Education for the Moral Development of Managers - Essay Example

Managing People Organizational ethics include all those values that an organization gives to its employees and other stakeholders with more or less interference of the government or any regulatory body and its laws. Best practice of ethical principles raises the morale of employees and their satisfaction level, and on the other hand, it also develops positive corporate image and goodwill. Organization’s ethical policies and practices are mutually dependent upon its culture. The purpose of writing this paper is to identify the ethical policies and practices of an organization, its benefits and effects on stakeholders, and how people at the managerial level play their role in developing and implementing organization’s ethical policies and practice. Corporate level managers and executives are facing a lot of pressure from the external forces to maintain their ethical records. External forces may include government, legislative bodies, consumers, and employees etc. The objective of adopting ethical principles and practice is to provide ground for the development of modern ideas of doing work and collaborative efforts for business activities. Traditional concept of doing business aiming higher profit and enrichment of shareholders is no more successive because business ethics are now important aspect that every manager has to deal with (George 1982). Ethical managers believe in the fulfilment of following aspects: Achievement of corporate social responsibility Development of fair trade policies with business partners Ethical leadership, supervision, and control Community development Mutual cooperation (with employees and other stakeholders) Fair production and distribution Environmental protection Communal enterprise Fulfilling social rights, employee empowerment, and work life balance (Crane and Matten 2007). Managers who believe in serving ethical behaviour and practices gain more and achieve higher degree of cooperation and trust from their stakeholders. Adoption of ethical values results in higher revenues due to positive sentiments amongst general public and higher demand from the customers. It develops strong moral as well as financial support from ethical investors, and increases brand awareness and brand recognition. Moreover, ethical behaviour increases employee satisfaction, commitment, and their loyalty towards job and finally, it generates better corporate image and goodwill for the business (Andreasen 2001). On the other hand, managers may also face some drawbacks or disadvantages by adopting ethical policies such as higher costs for promoting corporate image and compliance with the fair trade policies with suppliers without quality compromise. Another disadvantage can be the development of false or wrong expectations among stakeholders. Organizations also lose their freedom to maximize profit. For example, an organization transfers its manufacturing facility to an underdeveloped country for less costly production due to the availability of cheap labour. Practices like child labour, poor work safety, and low wages are acceptable in that country, but all these may not be permissible in organization’s ethical policies and practices, therefore managers and other executives would compromise on profitability giving higher consideration to the values that the company holds for the society it operates in (Andreasen 2001). According to Milton Friedman, “primary and only responsibility of business is to make money” (Duska 2007). This statement can be true to some extent and most of the supporters of this view suggest that self-interest of an organization seeking profit automatically benefits the overall society. It is true that all profitable businesses provide benefits to their shareholders but stakeholders may or may not get their share. Stakeholders basically are those people or groups who directly or indirectly get benefits from organizations. Stakeholder includes shareholders, employees and their families, the community, suppliers, distributors, and customers etc. Today’s manager has to recognize that doing business with more profitability is not the priority, but accomplishment of ethical policies and practice is much more important. Therefore, managers try to achieve the concept of triple bottom line - People, Planet, and Profit (Paetzold 2010) by reporting on ecological, societal, and financial performances of their organizations. Triple bottom line encourages profit making capability along with accomplishing ethical behaviour and sustainable moral practices. As already discussed, there are number of aspects that come under organizational ethics and practice. Managers play a key role in the establishment and fulfilment of ethical values and practices in accordance with the organizational culture. Researchers believe that ethical organizations have high level of connection and trust between employees and management (Treviño and Weaver 2003). Adoption of proper ethical behaviour and practice has become an important need for the global businesses in order to avoid any lawsuits or scandals. Non-ethical behaviour of organizations leads to a negative corporate image and public perception. Therefore, managers try their best to fulfil their corporate social responsibilities and other ethical behaviour needs to avoid financial loss in the short run and develop positive customer perception and support in the long run (Jones and Mathew 2008). Due to the rise in communication technology, businesses have expanded all around the world. Removal of trade barriers and development of business treaties are acting as a catalytic factor to promote and expand business in other geographical areas. Maintaining ethical behaviour and practice in global businesses is too complex and difficult to achieve. Since, multinational companies have their operations in a number