Framework for Ethics - Essay Example

Introduction In contemporary business, as organizational sustainability ideas increases and continue expanding, most stakeholders and shareholders requires their leaders to exercise wisdom. Stakeholders also require leader’s encirclement willingness in difficult choice and foster brilliant personal integrity and strong values. Successfulness of the leader should go in hand with their ability to create openness environment and transparency for them to win stakeholders trust. Business leader can use a number of frameworks to measure their organizational structure and ethical behavior to achieve their performance. The paper will focus on two main frameworks to examine the performance and progress of the business. The frameworks include the Triple Bottom line and Balanced Scorecard models (Ferrell, Fraedrich and Ferrell, 2013, p. 21). The models in addition will analyze characterized components of the systems and expound how organizations corporate ethics enhances business performance. The models will emphasis on how business ethics programs helps in decision making using organization illustration as an example. The corporate culture has to come out clearly. The research should conclude by showing how organizations can measure ethical behavior and structure to maintain stakeholders trust. Effective systems should enable them obtain ethical culture, improve performance output, formulate ethical decision- making and upkeep an environment that nurtures ethical behavior (Boatright, 2009, p9). The models The Triple Bottom line model The improvement of business performances and ethical behaviors requires effective leaders to look for better methods to sustain them. The pressure and measurement demand for social performance has given upswing to accounting, social and ethical auditing and reporting. Corporate leaders have used the Triple Bottom Line model to evaluate on effective framework to ethical auditing system (Environmental Leader, 2013, p. 1). The model emphasizes on environmental, social and financial effects that may affect the corporate in decision- making. Leaders engage their organizations in this model to increase their commitment on social responsibility of the corporate, their sustainability and ethical conduct. The model helps leaders confirm that directives applied and investment support add value to the organization in achieving desired output or outcomes (Coffman and Umemoto, 2010, 1). Most of the leaders believe that for an organization to gain overall success in performance, it must put into consideration the social and environmental values achievements. The organizations must evaluate benefits associated by use of corporate social responsibility programs to make sure that devices incorporated and developed demonstrate their responsibilities to stakeholders. The organization should incorporate rating system to rank the social performance of the company in order for the leader to know where it lies to take measures in improving the performance. A good example for this influential ranking includes the Dow Jones Sustainability index that provides this service of ranking. Another framework adopted by the organization to report the social and sustainability performance progress includes the Global Reporting Initiatives (GRI). Main objective for using GRI focuses on disclosing social, environmental and governance performance of the corporate. Most businesses use GRI in designing standard systems for reporting their nonfinancial outputs in good manner that their recipients can easily comprehend (Environmental Leader, 2013, p. 1). Incorporation of GRI gives the corporate an opportunity for comparisons of organization’s sustainability with those of other companies. The comparisons enables the organization weigh its performance and possibly boost their status in their stakeholder’s eyes. The research shows that the model of Triple Bottom line as provided a framework for the organizations to achieve social, environmental and end economic performance. The corporation that uses this model has gained confidence and support of their stakeholder in the performance of business activities (Coffman and Umemoto, 2010, 1). Example of model application The Prigomia scheme Most organizations employ corporate social responsibility to improve on social and environmental performance of their business. The example of Prigomia firm which commonly known as the largest corporations benefits report annual sales approximately $550 million in a fiscal year. Prigomia firms incorporated this model as it freed them from ramification and litigation resulting from ethical misconduct. The firm conducted business in line with mission statement to build best product, cause no harm, inspire the business and provide possible solutions to environmental crisis. Prigomia firm demonstrates ethical behavior by forming partnership with Argentine ranchers. The main objective involves building sheep-grazing business to provide wool to not only protect but also restore Prigomia grasslands region. The practice of this business shows business decision in financial, environmental, social components that affect stakeholders (Boatright, 2009, p9). Balanced scorecard model Most leaders need their corporations to experience longevity and success of business performance as they nurture climate, which initiate ethical