Pumas Corporate Ethical Value - Case Study Example

Analysis of Puma’s Corporate Ethical Value By: Professor: Class: University: City: State: Date of submission: Analysis of Puma’s Corporate Ethical Value Introduction The smooth and efficient working within an institution where there is unethical behaviour relies on the extent of harmonization between the people and institutional values. A healthy fit between the workers and the institution has the ability of producing positive results including commitment and job satisfaction. With the rising number of unethical incidents within business entities, it is becoming vital that researchers focus on studying and developing adequate understanding of the ethical influence on the result of the organization (Aslan & Şendoğdu, 2012, 695). To establish an ethical culture within the institution, institutions need to ensure that the ethical customs tools are effective. Factors that could strengthen the commitment of the employees to the institutional ethical customs include utilization of clear code of conduct, influence of the colleagues, open communication, and proper ethical training. However, when such institutional commitment becomes visible, then there is creation atmosphere encouraging ethical behaviours through various processes: social and work norms. In addition, increment in the ethics of the workers is the major building blocks of ethical framework considering that the positive dealing with employees could contribute in institutional added benefits. It is from such background that the paper aims at analyzing the corporate ethical value for PUMA, which uses a basic Code of Ethics for all its workers, customers, and the suppliers. The company expects that each person including the workers of the affiliated institutions or joint ventures to operations within institutional framework and work within the code (Puma, 2015). Moreover, institutional Codes of Ethics sets out the basic principles for vital areas including anti-corruption and conflict of interest and serves majorly with an aim of raising the level of awareness. Organizational Commitment and Corporate Ethical Values Companies operating globally such as PUMA need to adhere to various regulations and standards depending on the country in which they operate. Irrespective of where PUMA operates, its most important principle is to ensure compliance with the applicable law. Besides its Code of Code, the institutions Code of Ethics prescribes the commitment of PUMA to the ethical and responsible employees and corporate behaviours, which all the employees, affiliate brands, and business partners have to ensure compliance (Ampofo, Mujtaba, Cavico & Tindall, 2011, 125). Even though various predictors of the organizational commitment have undertaken research on the relationship between organizational commitment and corporate ethical values, there is limited research directed towards understanding the significance of institutional ethical values. However, organizational commitment depends significantly and substantively on the perception of the high corporate ethical values; therefore, commitment refers to the institutional outcome of the ethical decision-making. Several theories are used in explaining the existing relationship between the commitment of the institution and corporate ethical values. For instance, the social identity, organizational justice theory, person-organization fit, and cognitive dissonance theory applicable within the company’s corporate ethical value. According to the cognitive dissonance theory, the employees usually tend to exert considerable efforts in minimizing the level of dissonance within the environment that puts in organizational context implying strive and the desire of congruence of the employees and their level of ethical standards and harmonization (Sekhar, 2002, 201). In case there is dissonance or incongruence perception, there would be dissatisfaction and the desire for congruence the ethical standards and institution. Health and Safety Health and safety of the employees is important in ensuring the achievement of the desired outcomes and enhancing the morale of their performance. Through the years, PUMA has managed to keep consistency in its profile on occupational health and safety for all its employees. Moreover, the company provides essential and necessities, which are consistent with the required standards of the countries it operates. However, some of the necessities provided do not keep up to the standards within the safety of the employees. PUMA aims to be Forever Faster and fastest sport brand globally. In line with such objective, the company has able to redefine its global sustainability strategy with the aim of striking a balance the balance between the economic, environmental, and social dimensions of sustainability to achieve the desired sustainable business development (Puma, 2013). With the company’s lifecycle approach that commences from the design of the product, the company is setting a strong sourcing sustainable raw materials and encouraging the suppliers to adopt the Industry Good Practice during its manufacturing process and the Zero Discharge of Hazardous Chemical. As company’s corporate ethical value, PUMA, the vendors, and subcontractors provide the workers with the safe and healthy workplaces and making the necessary efforts in avoiding the damage to the health of the employees. Moreover, the company has ensured that the employees supports its Occupational Health and Safety (OHS) Policy and ensuring that workers follow all the applicable laws and regulation regarding health and safety. For PUMA, safe workplace is of higher priority. Since poor working conditions could result in personal tragedy and