Corporate Code of Ethics and the Reinforcement of Management - Essay Example

CRITICAL REVIEW ON ORGANISATIONAL MANAGEMENT ARTICLES By Location Corporate of Ethics and the Reinforcement of Management Introduction Corporate Code of Ethics is a code that is meant to help employees in determining the difference between right and wrong when undertaking their duties. Such a code regulates how employees behave in a company. In the modern world corporate code of ethics allows employees to take full responsibility of their actions instead of these responsibilities being generalized. Code of ethics helps in maintaining professional relationships, controls the behaviour of people in an organization, and enhances accountability among employees. Helen and Sandstrom J’s “Resisting a Corporate Code of Ethics and the Reinforcement of Management Control” proves the importance and challenges of implementing a corporate code of ethics. Explanation of the research method There were several data collection methods that were used during this research. One of the data collection methods was interviews. They sampled employees from all departments and hierarchical levels to get response from different points of view. The sampling was done in such a way that all the levels of production and all departments were represented in the in this group of selection. The main reason as to why this type of selection was opted for is because the researchers wanted responses with diverse dimensions. The types of questions that were used in these interviews were open questions. Open questions do not limit the interviewees to certain specific responses. The advantages of using interviews include facts such as: they allow deep investigations, they find different opinions and the reason behind these opinions, they give an addition of the human dimension to empirical data, and they allow deep explaining and understanding of statistical data. The researchers also carried out a literature review with the aim of getting a better insight on the code. The materials that were reviewed include the America original code and its two Swedish translations. They also went through the company’s internal magazine, a DVD containing the compliance and ethics training manuals, and the firm’s home page. With the review of such materials, the researchers were able to gather relevant information pertaining to the activities of the company in the present and in the past. Information collected through this method is those that would not have been easily collected through interviews. Discussion of the findings The company used to be a large Swedish based company with a characteristic of being knowledge extensive. The authors realized that the company had a long history in Sweden even though more than two thirds of their products are exported. For there to be a quick overview of the code of work, the parent’s code of the U.S. had to undergo a translation into a Swedish one. With the use of both the original code and the translated one, the researchers had the findings below. It was discovered that the urge of contextualizing the code came as a result of the various business ethics and code of ethics related issues that had been seen in the mother company. An example of these issues is the Enron scandal which forced the parent company to use the code to improve the commitment of employees of lower ranks in order to make sure that those of higher ranks are free from blame. This brought about the necessity for the local management to recontextualizing the code. The local management had totally lost trust of the effectiveness of the original code. This was made necessary because of the fact that the local management had no choice but to implement this code. There were some parts of the original code that did not really fit into the Swedish laws. The code tends to hold employees responsible for the ethical failure of their fellow employee at some point. As a result of this the local management decided against a literal translation of the code, but rewriting them to fit the Swedish environment. After the rewriting the Swedish version was then translated to English then sent back to the USA for approval. There were problems with the approval and the parent company even demanded that the local management has the new code be signed by all the employees in the company. As a result of this conflict the local management and the head of communications decided to adopt a completely new strategy. Under the new strategy, the company decided to do a literal translation of the code with minimal changes to make applicable in the new environment. In order to make the code applicable in the local company, the local management made to arrange for a seminar of all the local employees. The aim of this seminar was to make sure a collective discussion of more general ethical dilemmas took place. A user friendly signing procedure was also set up in order to reduce the likeliness of there being conflicts arising from the process. In order to make the code more acceptable during relabeling, the local management undertook a critical analysis, dag information that would enable them to rework the code into a new version. Without reformulation it will be very hard for the code to be accepted into the organization. Finally, they were even able to get some autonomy when they relabeled the code. Even though the parent company insisted strictly on literal translation, the local management made the risk of having to face legal action if the original code was put into use in Sweden. As a result of this communication, the parent company gave a green light for minimal alteration of the original code (Mamic 2006, p. 122). A common response that was given by a good number of the respondents was that the code was completely American. They believed that when the code was being devolved the focus was on the American business environment and not the Swedish one. Given the legal and cultural differences between the United States of America and Sweden was pointed out to be the main reason as to why the code was unsuitable for the local company. This is known through the fact that many of the respondents had no problem with the content of the code. Most of them pointed out that the problem with the code is that it was written in the American way. Some of the responders also believed that the code was targeting a certain group of people. For instance, a respondent from the department of marketing argued that when individuals follow the marketing strategy that was developed by the management, the junior employees who were involved actively in the marketing process should not be blamed for the failure of the strategy. This further shows just how much it would be hard for the original