Ethical Organizational Management

Prepared by

Bashir Jaman

Word Count: 3,004

Ethical Organisational Management

Ethical Organizational Management

Table of Contents

Introduction................................................................................................................................4

TASK 1: Motives to Install New Technology...........................................................................4

Right Thing at Right Time.....................................................................................................4

Definition of Profession.........................................................................................................4

Unity of Command.................................................................................................................5

Commitment from Board of Directors...................................................................................5

Modification Concept.............................................................................................................5

Universality............................................................................................................................5

Communication......................................................................................................................5

Recommendation....................................................................................................................6

Awareness...............................................................................................................................6

Culture....................................................................................................................................6

Religion..................................................................................................................................7

Beliefs.....................................................................................................................................7

Societal Norms.......................................................................................................................7

Image......................................................................................................................................7

Diversity.................................................................................................................................8

Motives to Delay New Installation.........................................................................................8

Abiding by the Law................................................................................................................9

Financial Situation..................................................................................................................9

Imposition of New Regulations..............................................................................................9

Need to Update Regulations...................................................................................................9

Mission Statement................................................................................................................10

Board of Directors................................................................................................................10

Managers..............................................................................................................................10

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Stakeholders.........................................................................................................................10

Ethics of Accounting............................................................................................................10

Ethics of Marketing..............................................................................................................11

Ethics of Human Resource Management.............................................................................11

Ethics of Production.............................................................................................................11

Impact of Updated Regulation on the Region......................................................................11

Accounting Legislations.......................................................................................................12

Diversity Related Legislations.............................................................................................12

Production.............................................................................................................................12

Social Responsiveness..........................................................................................................12

TASK 2: Explanation to the Given Scenarios..........................................................................13

Receiving a Holiday Gift:...................................................................................................13

Sales Expense:.....................................................................................................................13

Conflict of Interest:............................................................................................................13

More Competition:.............................................................................................................14

TASK 3: Critical Evaluation of Ethical and CSR Practices..............................................15

Organisational Approach......................................................................................................15

Values, Beliefs and Ethical Decision Making......................................................................15

Community Orientation........................................................................................................16

Organisational Practices.......................................................................................................16

Value Statement....................................................................................................................16

Corporate Social Responsibility...........................................................................................16

Employment.........................................................................................................................17

Cultural Products and Services.............................................................................................17

Local Adaptation..................................................................................................................17

Conclusion:.............................................................................................................................18

References................................................................................................................................19

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Introduction

Code of conduct is a certain framework that states the way to accomplish a task and such a

framework is commonly called ethical standards or ethical standards in the business

language. Like dress code is a part of code of conduct which is to be followed by the

professionals in an organisation. For instance, doctors have to wear white overcoat at work,

lawyers have to wear black collar coat as part of their outfit. Similarly code of ethics exists

for the behaviour, manners and attitudes of employees (Anand, 2002). This piece of work

will provide reader with different angles related to the topic in the light of case study that has

been provided in order answer a certain set of questions in thorough detail.

TASK 1: Motives to Install New Technology

Jonica Gunson has to maintain certain code of ethics in the company in order to enable the

employees to work in orderly manner. The code of ethics made by an organisation is based

upon certain principles of ethics. Those principles and norms are important for the decision

and policy makers of the organisation to create such a universal code of ethics which is

acceptable to each member of the organisation. Due to following reason the company is

motivated to install new technologies:

Right Thing at Right Time

The concept is about providing convenience to the people and decision makers to have right

decision at the right time so that the organisational objectives may be achieved (Moon et al.,

2001).

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Definition of Profession

The code of ethics clearly states about the nature of the business and it should help to attain

the physical, financial and other resources of the business by giving a returned value to the

society (Biggs et al., 2004).

Unity of Command

In the situation of overlapping interests and workload, the ethical standard demand to follow

the command of law (Anand, 2002).

Commitment from Board of Directors

The ethical standards are made such that they conform, the commitment with board of

directors as the board finally approves or disregards the code of ethics (Mallor et al,. 2007).

Modification Concept

Jonica Gunson keeps flexible code of conduct so the terms can be modified as per the need of

the time and situation and in the given case study the firm needs to raise its ethical standard to

retain its goodwill.

Universality

The code of conduct is made with intention to address environmental and other factors so that

the code may not seem culturally or socially partial (Moon et al. 2001). Thus the company

needs to follow the universal standard for safety and should decide to go for new installation

(Bansal & Kandola, 2003).

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Communication

The code of conduct about the communication in the company for which Jonica Gunson

performs as an environmental compliance manager is stated so miscommunications on any

level shall be avoided. Once the need for the new installation has been triggered and

communicated to the company, then it must be put in action (Murphy, 2011).

