Can Ethical Behavior Really Exist in Business - Research Paper Example

 Introduction 2 Thesis Statement 2 Corporate Social Responsibility 2 Research Methodology 3 Significance of the study 3 Ethical behavior in business- Critical Analysis 3 Sears Auto unethical behavior 6 Conclusion 8 Reference 10 Introduction Thesis Statement Today companies have realized that to stay competitive, productive and relevant in the changing world of business, organizations need to become socially responsible. With globalization along with advanced technology has brought about a sea change in the corporate organization. The companies today want to increase its ability to manage profits and manage risk, protect brand name. Therefore corporate social responsibility has become the new buzz word for the organization and act as a competitive advantage. Thus the aim of the thesis is to study on the factors which affect the Corporate Social responsibility towards employees as well as their communities. Corporate Social Responsibility Corporate social responsibility has been regarded as one of the most vital aspect in doing business. Since there is no such definition of corporate social responsibility, however it refers to the business practices which are transparent, based on the ethical values, compliance with all the legal requirements and at the same time shows respect for community, environment and people. Therefore beyond the concept of making profit, companies are also responsible for the impact on people and the environment. Here “people” refers to the stakeholders of the organization, the employees, business partners, customers, suppliers, investors, and the government along with the community. Stakeholders expect that the companies should be much more socially responsible and environmentally for the business (Catalyst, 2002, p. 2). Research Methodology In order to conduct the thesis the type of research method that will be used are of both primary research and secondary research. Primary research will be based on questionnaire and secondary research will be based on the secondary information gathered from articles, books and other relevant sources. The questionnaire used for primary research will be based on likert scale where 5 means strongly agree and 1 refers to strongly disagree. Other forms of questions will include both open ended questions as well as close ended questions. The data will be gathered through quantitative analysis. Significance of the study Corporate social responsibility is one of the most important topic for discussion and corporate have understood the importance of CSR activities. Therefore the study on Corporate Social responsibility will help organization to know the value of the environment, communities and the people for an organization and work effectively towards them and not only concentrate on profit making and to understand the importance of CRS in the changing global environment. Ethical behavior in business- Critical Analysis The imperatives of regular organizational performances are so compelling such that they can very little time or space to concentrate or focus their attention on the moral concepts of organizational decision making. Morality is regarded as qualitative or esoteric in nature that it lacks substantial or adequate relation to quantitative or objective performance. In addition to this, morality also demands understanding of the long forgotten philosophies and there possibly exists a gap in moral philosophies between the organizational executives and the administrators in various generations (Sims, 1992). It appears that irrespective of whichever direction is looked at, the erosion of moral principles and ethics of right or wrong has reached to a point where trust in institutions and systems making up the society have gone into danger of oblivion. Since the last two decades, the importance and criticality of business ethics have heightened immensely and have gained paramount importance for businesses and society at large. According to a brief in the ‘2006 Business for Social Responsibility’ organizations can have numerous reasons for operating ethically. This includes reasons such as avoidance of fines, reducing damage of a firm’s reputation and image, increasing and protecting the value of shareholders in the business, eliminating internal corruption and creating competitive edge in the market. On the contrary unethical behavior in organizations has demonstrated resulting into lower productivity and performances, particularly among high skilled and productive employees. Lack of business ethics in organizations have reflected through deteriorating financial performance and productivity in business. According to surveys conducted by Barlett and Preston (2000) on the need for business ethics in organizations, reveals much of the assumption underlying the literature of business ethics. They are of the opinion that the product of businesses must bring good to the society. However, it is seen that companies investing in ethical programs are held low in worth in the perceptions of managers and employees. The examination of relationship between work, bureaucracy and the market reveals that employees are often seen to question the notion of business ethics as they do not consider a good or a bad to choose from. The only choice they have is success and failure. Commonly the perception of success is determined by hard work in an organized company which is established in a free market environment. In a free market economy organizations are framed and operate in fashion which is only designed towards maximizing profits and have no further intentions of doing any good to society. It is a challenge to make these organizations believe or convince that ethical behaviors would be eventually beneficial to them. For doing this organizations must be convinced about importance of long term solutions. Employees, managers and executives can be expected to attain high standards of ethics only when they feel respected and recognized in the organization which actually respects those standards. One of the key ways to unraveling the undesirable conditions of perceived absence of business ethics is through the encouragement of on identity community, company and workforce (Barlette & Preston, 2000). Despite the challenges associated with the establishment of ethical standards in organizations, researchers are optimistic about how ethics can be made mandatory and an integral part of businesses. One potential way of addressing the problem is to decide on the right level of analysis in analyzing the study of organizational ethics. Boatright (1988), for example has put forth the role of organizational actors in intervening between the organizational and individual level analysis. The importance of managerial roles and responsibilities and their relevance to the ethical considerations of organizations is considered critical by the researcher. Additionally another common approach of addressing the issue is the adoption of ethical decision making framework or structure in organizations which inspects and identifies the importance of both individual characteristics and organizational forces in ethical decision making. However, literature regarding ethical decision making has not yet attained a stage of theoretical