Organizational Ethics - Term Paper Example

Introductions The organizational ethics is the way that individuals from different backgrounds and varied interest refer to the organization. The way the organization responds to its internal and external stimuli is perceived as the ethics of the organization. The ethics in an organization is however dealt from two varied point of approaches like Individualistic approach and the communal or group or segment based approach. Thus it can be said that the Organizational ethics is the value that the employees, stakeholders and other entities given to it irrespective of the regulatory laws. One example of the US legislation of FCPA Act (Foreign Trade Practice Act) restricts the US business to perform any illegal act of bribery or such illegal processes both in domestic and international markets. Nevertheless, the organizations that fail to impose few business ethics and practices fail to have a good perception in the market irrespective of the legal positions. The essay would view the Organizational Ethics from a business perspective and assess the role of stakeholders in developing and maintaining them. Organizational Ethics Organizations focus upon building a set of ethical practices in respect to its employees and community that it operates in. Velasquez (1982) suggested that it has been observed in the market that the organizations those follow ethical practices achieves higher sales and increases the market stability by retaining the talents and attracting new skilled competent employees. The human capital result in building an atmosphere within the business that practices the culture of ethics in its processes. Soe.syr.edu (2014) observed the basic elements of ethical practices and creates a culture by introducing the following: -A Written code of conduct - Ethics training for executives, managers and stakeholders - Supervision over practice of ethical behavior - Feedback collection from consumers and stakeholders to oversee the ethical practices. Build upon the former the seven elements of the ethical organization follows the elements in its folds to build the bedrock for a strong ethical process and practice (Matthews, 2014). Respect: The mutual respect of the business stakeholders with the business and its surroundings is the key to this phase. Therefore an ethical business builds upon the suppliers and stakeholder’s association with other ethical people and organization to keep its image in public clean. Honor: Castro (1994) suggested that the people are the fundamental part of good ethical practice and are ambassadors of the business to its external environment to exemplify the organizational ethical backgrounds. The mutual honor between business and its stakeholders is a strong bed for ethical conduct development. Integrity: The integrity is the virtue of performance as promised. Therefore, the mutual level of trust between Organization and the employees needs to be high so that both of them practices the ethical norms, eventually enhancing organizational ethics. Customer Focus: A customer focus is the key to an organization’s survival. Provision of services is the key to a business’s ethical practices (Boyle, 2001). Unethical practices with consumers not only harm the Business-Consumer relations but the overall impression of the brand gets tarnished. Result Oriented Process: The organization works towards the benchmarking of the ethical practices in the operations and efforts so that the present and future procedures maintains the same in its standard operational processes. Risk Taking: Moon (2001) suggested that good business encourages the employees to take calculated risks in the operational processes. These actions are done to motivate employees to innovate and introduce new processes. However, it is of primary concern to the business to see that the risks are not taken in an arbitrary fashion and few business rewards the employees to innovate and make changes to make the processes better. Therefore the balance of risks and its fallout is to be noted at all times. Passion and Persistence: A passion for ethical practice and persistence in following the ethical norms as set by the business. Sticking to the set of values and ethical norms are the key to a business’s stability. Therefore the internal processes and its actual outputs would suggest how ethical the behavior is for a business is and their attitudes towards the ethical processes. Model of Ethical Behavior in Business The business ethics shows the philosophy for a business which aims in determining the fundamental processes of the company. Thus the way the business develops its relations and partners with various stakeholders, employees, suppliers shows the ethical and moral self of a business. Phillips (2003) suggested that in developed economy the most commonly found unethical practices are tax avoidance, corruption and bribery. Thus in every sphere the ethics is integrated by a business and standardized them in its operations and assess the moral and ethical practices to see that there is no gap. Intellectual property, labor laws, international business practices are all part of the ethical practices that the business needs to follow. Matthews (2014) argues that the ethical and moral practices should permeate into an organization to embrace all from top management to employees and stakeholders to see both long term and short term growth. For long term and short term gains the business highlights on both long and short term growth. The stakeholders are the people upon whom the business counts to exist. The consumers, employees, investors, suppliers, trade unions like entities those are in touch with the business in its functions and operations. The business in its association with its stakeholders gives out a very strong message of the kind of ethical and moral practice they indulge in (Paine, 2000). The critical components of business deliveries are determined by the stakeholders therefore the views of the stakeholders have a direct impact upon business functions and ethical practices. Thus the way the outsiders identifies a business on ethical grounds are build upon the