code to be effectively used in the local company. Most of the respondents were of the opinion that the code was necessary for making sure that ethical standards in the company are maintained. However, they think that the code should have been for specific people in the organization and not generally for everyone. They had the argument that the generalization of the code will benefit other employees while making others suffers for things that they were not in any way involved in. They believe that the code would have had specification according to the different roles and ranks of employees in the company. Some of the respondents also believed that the implementation process was flawed. The critics believe that the implementation is being carried out in a way that the approval of the code going to be almost automatic. On whether the code was used with the company’s policies, most of the respondents agreed that the code were in complete unison with the company’s policies. For instance, the code had no conflict with the company rules and guidelines. This makes it easier for it to be used in the local business organization. The reason as to why the code had no conflict with the company’s company rules and guidelines is because the company rules and guidelines of the local company have allot in common with those of the parent company (Davis, M 2002, P. 87). Given that they were developed by the parent company makes it very hard for there to be any conflict between the code and the company’s company rules and guidelines. Overall assessment As much as it is a good idea to have such a code in a business organization, it is very clear that it is not a walk in on the part. The primary aim of this report was to show how the process of corporate code of ethics and the reinforcement of management can face resistance from the company’s employee. This report advocates such resistance to two major problems. These problems are cultural differences and legal differences. Different countries have different laws that govern business operations. It will be almost impossible to come up with a code that will be universally acceptable in terms of the laws governing businesses (Singh, K 2010, p. 134). On the other hand different people behave different cultures. It is will be unfair expect codes toe culturally universal. All these have been evident in this case. However, these problems can be taken care of. For instance, the code in this case went through some minimal alterations for it to be applicable in Sweden. This shows that it will be practically impossible for a business organization that operates various companies in different countries to have a single code of ethics to govern the conduct of their employees. Stakeholder Theory and Globalisation, the Challenge of Power and Responsibility Introduction Organisational management denotes the integral processes that enable firms and other corporations to establish the ideal protocols through which they achieve their long-range plans and objectives. Ideally, the studies adapted in organisational management deliver knowledge to the society as they set precise resolutions towards the prediction and strategizing practices essential to bar any threats from harming the smooth running of the programs (Jensen, & Meckling 2006, p. 75). The article, Stakeholder Theory and Globalisation: the Challenge of Power and Responsibility, by Tommy Jensen and Johan Sandstrom asserts that globalisation is a barrier to in stakeholder theory. Critical review The two authors devote their study on evaluating Edward Freeman’s stakeholder theory. Since the global business environment asserts stringent barriers towards successful penetration, business theorists perceive that it is important for every organisation to develop a renowned culture that seeks to tame the environmental forces while still changing the present and future threats into opportunities towards success. Jensen and Sandstrom argue out that stakeholders’ theory and the issue of globalisation present challenges towards power and responsibility in organisations. Mainly, the two subjects deter or propel organisations’ chances towards success (Sim 2009, p. 53). The intuitive study derives an understanding that the internal and external environment comprises of potential people with whose beneficial contributions enable corporations’ growth and achievement of the set goals. Arguably, employees represent a vital group of organisations since it is through their performances that corporations are capable of delivering their values to the clientele community. The authors evaluate the contributions of a proper managerial portfolio for global corporations, and the ideal methods and responsibilities that propel businesses to acquire their objectives in every segment of operation (Helin and Sandstrom 2010, p. 90). Accordingly, the study indicates that owners of every corporation at the global platform reassert influences and the business management should always consider their views, needs, and wants. Eventually, Jensen and Sandstrom indicate a Freeman’s theory of stakeholders as contradicting as organisations may fail to establish a theory that conforms to the challenges of globalization (Le Breton-Miller, Miller, & Steier, 2004, p. 80). The authors realize that every organisation requires a stringent code in order to succeed on the global scale. Arguably, it is knowledgeable that Sven and Jensen are critically on the issues of code of ethics, power, and the overall control of multinational corporations. Several data collection methods were used during this research. One of the data collection methods was interviews (McConaughy, Matthews, & Fialko 2011, p. 104). They sampled employees from all departments and hierarchical levels to get response from different points of view. The sampling was done is such a way that all the types of questions that were used in these interviews were open questions. The advantages of using interviews include facts such as: they allow deep investigations, they find different opinions and the reason behind these opinions, they give an addition of the human dimension to empirical data, and they allow deep explaining and understanding of statistical data. The researchers also carried out a literature review with the aim of getting a better insight on the code (Jensen & Sandstrom 2011, p. 82). The materials that were reviewed include the America original code and its two Swedish translations. They also went through the company’s internal magazine, a DVD containing the compliance and ethics training manuals, and the firm’s home page. Outline of the content Tommy Jensen and Johan Sandstrom’s article on stakeholder theory and globalisation implements various issues concerning the