of regions and countries; therefore they have to fulfil their CSR and ethical behaviour in accordance with the domestic culture of that country keeping in view the core organizational culture (Homann, Koslowski and Luetge 2007). The protection of human rights, well-being of social community, labour safety, secure production, developing and sustaining social harmony, and environmental conservatism are some of the important factors that multinationals have to cope with while entering into international markets. The ethical conduct of employees and managers has added importance for global organizations. Since core business ethics of an organization cannot be changed it may have to vary from culture to culture (Crane and Matten 2007). Global businesses spend a huge portion of their profit on the problems relating to ethical behaviours. Thus, it can be assumed that the profitability of the company is largely influenced by the ethical dimension of its employees and managers. Therefore, effective development of ethical climate within an organization requires that management properly communicate core ethical behaviour and responsibilities throughout the organization. Managers should conduct training sessions, coaching, and other teaching efforts to properly train and educate their employees regarding ethical responsibilities of the organization. Moreover, there should be an incentive or reward system given to the employees for better ethical behaviour and practice (Homann, Koslowski and Luetge 2007). “Ethics is the moral principle that individuals inject into their decision making process and that helps temper the last outcome to conform to the norms of their society” (Mahdavi 2001). Management of true Global organization operates under strict legal and moral atmosphere in order to communicate ethical values efficiently as well as effectively. Such organizations establish conservative environment to foster ethical behaviour in order to achieve their moral and corporate objectives. Most of the organization faces serious issues regarding communication of ethical values therefore, managers develops certain codes, teaching techniques, and ethical expectations that they clearly communicate and disburse within the organization (Baxter and Rarick 1987). Researches reveal that organizing training sessions and orientation programs are the major sources of communicating ethical values and behaviour to the employees. Handbooks and codes are another useful source of communicating ethical values. It is also found that employees frequently communicate ethical problems with each other instead to their managers and supervisors. Therefore, focus should be given to the direct or face to face communication with employees in order to solve ethical dilemmas proficiently (Kaptein and Schwartz 2008). Moreover, managers should persuade moral awareness in their people and provide care and support regarding ethical practices. Formal training and teaching procedures should be used to strengthen moral behaviour among employees. Before 1970’s, both general public and media criticized business ethics and values. In mid 1980’s, the increasing corruption, arrogance, greed and power, employee dissatisfaction, environmental disturbance, and corporate scandals raised the need of developing moral values and codes that must be obliged and fulfilled by management as well as employees of the organizations. Developing ethical climate is an important tool for the managers to nourish ethical behaviour of employees. They develop strong and comprehensible set of norms to shape up the moral behaviour of their employees (Johnson 2011). Finally, it is concluded that managers play a pivotal role in the development of ethical values and practice in the organization. Organizations that possess higher degree of ethical behaviour develop more loyalty and commitment amongst their clients, employees, and general public. Resultantly, it raises their profits and overall well-being of its stakeholders. Ethical climate of any organization is the shared sets of ethical policies and behaviour that must be adopted and followed by each and every member of the organization. Inefficiency in the ethical climate results in ethical dilemmas which ultimately affect the profitability and corporate image of the organizations. Therefore, the top management plays its key role to cultivate ethical values and practice in order to achieve the broad corporate level objective in accordance with organizational culture and climate. List of References Andreasen, A.R., 2001. Ethics in Social Marketing. Washington D.C, USA: Georgetown University Press. Baxter, G.D. and Rarick, C.A., 1987. Education for the Moral Development of Managers. Journal of Business Ethics, 6(3), pp.243-48. Crane, A. and Matten, D., 2007. Business Ethics. 2nd ed. New York: Oxford University Press. Duska, R.F., 2007. Contemporary Reflections on Business Ethics. Dordrecht, Netherland: Springer. George, R.T., 1982. The Status of Business Ethics: Past and Future. Journal of Business Ethics, 6, pp.201-11. Homann, K., Koslowski, P. and Luetge, C., 2007. Globalisation and Business Ethics. Hampshire, England: Ashgate Publishing, Ltd. Johnson, C.E., 2011. Meeting the Ethical Challenges of Leadership. 4th ed. Washington D.C., USA: Sage Publications. Kaptein, M. and Schwartz, M.S., 2008. The Effectiveness of Business Codes. Journal of Business Ethics, (77), pp.112-27. Mahdavi, I., 2001. International Business Ethics: Strategies and Responsibilities. Journal of Academic and Business Ethics, p.6. Paetzold, K., 2010. Corporate Social Responsibility (CSR). Hamburg, Germany: Diplomica Verlag. Jones, R. G. and Mathew, M., 2008. Organizational Theory, Design, And Change. 5th ed. New Delhi, India: Dorling Kindersley. Treviño, L.K. and Weaver, G.R., 2003. Managing Ethics in Business Organizations. California, USA: Stanford University Press. Read More