financial loss for the business. The company aims at ensuring zero accidents within its operations and the contracted supplier production facilities within the company’s supply chain. Within the company, health and safety is a shared responsibility, which makes is the duty of every worker to report immediately to the manager any health and safety issue within the workplace (Puma, 2013). Furthermore, PUMA encourages the workers to play active role in the identification of the hazards and offering ideas of improving health and safety. The company recognizes that it requires permanent efforts in keeping safe working environment; therefore, there is adequate commitment in improving continuously its performance. It is the responsibility of the OHS committee to monitor the health and safety conditions. Antitrust With the rising level of competition, companies within the sports industry are focusing on unsustainable methods of attracting the customers. However, PUMA emphasizes on trust in building effective relationship with the customers. PUMA contributes to fair competition and refrains from various behavioural activities, which are likely to contravene the applicability of the antitrust laws. Although the antitrust laws and regulations might different from place in wording, the legal systems tend to share the common goal of ensuring that there is fair competition between the market players (Spencer, 2009, 101). Besides, violation of the applicable antitrust laws and regulations could result in significant fines and loss of institutional image reputation and the personality of the employees. It is from such background that the PUMA emphasizes on quality and effective customer relations in a bid to sustainably attract the customers and ensure that the products and services it provides meet specific needs of the customers. To ensure the effective of the company’s Corporate Ethical Value, PUMA has avoided through the years the forbidden actions in the legislations under all the circumstances. PUMA strengthened its antitrust policy through the establishment of the key corporate culture, which communicate the core values, approaches, and beliefs of handling both common and uncommon business situations. All the employees understand the significance of ensuring trust in all the operations of the company (Spencer,2009, 143). Besides, the working with firm grasp of the institutional values tends to make the appropriate choices whenever in any business dilemma. The managers of the company define the ethical business behaviours and major actions affecting the overall mission of the company. However, PUMA offers the employees the opportunity of participating in the development of the organization through collection of the information on the needs of the customers and ensuring that there is adequate trust between the company and the customers. For example, through demonstrating the connection between respectful workplace relationships and the level of turnover, increment in the level of customer satisfaction, and ensuring the existence of lenient return policies, the company assist its employees in understanding the existing connection between the ethical behaviour and corporate success. PUMA also has an ethical workplace policy. In any place there are several shades of gray within the business activities, business entities often define their ethical business values through outlining their clear behaviours, which they consider right, and wrong. Such aims are achievable through ensuring role-playing scenarios including interaction of the customers, disputes of the workers, and negotiations with the various vendors. Gifts and Hospitality Within PUMA’s corporate ethical values, various fragments of gifts and hospitality ensure high level of compliance with ethical codes of the company. In regards to accepting the gifts and hospitality, the company does not allow its employees to accept any gifts or any hospitality that could affect or raise institutional concern on objectivity and integrity of the institution. Although receiving gifts, to some extent, could result in motivation of employees considering that the customers often issues such gifts and hospitality after receiving satisfying services (Puma, 2014). According to the motivational theory, it is vital that at all time the employees experience high level of job satisfaction. PUMA’s code of ethics states that under no circumstance should any of the employees accept a gift or hospitality from the potential customers with stated, obligation, and implied expectations. However, the company only requires that the workers to accept the gifts from PUMA’s business partners if they feel like they could talk openly on such gifts without feeling embarrassed. On offering and granting the gifts and hospitality, the policy of the company is clear. The company does not allow the workers to offer or grant improper advantages to the business partners with aim of acquiring or retaining the business or influencing the organizational decisions. Besides, such principle is applicable in all the business transaction of PUMA. However, to ensure that all the employees comply with the established ethical values, the company established circumstances under which the employees are allowed to offer gift and hospitality (Puma, 2014). The employees are not allowed to offer gifts unless it does not contravene the applicability of the local law; if the offer is in line with the needs of the local customers; high level of appropriateness, and the institution are registered duly with the books of PUMA. Code of Conduct To ensure compliance with the standards of the Fair Labour Association (FLA), PUMA has through the years ensured maintenance of its code