Recommendation

The ethical standards of the case study company also mention the norms to recommend the

actions for specific tasks or rewards or to tackle the recurring event.

Awareness

Anand (2002) states that in order to creating awareness about the ethical practices within the

organisation is a must, as it is important concept in the organisational ethics and the

developed code of ethics is circulated and made known to all members of a company. Similar

is the case with the company for which Jonica Gunson works as it in turn has created the

pressure to abide by the environmental safety standards.

There are numerous factors despite the principles of organisational ethics which keep a deep

influence upon the ethics of the organisation. The reason of existence of influencing factors is

the strength of individuals keeping different beliefs and mindsets and the traditions that

collectively form a prominent difference from other strata. Following factors could be most

influencing in the context of organisational ethics that are the key motives for the company to

consider new technology adaptation with gravity:

Culture

The culture of the origin of the company where Jonica Gunson works could be different from

the culture in which the organisation currently operates and hence the organisation needs to

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adopt the altered code of ethics to meet the feelings of local workforce and the customers. If

the demand to install new technology is raised in the current culture which might be

apprehended as sensitive and cautious to the environment, then the company has to follow it

despite other factors (Fombrum, 2005).

Religion

Religion is another highly influencing factor for the organisational ethics because people

within the organisation and the community hold certain associations with the religion. Thus

Jonica Gunson may not keep such code of ethics that are tilted to one religion. The company,

if belongs to people of another religious group, then the issue of safety can be raised on

partial basis and resultantly the company can come under controversy (Bansal & Kandola,

2003).

Beliefs

Common beliefs of the people may influence Jonica Gunson to alter the ethical standards if

any practice found against certain beliefs. The company has to ensure the society that all

measures will be taken to control the loss of the environment (Biggs et al 2004).

Societal Norms

The norm of the society in which the company operates seems to be influencing Jonica

Gunson to mould the company codes and practices. The company has to reconcile with the

needs of the society and it should compensate the community by altering its ways of

manufacturing.

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Image

The positive image of Jonica Gunson also influences the organisation to retain its image by

practicing universally accepted ethical practices.

Diversity

Diverse environment and workforce can influence Jonica Gunson to develop the ethical

norms, eradicating biasness and discrimination and thus she must ensure that the company

respects the opinions of diverse people to install advanced technology to reduce the wastage

poured to the lake (Fombrum, 2005).

Motives to Delay New Installation

Business ethics exists at three different levels which are individual level, corporate level and

macro level. At corporation level, the code of ethic, rules and standards are collectively called

business ethics and they are affected by certain situations and socio-cultural context where

public or private sector organisation operates. Theories suggest that ethics and personal

morality directly influence the corporations while the gap still remains in the practice of

individuals inside the organisation and outside. It can be argued that it is a significant factor

that creates distrust of giant businesses where separate entity concept of the organisation is

open to abuse. If the executives and top management act ethically, yet their act would be

different they were taking decisions on the business and money of their own (Borgerson &

Schroeder, 2008).

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Jonica Gunson has got few genuine and valid reasons to delay the installation of the new

machinery and technology. The reasons are based on the prior continuity of the company in

the same scenario. Such motives of the company are discussed as follows:

Abiding by the Law

The company has been, though pouring the waste to the lake but the level of the waste is in

accordance with the provision of the law and hence if the public sentiment or the competitors

raise their voice, yet the company has the reason to defend in the context of law.

Financial Situation

The company has been going through hard financial situations and the company has a

nominal budget of environment and social responsibility. Thus the company cannot afford to

have the expensive technological installation.

Imposition of New Regulations

Ethics and the law are closely related to each other as the law enforces the organisations to

develop certain code of ethics. Like 406 section of Sarbanes Oxley Act requires the public

limited companies to disclose that they have a code of ethics and it also reveals the utility of

provided rules. The provision does not ask the companies to keep any code of ethics but it

demands the organisations to disclose whether their code of ethics covers the positions of

controllers, accountants and financial managers (Sarbanes Oxley Act, 2002).

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Need to Update Regulations

Different organisations keep a different set of standards for their people and the difference

may occur due to perceptions, values or cultures. However, according to Friedman (1984),

the crux of all ethical codes is to show compliance by the law. The region where the case

study company operates should have an updated version of imposed regulations because the

current regulations seem misfit and outdated and the companies should be obliged to practice

under new regulations especially in the context of ethics and social responsibility for the

following reasons:

Mission Statement

The mission statement of the organisation does not reveal anything about ethics which

reveals lack of gravity of the organisation towards ethics (Murphy 2011).

