Ethics and Social Responsibility in Project Management - Literature review Example

Ethics and Social Responsibility in Project Management Number Section A The essay will explorethe importance of ethics codes and social responsibility to project management. The discussion will involve how the two values contribute in the social acceptance of project outcomes and in the handling of various important assets in project management such as human resources and the equipment. Various cost-benefits which are usually associated with enforcing ethics codes and social responsibility in project management will also be explored. In addition the paper will examine how a socially responsible and ethical project management achieves primary business interests - profitability. Key words: ethics, ethics codes, procurement, project management, social responsibility, human resource. Introduction Project management often encounters challenges which cannot be handled easily by knowledge or concepts obtained from formal education. These kinds of challenges are normally not technical in nature; rather they usually tend to be moral or relating to resolving human-business conflicts that often arise from the course of project management. As such, the satisfactory response is often contentious and may resolve one set of a situation and leave another hanging precariously (Shafer, 2015). The Code of Ethics and Social Responsibility help to resolve these challenging issues by availing ready answers that are satisfactory to most of the parties. Ethics codes and social responsibility offer effective project managers the opportunity to consult their past experiences, summon their moral and ethical duties, and occasionally the prevailing market regulations in order to arrive at satisfactory responses which do not unfairly jeopardize the legitimate interests of a party. In many working environments where project management takes place, for example, a project management team usually feels the heat of the prevalent cases of ambiguity and conflicts between market regulations and internal ethics codes in the way business operations should be conducted (de Colle, Henriques, & Sarasvathy, 2014). Laws and government policies requiring project managers to support social causes are normally in conflict with project goals of profitability and minimization of all expenditures. However, with elaborate codes of ethics and social responsibility, the ideal project manager would embrace morally consistent actions when handling issues relating to its workforce, the environment and other social issues such as poverty facing the host society. Owing to the conflict between short-term business interests and the general society interests in project management, project managers face ethical dilemmas. The primary challenge involves strategic deployment of limited company assets to achieve company objectives; ethical treatment of the human resources and the society often at a higher cost in order to avoid equally costly HR implications; and offering material support for social support programs, which usually cuts into the profit but improves the company’s long-term reputation (de Colle, Henriques, & Sarasvathy, 2014). In such dilemmas, Shafer (2015) said a clear code of ethics and social responsibility criteria balancing the interests of all parties would make effective project management. Despite the advantages of ethics codes and social responsibility causes, de Colle, Henriques and Sarasvathy (2014) suggested that project managers and their respective teams usually face the dilemma of shrinking corporate budgets, and poor or delayed deliverables. By enforcing expensive social responsibility causes and ethics codes, OConnor (2010) said product life cycles would be longer than expected, for instance, due to limited budgets for R&D processes. As such, clear ethical codes and or a social responsibility programs would prompt the project manager to practically tradeoff tight project scope with social responsibility causes in a way that does not jeopardize the achievement of the primary project goals. Conclusion Generally, codes of ethics and social responsibility offer project managers the opportunity to play the corporate citizenship card by treating their workforces and the host community in a humane manner. Both values enable project management to fulfill its moral duty of facilitating the effort of the community to handle its own challenges in order to uplift its general welfare. Part of their impact in project management is evidenced in accomplishing the noble role of effectively producing commodities which the society needs and at affordable price; creating employment opportunities; paying competitive wages; and creating a safe workplace for more effective work. Section B: Ethical issues in HR and Procurement Features that should be included in HR and Procurement plans include: firstly, stating future plans by deciding what resources would be needed by how many staffs, possessing what skills in order to achieve the strategic goals of the organization within a given period of time. Secondly, future plans for balance by weighing the amount of assets and staffs needed in future against the amount of current employees and assets which will remain in the organization’s service should also feature in the plan (de Colle, Henriques, & Sarasvathy, 2014). An effective project manager should allow more time to the HR and Procurement experts to determine the issue because they are better-equipped to handle the issue. Thirdly, recruiting and acquiring of new employees and equipment respectively also forms an important part of HR and Procurement plans. This feature deals with the issue of whether the quantity of assets needed is less than or surpasses the current number for optimum performance. Fourth, an effort towards developing the staffs and