Organizational and Business Ethics Imperative - Essay Example

ORGANISATIONAL AND BUSINESS ETHICS IMPERATIVE By Name Course Instructor Institution City/State Date Organisational and Business Ethics Imperative Introduction Business ethics as mentioned by Velentzas and Broni (2010, p. 795) is a system of ethical value and principles utilised in the business world. Business ethics has turned out to be a very flexible term with diverse aspects and offers guiding principle for tolerable behaviour within the organisations their daily operations and strategy formulation. As it will be evidenced in the essay, an organisational and business ethical approach has turned out to be crucial not just for positive corporate image, but also for corporate success. The significance of ethics in the organisation and business is global as well as superlative. According to Salehi et al. (2012, p.1), new issues and trends come about every day and consequently, may generate key burden to end users and organisation itself. These days, the need for suitable moral behaviour in the organisations according to Salehi et al. (2012, p.1) has turned out to be critical so as to steer clear of possible lawsuits. Evidently, corporate misleading and malfeasance practices have impacted how scores of organisations such as Enron are perceived by the public. Empirical evidence according to Alshammari et al. (2015, p.108) exhibits the increasing number of business excellence in the current business world, which is brought about by leadership competencies. Basically, the ethical leadership frameworks exemplify the desire for engaging the psychological empowerment precincts pertaining to influencing the employees’ moral identity as well as the performance of the organisation. In the current business environment, scores of businesses have re-examined their strategic acumen through the development of guidance suitable for initiating ethical leadership foundations for business profitability and efficiency. The essay identifies key ethics values and principles that need to be considered within the organisational and business context and discusses the role that corporate responsibility (negative and affirmative), codes of conduct, corporate ethics programmes and organisational culture play in ethical organisational and business practice. Discussion There are a number of key ethics values and principles that must be taken into account within the organisational and business context: First, honesty, whereby business must be truthful and honest and in each of their dealings, and should not by any means intentionally deceive or mislead others through selective omissions, overstatements, misrepresentations, or other means. Second, integrity is a key ethical principle that needs all entities in the organisation to exhibit personal integrity in everything they do. Specifically, organisational leaders and employees must be upright, honourable and principled and should not sacrifice be unscrupulous or hypocritical. Third, trustworthiness, wherein information supplied at organisational level must be factual and with no false impressions. In this case, leaders should not interpret agreements in an unjustly legalistic and technical manner so as to justify non-compliance or generate rationalisations for not fulfilling their commitments. Fourth, law abiding; in this case, organisations must adhere to existing rules, regulations and laws associated with their business activities. Besides that, the organisation must be committed to excellence by continually making an effort to improve their ability in every area of responsibility. Leadership is another ethical value that must be considered bearing in mind that most leaders fail to be ethical role models through their own conduct. As argued by Mishra and Sharma (2010, p.60), the values, beliefs and principles of the right and wrong typify the basis of organisational behaviour; thus, creating the foundation through which leaders can positively influence workers to realise the organisational goals. Ethical leadership as defined by Mishra and Sharma (2010, p.60) is the process whereby workers are influenced through beliefs, principles and values, which expansively border on the recognised organisational behaviours’ norms. Basically, ethics management at in the place of work is concerned with how the ethics, values as well as moral principles are crucial to effective decision making. Whereas it is naive to believe that ethical behaviour in the organisation may be altered through moral principles, Mishra and Sharma (2010, p.60) posit that it is also ingenious to think that organisational ethics just materialises and nothing can be done with regard to it. Basically, the clear fundamentals of the corporate ethics programme consist of the things that a business organisation believe in along with the efforts made in directly communicating these principles. As mentioned by Limentani (1999, p.397), the content of codes as well as general principles epitomizes values and concepts capable of setting the overall ethical approach and character for the organisation. The significance of creating ethical codes lies in distinguishing their possible value in defining the ethical attitudes as well as ethical environment, which employees share. Ethical clause and