 14806.45 18904.00 24717.00 29670.00 Table 1: Annual Data extracted from Google financial Reports. Most of this revenue comes from advertising and it is far above its competitors in the same industry such as Microsoft, eBay, Face Book, and Apple. Its sales growth of 15.48% year on year is above competitor’s average revenue growth of 6.45% according to CSIMarket (2013). The revenue growth of the various companies year on year is: Google 15.48%; Apple Inc 0.86%; eBay 14.1 %; Microsoft 10.17% and Yahoo Inc -5.22%. From these statistics, it is evident that Google is the dominant in the industry and this has been the source of various antitrust suits against it in recent years. The competitors are crying foul over this market dominance hence accuse it of using unethical business practices (Gustin, 2013; ICOMP, 2013). In all market segments, Google is doing better than its competitors. For example it has a market share of 92.93% in its website services, 84% in AdSense, and 70% in advertising while Face Book the second largest in advertising has market share of 9%, Microsoft 4.69%, and Yahoo 5.28%. Google encounters a lot of obstacles in this sector but it has many innovative approaches to overcome them. One of the obstacles it encounters is government interference for example, by blocking access. To solve this problem, in 2010 it decided to publish the number of requests by government to provide information about users or to remove content from its products (Google.com, 2013). In 2011, it lobbied users to stand up against two legislative proposals (SOPA & PIPA) in the US which would have impeded growth. To deal with competitors, it has to continuously innovate new products such as Android, AdWord, AdSense and doubleclick. These offer customers superior service and enable it to differentiate itself. It engages in mergers and acquisitions such as acquisition of You Tube in 2005 hence increasing its market share. As stated earlier, Google is faced with various antitrust allegations in various countries which are a threat to the business. These can result in heavy fines or remedies which would see its competitors gain advantage over it such as was the case with Microsoft. The most affected by these allegations is the use of its dominant position to disadvantage competitors by lowering their search rankings. However, the lawsuit was dismissed by the competition commission (Gustin, 2013). One such major crisis was the accusation against Google books by authors and publishers through class action in 2005 (ICOMP, 2013). In this case, Google was accused of scanning works into database, almost entirely unchallenged as well as coupling its Google book search with its universal search project to outrank those of competitors (ICOMP 2013 pp 18-22). The class action has rights to produce books and enabling Google to scan these books on database without permission is copyright infringement. A settlement was reached on what books could be used for display and non-display. Instead of respecting copyrights, Google was determined to continue with its work hence its definition of these classes of books resulted in Google being able to scan all books without permission and the right-holders were left with limited means to protect their interests (p. 20). Orphan works were also left unprotected thus Google could use it without hitches. Google in recent years makes deals with libraries to make books available online such as the one with British library in June for 250.000 books and another with a France publisher in August. Google also responded by making its search comprehensive in ways its competitors cannot hence gaining scale over them (p.22). The outcome of this decision is that the competitors are still in a disadvantaged position as few users search on their platforms. The company gets more revenue from this service at the expense of right holders and competitors. Company Profile: United Service Organizations (USO) USO is a private non-profit organization that partners with the department of defense to provide programs, services, and live entertainment to US troops, their families, and families of fallen warriors (Uso.org, 2013).It was founded in 1941 and up to now it has more than 160 centers worldwide in 14 countries and 27 states with its Head quarters situated at Arlington, Virginia. Its main branches are in America, Europe, Asia, Pacific and Afghanistan. It was founded to support war efforts by giving morale to troops through camp shows and other events. It was a combination of 6 organizations that came together to offer services to troops. These include: Salvation Army, Young Men’s Christian Association (YMCA), Young Women Christian Association (YWCA), National Catholic Community Service, National Travelers Aid Association and National Jewish Welfare Board. Its mission is to “lift the spirit of America’s troops and their families” (Uso.org, 2013). It employs a multinational workforce comprising of 350 full-time employees, 101 part-time employees and thousands of volunteers. Since it is a non-profit organization, it is funded through individual contributions, organizations, and corporations. The donor partners include but not limited to Kroger, AT& T, P&G, Northrop, Coca-Cola and JCPenney. It is an organization chartered by congress and operates under section 501(c) (3) of the Internal Revenue Code (IRS.org, 2013). Since it is exempt from