Ethics_Paper_Str581

Ethics Reflection Paper Perry D. Lomond University of Phoenix STR-581 / WS09-V21.1 20 May, 2010 Dr. Albert E. Smothers, Ph.D. Ethics Reflection Paper Ethics and Social Responsibility In most corporations, a strategic plan is developed by the executive management team to give direction and set long-term goals for the company. The plan may range from maintaining the current market position through to aggressive growth or a military like maneuvering of resources to a competitive advantage. The role of the board and the executive team has been stated as maximizing shareholder wealth so concepts like social responsibility and ethics traditionally have been absent in the corporate strategy. However, during the last four decades, corporate images have been damaged by several scandals involving fraud, theft, safety, and environmental accidents. Damages caused by corporations like: Enron, Dow, and Author Anderson have changed the legal landscape for chief executives today because of new laws like Sarbanes-Oxley. Clearly, the legal framework is tightening and the government is trying to mandate ethical behavior. However, Pearce and Robinson suggest, “Ethical responsibilities reflect the company’s notion of right and proper business behavior. Ethical responsibilities are obligations that transcend legal requirements. Firms are expected, but not required, to behave ethically” (2007, p. 58). Ethics is being mandated with laws like Sarbanes-Oxley and the Environmental Protection Act; however, now it can be found in the mission statements and strategic plans of many Fortune 500 companies. Corporations are learning that customers regard good corporate citizens, companies that participate in and sponsor community events and other social and ethical activities, very highly. Pearce and Robinson state, “… at least three broad trends are driving businesses to adopt CSR frameworks: the resurgence of environmentalism, increasing buyer power, and the globalization of business” (p. 59). By introducing higher ethical standards and corporate social responsibility (CSR), companies are seeing higher levels of buy-in from the various stakeholders. For example: 1. Employees are more productive and have higher job satisfaction. 2. Shareholders are seeing higher revenues and profits from new eco-friendly product lines and higher returns because of more stringent accounting and reporting practices. CEOs and CFOs are held legally accountable for errors and fraud in SEC filings, so shareholders have more protection. 3. Consumers are more informed and tend to buy from companies that better demonstrate environmental stewardship and ethical workplace practices. 4. Society is enjoying more corporate sponsorship for community activities, charitable causes, and environmental programs. 5. Corporations themselves are reducing operating costs through green technologies, changing to renewable resource technologies and making larger capital investments in these technologies. Corporations, who embrace ethical and social responsibility, have benefited from the marketplace of informed consumers through goodwill and better public relations. Communities in which these corporations operate have benefited financially and enjoy higher levels of environmental protection and corporate accountability. Although corporations with ethical workplaces are benefiting, some companies are losing the public relations battle with financial irregularities and inaccurate SEC filings. The few companies caught in these financial problems, have tarnished the good will created by the more ethical firms. Thus, laws are created and ethics are being legislated to reduce fraud and other wrongdoings by corporate executives. Evolution of Ethical Perspective A person’s ethical perspective is formulated from legal and moral obligations developed by society, family, experience, and other influences. In the case of Perry, other influences include the military and a professional association with a code of professional conduct he has agreed to follow. This MBA program has influenced Perry’s professional ethics by introducing obligations on the manager developed from business law, human resources management, and agency theory. Business law outlines one’s legal requirements toward the company and employees with respect to contracts, tort law, intellectual property, regulatory requirements, corporate governance, and employment law. Human resources management has expanded on employment law, motivation, rewards, and other HR problems. Throughout the program, agency theory was used to distinguish situations in which conflicts of interest may arise between a company and its agent or employee and the client. Coming from Canada where much of the legal and ethical base was developed, this program introduced the American legal perspective. The effect of this education over one’s ethical perspective is to provide a new legal framework for some of the ethical decisions made as a manager. Ensuring a minimum awareness of some of the laws and regulations in which potential issues may arise. For example, when making a hiring or firing decision, there are a number of human characteristics that should not enter the decision unless there is a bona fide business reason that characteristic may be used; a classic example is the hiring of young women to work for Hooters restaurants. Prior to taking the MBA program, the term a bona fide business reason would likely not have entered a decision by this manager to hire a new employee. However, the legal system should be considered the minimum standard of ethical behavior and not the ultimate standard. The law can be seen as an attempt by society to enforce morality but as noted above, moral behavior transcends the legal requirements and a manager should be expected to work within a social context. This argument can be seen in the recent debate on health care coverage, with one position framing health care as a human right and the other framing it as a costly benefit or entitlement. This issue has been addressed by most western countries as they provide a high-level of health care to their citizens at a lower cost than is expected in the United States. This benefit is used by foreign corporations to reduce the cost of production and compete against American businesses that pay higher health care costs to attract employees. By understanding that differing ethical perspectives exist, utilitarian, moral rights and social justice approaches are often used to guide one toward an ethical decision. Contemplating these alternate views, one can better to manage and understand people and potentially reduce conflict in both the personal and professional environment. Pearce & Robinson state, “Central to the idea that companies should be operated in socially responsible ways is the belief that managers will behave in an ethical manner” (p. 23). Ethical issues in the workplace are prevalent in today’s news casts with legal decisions announcing the outcome of court cases that correct a long standing problem. For example, recently a Federal court has ruled in favor of pay equity for women in the pharmaceutical sales industry while the Supreme Court is still adjudicating a similar pay equity case for women employed by Wal-Mart. References (Barney J B 2007 Gaining and sustaining competative advantage)Barney, J. B. (2007). Gaining and sustaining competitive advantage (3rd ed.). Upper Saddle River, New Jersey: Pearson - Prentice Hall. Mintzberg, Lampel, Quinn, and Ghoshal (2003) (Mintzberg H Lampel J Quinn J B Ghoshal S 2003 strategy process: concepts, contexts, cases)Mintzberg, H., Lampel, J., Quinn, J. B., & Ghoshal, S. (2003). The strategy process: concepts, contexts, cases (4th ed.). Upper Saddle River, New Jersey: Pearson - Prentice Hall. (Pearce Ii J A Robinson R B 2007 Strategic management: formulation, implementation, and control)Pearce, J. A., & Robinson, R. B. (2007). Strategic management: formulation, implementation, and control (11th ed.). New York, New York: McGraw-Hill/Irwin.