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Case study on managerial ethics
Case study on managerial ethics
Importance of ethics in management
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Documentations that state significant philosophical principles and make clear the values depicted within an organisation are known as ethical codes. For these codes to be considered effective they are required to be able to define the responsibilities of an organisation to stakeholders, the conduct expected of employees (Kaptein & Wempe, 2002) and articulate the ethical parameters of the organization as to what is acceptable and what is not (Stevens, 1994). While behaviour of course, refers to the ethical behaviour of individuals in organizations. Employee behaviours are purposely designed to be affected by codes, regardless of the extent of the script. As much as codes are used to enhance social responsibility and explain the norms and values of the organisation, it would be equally important to consider how codes can influence behaviour. Numerous systems and methods in conjunction with the embedment of ethical codes will be considered to exhibit the effects of ethical behaviour; these include analysing the link between control mechanisms and correlating them to the primary components of a management system. As well as portraying how an ethical culture and successful communication stream enhances ethical behaviour amongst employees. In effect these methods are used as an overall message, created by the corporation in an attempt to instil behaviour and effect change through explicit statements of acceptable behaviour (Stevens, 1994).
Codes of ethics are written to guide behaviour, and so any analysis of the impact of a code must include how well it affects behaviour. Contemporary social psychological research such as those done by Ferrell and Gresham as part of their contingency model suggest that, “Ethics related corporate ...
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.... C. and W. D. Richardson: 1994, 'Ethical Decision Making: A Review of the Empirical Litera ture', Jo urnal of Business Ethics 13, 203-221.
11. Bowden, P & Smythe, B. (2008). Making codes of ethics meaningful and effective. Keeping Good Companies. 1 (1), 584-588.
12. Stevens, B. (2008). Corporate Ethical Codes: Effective Instruments For Influencing Behavior? . Journal of Business Ethics. 78 (4), 601-609.
13. Trevino, L. K., G. R. Weaver, D. Gibson and B. L Toeffler: 1999, 'Managing Ethics and Legal Compli ance: What Works and What Hurts', California Management Review 41 (2), 131-151.
14. Schwartz, M.: 2004, 'Effective Corporate Codes of Ethics: Perceptions of Code Users', Journal of Business Ethics 55, 323-343.
15. IFAC. (2007). Defining and Developing an Effective Code of Conduct for Organizations . Professional Accountants in Business Committee. 1 (3), 8-21.
The ethical code of an organization illustrates the importance of being honest, acting with integrity, and showing fairness in decision making (Bethel, 2015). Ultimately, “laws regulating business conduct are passed because some stakeholders believe they cannot be trusted to do what is right” (Ferrell, Fraedrich, & Ferrell, 2015, p. 95). In the last couple of years, culture has become the initiator for compliance, which means from the top down there has to be a commitment to act in a way that represents the company’s core values (Verschoor, 2015).
The importance of having a code of ethics is to define acceptable behaviors and promote higher standards of practice within a company. The code should provide a benchmark for...
Trevino, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right. New York: John Wiley.
Ethics or rather morals entail mechanisms that defend, systematize as well as recommend conceptions of right or wrong. Many organizations develop ethical codes to ensure employees and employers understand the difference in doing good or bad. In that respect, ethics are an essential aspect of successfully running of any organization or government. Ethics ensure employee’s productivity levels are up to the required standards. It also assists them to know their rights and responsibilities. Additionally, employers, as well as any persons in management, are guided by them to ensure they provide transparent leadership. Ethics also defines how customers should be handled. Ethical codes govern the relationship between customers and an
Trevino, L., & Nelson, K. (2011). Managing business ethics - straight talk about how to
...urvey of ethical behavior in the accounting profession. Journal of Accounting Research, 9 (2), pp. 287-306.
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).
Svensson, Goran & Wood, Greg 2007, ‘A Model of Business Ethics’, Journal of Business Ethics, vol. 77, pp. 303-322.
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).
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases: 2011 custom edition (9th ed.). Mason, OH: South-Western Cengage Learning.
To provide an example of a breach of ethical conduct in the workplace, we may remember the case of a financial manager in a corporation that decided not to pay overtime to some employees. After a deep outside investigation, the company was summoned with thousands of dollars to remedy the payment that was supposed to be paid to all employees who worked more than forty hours per week. Again, it is needed more than just a booklet stating that the company adheres to the code of business ethics. It is needed serious managers that can run the company with the most seriousness as possible. Consequently, any written codes of business ethics, regardless of how well it has been crafted, need people that adhere to its internal content with a serious desire to do the right thing.
Nowadays, society is governed by the implications of rules and legal restrictions. All of these rules were created to uphold and maintain the idea of ethical and moral values. Even children growing up were taught by some very important codes of ethics at school. These lessons learned as a youth growing up carry over into adulthood, as an employee or manager. Managers and workers both follow a similar code of ethics within the work place. Today, as a management consultant, I am going to prepare a code of ethics for my clients as they have recently started a restaurant called Knox, it is important to have a code of ethics in every company for their employees and also a circular by explaining the purpose and benefits of a good ethics. And finally, a brief report on the steps of strategic formulation and implementation.
Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right Fourth ed., Retrieved on July 30, 2010 from www.ecampus.phoenix.edu
Ostapski, S.A. & Pressley, D.G. (1992). Moral Audit for Diabco Corporation. Journal of Business Ethics, 11(1), 71-80.
Having a code of ethics leads to improved employee behavior, which is a huge part of culture for a standard company. Because employees are the people who create value for the company, in which way, they need to have honest and candid altitudes to the company. Having a code of ethic is a useful tool to manage an organization’s values, responsibilities, and ethical duties. To make the codes work, companies must put the code of conduct into the business so that employees know how it applies to them. The code is also a way for employees to get advice about ethical problems or concerns. “According to the 2009 National Business Ethics Survey, eighty-nine percent of those polled felt management adequately discussed the importance of ethical conduct. Similarly, 2008-2009 Integrity Survey, published by KPMG Forensic, it was found that ethics programs, including codes of conduct, had a strong impact on how employees felt. Ninety percent of those surveyed who worked in companies with a code of conduct felt they were motivated to do the right thing. This compares with just 43 percent of people who work in companies without strong codes of conduct.” (NCARB) The code of conduct plays an important role in the business no matter