coherence or integration. One of the most prominent models of ethical decision making in businesses is proposed by Trevino (1986). According to this model ethical decision making results out of the interaction between situational and individual components with the mode of thoughts of individuals regarding ethical dilemmas (Bartlett, 2003, p.4). The problem with implementing the above models is that they are too widely focused and seek to integrate analysis at various levels. These models of decision making often fail to provide a compelling detail of the actual processes in which individuals can engage themselves in making decisions regarding ethical concerns and issues and constitute more than the list of variables that can influence that unexplained process. Even though the theoretical ground for the study of business ethics is offered in the form of both psychology and philosophy of moral development, the approaches continue to have limited value when they it comes to applying ethical theories in real life situations. Maclagan (1995) has suggested that researchers associated with business ethics need to recognize the disorder and complexity of real-life management practices and undertake methods of investigation and conceptual frameworks which allow for this, instead of borrowing from intangible concepts of philosophical ethics theory. Sears Auto unethical behavior To deal with the issue of unethical behavior, a case study of Sears Auto has been analyzed. Sears Auto Centers mainly concentrated on some of the basic “undercar” services which included tires, mufflers, brakes, shock absorbers, and also steering mechanisms. DCA’s investigators from the Bureau of Automotive Repair had purchased old vehicles which was in need of minor repairs and had also disassembled the suspension systems and brakes. After Examining and each of the part, the investigators took the automobiles where the brake was inspected. Out of 38, 34 instances, Sears’s employees had recommended unnecessary services and repair, and some of the auto centers had also charged for those parts which were not installed. The price was about $235, but in two of the cases the amount exceeded $500 (Boatright, 2007). The above actions of Sears Auto centers indicated that the organization was not concerned about the quality of service, product, nor ethical behavior. Sears Auto centers were charged with the fact that it has been performing unnecessary repair to the customer’s vehicles. Many believe in the fact that due to change in the compensation system gave rise to the problem. Compensation policy of Sears Auto changed from ‘strictly’ an hour wage to an hour wage which equals to about 83% of the former earning along with variables. The increase pressured the mechanics to speed up their work and surpass a minimum production quote (Brenkert & Beauchamp, 2012, p. 711). In the case of Sears Automotive which had numerous complaints had to adjust to public humiliation of many defaulted vehicles returned from lack of proper service provided to the customers. The state of California stated the blame was heavily placed on their corporate management practices and poor regulation of its employees. As business owners, the leaders are responsible for the production of its products. If the main emphasis were visibly on the quality of service and not on whether or not the company could cut back by shaving hours to reduce the amount of money paid out by the company hourly, then a large amount of these complaints may not have occurred. Quotas should be planned in the structuring of organizational layouts, but never at the expense of the customers. Sears clearly did not conduct these issues in the best ethical manner possible. Thus to control unethical behavior, firms needs to have effective code of ethics and enforce the policies through training, pay practices and performance appraisals. Pay practice should be thus designed in a way to encourage ethical practice and discourage unethical behavior (Werner, Schuler & Jackson, 2011, p. 408). Conclusion With the increasing competitive business environment and complexities of the workplace, maintaining ethical standards have become increasingly difficult in the recent organizational scenario. Businesses find it extremely difficult to maintain ethical standards at the workplace on account of maintaining the standards of revenues and profits. However, they shirk from realizing that maintaining an ethical code of conduct at the workplace would eventually be beneficial in yielding higher returns in future. When unethical acts are present in the business, it can bring significant risk to the organization. It is also understood that individuals who remain most vulnerable to suffer from such unethical practices are the quality professionals. However research reveals that organizations demonstrating ethics at the workplace have eventually made financial gains on account of the same. Few of the other aspects which make maintaining ethical standards in the organization challenging are the difficulty of applying the theoretical concepts in practice. In this regards, the role of the management and top level executives of the organization is important. It is crucial for the management to go beyond the application of code of conduct at the workplace and actually intervene in organizational practices which involves ethical issues and concerns. Besides establishing CSR standards, they themselves must display the right attitudes and behavior at the workplace and act as examples for al to follow. Researchers have also realized the importance of establishing ethical decision making framework in the organization for the psychological and philosophical moral development of individuals rather than just applying theories in practice. The case of Sears Automotive is an ideal example of unethical business practices which caused downfall of the company. Along with declining profits the firm also confronted with damaged reputation and image. Thus it is felt that organizations must necessarily have and implement an effective ethical code of conduct which must primarily followed by the top level executives of the organization who are looked up to by the junior level employees. Reference Barlette, A. & Preston, D. (2000). Can Ethical Behavior really exist in business?. Retrieved from http://www.deepdyve.com/lp/springer-journals/can-ethical-behaviour-really-exist-in-business-VHyzYVREue. Bartlett, D. (2003). Management and Business Ethics: A Critique and Integration of Ethical Boatright, J. (2009).  Ethics and the conduct of business (6th ed.) Upper Saddle River, NJ: Prentice Hall. Brenkert, G. G. & Beauchamp, T. L., 2012. The Oxford Handbook of Business Ethics. USA: Oxford University Press. Catalyst. (2002). What Is Corporate Social Responsibility? Retrieved from http://pdf.usaid.gov/pdf_docs/Pnada498.pdf. Decision-making Models. British Journal of Management, Vol. 14, 223–235 (2003). Retrieved from http://php.scripts.psu.edu/users/k/r/krm10/PSY597SP07/Bartlet%20ethics%20models.pdf. Sims, R. R. (1992). The Challenge of Ethical Behavior in Organizations. Retrieved from http://resources.metapress.com/pdf-preview.axd?code=g38w400021h25423&size=largest. Werner, S. Schuler, R. & Jackson, S., 2011. Human Resource Management. USA: Cengage Learning. Read More