Board of Directors

The clarity about the ethical role of board of directors of the organisation does not exist and

hence the organisation should have a comprehensive code of ethics (Asaecenter 2011).

Managers

According to the law of Principle – Agent relationship, the managers should be provided the

ethical norms with comprehensive guideline to act in favour of the owners and comply by the

law (Bansal & Kandola, 2003).

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Stakeholders

The stakeholders must also be provided code of ethics to remain compliant to the law and to

act in favour of other stakeholders (Asaecenter 2011).

Ethics of Accounting

The code of ethics obliges the employees to follow the ethics of accounting by avoiding

accounting fraud, bribery and by giving just compensation so the companies may not find

excuse to continue practicing anything hazardous for environment (Sarbanes-Oxley Act,

2002).

Ethics of Marketing

The code of ethics should also be clear about the practices in promotion, sales and

advertisements of the organisation and not to use any unfair means or misstatements (Mallor

et al. 2007).

Ethics of Human Resource Management

The most important part of the code of ethics is provided for the HR department to eradicate

any kind of discrimination or sexual harassment and to ensure the provision of safe and

healthy working environment (Asaecenter 2011).

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Ethics of Production

The code of ethics also states that the production functions of the organisation must not

distort environment and the products should be assured to be of quality by pretesting (Biggs

et al. 2004).

Impact of Updated Regulation on the Region

The aforementioned evaluation of the code of ethics clearly reveals that the accounting, HR,

marketing and production personnel of the region needs to be provided with the code of

conduct and ethical standards which makes them logically and morally bound to obey the

code of practices and also makes them accountable for not following or breaching the code.

Most researches show that practicing ethics in the organisation has a positive relation with the

accountability of the key players of the organisation (Bansal & Kandola, 2003).

Accounting Legislations

International Accounting Standards (IAS), Sarbanes Oxley Act and other provisions for the

accounting and financial standards have made the accountants and financial managers legally

liable to abide by the principles of law and this can reduced the financial scams in the

corporations.

Diversity Related Legislations

Legal provisions about diversity like Race Act, Sexual Harassment Act, etc ensure the

organisations to develop the code of conduct in view of those laws and this can also make the

members of the organisation accountable to show respect for the diversity (Mallor et al,

2007).

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Production

Certain regulations about the safety of the workers and the environment ensure that the

production norms of the organisation must not be compromised and hence the production

department also becomes accountable due to the legislation (Anand, 2002).

Social Responsiveness

Organisations will be bound to show their concerns for the society by activating initiatives of

social responsibility and the organisation as a whole is responsible and accountable to

contribute to the environment and the society in which it operates (Biggs et al 2004).

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TASK 2: Explanation to the Given Scenarios

Receiving a Holiday Gift:

It primarily depends upon the nature of relationship; if relation is purely professional and the

supplier wants to liaison for better understanding then the gift should be accepted with

appreciation. However if the supplier wants to get out of bound benefits, then the thing must

be discouraged/rejected.

Sales Expense:

There is no harm in accepting such an offer because the social responsibility department of

the company has to contribute to charity, no matter if the organisation is of other’s choice

because this would fulfil the aim of CSR and would get another benefit in shape of a large

order. But management should try to find out any controversy in that charity organizations

accountability. Also, management should be convinced with the cause of the charity

organization. Donating on charity just for financial gain should not be encouraged in

organization. If the motives of the stakeholders is to encourage people in charity, then it

should be taken positively.

References:

As per code of ethics, no confidential information will be shared but the client will be

diplomatically dealt and will be told what the entire market already knows about the

competitor (Borgerson & Schroeder 2008).

Conflict of Interest:

The new business owner will be contacted and asked for the quality and range of items and

then will be decided if the new business owner provides extra benefits. She can further act as

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useful contact for the company for future orders.

More Competition:

It seems attractive offer at an instance but the consequences can be dangerous and can bring

in escalated conflict if the competitor comes to know about the leakage of confidential

information and files a lawsuit against the individual or the company. The offer will be

denied but the personnel will be asked to share learning experience and suggestions to bring

improvement in the performance of the company.

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TASK 3: Critical Evaluation of Ethical and CSR Practices

Corporate social responsibility and ethics are important in the decision making process of an

organisation and their contribution cannot be denied in the progress and development of the

nation. Reaping profit is not the only aim of the business but the organisation also needs to

perform the social actions. Corporate social responsibility and the business ethics are two

separate concepts but their overlapping and inter-dependence is a proven fact. Thus many

organisations in present era have adopted the integration approach to business ethics and

corporate social responsibility (Mallor et al. 2007). The company (Wolse Inc.) has following

ethical and corporate social responsibility practices with critical analysis:

Organisational Approach

Organisations keep the following approach in relation with ethics and CSR:

Values, Beliefs and Ethical Decision Making

Organisations show their commitment to the community and value the responsibility to

contribute to its customers and employees. Senior managers and executives are the decision

makers for an organisation and their decisions are based upon the values and beliefs in

context of social responsibility and business ethics. Like, they make all decisions keeping in

view the interests of all stakeholders and shareholders of the company. Similarly they decide

to develop code of ethics and policies based on the common beliefs and values of the

organisation and the society (Anand 2002).

