The Legal and Ethical Environment of Business - Coursework Example

Phase 4 Individual Project The Legal and Ethical Environment of Business Introduction Corporate ethics refers to the behavior by which a business conforms to its day-to-day dealings with the world. In other terms, it delineates a set of professional ethics which examine moral and ethical problems prevalent in business environments (Trevino, Weaver & Brown 2007). Corporate ethics is applicable to all the aspects of business conduct. Moreover, it is applicable to the conduct of each and every individual in the organization, as well as the entire organization at large. However, more often than not, research and practice of business ethics has typically taken the view-point of top management. Less emphasis is placed on how Lower level managers and employees define ethical issues, think about ethics and resolve ethical issues. Thus, on this premises, this paper seeks to explain how the lower level managers and employees perceive ethics, in comparison with how the top managers perceive ethics. In establishing an ethics program, a bottom-up approach is recommended (Brown, 2005). This entails engaging all the employees in the discussion and thinking about ethics. This makes it easier to implement as everyone in the company may feel that they had an input in deciding about ethics program. As fact, top-down nostrums are less effective in most organizations. They tend to perpetuate even further, the varied perception toward corporate ethics as perceived by the employees and the top management. Nevertheless, senior managers are known to influence the character and the scope of the organization’s corporate ethics program. They are charged with the responsibility of ensuring the integration of the ethics into the day-to-day routine of the organization. In general, senior managers have much to play in the successful implementation and management of ethics in an organization. Thus, their take and perception on ethics matters a lot. Research has evidenced that senior manager in most companies exhibit a more positive perception towards organizational ethics as compared to the lower level managers and employees. On the other hand, lower level managers and employees tend to be more cynical when it comes to business ethics in organizations. Thus, there is a clear contrast in perception towards organizational ethics between the two groups. Even so, many senior managers have proved to be ignorant of the ethical problems and matters affecting their organization. This plays a pivotal role in discouraging ethics as well as perpetuating the differences in perception towards ethics in most organizations. On the other hand, a substantial number of lower level managers and employees perceive ethics programs, mission statements, codes of conducts among other ethics-related programs to be of little help or of no value to them. The employees also believe that the top managers usually are out-of-touch in matters concerning ethics. They believe that the top managers tend to avoid any discussion about ethics. According to Byron (2006), this is attributed to the fact they are too busy for ethical issues or they are just deliberately avoiding responsibility. There is also escalating tendency of cynicism of the lower level employees and the higher level managers. The lower level employees tend to psychologically distance themselves from the top managers in several instances. The positive perception towards organizational ethics as exhibited by senior management has been attributed to various reasons. Their social interaction and their role expectation is one of the reasons. Another reason is the link between the senior mangers identity and that of the organization. In this regards, senior managers usually play a significant role in the establishment of the organization reputation. According to Trevino, Weaver and Brown (2007), they tend to identify themselves strongly with the organization as well as its image. On the contrary, lower level managers and employees are less likely to identify themselves with the organization. Instead, they are more likely to identify themselves with the department or the work group they belong to (Collins, 2009). This implies that, while the lower level managers and employees identify themselves more to the particular department and work-group and show less regard to identifying themselves with the organization, senior managers identify themselves with the entire organization. Business or cooperate ethics is not all about ensuring adherences to the set code of ethics. Instead, it involves establishing trust as an intrinsic part of the company’s culture. This can only be achieved through transparency and open bottom-up dialogues. There is need to invert the traditional prism of how corporate ethics are perceived (Collins, 2009). Top management should be accountable to their employees in ethical matters, and not vice versa. Senior manager should take the initiative of seeking the perception of lower level employees with regards to ethics so that they may be able to have a proper understanding on how the lower level employee perceive ethics within the organization. This could be done through conducting employee surveys with a few questions about the incumbent ethics program. They should promote direct and regular interaction between the low level employees and the senior management on matters regarding ethics. This could be done through reviewing of the organizational structures by making them more interactive and less hierarchical. Thus, on the basis of the above discussion, it can be concluded that, there is a varied perception towards ethics between lower level managers and employees, and the top managers. However, this should not be the case. The establishment and implementation of a corporate ethics program within an organization should be a collective responsibility. For effectiveness, the two groups must interact. The reasons for the development of ethical conduct implementation plan are numerous. First, ethics and ethical practices have become a major indicator for the integrity of the companies. The buyers and dealers not only verify the financial position of the companies but also inquire about the ethical standards. In this regard, following are the main ingredients for the ethical conduct implementation plan. The legal regulations of conducting business overseas: International Business Law World Trade Organization The Hague Convention on the Service Abroad The United Nations Commission on International Trade Law The above mentioned international business related aspects require a smooth working of the international business transactions. They guide, monitor and provide verdicts over the normal international business dealings and disputes as well. After reading and understanding the relevant rules and regulations in the above mentioned areas of the international