of conduct. The company’s code play vital role in setting the standards required from the suppliers; hence, it represents the inherent values of the company’s sourcing chain. With the rising level of workforce and hard economic times, the minors are seeking employment opportunities (Fisher & Lovell, 2006, 196). The company’s code of conduct does not support the employment of the minors; as a result, PUMA defined a minor as anyone under the age 15 years or the minimum age applicable in any state. The company disagrees with child labour. Even though the companies operating in the clothing industry employ children in making the clothing, PUMA holds that such activities violate the rights of children. The practice also ensure that the workplace promote health and safety of the employees and ensure protection and preservation of the environmental condition. There are several methods of motivating the employees. PUMA has a compensation that it considers respectful of the basic needs and all the opportunities as required by the law. All its employees are paid above the minimum wages, which improve their level of commitment in the satisfaction of the business and customer needs. Moreover, respect and equality is a vital code of conduct highly stressed within the company irrespective of the race, sex, creed, social origin, and position. Business entities need to realize the significance of according the employees equal opportunities in a bid to ensure high level of engagement. These activities tend to create a workplace with high level of dignity and respect which in turn eliminate various illegal activities including forced labour, corporal punishment, abuse, and harassment (Ismail, 2015, 152). Although the code of conducts are vital in ensuring the employee act in accordance with the established standards, there is need to allow the workers exercise their rights. PUMA emphasizes on the freedom of association and the right of joining various unions and collective bargaining to ensure that it does not violate the rights of its employees. Ethical Position of the Company With such practices in place, PUMA is an ethical company that not only considers the protection of its employees but also the welfare of the customers. Freedom of association and collective bargain are vital human rights. The company often talks to its suppliers on the freedom of association of their workers; however, there has never been made changes. Despites the inadequate changes in collective agreement, the retail prices of the company’s products have remained the same. The company also has no signs of discrimination, as the brands are willing to pay more to ensure there is better care for the employees. All the workers are treated with respect and taken care of in a bid to increase their level of motivation and job satisfaction. However, the suppliers of the company have not been in a position of showing respect to their employees with PUMA showing commitment to take action for such problem. The workers often work within the acceptable hours, though in some cases there is underpayment. Conclusion The market is becoming highly competitive while retaining effective and efficient employees is becoming difficult. PUMA, through its corporate ethical values, is adhering to various regulations and standards in the countries it operate. The company uses various factors in strengthening the commitment of the employees to the ethical customs of the company including using clear code of conduct, open communication, and ensuring adequate level of employee training. Moreover, the paper also analyzed the Code of Ethics that the company uses to high level of integrity among its customers, employees, and customers. Therefore, its corporate ethical values cuts across different stakeholders as it expects all the affiliations to comply with the required standards. With its health and safety ethics, code of conduct, and gifts and hospitality ethical values, the company has a chance of competing effectively globally. References Ampofo, A., Mujtaba, B., Cavico, F., & Tindall, L. (2011). The Relationship Between Organizational Ethical Culture And The Ethical Behavior Of Employees: A Study Of Accounting And Finance Professionals In The Insurance Industry Of United States. Journal of Business & Economics Research (JBER), 2(9), 122-132. doi:10.19030/jber.v2i9.2915 Aslan, Ş., & Şendoğdu, A. (2012). The Mediating Role of Corporate Social Responsibility in Ethical Leader's Effect on Corporate Ethical Values and Behavior. Procedia - Social and Behavioral Sciences, 58(1), 693-702. doi:10.1016/j.sbspro.2012.09.1047 Fisher, C. M., & Lovell, A. (2006). Business ethics and values: Individual, corporate and international perspectives. Harlow, England: FT Prentice Hall. Ismail, S. (2015). Influence of emotional intelligence, ethical climates, and corporate ethical values on ethical judgment of Malaysian auditors. Asian J Bus Ethics, 4(2), 147-162. doi:10.1007/s13520-015-0047-x Puma. (2013). Handbook for Occupational Health & Safety. Retrieved September 24, 2016, from http://about.puma.com/damfiles/default/sustainability/standards/PUMA-s-handbooks/HS_New_Version_Manual_2013_EN-40de315edd9c88f350d0c6cbe145d65a.pdf Puma. (2014, September 3). Code of Ethics. Retrieved September 24, 2016, from http://about.puma.com/damfiles/default/sustainability/standards/code-of-ethics/PUMA-Group-Code-of-Ethics-e91029e4669959feab7bf6193bc26d54.pdf Puma. (2015). Health & Safety – PUMA Annual Report. Retrieved September 24, 2016, from http://report.puma-annual-report.com/en/company-overview/sustainability/health-safety/ Sekhar, R. C. (2002). Ethical choices in business. New Delhi: Response Books. Spencer, J. (2009). Puma. Macon, GA: Samhain. Read More

