Ethical Principles of Profit versus Non-Profit Organization: Starbucks and YMCA - Research Paper Example

 Problems Associated With Ethical Principles for Profit (Starbucks) and Non-Profit Organization (YMCA) Introduction Over the years, organization’s business ethics are ascribed as superseding facets in shaping an organization’s success and reputation. In most cases, business entities are presumed to be evil due to their frequent involvement in economic scandals and misappropriation of stakeholders’ resources (Ferrell, 2010). Business ethics are shaped by the organization culture and leadership structure within an organization. Strict adherence to business ethics is a prerequisite of any organization’s long term prosperity. In usual circumstances, apposite implementation an organization’s ethical strategies fosters viable relationships with customers and other stakeholders leading to long term profitability (Cronbach, 2001). Although the establishment of an effective business ethics program requires adequate resources, commitment, and time, realistic business ethics not only improves the organization profitability but also advances the living standards of the business’s employees and the organization’s external dependants (Enquist, Edvardsson and Sebhatu, 2009). Business ethics have a direct impact on the operations and success of an organization at all levels. Ethical standards also influence the behavior of all the external forces to the organization including: competitors, suppliers, employees’ stakeholders, and customers towards the organization (Robinson, 2010). Due to its momentous influences on the organizational functions, a clear understanding of business ethics constitutes a significant step towards improving business operations of an organization. Ethical principles are extremely vital and pertinent for the organization’s achievement of the projected objectives. However, there are some key problems and barriers that that hinder effective execution of the laid down business ethical principles. Additionally, having the most effective ethical policies and principles is not adequate for a flourishing business. The realization of the laid down principles is more essential than the entire process of coming up with business ethical principles. As a result, searching for practical measures to get rid of emerging problems in the execution of business ethics is demanding and indispensable. The subsequent writings offer an intensive analysis on the main problems that are associated with business ethics in non-profit organizations (YMCA) and profit making organization (Starbucks) Problems Related To Business Ethics in a Non-Profit Organization (YMCA) Being a charitable organization, the YMCA’s reputation depends entirely on ethical principles and standards, personal integrity and good judgment. The core responsibility of YMCA is to put into practice Christian principles by facilitating programs that create a healthy mind, spirit, and body in the society. The organization also depends entirely on its employees’ contribution as well as its leadership in executing its business ethics programs and policies. The organization attracts, trains, and motivates its staff to attain its core intent of creating strong families and society. The YMCA is committed to complying with its business ethics principles. The organization’s management encourages its representatives across the globe to commit themselves to working in the best interest of the organization. However, in executing its basic principles, the organization has reported major challenges and hindrances that diminish the organization’s reputation. YMCA’s core ethical values requires the board of directors and other employees to be committed to upholding the public Act and trust in an ethical manner (YMCA 2010). The organization’s code of ethics directs its employees and directors to exercise a sense of fairness, integrity, accountability and openness. However, the organization is yet to come up with comprehensive regulations that will ensure full execution of the policy, giving a leeway to consistent violation the written down ethical values. Being a charitable organization, most of YMCA’s resources and funding come from the general public and corporations. This places an obligation on the organization to always act in the best interest of the public by carrying out its programs and activities in an ethical and socially responsible manner. Failure to meet the expectations of the general public and supporting corporations is likely to cut the resource allocation for the organization and potentially lead to its ultimate demise. All stakeholders in YMCA are expected to comply with the existing local and international regulations and laws. The organization’s employees are also restricted from disclosing the organization’s proprietary information such as supply information, financial data, business plan, management information system, and customers’ information. However, most of the organization’s employees do not fully comply with international, regional and local laws and regulations due to poor knowledge such laws. Lack of adequate information on laws and regulations forces most YMCA employees to conflict with organization business ethics requirements. This often occurs due to the fact that the board of directors entrusted with the responsibility of offering legal advice has inadequate personnel to serve its employees globally. Additionally, the process of accessing boards of directors’ chairman for legal advice is also complicated and challenging, especially in the case of lower cadre employees. Moreover, strict adherence to the existing laws and regulations may at times delay the execution of an urgent business ethics plan in