tax, it must file its returns through form 990-N. Since it is tax exempt, it cannot engage in lobbying and politicking or for the benefit of individuals (Hopkins, 2011). It ensures troops have “a home away from home” thus its motto is to “be there for the troops until everyone comes home’ (Uso.org, 2013). Its core values are thus respect, collaboration, accountability, excellence, doing the right thing and mission first. All its activities are geared towards ensuring the military missions are successful by motivating the troops. Its activities include offering free mobile services for soldiers to call home, help kids of the deployed troops, give services to troops in remote areas through its USO2GO program, help families of those deployed, assisted the wounded as well as entertaining the soldiers especially during charismas so that they can feel at home. Its family care program ensures those who sacrifice in battle have a bright future. Though the company is non-profit hence not affected by competitive pressures like profit organizations, it faces many challenges especially funding problems. Its employees and volunteers travel to different parts of the world where military troops are engaged in war hence many challenges. They participated in the World war 11, Korean War, Vietnam war and now are engaged in Afghanistan. These are war zones and as such, those who render services are as much in danger as the soldiers themselves and as such USO has to protect them. The entertainers especially are also confronted with cultural problems as they serve in different cultures and the company devises training programs to ensure employees learn the language of the locals (Uso.org, 2013). Some areas are very remote and the company has to develop programs such as USO2GO to reach such areas. Moreover, some services are criticized as troops are supposed to work and not to be seen relaxing in comfortable areas enjoying themselves. However, USO maintains this is the only way to boost their morale by making them feel home. According to Annual Telluso Survey, 93% of respondents said USO boosts morale and eases separation from families (uso.org, 2013). One of the major problems facing USO is related to culture. USO travels with entertainers wherever the soldiers are and these service givers are accustomed to American culture (Frank, 2012). New challenges are thus encountered in the Middle East and Afghanistan where social values conflict. Women in such countries are supposed to cover their heads or wear Hijab which is contrary to Christian views. These women are thus prohibited from carrying out their entertainment services unless they adhere to the norms and customs of the Afghans. Failure to entertain the troops would lead to failure of its core mission which is to lift the spirits of the troops and their families. On the other hand, the soldiers want to feel at home hence enjoy home music, have fun with the beautiful women just like home. Adhering to local culture would mean the troops would not feel at home away from home. The management had thus to oblige and be racially inclusive (Frank, 2012). Personal Reflections On Ethical Actions Google has continued to remain dominant in the search engine industry despite the many antitrust lawsuits against it. It is the duty of the management to ensure the goals of the organization are achieved but in the most responsible way without disadvantaging others. Business ethics is very important as it enables leaders to choose to do what is right or wrong and act in a morally responsible way. Although I agree with Pojman and Fieser (2011 p. 3) that moral rightness and wrongness of actions vary from society to society thus morality is relative, some universal moral standards can be established. From my ethical point of view, Google ought not to have taken advantage of the legal outcomes of its cases to further its interests at the detriment of competition and right holders. It should seek permission from copyright holders to scan their books and digitize them. It is their duty to refrain from doing what is wrong. As such, they acted in a morally irresponsible way to achieve their goal of digitizing books. It is the company which created the ethical dilemma in the first place as it knew it was wrong not to ask for permission from authors if they intend to use their books for commercial purposes. The leaders were egoistic in this case as they only considered their self interest (Fieser & Moseley, 2012). Although they may claim they were acting on other people’s interest, that is, to make books accessible to them they only acted in their own interest. The person in charge of ethics and compliance should have done more to prevent this scenario by acting ethically. Copyright laws are in existence and ought to be adhered to hence acting morally. Use of the correct moral judgment on the part of the company would have saved the situation and still can. Jennings (2011) argues that moral judgments enable the business to act beyond compliance. In the case of USO the ethical dilemma was the outcome of an unforeseen force and not intentionally intended. The company’s mission is to lift the spirits of American troops and their families (Uso.org, 2013) and this was by creating a home away from home until everyone returned home. Use of their cultural practices in such events was therefore important and they did not mean