Ethics

Ethics Reflection Don Hudson March 8, 2010 University of Phoenix STR581 Ethics in the workplace, whether it is a for-profit or non-profit organization, is an important consideration. A sound corporate social responsible organization can be both profitable for its shareholders and rewarding for its customers and society in which it operates. Ethical discussions abound in corporate America today. A news day rarely goes by without something related to the ethical or unethical actions of one organization or another. The leadership of today’s businesses should closely consider the behaviors of their organizations and at the very least guide them to act as ethically as their customer base wishes them to act. Keeping ethics as an integral part of the organization’s strategic planning process can help cement the values and beliefs the leadership considers important for the business to thrive and survive. “Ethical responsibilities reflect the company’s notion of right and proper business behavior” (Pearce and Robinson, 2009, p. 58). Acting ethically is not necessarily needed for the organization to act legally and the view of what is ethics can change from culture to culture and from place to place. Many people would consider selling birth control pills and devices unethical, but there is nothing illegal about this activity in the United States. The sell of these items are considered unethical and illegal in other countries. A business operates to be profitable for its stakeholders and shareholders. Understanding what comprises the ethical view of a business’s markets is a very important of part of meeting the profitability goals and staying viable for the future. The act of addressing ethics in strategic planning has in today’s world become a legal requirement. “Each company is required to disclose whether they have adopted a code of ethics for its senior financial officers. If not, the company must explain the reasons. Any change or waiver of the code of ethics must be disclosed” (Pearce and Robinson, 2009, p.58). The SEC had been given voice the Sarbanes-Oxley Act. Businesses must follow strict guidelines regarding how a corporation controls its auditors, attorneys, executives and accounting personnel. The idea is to have some checks and balances within an organization to help it not blur the ethical lines. Indeed the SEC gives organizations the guidelines they must abide by. The term ethics refers to the moral principles that reflect society’s beliefs about the actions of an individual or a group that are right and wrong” (Pearce and Robinson, 2009, p.70). Part of strategic planning is setting, communicating and creating momentum towards the company’s mission and vision. The leadership should include its view of ethics and values in both of these documents. Without them the employees within the organization will use their own guidelines for the day to day and strategic decisions they make. Corporate Social Responsibility (CSR) will be a deciding factor of success or failure in many organizations. CSR affects a company in the area of costs and social good standing. While it is certainly admirable for organizations to socially responsible it is also profitable in many cases. CSR has become more important to firms in the recent past due to strong environmental groups, the collective use of buying power among certain groups, and the globalization of businesses. CSR makes sense strategically because they improve the image of an organization, the benefits out weigh the cost, it creates goodwill among its neighbors and markets and it can reduce the scrutiny of regulatory agencies. All of these attributes of CSR make it an important part of a strategic planning process. Companies can benefit greatly by how they are perceived and strategically communicating a company’s CSR plan or mantra can bring rewards such as free publicity and strong and dedicated customer bases. Ethics and CSR can not only be on the peripheral of a firm’s strategic plan, it can be at the center of the strategic plan. “On the other hand, codes of conduct, especially if management visibly supports and emphasizes them, often have a good educating effect. In a way they form a statement of corporate vision. A clear and consistent show of personal corporate vision and moral conviction may have strong unifying cultural effects in the organization” (Mintzberg, 2003, p.299). Some companies such as BMW, Honey Well, Nike, Johnson Controls and Patagonia are considered to be some of the most ethical companies in the world according to the Ethisphere Institute (Jonas, Reuters, 2010). These companies were chosen by a group of their peers and not by some governmental or publication source. The criteria for selection included factors important in the realm of corporate governance, environmentalism, innovation that increases the well being of the world or communities they operate in and by how few resources they use. These company’s leadership, track record, internal systems and ethics programs are all considers. It is no doubt that without ethics and CSR being central to strategic planning, these 99 companies would not have been chosen to be among this group of leaders. Ethics enters into a company’s strategy whether intentional or unintentional and as individuals we make decisions based on our own set of the ethical or moral values. Through the studies so far in this class and throughout my UOP studies ethics has been a major theme and topic. My perspective has changed simply due to the high volume of mention ethics receives while I’ve been at UOP. It certainly is a topic whenever I discuss business plans with my current organization or whether I’m in a discussion with a colleague or friend about launching a new business. One of the local grown firms in my town, Liquid Highway, donates 100% of its net profits to charitable causes. When I moved to my current location, Greenville, SC, this company had one location. Today it has five and this has happened in less than two years. It’s easy to see that its strategic plan of putting CSR at the center of its operation is already paying big dividends to its stakeholders. The studies on ethics in the workplace and examples such as Liquid Highway have incented me to launch CSR initiatives within my work group and it has caused me to put Corporate Social Responsibility as a major part of my investment decisions. I’ve also have helped our neighborhood association consider social responsibility as an important part of our vision statement. Ethics is an important part of any endeavor and by including CSR in the planning process any organization or individual can lift up the wellbeing of the society in which it or he/she operates and lives. References Pearce, J., Robinson, R. (2009). Strategic management. 11e. McGraw Hill Mintzberg, H., Lampel, J., Quinn, J., Ghostal, S. (2003). The strategy process. Prentice Hall, NJ. Jonas, Llaina, (2010). U.S. institute names 99 top ethical companies. Retrieved on March 8, 2010. Found at: http://www.reuters.com/article/idUSTRE53C0F020090413