Organizational commitment depends significantly and substantively on the perception of the high corporate ethical values; therefore, commitment refers to the institutional outcome of the ethical decision-making.  Several theories are used in explaining the existing relationship between the commitment of the institution and corporate ethical values. For instance, the social identity, organizational justice theory, person-organization fit, and cognitive dissonance theory applicable within the company’s corporate ethical value. According to the cognitive dissonance theory, the employees usually tend to exert considerable efforts in minimizing the level of dissonance within the environment that puts in an organizational context implying strive and the desire of congruence of the employees and their level of ethical standards and harmonization (Sekhar, 2002, 201). In case there is dissonance or incongruence perception, there would be dissatisfaction and the desire for congruence with the ethical standards and institution.

The Health and safety of the employees are important in ensuring the achievement of the desired outcomes and enhancing the morale of their performance. Through the years, PUMA has managed to keep consistency in its profile on occupational health and safety for all its employees. Moreover, the company provides essentials and necessities, which are consistent with the required standards of the countries it operates. However, some of the necessities provided do not keep up to the standards within the safety of the employees. PUMA aims to be Forever Faster and the fastest sports brand globally. In line with such an objective, the company has able to redefine its global sustainability strategy to strike a balance between the economic, environmental, and social dimensions of sustainability to achieve the desired sustainable business development (Puma, 2013). With the company’s lifecycle approach that commences from the design of the product, the company is setting strong sourcing sustainable raw materials and encouraging the suppliers to adopt the Industry Good Practice during its manufacturing process and the Zero Discharge of Hazardous Chemical.

A company’s corporate ethical value, PUMA, the vendors, and subcontractors provide the workers with safe and healthy workplaces and making the necessary efforts in avoiding the damage to the health of the employees. Moreover, the company has ensured that the employees support its Occupational Health and Safety (OHS) Policy and ensuring that workers follow all the applicable laws and regulations regarding health and safety. For PUMA, a safe workplace is of higher priority. Since poor working conditions could result in personal tragedy and financial loss for the business. The company aims at ensuring zero accidents within its operations and the contracted supplier production facilities within the company’s supply chain. Within the company, health and safety are a shared responsibility, which makes it the duty of every worker to report immediately to the manager any health and safety issue within the workplace (Puma, 2013). Furthermore, PUMA encourages the workers to play an active role in the identification of the hazards and offering ideas of improving health and safety. The company recognizes that it requires permanent efforts in keeping a safe working environment; therefore, there is an adequate commitment to improving continuously its performance. It is the responsibility of the OHS committee to monitor the health and safety conditions.

With the rising level of competition, companies within the sports industry are focusing on unsustainable methods of attracting customers. However, PUMA emphasizes trust in building an effective relationship with the customers. PUMA contributes to fair competition and refrains from various behavioral activities, which are likely to contravene the applicability of the antitrust laws.

Although the antitrust laws and regulations might differ from a place in wording, the legal systems tend to share the common goal of ensuring that there is fair competition between the market players (Spencer, 2009, 101).

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