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why ethical standards in business are important
role of ethics in corporate governance
role of ethics in corporate governance
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Ethical Issues Are Major Concern
Every organization has a set of ethical standards that they abide by. The organization ethical standards purposes: it build the organization confidence in the community , keep the employees uniformed in what the organization strive to have as organizational behaviors and help the employees have guidelines to make ethical decisions that protects the organization.
Every organization also has a profession responsibility to conduct business honestly and ethically. Our readings reported, “Experts estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior” Kinicki and Kreitner (2009). The organization could avoid having ethical issues by meeting the guidelines of state, federal, and local laws. Ethical issues are a great concern for the organization because it place liabilities on the organization as well as harsh penalties such as:
1. It could be costly for the organization.
2. It can ruin the reputation of the company cause the organization to shut down.
3. Employees will be at-risk of facing incarcerations.
When an organization use ethical practice it builds a strong reputation, increase profits and accomplish long-term standings with their consumers. When the organization use unethically practices the damages to the organization reputation is hard to repair, the company usually have to restructure and repair the internal and external forces of the company. A great example would be the starting of Wal-Mart, it started out with a strong reputation as a respectable organization the stores produce tremendous growth and popular very quickly. Wal-Mart problems and publicity came when the employees complaining of unfair, ...
... middle of paper ...
...ity on the organization.
Although no organization is 100% protected, the organization can minimize the risk of unethical practice penalties by screening applicants, providing ongoing ethical training, insist that management lead by example, implement reward and appraisal system for employees, and observe the behavior of individual ethics .
Works Cited
Kinicki, A., & Kreitner, R. (2009). Organizational behavior: Key concepts, skills & best practices (4th ed.). New York, NY: McGraw-Hill Irwin. ISBN: 9780073381411
Stephanie Rosenbloom, (2008) Wal-Mart announces new ethical and environmental principles
www.nytimes.com/.../business/worldbusiness/22iht-walmart.4.17172614.html
Danny Weil, 2010 Chronicle of Higher Education
http://dailycensored.com/2010/07/19/14027
This paper is intended to cover the ethical dilemma’s and responsibilities that a business will face and the moral, social and ethical standards that should be kept. The ethical standards that are acceptable by the organization must be written and verbally enforced. How the employee 's react is up to the moral and ethical standards that the individual employs. These standards however can be supported by the employers and fellow employee 's that uphold those standards. The paper will be outlined into three main segments: Introduction, Body and Summary. Within the Body of the paper there are three subsections: April 's Ethical Dilemma, Employee 's Roles and Responsibilities, and The Organization 's Role 's and Responsibilities.
Kinicki, A., & Kreitner, R. (2009). Organizational Behavior: Key Concepts, Skills & Best Practices (fourth addition). New York, NY: McGraw-Hill Irwin Publishing
In today’s global society, a Code of Ethics policy is used to label established, acceptable behaviors among that industry’s business associates, potential investors, and the corporation’s executive officers and employees, and most important, the consumer (Ethics Resource Center, 2003). In an attempt to promote an increased efficiency and productivity potential level, among employees and prospective clients, a corporation’s standard Code of Ethics should guide its members toward a more in-depth examination of their personal moral activity, and how these actions affect the people or acquaintances they encounter. A company should utilize this strategy as a model for the professional behaviors and responsibilities of its constituents, and proves the occupational advancement of that business. Ethics are important in every level of a corporation, but specifically in the day-to-day actions of its members, and the image the company broadcasts to its associates is fundamental in building a stable business foundation. These pledges are a vital communication tool used to covey the firm’s standards for business operations, and predominantly, its relationships with the surrounding communities (Ethics Resource Center, 2003).
Incorporating ethics into everyday decisions in the business world can greatly reduce the scandalous behavior that has as of late has run ramped. Obviously, we have seen the results and consequences of business conducted absent any moral or ethical boundaries. When decisions are made without the consultation of ethics there is no direction from the moral compass and surely consequences will follow. Choices contemplated by managers may often seem difficult, but assessing the options against ethics can assist the manager in making the best decision.
Trevino, Linda Klebe, Gary Weaver and David Gibs. "Managing Ethics and Legal Compliance: What Works and What Hurts." 1 January 1999. Harvard Business Review.org. California Management Review. Web. 9 November 2013. .
Ethics are the principles and values used by an individual to govern his or her actions and decisions and it is very important in an organization. The code of ethics within an organization must be developed to help guide the organization in its decisions, programs, and policies. Having an ethical organizational culture that consists of leaders and employees adhering to ethical standards can guide leaders in determining organizational procedures and outline acceptable behavior among staff. Ethical leaders can also help employees meet standards of good quality work, accomplish organizational goals, adhere to policies and rules within the organization, and enhances the organization reputation within the community.