to trample on others. They were doing what is good for other’s interests. According to Solomon (2011) people follow norms of the culture they live in to preserve social order furthermore, no absolute standards for moral judgment exist. ‘When in Rome, do as the Roman do” is a famous clause used to advance moral relativism (Wilkens, 2011 p. 29). USO forgot to apply this moral principle in its activities thus landed into trouble. It thus responded in a morally responsible way by accepting that people have different cultures and what is right in one culture may be wrong in another. Entertaining people wearing few clothing is the American culture but Afghans appreciate a fully covered body and avoiding some practices such as romancing the beautiful women. These are morally accepted behaviors in America but not in Middle East or Arab countries. USO was acting in the best interest of the soldiers hence no more could have been done to alleviate the situation. Employing individuals from different cultural backgrounds was essential to ensure everyone is included and to gain acceptance of the locals. Critique based on Philosophical Theories There are various philosophical or moral theories that try to explain what is right or wrong or what is ethically correct. Whatever is right or wrong is determined by which point of view the leader is using or the person who feel that the leader is not acting ethically. Egoism dictates that “even if we act in other’s interests, we ought to always act in our own interest” (Wilkens 2011 p. 81). A morally good action is thus that which serves one’s interests. This is the moral theory that Google Inc seems to be abiding by. The decision to digitize books and couple them with its universal search project makes it easy for readers to access books without having to visit libraries thus it is for their best interest to use this service. However, as per ethical egoism even if we act in other’s interests the main aim should be our own interest (Feiser & Moseley, 2012). In this sense, the company was aiming at maintaining its dominance in the market as such an act definitely gave it an edge over others. Only few people would use other search platforms to fulfil their needs. I differ with this theory as I believe we can be motivated by concern for others. I would in this case embrace virtue by Aristotle which views happiness as the natural end for man (Solomon, 2011). If people always acted in self interest what would become of society? Men should act rationally while deciding to perform a certain act. Whatever we do must lead to a certain end which is good. Think of what our actions would lead to before we act so that in the end we would be happy about our actions from the soul (Jennings, 2011). Virtues should thus guide our lives and not self interest. If our action will harm another person, we should desist. On the other hand, USO used moral relativism to respond to its problem. This theory indicates that moral rightness or wrongness depends on the situation and circumstances and differs from society to society (Fieser & Moseley, 2012). There are no universal moral principles as people are different. Moral principles are the product of the culture in which we live in; it is the society which determines whether what one is doing is moral or immoral and as such what is good in one culture may be bad for another. In other words, the society sets moral standards of behavior that we abide by as a norm rest we be considered deviant. In this case, no culture has superior moral principles as each society’s principles are important to those who follow (Pojman & Fieser, 2011). I agree with the ethical theory adopted by USO as what is ethical is determined by the social environment. When you go to a different environment, those people are accustomed to different ways of viewing the world and it is probable you adopt their worldview if you cannot change their culture. If they view Hijabs as the right way of dressing, then do as they do. This does not mean you are violating your moral principles; it is only the circumstances that have changed. You have a moral obligation to do as that society does as it is what is morally acceptable. Conclusion How should managers act in various circumstances? How do they decide what is the right or wrong thing to do especially in a highly competitive environment? Whatever they do, it is bound to result in either wanted or unwanted consequences and not all people will be satisfied with the decision. All in all, it is the duty of businesses to act ethically for their own sake and that of the society. Google is one company that has been in the news for long all for the wrong reasons due to its ethical practices. Its dominant position in the industry does not help much as competitors cry foul. However, the company can try to consider the interests of others while making decisions so as to coexist properly with them. USO is also faced with challenges in its global operations due to cultural differences. However, there are no universal moral standards hence they should do as the locals do whenever they go hence act ethically. References CSIMarket (2013).“Competition at a Glance”. Retrieved October 15, 2013 from http://csimarket.com/stocks/competition-glancephp?code=GOOG Fieser, J and Moseley, A (2012). Introduction to Business Ethics. 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