the organization, compromising the core obligation of the organization to offer quality and timely services. The integrity of YMCA is based on its policy volunteers, the employees as well as the prevailing ethical, moral, and legal standards. In their engagement with the outside and personal interest, policy volunteers and employees should shun their personal interest, which may appear to contradict the interest of the organization. In the recent years, the organization has reported consistent conflict of interest between policy volunteers and the organization’s best interest. Ideally, the organization’s employees and policy volunteers have ethical, moral, and legal duty of protecting the organizations interest as well as refraining from actions that may negatively interfere with the organizations’ reputation and service delivery. However, the organization is yet to come up with practical policies for regulating conflict of interest in the organization. Although the organization’s ethical principles prohibit its employees from engaging in activities that might lead to conflict of interest, most of the employees run parallel businesses that interfere with their involvement with the organization’s activities. To maintain a good reputation and integrity, YMCA policy volunteers and employees are proscribed from making any payment for illegitimate purpose or accepting bribe. The YMCA employees are also prohibited from accepting any form of benefits from the organization suppliers, customers or government officials. However, the organization has always received endless compliant from the general public and the organization’s customers on cases of bribery among employees. Most of the organization’s employees engage in both direct and indirect payment either through intermediaries, third parties or consultants. Although, the organization has very severe laws that bar bribery in the organization’s service delivery, the organization’s law implementers are always reluctant in implementing the existing laws. The procedure for punishing an offender in the organization is also complicated and time consuming. The YMCA also prohibits its employees from accepting gratuities or any substantial gifts from individuals or corporations. However, the organization accepts gifts that are recognized as custom of the trade. On this policy, there is a very thin line between substantial gifts and custom gifts. Policy volunteers and the organization’s employees are always on a dilemma as to what gifts they should accept and the one’s they are expected to reject. Some of the gifts that are accepted by the organization’s employees and policy volunteers cause liabilities and embarrassment, compromising the organization’s capability to operate on as an effective and self-regulating organization. Problems Related To Business Ethics in Profit Making Organizations- The Case of Starbucks Starbucks is committed to empowering all its partners in coming up with decision that can improve the organization’s reputation. The Starbucks Company‘s code of ethics offers an overview on legal, moral, and ethical standards relevant in the organization’s daily operations. Just like non-profit making organizations such as YMCA, Starbuck’s code of ethics values compliance with the established ethical standards and laws. However, some employees in the organization fail to understand some of the very critical business ethical standards in the organization. This state of affairs is necessitated by lack of effective bodies to sensitize the organization’s employees on the organization laws. Currently, the organization relies on skip-level managers, business compliance and ethics body and resource representatives to induct new employees on the organization’s business ethics and policies. Starbucks ethical policies promote equal and fair opportunities in recruitment and promotion of employees. The organization’s management is also proscribed from using forced labor to its employees. However, the regulations that manage the entire recruitment process do not offer distinctive penalties for the violators of this policy. As a result, most recruitments and promotion in the company are based on other facts as opposed to merits as stipulated in the business ethics regulations. Although the organization upholds individual respect and dignity, there are frequent cases of violation of individual respect and dignity in the organization’s activities. Being a profit making organization, Starbuck has ethical principles that ensure dignified treatment to the customers. The customers’ services are always given the highest priority in the organization daily operations. However, some organization employees especially the newly employed staff members are at times blamed for lack of the required skills in interacting with customers due to limited training time and personnel. The organization is committed to creating an environment that will embrace people with unique abilities, strengths to drive it in the path of success. However, Starbuck lacks the most effective affirmative action that will ensure adequate inclusion of marginalized and vulnerable people in its workforce. Development of an effective measure to ensure diversity in an organization is essential for the company’s success. Embracing diversity also offers an additional competitive advantage in global, regional, and international markets. Moreover, lack of practical policies and ideologies may interfere with the organization objectives of becoming one of the most inclusive organizations in global markets. The Starbucks Company is also devoted towards complying fully with the global, local, and regional regulations, rules, and laws in their daily operations. Just like in non-profit making