Introduction
This report mainly focuses on developing an ethical approach to manage organizations. This essay critically identifies and evaluate about ethics and how ethics helps an organization to take good decisions. This report is prepared by referring to various journals, management books, websites and relevant current articles.
Ethics is very important for an organization. This essay will give an idea about what is ethics? And what is unethically? Ethics helps to identify and differentiating an organization from each and another. This report mainly relies on discussing about theories, models and paradigms. More concentrate on radical humanist paradigm.
The purpose of this assignment is to provide base for understanding ethical decision making in an organization and providing one real world example managing organization ethically and three real world examples for the organizations disaster by managing the organization unethically.
In this report we critically analysis on business ethical decision making by an individual or group of working people in the organization. Our report focus on individual moral, honesty, frankness and fairness while taking business decision in an organization. Our approach would be by understanding the organizational values and working people ethical training program is necessary for preventing them from engraining any unethical conduct.
Ethics
Ethics in an organization means the business conduct of that organization to run the business more effectively and efficiently. In an organization people are working together with different values and motives. Managing the business ethics of an organization more effectively needs to setup common norms and standard and also it need to be communicated and enforced among the working people. Ethical principle provides the base for modern business concept in an organization.
The leadership of the organization and the ethical decision-making are the basic for an ethical organization. Ethical values and principles of an organization guide the working people and corporate from the common business motive of profit and shareholders enhancement. The modern ethical organization follows corporate social responsibility, fair trade, sustainability, globalization taking into consideration ifs negative effects.
Ethical organization management model
The modern ethical management of an organization in the 21st century illustrate by four ‘P’s as explain as follows for the success for any modern business ventures. (Refer appendix 3) Traditionally the organization main aim is to make profit and methods for achieving it. The modern organization performance, activities and standards are exposed globally and the lenders of the organization are accountable globally.
- Purpose of the organization Purpose of the organization is to making fair profit for the shareholders and in case of public service delivery of cost effective service. Personality of a good ethical organization has to consider people needs and mindset with proper consideration given to the world it operates.
- People to whom the organization operate People comprise the organization staffs, customers, suppliers, local communities, stakeholders who has interest in the organization.
- Planet where the organization operate Organization should give due consideration for environment, neural recourses, fair-trade and sustainability.
- Principles of the organization
Principle of the organization comprises honesty, truth, and integrity. Principles of the organization has to be matched with other conflicting aims in between purpose of the organization, people to whom it operates and the planet where the organization operate in order to have sustainable organization success.
Need to manage the organization ethically
In the modern environment organization ethics should be actively manage and it is necessary to understand the main ethical value through an organization ethic program. There are five components in organization management ethic program.
- Commitment -Leaders and senior management should have commitment to the program.
- Assessment -There should be active assessment of organization ethical value and effectiveness.
- Codify -Develop a code of ethics and communicate with each other,
- Formalize -Formulate ethical structures and systems, ethics training and ethics communication
- Integrate -Build an ethical culture and conduct in the organization.
Need to develop ethical leadership in an organization
In the modern world ethics and values are in front of executives, managers and leaders who spend much of their time for developing organizational culture. The leadership of the organization should take responsibility and carryout the business in accordance to the management ethics program. The ethical leadership should take steps the senior management and executives including board of directors to follow and respect organization values. Carryout organization ethics program to achieve ethic program goals. Appointing senior person to coordinate the program and determine the ethics function which needs initiative.
Unethical policies, activities and behaviors in an organization
The following organization activities are not necessarily unlawful which are commonly considered as unethical.
- Dishonesty, manipulating the facts and hiding information.
- Manipulating and misleading advertisement, positioning and communications
- Exploiting peoples feeling.
- Fooling and taking advantage of people weakness
- Greed and making excessive profit
- Anything harming or endangering people
- Breaking trust of the organization
- Not accepting the blame and paying lot of amounts for the wrong doing
- Preventing to notify people any significant changes
- Lack of transparency
- Harming environment or earth
- Preventable waste or excessive consumption
- Raiding anyone’s privacy
- Misusing authority, power and reputation.
- More preference giving in appointing family members
- Preferential treatment or decision-making based on secret motive or deals
- Unfriendliness association with people or group of people
- Conflict of interest, disloyalty of trust and breach of confidentiality information
- Neglecting the duty of care of an organization
- Fail to prevent wrong report within his authority
- Unfairness and unkindness
Marketing ethic issues and stakeholders
The organization activities are affected directly or indirectly by the internal and external stakeholders. Internal stakeholders are includes board of directors, managers, employees, and other functional departments. External stakeholders include consumers, other interest groups, competitors, advertising agencies and regulatory bodies. (Miller and Lewis, 1991).
Stakeholder’s ethical values are subject to various business issues such as sales practices, consumers’ privileges, environmental and product safety, disclosure of information about the products. (Maignan and Ferrell 2004)
Various stakeholders are possibly exercise pressure on organization to achieve their individual ethical values and norms.(Annexure 1) Hence the organization values and norms are affected by specially by primary stakeholders since they are in good position to influence the organization ethical values.
Organizational ethical decision making
In organization marketing ethical activities we should understand how people make ethical decisions. (Refer appendix 3) explains how the ethical decisions are taken in the normal organizational environment. The outcome of the decisions is evaluated by the internal and external stakeholders. The roll of the individual and values has the great impact on any business decision making. Determining ethical decision is the primary factor in an organization (Ferrell 2005)
Ethical decision making – Ryanair
The current CEO Mr.Michael O’Leary took the ethical business decision to operate the Ryanair airline as budget airline business model in the European market. It was very success taking such decision in the past and now most successful airline in the European market and most of the airline travelers prefer to travel by Ryanair. The following are the benefit by taking such decision
- Low cost-low frills concept
- 94% of the booking through Internet reduced operating cost
- All Boeing 737-800 aircraft reduce training and maintenance cost
- Environmentally friendly Boeing 737-800 aircraft
- Customer satisfaction – Low cost and high service performance
Unethical decision making – Enron, Daewoo, Toyota
Enron: The Enron disaster is exhalent example for organizational unethical decision making. On May 25, 2006 US Huston jury found guilty the Enron CEO Mr Ken Lay and Mr Jeff Skilling for hiding financial status of the organization in 2000 and 2001