The Role of Business Ethics in Modern Organizations - Essay Example

Reflective Essay: The Role of Business Ethics in Modern Organizations [Name] [Professor Name] [Course] [Date] Content: What did you learn about the role of business ethics in modern organisations? What knowledge, ideas or issues will you take with you as you leave the course? Abstract: Ethical practices are crucial for business success as they portray a significant characteristic of the organization and the stakeholders. This essay is a personal reflection on knowledge accumulated and the ideas discovered on the role of business ethics in modern organizations. It also explores the ideas or issues imparted by the course (Haggis 2002). Keywords: business ethics, organizational ethics, leadership ethics, business ethical practices, corporate social responsibility Introduction Ethics refers to an individual or an organization’s established moral opinion of right and wrong. These moral conventions of right and wrong play a significant role in the decision-making process of an organization. Decisions made in an organization may be made individually or by groups, however, the decisions will always be influenced by the organizational culture. Thus ethics is mutually dependent on organizational culture. In addition, they express the established norms, principles and values of an organization to its stakeholders, such as the customers, employees or the local surrounding community as well as other entities, regardless of government regulations. Throughout the 12 weeks, a number of organizational studies, case studies and theories were examined within the course. The studies ranged from individual employees, teams, the organizational leaders, stakeholders and group interactions as well as the psychological structure underlying each area or task with an organization. In particular, this reflective essay examines the influence of leadership relative to ethical practices within an organization (Haggis 2002). Roles of Ethics in Modern Organizations Organizational ethics include the values, practices and principles an organization applies in overseeing decisions and activities. I was able to make out that ethics are crucial for business success as they portray a significant characteristic of the organization and the stakeholders. Over the 12-week period, CAWs have centered on presenting ethical case studies that have enabled me to learn the successes (such as in the Interface case study) and the failures (such as James Hardie, Challenger and Pinto) related to ethical practices. The resounding theme throughout the course is that that a modern organization will significantly gain a competitive edge depending on its reputation as a result of its corporate governance or business practices. I observed that ethical behavior should be translated in the corporate governance and business practices. Critically, businesses that have gained reputation for dealing honestly and with integrity with their stakeholders – such as shareholders and employees -- are more likely to achieve successes in their areas of operations (Brimmer 2007). Further, I picked out that the significance of business ethics should be demonstrated in the business management practices, such as hiring employees. Within this perspective, the new recruits should be aware of the ethical behaviors so that the behaviors can be replicated. In recounting the roles of ethics in modern organizations, I also noted that organizations that have excellent ethical behavior are often managed well. In return, employees will often feel that they are managed well thus enabling the organization to retain excellent employees as well as cut employee turnover rates (Dimitriades 2007). . However, it is also noted that the significance of ethics to an organization goes beyond the direct relationship between the leaders and the employees as it also includes an organization’s social responsibility to the local community. Indeed this is recognized in Kohlberg’s stages of moral development. Corporate social responsibility and ethical practices can a have significant benefit to an organization. In fact, an organization with enhanced mechanisms that ensures it observes ethical practices in a community can gain a reputation that can be translated into customer loyalty. Business ethics are seen to bring new considerations on how a case is evaluated particularly in organizational decision-making. Therefore, they may attract investors to the company and sustain the company’s share price thus preventing takeovers. On the other hand, unethical practices can dent the reputation of an organization thus making it less attractive to customers, shareholders, as a result leading to declined profitability. Towards this end, I was able to establish that organizations that do not observe integrity are most likely to earn much less profits than expected (Stroud 2002). The ethics used by leaders over the management of the organization may have a significant effect on the loyalty and self-esteem of the employees. Leaders with high ethical standards encourage workers to attain the same level. Ethical leadership can also improve the organization’s reputation within the society thus improving the organization’s business. Ethical behavior among employees within an organization also ensures that the workers execute work with integrity. In addition, employees are able to meet the standards for quality of work which in return improve an organization’s reputation. Overall, the arguments on the role of ethics to a modern business call for the need of ethical reflection or thinking. Ethical thinking implies the ability of individuals within an organization to think critically, recognize practices or norms that have moral content, see beyond personal experiences, address issues from various perspectives, consider the consequences of the decisions made, asses the arguments using various perspectives and finally, make conclusive decisions based on systematic analysis and finally defend viewpoints (Drucker 1999). Links