stakeholder’s choices that business makes. It has a direct effect on the business and its performance in the both long and short term. Hence understanding stakeholders or and developing best of ethical practice is an utmost necessity for business. The Maslow’s Hierarchy model suggests the theory of Psychology as proposed by Abraham Maslow in 1943. The Maslow’s Hierarch of Need Model (Source: Chang & Hsiao, 2006, pp. 378) The model as above in the shape of a pyramid shows the very basic needs of personnel in the lower strata of the pyramid with ascending order of self actualization on top. The needs of a person is explicitly demonstrated in each of the strata where the basic physiological needs of rest, food, shelter forms the basic need for a personnel at the bottom. As and how the relationship of the business develops with the employees in a long term model is well demonstrated by the Maslow’s model with increasing deficiency needs. The employees expect the employer to understand the needs of employee and provide them at the work place to demonstrate the employers care and motivate the employees in their performance. Physiological Needs: The need for food, shelter, those needed for human survival or the basic needs are represented in the lowest strata. Without the fulfillment of these needs the other needs do not occur and is the basic need. Safety needs: The need for the business to be able to give the right amount of physical safety at work place is the next step in the Maslow’s model. The next step for the model is to see that the physical, financial, health and well being is adequately taken care of. This makes the personnel feel safe with an organization in the job which in turn develops the belongings. Love and Belongingness: The belongingness of an employee with an organization is dependent upon the interpretation of the employee’s connection with the business. This helps the business to develop a certain kind of belongings among the employee’s where the employee identifies his task and job as their identity. Esteem: The fourth level in hierarch model suggest the need to feel respected or to say have self esteem. Rauschenberger et al. (1980) describes it as the need to be valued by others in the peer group. The role of an employee in the organization and the recognition of the same go hand in hand to develop the motivation of the employee to peruse higher goals. Duska (2000) argues that the role of the hierarchy is interrelated than based upon a strict guideline. Thus the perceived esteem or recognition is the motivator for an employee to give the best output for business. Self Actualization (Self transcendence): The highest level of the model that depicts the value of personnel in business in accordance to the self actualization. The way that the employee values themselves at their job and therefore the desire to give the best, employee potential gets exposed in the role that they play. However, the counter argument as presented by Hofstede suggest that the model is ego centric and have little space to differentiate between social and individual needs raised in different societies based out different social ideologies. Nevertheless, the organizations find it a suitable model to build upon the hierarchy of need for employees working within. This model suggests the need for personnel from business and the business in return wants to achieve the best ethical and moral practices by providing the same to employees. Ethical decisions are made in an organization based upon the steps buy step approach (Brown, 2005). The problem needs identification along with the reasons that causes the problem. The ethical guidelines are then reviewed along with relevant laws and regulations and then consultation from competent authority is asked for. The courses of action along with a planning for implementation are then made with the probable consequences and thus settle for the best course of action. The ethical decision making for the best consequences outcome is a very critical business decision making process that needs to have consequences as desired. Conclusions The ethics and practices of a business are determined by the association it keeps with its stakeholders like suppliers and the kind of practices it implements in process. The way the business portrays its ethical and moral outlook to the audience or consumers gives the idea of the role of ethics in business. The long term stability and revenue are dependent upon the practices that the business undertakes and communicates to the audience outside business. The role of people in business is key to the ethical guidelines implementation thus the motivation of each individual in business plays a huge role in it. References Boyle, P. (2001). Organizational ethics in health care. San Francisco: Jossey-Bass. Brown, M. (2005). Corporate integrity. New York: Cambridge University Press. Castro, B. (1994). Business Ethics: Knowing Ourselves. Business Ethics Quarterly, 4(2), 181. Chang, Y. & Hsiao, S. (2006). Quality of Life: Scaling with Maslow’s Need Hierarchy. Gerontology, 52(6), 376-376. Duska, R. (2000). Business Ethics: Oxymoron or Good Business? Business Ethics Quarterly, 10(1), 111. Matthews, J. (2014). Eight Elements of an Ethical Organization. Kauffman - Test. Retrieved 3 February 2015, from http://www.entrepreneurship.org/resource-center/eight-elements-of-an-ethical-organization.aspx Moon, C. (2001). Business ethics. London: Economist. Paine, L. (2000). Does Ethics Pay?. Business Ethics Quarterly, 10(1), 319. doi:10.2307/3857716 Phillips, R. (2003). Stakeholder Theory and Organizational Ethics. San Francisco: Berrett-Koehler Publishers. Rauschenberger, J., Schmitt, N., & Hunter, J. (1980). A Test of the Need Hierarchy Concept by a Markov Model of Change in Need Strength. Administrative Science Quarterly, 25(4), 654. Soe.syr.edu. (2014). An Ethical Decision-Making Model - School of Education - Syracuse University. Retrieved 3 February 2015, from http://soe.syr.edu/academic/counseling_and_human_services/modules/Common_Ethical_Issues/ethical_decision_making_model.aspx Velasquez, M. (1982). Business ethics. Englewood Cliffs, N.J.: Prentice-Hall. Read More