Usually, the company attempts to form diverse groups in the organisation, hence the

decisions of the groups are restrained from biasness or discrimination and they form a

balance view in decision making process. Their ethical responsibility is to safeguard the

interests of shareholders and to be loyal to the community and the organisation. Similarly

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individuals base their decisions in conformity to ethics, beliefs, values and society and show

urge to deliver their roles and responsibilities efficiently (Fombrum 2005).

Community Orientation

The multinational organisation pays special attention to the matter of cultural and societal

differences with the operating environment and within the organisation. That’s why it hires

local people and adopts local slogans, tag lines and services to mix up with the prevailing

culture and to reduce the effect of the difference of values and beliefs. The top management,

executives and the individuals go through a devised procedure to approach a decision and the

procedure ensures minimised conflict with the cultural values. The effects of values and

beliefs strategy is positive on the performance of the organisation because it tends to reduce

the conflict with internal and external environment by giving respect to the values and beliefs

of the individuals and the community and allows the organisation to mould its values

accordingly if found in contradiction to the cultural or societal norms (Moon et al. 2001).

Organisational Practices

The organisational practices pertaining to CSR and business ethics are:

Value Statement

The organisation has developed a value statement stating the respect and consideration for the

employees and community (Borgerson & Schroeder. 2008).

Corporate Social Responsibility

The organisation does not actively participate in the social responsiveness programs like

charity, promoting local traditions, etc which can develop an air of respect for the society and

their basic standards and values (Mallor et al. 2007).

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Employment

Provision of equal opportunity is not highlighted which can intake the people of any

demographic or society on merit and can generate feeling ownership for the organisation

(Fombrum 2005).

Cultural Products and Services

The organisation has developed the products and services that are fit in the cultural context of

the society and it advertises and promotes accordingly by using local slogans and slangs

(Borgerson & Schroeder 2008).

Local Adaptation

The organisation attempts to adapt the local environment and it endeavours to alter its

policies, procedures or the products and affiliations if they are in contradiction to the

common beliefs and values (Moon et al. 2001).

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Conclusion:

On a concluding note it would not be wrong to say that it is very imperative for an

organization to stick to the basics especially when it comes to complying the rules and

regulations of the state in which it is operating. Public are becoming more and more aware

regarding the importance of environmental safety and security and to show the customers and

make the potential this factor can be used as key trigger by making the customers and or

service renderers to realize that the organization is serious about the environment safety and

strictly complies with the set regulations.

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References

Anand, V. (2002) Building Blocks of Corporate reputation- Social Responsibility Imitative,

Corporate Reputation Review, vol.5, No.1 (spring), pp.71-74.

Bansal, P & Kandola, S. (2003). Corporate Social responsibility, Why Good People Behave

Badly in organisations, Ivey Business Journal (March/April)

Borgerson, J. L. and J. E. Schroeder (2008) Building an Ethics of Visual Representation:

Contesting Epistemic Closure in Marketing Communication in Cutting Edge Issues in

Business Ethics. M. P. Morland and P. Werhane Boston, Springer pp. 87–108 ISBN 1-4020-

8400-5

Biggs, Tom & Halina, W. (2004) Linking Social Responsibility, Good Governance and

Corporate Accountability through Dialogue Discussion Paper of International Institute for

Environment and Development, www.iied.org

Building Corporate Reputation through CSR Initiatives: Evolving Standards, Corporate

Reputation Review, vol.8, No.1 (spring) pp.7-12.

Fombrum, C. J. (2005). A World of Reputation Research Analysis and Thinking

Friedman, M. (1984) Milton Friedman responds—an interview with Friedman. Business and

Society 84(5)

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Mallor, J. P., Barnes, A. J., Bowers, T., & Langvardt, A. W. (2007) Business law: The

ethical, global, and e-commerce environment (14th edition). New York: McGraw-Hill.

Moon, C Et al. (2001) Business Ethics London: The Economist: 119–132

Murphy, J. (2011). The Concepts of Vision & Mission Revisited. Retrieved from:

http://www.calumcoburn.co.uk/articles/articles-vision-mission

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http://www.calumcoburn.co.uk/articles/articles-vision-mission

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