upgrading other organizational assets to be in keeping with the new challenges in the market also constitutes HR and Procurement plans (OConnor, 2010). By developing the assets through continuous processes, the project owner would be basically determine how employees would be given additional training or how newly enlisted members would be precepted into the organizational culture and practices for a more seamless delivery of services (Kliem, 2011). Similarly, upgrades of equipment may include exchanging old machines with new ones or expanding the capacity of the existing ones in order to keep responding to expansion programs. By inserting future manpower and equipment requirements in an HR and Procurement plan, the organization can determine easily the prospects of staff demands for every project. This early planning can then limit the problem of having inadequate or excess workforces and or equipment. Secondly, by balancing organizational resources HR and procurement plans contribute towards effective execution of vital functions within the organization (OConnor, 2010). HR and procurement planning provides important and timely data for structuring and implementing functions such as obtaining new staffs and equipment, selection, deployment, promotions or upgrade, layoffs or replacement. It also supports better training as well as developing the staffs to achieve seamless human-machine interactions (de Colle, Henriques, & Sarasvathy, 2014). Thirdly, strategically-targeted HR and Procurement policy limits costs. The planning helps the company to predict and prepare for imbalances in staffs. This, eventually, enhances reduction in the amount of resources that would have been used in training or hiring high value employees. Lastly, prioritizing asset upgrade and development is an international strategy that improves competitiveness of an organization in a wider, international market sphere (Jonasson, & Ingason, 2013). Global operations such as standardization of business operations and cross-cultural recruitments are becoming increasingly common, but with a proper development strategy, international expansion of business would be easier to achieve (Kliem, 2011). This is especially true considering that the organization would have adequate staff to customer ratio; staffs with the relevant training and capacity to champion its interests and gain from a rewarding career. According to Kliem (2011), various issues relating to ethics and social responsibility issues feature in HR and procurement processes by virtue of the significant role played by the unit in the organization. These issues include: infidelity or breach of prevailing laws and internal organizational rules; lack of integrity of the relevant staffs and procedures; partiality and injustice to some parties; lack of transparency in the procurement process; leak of confidential information to some parties; and lack of diligence among the relevant staffs (OConnor, 2010). These ethics issues transcend every aspect of HR of an organization and invoke the need for social responsibility in the form of ethical sourcing of workforces from the host society. If I were confronted, I would resolve the problem by limiting undue influence on procurement, pressing for the enforcement of accountability and social auditing for the success of the procedures. As Shafer (2015) said, ethical HR and procurement is inexorably related to the relevant staffs and the plan. As such, I would help to initiate or implement fair, transparent, and efficient HR policies and procedures as a way to limit the exposure of my organization to costly corruption and fraud. The core of my HR policy and procedures would include: proper job definition, training of staffs, and investigations. First, I would ensure that job descriptions are well drafted into the employment contracts of procurement staffs in order to deter dishonesty among the personnel. Secondly, as Jonasson and Ingason (2013) said, I would ensure that the HR and Procurement staffs have adequate knowledge and training since this would enable them to understand the negative impacts of unethical conduct and choose ethics over them. I would also insist on issuing, on regular basis, booklets, articles and periodicals detailing the reasons and ways of acting ethically to old staffs. For new comers, I would introduce or strengthen induction programs in order to eliminate procurement mistakes or cases of fraud arising from inexperienced staffs. Lastly, I would investigate and bring to book any staffs found who is accused of impropriety. I would achieve proper investigations and accountability by setting up relevant internal rules for carrying out investigations into any alleged or reported cases of fraud or violations of security, including the duty of staffs to report and help with such investigations. I would also keep the staffs aware of criminal offences which they might face for serious acts or omissions; or grounds for punitive action for less serious cases in the cause of their service. Unethical behaviors of an organization which are aimed at preserving its position in the market or ensuring its sustainability may be considered acceptable. This is especially true for an organization that gains reputation or profits by adhering to unethical practices. As such, an organization that is threatened by industrial action, for example, may ethically engage in surveillance of the staffs as a “virtue” that would help its case and most importantly save the organization from collapsing. The case of “risk taking” ignores basic ethics or legal obligation of organizations to employee autonomy and right to picket, but the action may be considered sound in the sense that it meets the utilitarian interests of the employees, suppliers, consumers and the host community, all of who would otherwise be lost if the organization