Assignment on Business Ethics and Social Responsibility
What are your preferred definitions of business ethics and social responsibility? Why have you chosen these definitions?
Ethics in business, for me, means moral values and obligations. Ethics influences the value system of every organisation and employee by serving as a moral guide or “base” (Sweet 2001). Furthermore, business ethics is a potential vehicle for employee pride and motivation as well as a focus for customer satisfaction (Hall 1991). Ethics is a part of the manager’s responsibility as the ethical environment reflects managerial value system including personal and organisational perceptions and preferences of morality and known to be fundamental on a person’s attitude towards ends and means (McCarty and Bagby 1990, p. 21 cited in Fox 2000, p. 70). Fox (2000) believes that ethics are values that traditionally sprouted from religious or organisational influences and may evolve from personal experiences. There is importance in combination of value systems that leads to generalised principles, which are used as guidelines in making and evaluating decisions and specific cases that require acceptable conduct among people. General theories of business ethics are considered generic and are not directed to specific applications (Walle 1995). In almost all organisational setting, Frederick and colleagues (1994) state that ethical guidelines are expressed in the forms of code of conduct, outlining the organisation’s foremost expectations to every contributing factors such as the employees and other stakeholders. Business ethics further support management strategies, accountability structures, organisational policies, incentive systems, training programs, and decision-making processes. It ensures their unity of work as the common denominator of strengthening the organisation’s essential ethical code of conduct.
Abreu, David and Crowther (2005) argue that an organisation can affect its external environment and change it through its activities. Corporations or organisations in general are expected to have economic, ethical and legal responsibilities to the public at large (Lantos, 2001). This is covered by the idea of corporate social responsibility (CSR). For Lom (2005), CSR is the recognition of accountability aside from financial productivity of companies. This is the operating word for the concept of CSR – accountability. Accountability is believed to be the most important factor to be considered for companies to know their role in the society and its people.
These definitions are chosen due to its simple yet inclusive features. It does not require further explanations but rather simple words that are easily understood and executed.
What is one key issue in the area of business ethics and social responsibility that is relevant, current, to your organisation and your industry?
Business ethical practices and principles are important elements in building an ethical working environment with strong corporate guidelines. These guidelines govern the overall condition of the organisation in terms of allowing members of the workforce be familiar with the upper management authorities’ deliberation of ethical behaviours as significant ingredients of business operations. One key issue on ethics is the issue on forgetting social responsibility for the sake of profits. Thus, there is a need for stakeholders to know what the organisation needs to sustain its immediate environment and its people.
What strategies could your organisation adopt to address this issue?
It is considered that the stakeholders are any group that is affected by, or can influence, conducts of this organisation. In order to serve the needs and interests of stakeholders or other groups, managers are expected to employ their managerial expertise toward highest standards of effective management and customer satisfaction. Organisational relationships are associated by stakeholders’ interests and managers’ ability to be guided in terms of strategies employed in maximising organisational performance. The influencing ability of stakeholders is high that most managers are required to give in to it. This influential power guides managers to decision making in relation to strategic issues affecting the whole business operations. Managers are often dependent on stakeholders’ interests and act on the applicability of generic strategies. Such interests reflect desires that are subjected to moral evaluation by the manager by looking on ethics on business management. To serve stakeholders’ interests, the following ethical behaviours should be observed:
Þ Stakeholders’ desires are crucial consideration in decision making of managers.
Þ While the organisation requires maximum satisfaction on the employees as well as the customers, the managers in response to the desires of the stakeholders must encourage responsible planning, management, and development.
Þ Strict compliance to individual policies on bribery, extortion, facilitation payments, environmental problems, and human rights are addressed in details.
Þ Sexual and racial discrimination, price discrimination, and destructive products are also firmly avoided.
Þ Integrity and competence are significant managerial factors particularly in performance of their identified duties.
Þ Participation is an important aspect of determining the acceptability of stakeholders’ desires and interests.
Þ Responding to ethical dilemmas is a manager’s or leader’s concern.
Þ Stakeholders’ interests are mainly covered by managerial responsibilities.
Perhaps, established code of conducts help in ensuring managers’ ability to respond on times when they are struggling on moral crises and confusion. They keep hold of a strong moral compass. In hospitality and tourism industries, holding on to the moral compass of managers is a challenge when they try to serve the desires of stakeholders. Communication is very relevant. The duties of managers are always bounded on standard management principles and practices. Research and development efforts are encouraged so as to determine weak areas and loopholes of the said code of conduct. Responding to the its weaknesses will lead to more effective organisational governance provided that the desires of stakeholders are classified based on merits of desires on whether or not valid or invalid, etc. lastly, feedback systems must also be available.
Abreu, R, David, F, & Crowther, D (2005) Corporate social responsibility in Portugal: empirical evidence of corporate behaviour, Corporate Governance, vol. 5, no. 5, pp. 3-18.
Fox, J (2000) ‘Approaching managerial ethical standards in Croatia's hotel industry’, International Journal of Contemporary Hospitality Management, 12: 1, 70-74
Frederick, RE, Hoffman, WM, Kamm, JB, and Petry Jr., ES (eds) (1994) Emerging Global Business Ethics, Quorum Books, Westport, CT
Hall, SSJ (1992) Ethics in Hospitality Management: A Book of Readings, Educational Institute of the American Hotel and Motel Association, East Lansing, MI
Lantos, GP (2001) The boundaries of strategic corporate social responsibility, Journal of Consumer Marketing, vol.18, no. 7, pp. 595-630.
Lom, A (2005) Balancing act, The Daily Telegraph, 8 December issue.
Sweet, W (ed.) (2001) The Bases of Ethics, Marquette University Press, Milwaukee
Walle, AH (1995) 'Business ethics and tourism: from micro to macro perspectives', Tourism Management, 16: 4, 263-268
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