principles are important because they highlight the existing ethical issues and can offer answers to different ethical problems experienced day-to-day business and organisation practices. Whereas a number of companies have failed to consider key ethical values and principles, others have achieved a competitive edge after they established strong credentials in this field. For example, McDonald has heavily invested in activities intended to relate it with environmental and ethical awareness in attempt to rebuild its brand as well as to overcome negative publicity that have persisted for decades. Imperatively, firms that are sustainable and successful try to integrate ethical values and principle in every aspect of their organisational strategy. The role of corporate responsibility as observed by Carroll and Shabana (2010, p.101) include: Reducing risk and cost; creating competitive advantage; strengthening reputation as well as legitimacy; and generating win–win situations. With regard to reduction of risk and cost, corporate responsibility facilitates a company to elude strict regulation and achieve tax benefits. Besides that, a company can reduce the risk of stakeholders’ opposition through corporate responsibility activities. Furthermore, corporate responsibility activities can facilitate a company strengthen its reputation as well as legitimacy through proving its ability to meet its stakeholders’ competing needs and simultaneously operate cost-effectively. As mentioned by Phillips et al. (2015, p.5), moral self-licensing leaders may utilise corporate responsibility as a means of improving their individual reputation. Moral self-licensing as defined by Phillips et al. (2015, p.5) is the non-conscious way through which thinking and behaving ethically makes persons start worrying less concerning the implication of being unethical in the future. This can be evidenced by Enron, a company that participated in corporate responsibility before its fraudulent acts. In spite of its corporate responsibility activities, the leaders of Enron participated in damaging fraudulent behaviours that resulted to the fall of the company. Enron shareholders lost nearly 11 billion US dollars in unethical activities such as the surreptitious accounting scam, which resulted to a drop in stock price from almost 100 dollars per share to 1 dollar in December 2001 (Phillips et al., 2015, p.9). This case proves that corporations can utilise previous corporate responsible acts so as to rationalize future immoral acts. Code of conduct is crucially needed by all business considering that ethics’ infringements may land the company in unforgiving position with government authorities, employees as well as other organisations. Code of conduct outlines management as well as other workers’ behaviour expectations, but the codes cannot prevent fraud or inappropriate behaviour. Rather, they offer workers with ethical as well as legal standards that impact their commitment and performance. Code of conduct role includes making process of decision-making simple at every organisational level so as to lessen uncertainty. Basically, at organisational level the codes of conduct normally manage highly definite issues that are often associated with trends and experiences in the organisation. Undeniably, ethical considerations are crucial in contemporary business environment; therefore, companies that are “smart” always ensure their code of conduct is not just important to their employees, but also relevant. In view of this, companies must put ethics training programmes into practice for existing workers as well as new hires so as to improve the efficacy of its code of conduct. Some of the key roles of code of conduct include protecting confidential information of the company, eliminating harassment and discrimination, ensuring adherence to laws, rules and regulations, and facilitating the reporting of code violations as well as concerns. Potentially, a corporate ethics programme as stated by Singh (2006, p.123) has numerous benefits; for instance, ethics programmes may prevent workers’ ethical misconduct, which can damage the company’s reputation. Besides that, ethics programmes at the time of rapid change enable adaptation of the organisation by offering guidelines on how to handle new techniques of carrying out business. Therefore, the corporate ethics programmes offer a constant in a business environment that is continually changing. Furthermore, the corporate ethics programme exhibits to stakeholders the commitment of the company to high ethical standards. In consequence, stakeholders become reassured of the company’s determination of doing what is noble and right. Corporate ethics programmes also indicate to shareholders and stakeholders that the company is determined to protect them from scandals that result in loss of money. Corporate ethics programme can help a company avoid possible fines because they are able to adhere to existing laws that govern their operation. Inability to adhere to such standards may be costly in terms of brand image resources, time as well as customer and employee loyalty. Therefore, a strong corporate ethics programme may reduce the likelihood of fines attributed to illegal, fraudulent, wrongful, or biased activities. Corporate ethics programme