collapsed under the weight of long-drawn picketing, for instance. Madoff Fiasco Madoff is an American businessman who used $5,000 worth of his savings to start up a company. With the assistance of relations he started Madoff Investment Securities, LLC in 1960. His firm attracted heavy investment from rich American citizens including due to immense financial opportunities it provided. The firm became popular for its consistent yearly returns of at least 10% and within two decades of its existence, it was responsible for up to 5% of trading at the New York Stock Exchange. Buoyed by more returns, Madoff was set to issue millions worth of bonus checks prematurely, hence prompting his children to question where he had obtained the money. He then made a confession that part of his company was actually a popular Pyramid scheme. Madoffs two sons reported the issue to federal agencies, prompting his subsequent apprehending and charging with securities fraud in court (Ragothaman, 2014). Madoff also said that the scheme resulted in the loss of $50 billion of his clients’ investment money. During his trial, he pleaded guilty to eleven criminal counts including securities scam, investment adviser scam, mail scam, wire fraud, money laundering, mispresentation of financial records, perjury and false reports to the United States Securities and Exchange Commission (SEC). The magnitude of the crime came to light when detectives and prosecutors discovered that $170 billion was transferred through the main Madoff account since the 1960s, and that prior to his arrest the company’s accounts had $65 billion (Ragothaman, 2014). In mid-2009 Madoff was handed 150 years in prison. The Madoff case presents numerous ethical issues such as prioritizing own profitable gains. Madoff and his relations established and induced participations in the largest pyramid scheme in the US history. After many years in the moral securities and exchange business, he knowingly violated the law and misadvised unsuspecting customers and investors to make risky investments resulting in the loss of their money. I believe it was unethical for Madoff and his kin to defraud investors who had entrusted him with their money. He also repeatedly lied to investigators in order to evade the fraudulent changes facing him in a manner that betrays the ethics of truth and honesty. This implies that what began as an honest business eventually turned into a strategy of stealing from the majority of American investors, hence betraying their utilitarian expectations. If I was part of the Madoff firm and noticed the ethical issues, I would put the interest of the public firs by exploring the internal appeal mechanisms within the organization in an attempt to address the issue before petitioning industry regulators if the former failed. I would begin by objectively gathering sufficient evidence supporting the Ponzi scheme activities. Part of the vital evidence I would seek would include the total amount of money customers had invested in the scheme, cases of corruption or undue influence of clients to make risky investment decisions, sharp rise in the company’s profits over a short period of time without any commensurate investment programs, and inappropriate accounting methods that resulted in the misrepresentation of financial reports and filing of wrong statements with financial regulators. I would then examine whether I can take the issue forward professionally and in my individual capacity. Meanwhile, I would use the evidence to support a compelling report, line up witnesses, and mention the amount of money which the government and the investors would lose as well as emphasize that the ethical action of making the report is really worth it. I believe it would also be important to observe other vital interests including my confidentiality and chances of retaining the job. Above all I would weigh my individual interests of against those of the society and act in the latter’s favor. With the massive tens of billions of dollars in investors’ money on the line, I would proceed with the whistleblowing by approaching the relevant managers of the Ponzi scheme branch of the firm with a view to influencing them to change the shadowy deals for utilitarian benefit of the unsuspecting investors. If they refused to give in, I would petition the US Securities Exchange Commission (SEC) over the issue for action. In conclusion, ethics transcends every aspect of human life. Ethical leadership and decision-making requires of the principals to balance the interests of the parties concerned or affected by the actions and act in the best interests of most people in order to produce maximum happiness. Madoff, for example, failed this ethical test by limiting the benefits of the Ponzi scheme to himself and his close kin, while thousands of investors had their money at risk of loss. Organizations that observe ethics and social responsibility maintain good reputation which is essential for higher sustainability and long-term gains. References de Colle, S., Henriques, A., & Sarasvathy, S., (2014). The Paradox of Corporate Social Responsibility Standards. Journal of Business Ethics, 125(20, 177-191. Jonasson, H.I., & Ingason, H.T., (2013). Project Ethics. New York: Gower Publishing, Ltd. Kliem, R.L., (2011). Ethics and Project Management. Washington, DC: CRC Press. Mitchell, C., (2003). A Short Course in International Business Ethics: Combining Ethics and Profits in Global Business. New York: World Trade Press. OConnor, T.M., (2010). Federal Procurement Ethics: The Complete Legal Guide. New York: Management Concepts Inc. Ragothaman, S.C., (2014). The Madoff Debacle: What are the Lessons? Issues in Accounting Education, 29(1), 271-285. Shafer, W., (2015). Ethical Climate, Social Responsibility, and Earnings Management. Journal of Business Ethics, 126(1), 43-60. Read More