Refrace week2-1rem9 - Essay Example

SALEH ALOTHMAN Week 2: Discussion Word Count: This week the topic for discussion was the importance of ethics among top management and how it can impact, both positively or negatively, the stability and growth possibilities of the particular company. Morality in business is a difficult subject for many in management. As defined by Hill and Watkins ( 2007, page 417) Morality refers to thinking patterns followed by actions, which are driven by norms about right versus wrong associated with certain rewards and/or punishments.

They go on to say that there are a variety of factors, both positive and negative, which can have an impact upon a leader’s ethical behavior. They claim that these factors include such things as the particular scenario or context ; the people involved or present; and the perception of freedom to make the ethically correct decision. According to Jennings (2006) it is not a lack of knowledge about ethics in a business setting that is the difficulty, but the fact that leaders in industry find themselves lacking in the necessary moral fiber to cope with the pressures they meet when attempting to do what they really know what is correct.

Beggs and Dean (2007) advocate that in order to deal with this adverse situation business leaders require training in the practice of business ethics in a variety of situations and subsequent the making of relevant decisions. In 1992 Badaracco focused upon four types of morality for leaders in their many faceted lives.:-. Commitment to ethics in private life Commitments to ethics as economic agents, to people such as stakeholders, but also workers who need employment security , and to clients.

Commitments to ethics as company leaders Ethical responsibilities in wider society. In short, a business leader should be bound by an ethical code in whichever of his various roles he is operating. On a similar point Gick (2003) stated that it is a combination of several different factors which influence both the morale and the code of ethics adhered to. He cited the situation of the person, the circumstance in which he finds himself, as well as any shifts in society and culture, as being among factors which could have an impact upon a person’s ethical decision making.

Just think back over the past half century or so and consider how attitudes have altered about such things as apartheid, women’s rights and equal pay for example. Backing this up Kelley and Elle (2003) stated that values held and attitudes, including the perceptions of what is actually happening, are influences upon the cognitive development of an ethical response to a particular situation or problem. According to Reed (1999) people in leadership may look for clarification as to the most appropriate behavior in particular contexts.

A leader may turn towards the most important person he can find who has some association with the particular situation, when both trying to understand the ethics involved ,and also its relevance to decisions to be made. Gick (2003) points out how the ethics involved and the decisions made can depend upon the particular organization and the person’s position in it. These he says have their impact upon the ethical principles adopted by both individuals and the group as a whole. Dang and Mescher (2010) have also described a variety of factors related to the ethical patterns taken up by top management.

It is stressed how important it is that responsible corporate directors understand ethics and its various components. These are similar issues to those discussed by Small (2011). He focuses upon management based upon wisdom and morality, and describes the difficulties corporate directors have in to observing ethics in all areas. They must be bound both by national and international law, as well as the rules of their particular organization. It is possible of course that the legal experts within a company will be responsible for keeping within the letter of the law.

There are however always situations in a company where an ethical framework , rather than a legal one is needed. Dang and Mescher, (2010) point out that the laws do not exist in a moral vacuum. Within corporate governance, ethics must be important. The recent case of Starbucks and their tax liabilities within the United Kingdom is an example of how a perceived lack of ethics can lead to problems and negative reactions from stakeholders and clients ( Escobales and McVeigh (December 2012). Such actions also have an impact upon possible future investors.

When such potential investors have a perception, however rightly or wrongly based, about unethical practices carried out by the board of directors, then trust is lost, and once lost is very hard to re-establish. Ethics has its place within every sort of organization. Kerr (2009) discussed ethics in business schools and also from the point of view of situations where there is an economic and financial crisis. He admits that maintaining ethical standards during critical times not easy, but also feels that the business schools have a responsibility to teach their students to discern right from wrong , especially with regard to the principles and practices of business.

Donovan (2009) expands upon this point, arguing that the business schools not only have a responsibility to teach students how to tell right from wrong, but also to ensure that this is done correctly. This has particular relevance for our present situation and the module recently studied, as we are studying ethics in relation to real workplace problems. Study is related to the practicalities of business life, so that theory can be linked directly to our learning to real life circumstances. This fits in with what Donovan said (2009) about business study students needing a toolkit which would best enable them to understand ethical ideas and how to use them in practical work based situations.

References Badaracco, J.L. (1992) Business ethics: Four spheres of executive responsibility, California Management Review, 34(3), pp. 64-79. Beggs, J. and Dean, K. (2007). Legislated Ethics or Ethics Education? Faculty View in the Post-Enron Era. Journal of Business Ethics, pp. 15-37 Dang, M. and Mescher, B.(2010) Directors and the Ethics Components of their Duties, Macquarie Journal of Business Law, 7 (2010), pp. 1-14 Escobales,R., and McVeigh,T., Starbucks hit by UK Uncut protests as tax row boils over, The Guardian , 8th December 2012, available at http://www.guardian.co.

uk/business/2012/dec/08/starbucks-uk-stores-protests-tax, (accessed 10th December 2012) Donovan, A. (2009) Can Ethics Classes Cure Cheating? How to Fix Business’ Schools, Harvard Business Review, April 14th , pp. 42-46. Gick, Evelyn (2003) Cognitive Theory and Moral Behavior: The Contribution of F. A. Hayek to Business Ethics, Journal of Business Ethics, 45: pp. 149–165 Hill, R. and Watkins, A. (2007) A simulation of moral behavior within marketing exchange relationships, Journal of the Academic Marketing Science, 35 (2007), pp.

417–429 Jennings, M. (2006) In Their Own Words: What We learn About Ethical Lapses and Their Prevention from the Hindsight of Those Who Committed, The Corporate Finance Review, 10(6), pp. 44-47. Kelley, P. C., and Elm, D. R. (2003). The effect of context on moral intensity of ethical issues: Revising Jones’s issue-contingent model, Journal of Business Ethics, 48, pp. 139–154. Kerr, S. (2009) Do Not Blame the Business Schools, How to Fix Business Schools, Harvard Business Review, pp. 20-25. Reed, D. (1999) Three realms of corporate responsibility: Distinguishing legitimacy, morality and ethics, Journal of Business Ethics, 21, pp. 23–35. Small, Michael W. (2011), Developing wisdom and moral duty in management, Journal of Management Development,30 (9) pp.

836 – 846