practices that managers in big corporations should adhere to in order to succeed in the foreign markets. They argued out on the issues of globalisation as redirecting on establishing a powerful and profound organisational culture. Essentially, the two authors indicate that globalisation is a diverse subject that exposes the stakeholder population to a number of controversial situations, and it is upon this point that the subject of globalisation as a blind spot for the stakeholder fraternity prevails (Lansberg, 2013, p. 92). The artists are contented by the fact that Freeman’s theory of stakeholders, seeks to profess good relations between the organisation and its stakeholders. The authors assert on the issue of globalisation and narration of the rehearsed corporate responsibility methods, and the immense problems that Freeman’s theory presents to the corporate world. Further, the article indicates that power is salient to those people of the organisation that the management fails (McNulty, et al 2012, p. 103). The two authors rehearse on the problems of globalisation as presented through the theories of bureaucracy and hierarchical-structures. For instance, Jensen and Sven highlight on two different cases of Shintech and Shell corporations as they seek to penetrate into different global markets. The article reveals that Shintech met various hindrances in achieving its objectives in Louisiana, U.S.A. Secondly, and the article contests against the proficiency (Sun, Stewart, & Pollard 2010, p. 97). An explanation of the research methods The authors embark on analytical approaches on the researching about the intuitive nature of Freeman’s theories concerning stakeholders (Lee 2006, p. 90). The analytical approaches assert the implementation of the facts concerning stakeholders’ theories, and the challenges that multinational corporations face in the global business environment despite their industries of operation. Jensen and Sven indicate on diverse hindrances that bar Shintech, a Chinese MNC in accessing and operating proficiently in the American market (Sun, Stewart, & Pollard 2011, p. 53). Further, the authors indicate that Shell Corporation meets relative hindrances in the Nigerian oil mining industry. The analytical method enables the two authors to assert that the common theories of shareholders presented by Edward and his colleagues are incapacitating to the modern business culture since the issue of globalisation has served to include other groups of stakeholders in every business. The method has served to the effect of encouraging changes for multinational corporations in evaluating their stakeholders and the exact groups of people to ensure that they will be recognized. However, the subject and study method of acquiring two cases and presenting them in the analysis is deterrence to success since the existing theories seem to be perfect in other businesses. Discussion of the findings Throughout the study, it is realistic that Freeman’s theory of stakeholders presents various challenges to the business fraternity in that the aspect of globalisation seems to be forcing for new changes in every segment of the operation. The study indicates that a Chinese multinational corporation, Shintech targeted to establish a chemical plant in the American region, but met stiff challenges from the local population of Louisiana who argued on the plant’s processing methods as ill to the environment (Singh 2010, p. 09). On the second case, Shell undermined a local Nigerian community who in turn severed a blow to the establishment of the plant (Idowu & Leal 2008, p. 96). Therefore, the study findings are crucial in the recognition of the effects of globalisation and the need to reassess the theories related to stakeholders. The article interrelates towards the subject of globalisation and the imminent changes common within the global culture, which seem to barriers to successful revision of the ethical. The authors presenting the article on the theory of stakeholders assert that the knowledge implemented in the study is crucial to the evaluation of the current theories and their inability to enable organisations to achieve the desired outcomes at the global scale (McNulty, et al 2012, p. 120). Consequently, employees represent a vital group of organisations since it is through their performances that corporations are capable of delivering their values to the clientele community. Therefore, the articles redefine the necessity of adapting a compromising theory of all groups of stakeholders as the necessary tool of reducing the threat of insufficiency.   Bibliography Davis, M 2002, Profession, code, and ethics, Ashgate, Aldershot. Helin, S and Sandstrom, J 2010, ‘Resisting a Corporate Code of Ethics and the Reinforcement of Management Control’, Journal of Organisation Studies, Vol.31, no 5, pp. 583-604 Idowu, S. O., & Leal Filho, W. 2008. Global Practices of Corporate Social Responsibility. Berlin, Springer Berlin. Jensen T & Sandstrom, J 2011, ‘Stakeholder Theory and Globalisation, the Challenge of Power and Responsibility’, Journal of Organisation Studies, Vol. 32, no 4 pp. 473-488 Jensen, M., & Meckling, O 2006, Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics , 3 (2), 305–378. Lansberg, I 2013, Managing human resources in family firms: The problem of institutional overlap. Organizational Dynamics, Summer, 39–46. Lauterbach, B., & Vaninsky, A 2008, Ownership structure and firm performance: Evidence from Israel. Journal of Management and Governance, 3,189–201. Le Breton-Miller, I., Miller, D., & Steier, L 2004, Toward an integrative model of effective FOB succession. Entrepreneurship Theory and Practice, 28 (4), 305–328. Lee, J 2006, Family firm performance: Further evidence. Family Business Review, 19 (2), 103–114. Mamic, I 2006, Implementing codes of conduct: how businesses manage social performance in global supply chains,ILO, Geneva, Switzerland. McConaughy, D., Matthews, C. H., & Fialko, AS 2011, Founding family controlled firms: Performance, risk, and value. Journal of Small Business Management, 39 (1), 31–50. McNulty, J. J., Yeh, T. D., Schulze, W. S., & Lubatkin, MS 2012, What’s your real cost of capital? Harvard Business Review, 80 (10), 114–121. Sim, S 2009. The carbon footprint wars: what might happen if we retreat from globalization? Edinburgh, Edinburgh University Press. Singh, K 2010, Organizational Behaviour: Text And Cases, Pearson, Chandigarh. Sun, W., Stewart, J., & Pollard, D 2010. Reframing corporate social responsibility lessons from the global financial crisis. Bingley, U.K., Emerald. Sun, W., Stewart, J., & Pollard, D 2011. Corporate governance and the global financial crisis: international perspectives. Cambridge, Cambridge University Press. Read More