to Learning The term ethics is used invariably to mean set of standards defining the code of right behavior in an organization. Rather than being seen as moral or legal responsibility, I have learnt that ethics should become a priority in the organization. In the modern-day competitive world, even though organizational leaders should stay up to date with rapid technological development given the effects of globalization, they should as well observe the goals, strategies, values, visions and mission of their organization. This calls for authentic leadership as discussed in CAW 11. This kind of leadership aims to ensure that organizational leaders act in genuinely in a way that reflects their own ethical values and standards. For instance, when a leader speaks in his voice rather than parroting that of others, it improves his authority in the eyes of the followers (Gentile, M. 2010). However, at the heart of all these priorities, modern organizations must demonstrate that they have made ethics a priority. Indeed, most case studies examined throughout the course have demonstrated that ethical values should be accorded recognition as the most essential success factor in the 21st century organizations (Badaracco and Webb1995). I recognized that as an organizational priority, ethics will have an impact on the decision-making process as a result achieving organizational culture. However, for this to be attained, the ethical values should be aligned with the vision, mission, values, goals and corporate strategy. From Brown’s (2007) perspective, organizational leaders continue to gain their organizations national spotlight based on the business performance. However, gaining reputations in the modern organizations is conditioned on the extent of the ethical practices of the business leaders. Without doubt, the characters of the business leaders influence their ethical performances at work. Business should behave ethically. A predominant impression created by most study modules demonstrate that businesses are impacted by the society where they operate, hire employees or sell their products and hence should replicate the ethical standards set by the surrounding community. However, a critical argument is that businesses are intended to earn profits, to create community wealth and to offer employments. Other literature however argue that businesses in the modern world should practice (practice ethics and make profits) both although they will always conflict (Vuuren and Goosen 2005). I established that ethical leaders should be guided by ethics and principles. In addition, they are obligated to ensure that ethical behavior is translated throughout the organization. From my personal perspective however, basing on the number of case studies that demonstrated ethical lapses and scandals, it is possible to conclude that ethical leadership is uncommon across the modern organizations (Sargent 2007). Generally, these ethical values are social in nature, thus in my view, the alignment process should center on organizational relationships, for instance between the company and its stakeholders, as a result every employee, customer or shareholder will be treated consistently as a result establishing an ethical culture. In a number of literature examined on business ethics, it is evident that while there is the need to focus on ethics on one hand and on business on the other, there appears to exist a trade-off between making profits and practicing ethics. For instance, excess of one implies less of the other (Brown 2007). Conclusion In conclusion, I learnt that organizations should keep abreast on the crucial need for ethical practices in their cultural framework. From the analysis of the CAW case studies in the last 12 weeks, it is evident that even those organizations that do not fully focus on integrating ethical practices still have a room for improvement. From the outset, organizations must view ethics as a social responsibility that they are obligated to ensure. Next, I perceived that ethics can only find its rightful place within an organization that prioritizes on it through creation of expectations that is of mutual benefit to both the organization’s stakeholders and the business. Lastly, I learnt that the best organizations will often seek to shape their prospects by influencing the organizational culture through commitment to ethical practices. In the end, once an organization creates cultures that are based on ethical values, the local societies or communities can be influenced positively through social responsibility (Dimitriades 2007). References Badaracco, J. & Webb, A. 1995. "Business Ethics: A View From The Trenches." California Management Review, Vol 37 No 2. 8-17 Brown, M.E. 2007, “Misconceptions of Ethical Leadership: How to Avoid Potential Pitfalls” Organizational Dynamics Brimmer, S. 2007. The Role of Ethics in 21st Century Organizations. Leadership Advance Online. (Online) Retrieved from: [http://www.regent.edu/acad/global/publications/lao/issue_11/brimmer.htm] Accessed 5 June 2013 Dimitriades, Z. 2007. "Business Ethics and Corporate Social Responsibility in the e-Economy: A Commentary." Electronic Journal of Business Ethics and Organization Studies, Vol 12, No. 2 Drucker, P. 1999. "Managing Onself." Havard Business Review Gentile, M. 2010. Giving Voices to Values: Brief Introduction. Babson College Haggis, T. 2002, “Exploring the ‘Black Box’ of Process: A comparison of theoretical notions of the ‘adult learner’ with accounts of postgraduate learning experience” Studies in Higher Education 27(2):207-220 Sargent, T. 2007. "Toward Integration in Applied Business Ethics: The Contribution of Humanistic Psychology" Electronic Journal of Business Ethics and Organization Studies. Vol. 12, No. 2 Stroud, S. 2002. Defending Kant’s Ethics in light of the Modern Business Organization. Temple University. Philadelphia Vuuren, L & Goosen, X. 2005. "Institutionalising Ethics in Organisations: The Role Of Mentoring." SA Journal of Human Resource Management, 3 (3), 61-71 Read More