According to Ferrell (2004), “Organizations create ethical or unethical corporate cultures based on leadership and the commitment to values that stress the importance of stakeholder relationships. Establishing and implementing a strategic approach to improving organizational ethics is based on establishing, communicating, and monitoring ethical values and legal requirements that characterize the firm's history, culture, and operating environment” (p. 129). Ethics programs ensure satisfactory relationships with all stakeholders by aligning with all of their demands and needs, and determine conduct with customers and relationships with regulators, shareholders, suppliers, and employees (Ferrell, 2004).
This concern of integrity and organizations like Wells Fargo to do what is right stems from our personal ethical framework. We all have one which helps us decide what is right and what is wrong. It is this decision that is a concern for organizations that must be managed on a day to day basis. Company’s such as Wells Fargo are so big that bad ethical behavior may be overlooked and not dealt with until the damage has already been done. Other organizations need to learn from Wells Fargo and start addressing their own organization ethical framework. This would include the organizational culture, business strategies, employee ethics concerns and the overall ethics and decision-making
In order to prevent the development of such cultures, organizations should make sure to enforce their code of conduct instead of just hoping for the best and implementing actual punishments for employees that fail to follow them. They should also be sure to incorporate and bring up ethics as much as possible in the work place, such as meetings and announcements. Meanwhile, publically committing to being an ethical organization will keep a company more in line and focused upon doing the right thing because they are now in the public’s eye and have given their word to abide by their rules.
An organization needs to adhere to ethics in order to effectively implement its mission, vision, and objectives in a way in which offers a solid foundation to management and their subordinates to properly develop and implement its strategies. By doing so, the organization as a whole is essentially subscribing to one commonality that directs all of the actions of the employees of the organization. Additionally, it assists in preventing such employees from divergence in regard to the proposed strategic guideline. Ethics additionally ensures that a strategic plan is developed in accordance to the interests of the appropriate stakeholders of the organization, both internal and external (Jin & Drozdenko, 2010). Likewise, corporate governance that stems from various regulatory parties makes it necessary for organizations to maintain a high degree of ethical standards; this is done by incorporating ethics within the organization’s strategic plan so as to foster a positive corporate image for the stakeholders and general public (Min-Dong Paul, 2009).
According to Umphress and Bingham (as cited in Graham, Ziegert & Capitano, 2013), unethical pro-organizational behavior refers to “actions that are intended to promote the effective functioning of the organization or its members (e.g. leaders) and violate core societal values, mores, laws, or standards of proper conduct” (p. 423). One of the typical examples of unethical pro-organizational behavior is accounting fraud. Accounting fraud is purposeful act of changing the financial statement to increase the investors’ incentive to invest in the company. In 2001, avoiding reporting expenditures to increase the asset in its financial statement, Enron’s accounting scandal led to catastrophically consequence. Many employees lost their jobs, retirement funds, health benefits, and stock option. Investors lost billions of dollars. Unethical pro-organizational behavior not only adversely affects the managers and workers of the organization, but also affects investors and the economic in
Focusing on what is best for the organization as a whole and not self greed, not focusing on short-term profits but the long-term profit goals for the shareholders, investors, and employees would help keep employees ethical (Ferrell, et al, 2009).When an employee is fearful of losing his or her job, unethical conduct can be the result of trying to keep that job (Ferrell, et al, 2009).When pressures are placed on employees to make money quick, fast, and in a hurry, the results could be unethical behavior (Ferrell, et al,
A company's code of ethics is very important to establishing the expectations and quality of its brand. The code of ethics are concrete expectations for employee behavior, accountability and communicates the ethical policy of a company to its partners and clients. A good business practice is to have sound ethics. Having good ethical practice is knowing the difference between right and wrong and choosing what the right thing is. Though good ethical behavior is something that should be done automatically, a company needs to have a set of rules in place that holds everyone accountable. Over the last twenty years, the country has been bombarded with company scandals and unethical behavior; though morally wrong, the punishment does not fit the crime. The punishments have been overkill. A murderer, rapist, or child molester commits violent crimes and potentially is out of jail in 10 - 20 years. The CEO’s that commit white collar crime receive 25 years to life; this paper will discuss how this punishment for committing nonviolent crimes, such as breaching a company’s code of ethics, are disproportionate to violent crimes that plague the country today.
The area of “ethical structures” is intended to support organizations’ ethical concerns across organizations. There is a need for ethical structures that surround the modes in which organizations strive to inculcate corporate and business ethics. Without them there are no supports in place to create ethical processes and evaluate ethical performance. This area serves as a support that the organization and its staff should be able to relate to at the strategic, tactical and operational levels of business practices. It is a point of reference to other stakeholders in the marketplace and society.
Ethics and values are very important in guiding employees and management in an organisation. It encourages employees to be accountable and transparent and also in make ethical decisions. In an organisation that ethics are practiced there are less conflicts and there is consistency at all times even when an organisation undergoes difficult times. A code of ethics is established in an organisation to solve problems when the do arise and explains how employees should respond when faced with different situations. Values and ethics are important for employees to get along. Our values tell us what we think is important and that helps us in making right decisions. For example a person who values justice will not be coursing conflicts and will adhere to ...