organizations, education on the applicable laws forms the main barrier towards the organization’s full compliance with the existing ethical laws and regulations. At Starbucks, the management has the core responsibility of informing the employees on the existing ethical standards and regulations. It is sometimes exceptionally complicated to access the organization’s managers due to their vast commitment to their managerial duties. Additionally, the organization has demonstrated some commitment towards upholding the utmost ethical standards in its business transactions. Conversely, most of its business partners are always reluctant in complying with the existing international laws and regulations. Although it is ethically wrong to make payment or offer gifts to facilitate local business processes or influence government officials, Starbucks lacks appropriate measures for dealing with the violators of this policy. Over the years, the organization has received criticism for influencing government officials in their business transactions. Moreover, lack of adequate training on other partners such as anti-corruption and anti-Robby groups on the significance of complying with federal laws have also hampered the organization’s efforts of conforming fully to local and international regulations (Howard, 2010). Regarding issues relating to conflict of interest, the Starbucks company business ethical principles mitigate any potential conflicts of interest from employees or external stakeholders. The organization stakeholders and employees are advised to execute maximum control on any personal activity or interest that may interfere with their obligations to the organization. The organization however lacks an appropriate avenue for disclosure of emerging conflicts of interests among its employees. According to the organization’s ethical policies, employees are expected to disclose any conflicts of interest annually to partner managers or vice presidents assigned to the specific business units. Due to the disclosure of any arising conflicts of interests, many employees in the organization operate firms that compete with Starbucks while others have made direct investment in competitive firms while retaining their employment with Starbucks. The Starbucks Company’s ethical principles prohibits acceptance of any form of entertainment or gifts that may compromise professional judgment or lead to a sense of commitment. The employees should however evaluate the impact of the gift they receive on the organization reputation. However, the policy does not offer a distinctive definition of the gifts that ought to be accepted by the employees and the one’s that they ought to reject. This makes it the responsibility of the employees to decide on what to accept and what to reject, which is purely subjective and prone to abuse. Some traditional gestures such as traditional gift-giving seasons in Japan and Malaysia compromise continuously compromise Starbucks ethical principle that proscribes accepting of gifts and entertainment and open the floodgates for corruption. Conclusion From the above analysis, it is evident that both profit-making organization and non-profit making organizations have different ethical principles that guide their daily business operations. The success of an organization is purely based on the presence and the execution of the existing ethical standards and principles. The YMCA’s operation relies purely on its employees while the Starbucks Company is more focused on the customers’ wellbeing. In general terms, the common challenges for profit making organization such as Starbucks and non-profit making organizations such as YMCA in enforcing ethical standards emanates from the lack of proper laws to oversee the execution of the stipulated ethical principles, complicated reporting procedure and unclear business ethical principles. The creation of effective and realistic policies and avenues for total execution of the existing business ethics principles is important and timely. Moreover, strict ethical standards are necessary to eliminate unwarranted fines, maintain the organizational reputation, improve the community’s living standards and reduce the violation of human rights within the organization. Ethical practices also enables organizations, profit making and nonprofit making to advance the ethical business and to facilitate teamwork and productivity, appropriate execution of business ethical principle and elimination of execution barriers is incredibly appropriate and significant. References Cronbach, L. (2001). Sustainability Entrepreneurship and business ethical practices: Design Principles, Processes, and Paradigms. Cheater 4 Research design: strategy, data, and analysis. Business Journals, 1 (5) 345-347. Enquist, B., Edvardsson, B., & Sebhatu, S. (2009). Social Responsibility and business ethic for Charity or for service Business. The Asian Journal on Quality, 9 (1), 78-120. Ferrell, O., (2010). Business ethics: Ethical decision making and cases. Journal of Business, 23 (76) 1-14 Howard S. (2010). The Starbuck Business ethics and compliances. Journals of business conducts, 12 (23) 1-12. Robinson, D. (2010). Managing ethical dilemmas in non-profit organization. Journals of business, 12 (9) 1-10. Starbucks (2010b) .Our Starbucks Mission. Retrieved September 3, 2012 from: http://www.starbucks.com/about-us/company-information/mission-statement YMCA. (2010). YMCA volunteer business ethic guidelines, YMCA Journals. Retrieved of September 3, 2012 from http://www.quickscores.com/downloads/johnsonymca_Volunteer_Guidelines.pdf YMCA. (2010). Code of ethics: YMCA of greater Richmond. Retrieved September 3, 2012 from www.ymcarichmond.org/WorkArea/linkit.aspx?LinkIdentifier=id... Read More