business, the management of the organization will strictly follow the terms of trade and terms of engagements with the business partners. In this regard, the directors of organization will directly deal, engage, monitor and inspect the international dealings and will be responsible for any violation of the international business rules and regulations. In case of any allegation, the accused shall be required to delegate his or her job responsibilities to any director and shall voluntary step aside on the moral and ethical grounds till the establishment of innocence or guilt. If he or she is found guilty, the management shall terminate his or her employment and he or she will not be given any benefits. In the internal affairs of the organizations, the directors shall not be tolerated to misuse their position for their business or personal advantage. They shall be required to follow the ethical guidelines for the directors. In which, ethical practices pertaining to the directors shall guide their behavior, conduct and communication with the subordinates. The management of the organization is of the view that if the ethics are strictly adhered and enforced at the senior management level, this will send a positive signal to the middle management and they will follow the trend. Moreover, the ethics pertaining to harassment, gender, age, and racial discrimination, favoritism and nepotism shall be strictly applicable to the directors as well. The ethical code of conduct for employees: Harassment Gender discrimination Age discrimination Racial discrimination Nepotism Favoritism Equal and balanced rights Honest communication starts at top and employees follow suit (Wiley and Kowske, 2012).The ethical code of conduct for employees shall define the above mentioned terms. In addition, their types and examples shall also be provided in the code of ethics. The employees are required to understand these terms and should apply them in their office environment and in their dealings with the staff members. The ethical code of conduct for employees shall also consist of the penalties and offences. After the establishment of guilt, the employee will be terminated from employment and other sections of the ethical code will also be applicable. The management strictly disallows and discourages the activities that come within the circle of harassment, discrimination, favoritism and nepotism. The management encourages the employees to discharge their duties with professionalism, dignity and with the adherence of the ethics. The ethical code of conduct for vendors: Regulatory compliance Legal compliance Compliance with the terms of partnership The ethical code of conduct for vendors shall provide ethics relevant for the vendors. In which, the code shall provide some points for the vendors. For example, the vendors shall adhere to their business commitments and on time delivery of goods. If they fail to do so, they shall be given one warning with a penalty. Even if they continue to delay supplying the goods, the contract with the vendor or vendors shall be overlooked or may be terminated, depending on the severity of the situation (Collins, 2009). Distinguishing between right and wrong in business dealings when the action is legal: Intention Outcome of the dealings Ethics may mean different things for different people (Butts & Rich, 2005). It is a legal requirement to publish annual reports but it is unethical to overstate figures either with a slight or major margin. Under such circumstances, it is wrong to distort the original figures and it is right to publish annual reports. Intention and outcome will also highlight a difference between right and wrong. Motivations behind unethical or illegal business operations: Personal motives Economic motives Political motives Racial motives People become unethical when they intend to satisfy their personal interests. And the limit of ethical violations is also hard to determine (Munson, 2002). Personal, economic, racial, economic, or political motives may be encouraging employees to conduct an illegal or unethical business activity. Under such situation, it is an ethical responsibility to establish any of the above mentioned motives before making someone responsible for illegal or unethical business operations. In today’s society there are more women becoming CEO and President of companies than males, because women are beginning to speak up more and gain control of an organization. It’s certainly important to have all employees involved in business events and meetings that will improve the company value and organizational structure. Many women can sometimes have a better influential way of reaching out to people, by understanding their client’s needs and wants. Scandinavian countries are leading the way with the number. As a results researchers show that old way that’s was general based for a male dominant workforce and management team, don’t work with employees and customers from various cultures, race and ethnicity. There are programs that promote minority candidate such as Women in Higher Education, Hispanic Outlook in Higher Education and that is just to name a few. These programs allow people to be able to gain the right and ability to speak their mind and not follow the rules and regulations of the male species, when sometimes the rules only apply to benefit them and not others of the organization. As results, women leaders can be very persuasive and influential when it comes to leading a team and taking on risk. In sum, the conduct of directors is normally applied by the employees. If the directors act upon the ethical codes in total, the ethical environment of the organization will be established. With this belief, the ethical code of conduct is developed to address the root cause of unethical practices in the business organizations. If the directors are discouraged to commit an unethical activity, this will motivate employees to adopt ethical practices in their internal and external business dealings. References Butts, J.B., & Rich, K. (2005). Nursing Ethics: Across the Curriculum and into Practice. London: Jones and Bartlett Publishers. Brown, M. (2005). Corporate integrity: Rethinking organizational ethics and leadership. Cambridge: Cambridge University Press. Byron, W. J.(2006). The power of principles: Ethics for the new corporate culture. New York: Orbis Books. Collins, D. (2009). Essentials of business ethics: Creating an organization of high integrity and superior performance. (1 ed.). New Jersey: Wiley. Munson, C.E. (2002). Handbook of Clinical Social Work Supervision. New York, NY: Haworth Press. Wiley, J., & Kowske, B. (2012). RESPECT: Delivering Results by Giving Employees What They Really Want. California, CA: Jossey-Bass. Trevino, L. K., Weaver, G. R., & Brown, M. E. (2007). Its lovely at the top:hierarchcal level, identities, and perceptions. Business Ethics Quarterly, 41(2), 48-112. Read More