decision- making. Stakeholders also feel confidence when the organization they work with does not cause harm or engage in ethical misconduct or fraud. The leaders can measure the performance and organizational behavior by incorporating model such a balanced scorecard. The model helps in translating organization’s strategies and visions into a measurable performance coherent set. The model involves the following components customer knowledge, internal business processes, financial measures and growth and learning. The main objectives for incorporating this model involve creating balance between long-term and short-term objectives, control performance to achieve outcome and monitor fact-based objectives. The model also provided accurate methods for achieving organization goals (Kaplan and Norton, 2007, 1). Balanced scorecard model states the mission and strategy of an organization in comprehensive manner to measure performance and provide strategic framework. The achievement of performance requires the incorporation of devices to track financial report and monitor the organizational growth progress capability. The model focuses on elements that contribute to performance of the organization and the outcomes. The elements include consumer, internal devices, market and financial (Niven, 2010, p.3). Example applications for the model Shatter Company Most corporations embrace the balanced scorecard model as the concept of its application become known by people. A good example of such corporation includes shatter company Corporation that operates under balanced scorecard framework. Shatter Company comprises a manufacturer company that specializes in production of plastic shatter- resistant lamps used in consumer products and food processing as well as packaging industries. The CEO of the organization adopts the model to emphasis on the performance of the business. Training on balance scorecard model undertake a very crucial part in the organization to ensure that the trainee acquire the knowledge of using the model. The organization has discovered how they could become successful if they implement the system model (Kaplan and Norton, 2007, 1). Organization can measure the performance of strategies implemented and monitor their operations to obtain large organizational outcomes. Although organization face challenges while making transition to balanced scorecard model, the results obtained has benefited the corporation in management and measurement of business performance. Corporation can incorporate strategic initiatives to help them score a greater height in business progress. As the corporation becoming balanced scorecard organization, it has enabled the optimization of business system, increased product development and enhanced management behavior (Balanced Scorecard Institute, 2015, 1). Conclusion In conclusion, for corporate social responsibility to add value, organizations have to engage in seeking for the benefits that corporations claim to have. Shifting of companies’ framework and practices continues to increase from industrial age and transits to conform to revolutionary age for information competition. The search for informational age climate necessitates new capability in order for organizations to achieve and gain competitive success. The best results from finding research can become effective if ethical models for measuring organization ethical behavior and structure leads to adoption. Leaders encouraging the adoption of the model will enable them detect and avoid misconduct or fraud in measuring the performance of the business. Model use enables the stakeholders gain or acquires trust for their leaders that guide them on their performance in improving success of the organization. The organization also obtains a comparisons framework for their performance with other organizations. This enables the organizations to evaluate their strength and weakness in order for them to improve on performance and gain competitive advantage. References Amazon. September 1, 1996. The Balanced Scorecard: Translating Strategy into Action. Web. April 3, 2015. Retrieved from http://www.amazon.com/The-Balanced-Scorecard-Translating-Strategy/dp/0875846513 Balanced Scorecard Institute. 2015. April 2, 2015. Balanced Scorecard Basics. Web. April 3, 2015. Retrieved from http://balancedscorecard.org/Resources/About-the-Balanced-Scorecard Boatright, J. 2009. Ethics and the Conduct of Business. Upper Saddle River: Pearson Education, 2009 Coffman, M., & Umemoto, K. (2010). The triple-bottom-line: framing of trade-offs in sustainability planning practice. Environment, Development & Sustainability, 12(5), 597-610. doi:10.1007/s10668-009-9213-4 Environmental Leader. May 1, 2013. Companies increasingly pursue triple bottom line. Web. April 3, 2015. Retrieved from http://www.environmentalleader.com/2013/05/01/companies-increasingly-pursue-triple-bottom-line/ Ferrell, O., Fraedrich, J & Ferrell. 2013. Business ethics and social responsibility. Mason: Cengage Learning, 2013 Niven, Paul R.. 2010. Balanced scorecard step-by-step: Maximizing performance and maintaining results. Hoboken: John Wiley and Sons, 2010 Kaplan, Robert S. and Norton, David P. July 1, 2007. Using the Balanced Scorecard as a Strategic Management System. April 3, 2015. Web. Retrieved from https://hbr.org/2007/07/using-the-balanced-scorecard-as-a-strategic-management-system Read More