offer the needed tools to make sure that ethical decisions are made by all employees. In consequence, this reduces the company's vulnerability to misdemeanours as well as the damage it can bring to brand image profitability as well as the focus of the company’s management. The organisational culture has a deep impact on the employees’ ethical behaviour; therefore, employees are encouraged to behave ethically and responsibly by positive corporate culture leading to a worker empowerment, team collaboration as well as satisfaction. However, negative organisational cultures promote immoral/unethical behaviour resulting in numerous problems. When employees are rewarded by organisational culture for pursuing individual advantage instead of concentrating on improving the overall performance of the organisation, the employees are likely to go beyond the ethical boundaries so as to be successful. For instance, if top performers are rewarded devoid of assessing how their results were achieved, then a number of workers can utilise unethical means to outsmart their rivals. Contrary, if the organisational culture model ethical behaviour for workers and where only good behaviours are rewarded, it will result in ethical behaviour that helps all and sundry become successful and boost business performance and productivity. According to Mihelič et al. (2010, p.32), leadership indicates a connection between leaders as well as their followers in an organisational and situational context. Basically, ethical leadership is perceived a crucial aspect of the organisation’s reputation management within the external setting. The moral health of any organisation relies on the leader’s standards. For this reason, the key responsibilities of leaders include: ensuring that ethical decisions have been made and developing an organisational environment wherein the conduct of ethical follower is fostered. For a leader to lead ethically, he must know what is right and wrong and be ready to set an example to his/her followers concerning the wrongness or rightness of certain actions. Alshammari et al. (2015, p.111) argue that the principles of value ethics’ practical implication rests squarely on the leader ability to create strategic element of early ethical maturity capable of impacting their followers to facilitate them pursue organisational performance competence as well as success. Ethical leadership can be improved by adopting standard operating procedures as well as effective business codes of conduct so as to codify employees’ behaviour in the organisation (Oates & Dalmau, 2013, p.26). Conclusion In conclusion, it has been argued that even though being ethical can save an organisation from some public relations and legal nightmares, business ethics is as well costly. As evidenced in the essay, a company that is morally responsible has to focus on environmental impact, integrity, honesty as well as abide by the existing laws, rules and regulations. Undeniably, leadership is crucial in establishing whether the organisation can successfully integrate ethics into strategy. Besides that, only dynamic as well as effective leadership may set an organisational culture, which averts possible reputational damage due to immoral and unprincipled behaviour. Ethical leadership as mentioned in the essay can modify the risks posed by ethical issues into business opportunities. In view of this, ethical leadership reflects the organisational behaviour, culture and leadership dimensions are reflected by ethical leadership, whose key role is leading the company through ethical decision making so as to integrally influence the employees’ interactions and attitudes. References Alshammari, A., Almutairi, N.N. & Thuwaini, S.F., 2015. Ethical Leadership: The Effect on Employees. International Journal of Business and Management, vol. 10, no. 3, pp.108-16. Carroll, A.B. & Shabana, K.M., 2010. The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice. International Journal of Management Reviews, pp.85-105. Limentani, A.E., 1999. The role of ethical principles in health care and the implications for ethical codes. Journal ofMedical Ethics, vol. 25, pp.394-98. Mihelič, K.K., Lipičnik, B. & Tekavčič, M., 2010. Ethical Leadership. International Journal of Management & Information Systems, vol. 14, no. 5, pp.31-42. Mishra, N. & Sharma, G., 2010. Ethical Organisation and Employees. Asian Journal of Management Research, vol. 1 , no. 1, pp.59-80. Oates, V. & Dalmau, T., 2013. Ethical leadership: a legacy for a stronger future. Performance, vol. 5, no. 2, pp.18-27. Phillips, A.F., Williams, R., Harvey, D.M. & Bosco, S.M., 2015. THE NEGATIVE IMPLICATIONS OF CORPORATE SOCIAL RESPONSIBILITY. Research Paper. Bristol, RI,: Northeast Decision Sciences Institute. Salehi, M., Saeidinia, M. & Aghaei, M., 2012. Business Ethics. International Journal of Scientific and Research Publications, vol. 2, no. 1, pp.1-5. Singh, J.B., 2006. Ethics programmes in Canada’s Largest Corporations. Business and Society Review, vol. 111, no. 2, pp.119–36. Velentzas, J. & Broni, G., 2010. Ethical dimensions in the conduct of business: Business ethics, corporate social responsibility and the law: The ethics in business as a sense of business ethics. In International Conference On Applied Economics., 2010. Read More

In this case, leaders should not interpret agreements in an unjustly legalistic and technical manner so as to justify non-compliance or generate rationalisations for not fulfilling their commitments. Fourth, law abiding; in this case, organisations must adhere to existing rules, regulations and laws associated with their business activities. Besides that, the organisation must be committed to excellence by continually making an effort to improve their ability in every area of responsibility. Leadership is another ethical value that must be considered bearing in mind that most leaders fail to be ethical role models through their own conduct.

As argued by Mishra and Sharma (2010, p.60), the values, beliefs and principles of the right and wrong typify the basis of organisational behaviour; thus, creating the foundation through which leaders can positively influence workers to realise the organisational goals. Ethical leadership as defined by Mishra and Sharma (2010, p.60) is the process whereby workers are influenced through beliefs, principles and values, which expansively border on the recognised organisational behaviours’ norms.

Basically, ethics management at in the place of work is concerned with how the ethics, values as well as moral principles are crucial to effective decision making. Whereas it is naive to believe that ethical behaviour in the organisation may be altered through moral principles, Mishra and Sharma (2010, p.60) posit that it is also ingenious to think that organisational ethics just materialises and nothing can be done with regard to it. Basically, the clear fundamentals of the corporate ethics programme consist of the things that a business organisation believe in along with the efforts made in directly communicating these principles.

As mentioned by Limentani (1999, p.397), the content of codes as well as general principles epitomizes values and concepts capable of setting the overall ethical approach and character for the organisation. The significance of creating ethical codes lies in distinguishing their possible value in defining the ethical attitudes as well as ethical environment, which employees share. Ethical clause and principles are important because they highlight the existing ethical issues and can offer answers to different ethical problems experienced day-to-day business and organisation practices.

Whereas a number of companies have failed to consider key ethical values and principles, others have achieved a competitive edge after they established strong credentials in this field. For example, McDonald has heavily invested in activities intended to relate it with environmental and ethical awareness in attempt to rebuild its brand as well as to overcome negative publicity that have persisted for decades. Imperatively, firms that are sustainable and successful try to integrate ethical values and principle in every aspect of their organisational strategy.

The role of corporate responsibility as observed by Carroll and Shabana (2010, p.101) include: Reducing risk and cost; creating competitive advantage; strengthening reputation as well as legitimacy; and generating win–win situations. With regard to reduction of risk and cost, corporate responsibility facilitates a company to elude strict regulation and achieve tax benefits. Besides that, a company can reduce the risk of stakeholders’ opposition through corporate responsibility activities.

Furthermore, corporate responsibility activities can facilitate a company strengthen its reputation as well as legitimacy through proving its ability to meet its stakeholders’ competing needs and simultaneously operate cost-effectively. As mentioned by Phillips et al. (2015, p.5), moral self-licensing leaders may utilise corporate responsibility as a means of improving their individual reputation. Moral self-licensing as defined by Phillips et al. (2015, p.5) is the non-conscious way through which thinking and behaving ethically makes persons start worrying less concerning the implication of being unethical in the future.

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