Business Ethics by Serco Group PLC - Coursework Example

BUSINESS ETHICS- SERCO GROUP PLC Business Ethics- Serco Group PLC Part A Serco Group PLC is a U.K. private outsourcing firm that was founded 1929. The company was listed in the London Stock Exchange in 1988 and currently provides a range of services to private and public sectors, including local governments and top companies. Serco Group PLC has grown into a giant multinational company with businesses in different sectors with subsidiaries in the Middle East, North America, Asia Pacific region and Europe, including its home market, the United Kingdom. It is a major purveyor of transport and traffic control, military weapons, penitentiaries and aviation industry. The company’s diversified business operation has been one of its major strengths, which has cushioned it from adverse impacts of economic downturn (Serco 2013). Having been in business for more than 80 years, Serco Group PLC boast of the vast experience it has over other firms in the service market. The company’s value focus is driven by its culture and ethos, which influence how employees are supposed to perform their tasks. Serco embraces creativity by giving people the chance to explore new ideas that contribute positively to the health of the organisation. Business ethics helps companies to address moral and ethical aspects of their commercial activities (Desjardins 2008). Effective communication plays a significant role in ensuring that an organisation’s “best practices” are known to every employee and all other stakeholders of the company. Developing an image of “ethical company” requires a company to adopt and integrate “best ethical practices” in its culture. As such, the culture of Serco Group is one aspect that the company has focused on as a key driver in its active pursuit of business best practices or establishing itself as an ethical firm. The success of any company in the ethics sphere is greatly embedded in the manner in which the company makes its ethical and social responsibility commitment known to every member of the organisation and encouraging employees to embrace ethical policies of the company (Spencer2013). Establishing a culture that fosters ethics can never be a success if left in the hands of a few people or organisational units of the company. Companies that succeed to cast the image of “Ethical Corporation” usually have every employee actively involved, from the security personnel at the gate the executives of the company. As such, every single worker within an organisation should be involved and made aware of the company’s commitment towards ethical practices and high display of corporate social responsibility. Serco Group PLC acknowledges that doing business in a responsible way is pivotal to their success. The company realised that responsible business practices of the company enhance its financial performance and established sustainable shareholder value. Serco has integrated has incorporated corporate responsibility in every dimension of Serco Management System (SMS), which creates rules that direct the behaviour of employees and determine how organisational goals are to be achieved. The SMS covers group-wide standards and policies that ensure every single business process in all sectors are run in the most ethical manner (Serco 2013). In order to be successful with the implementation of ethical culture, a company must develop and implement effective ethics policies and programs that emphasise and reinforce the significance of ethics and integrity in the company’s journey towards achieving its long-term objectives. A company needs to establish a dedicated communication effort and strategy in support of the company’s commitment and compliance with ethical requirements of corporations. Upon opening the company’s website, one is hit by well organised slides that display in the home page of the website. These slides contain information about the businesses of the company, communicating them out in such a way that spells ethical concern of the company. For every business operation of Serco Group Inc. presented on the slides, it appears like the company is only trying to fulfil its responsibility of making life better by offering critical services. The company also have in its website a corporate ethics and responsibility handle from where anyone can access its operation history and ethical practices in the past. The company clearly states to the stakeholders how it ensures that all its business operations are done in an ethical and responsible way. The company uses this avenue to convince its stakeholders that it has the welfare of the society at heart and upholds high business ethics and integrity, which are critical success factors for any business enterprise. Serco Group PLC has established programmes and principles that govern its business and emphasises on service quality aimed at making the lives of people better. The company communicates its commitment to ethical practices and responsibility to employees through a set of rules and guidelines that direct employees on how they should behave and perform tasks assigned to them. The company has governing principles that all its employees must adhere to when dealing with all stakeholders of the company, including suppliers, partners, and customers among others (Serco 2013). Serco, through its governing principles, fosters entrepreneurial culture by motivating its employees to explore new ideas and thus promote creative thinking. The company harnesses the power of individuals through talent recognition and development. According to the company’s website, Serco focuses on delivering to its customers and other stakeholders what it promises. Further, the company emphasises on operating in an environment of trust and respect. Serco operates ethically and responsibly and focuses on sustaining safety in its operations. Serco’s aim is to treat others in a similar way that they would want people to treat it and focuses on harmonious integration into the communities in which it does business. As of December 2013, Serco had provided employment to120, 535 people in the company (Serco 2013). This figure has been posted on the company’s website and featured under the company’s business key facts. By featuring this huge number of employees on its website, the company communicates to its stakeholder how committed it is to improve the welfare of the individuals, not only from the United Kingdom, but also from other countries in which it operates. The company clearly indicates that it is its responsibility to improve the lives of people. The company uses annual reports to communicate to stockholders and stakeholders about the company’s ethics and responsibility journey throughout the year. The company posts its annual engagements that showing its commitment to do business in the most ethical and responsible manner. The company has its social corporate responsibility reports posted in its website so that all the interested parties can access them any time as they wish upon accessing the website of the company. Serco Group PLC uses community-based initiatives to demonstrate its commitment to all stakeholders (Serco 2013). The company lists all its engagement with the community, which communicates the company’s commitment to improving living standards for all individuals in the society in which it operates. Active participation in development of the welfare of the community is one way through which organisations create an impression of ethical concern to the society and responsible conduct of business. For example, the company communicates its commitment to corporate social responsibility via Serco25 (Serco 2013), which facilitates campaigns for raising funds for charities aimed at developing communities. The establishment of Serco25 is a communication strategy that is likely to have a big impact on the minds of stakeholders as it portrays the company to be very concerned with the welfare of the communities, which form its market. Through demonstrating concern for the society by active mobilization of funds for bettering the lives of individuals, Serco Group Inc. has established itself as an ethical company in the eye of the public. Serco Group PLC also utilises advertisements and social media to convey their corporate social responsibility to stakeholders. The company has created interactive accounts in social media such as Facebook and Twitter among others in which stakeholders are engaged on matters concerning the company’s ethical practices. Serco Group Inc. Has used social media to extensively publicise its ethical and social responsibility commitment to stakeholders in the United Kingdom and also in other countries in which it operates. The advertisements aimed at promoting the sales of the company’s products all attempt to convince the public that the company is highly committed to doing business in a moral manner and does all it takes to adhere to its guiding ethical principles. Further, Serco Group PLC has a direct contact to media, which facilitates the communication of its best business practices to the public. Critically assessing the active pursuit of ethics and responsibility display, it is clear that Serco Group PLC focuses on displaying high levels of business ethics and corporate responsibility (Serco 2013) in order to create a positive impression in the public sphere and hence build a sustainable competitive advantage over its competitors. Clear communication of its commitment to carry out business ethically and contribute positively to the development of the society provides the company with the opportunity to create a loyal base of customer and reduce community resistance, which would jeopardise the operations of the firm. Part B For every organisation, codes of ethics are implemented to direct organisational behaviour (Gilman 2005). The effectiveness of code of ethics and principles related to ethical and responsible conduct within the organisation is usually determined by assessing the extent to which the codes or principles influence the behaviour of individuals making up the organisation (Gilman 2005). Codes of ethics are usually designed with a notion that they will shape the behaviour of individuals within an organisation to act and behave in a desired and predetermined manner. Ethical principles promote moral choice in decision making process within an organisation and thus limit the chances of employees making bad decisions, which might taint the image of the company. CSR has become a crucial platform through which organisations such as Serco Group Inc. exhibit their ethical practices to win the trust of their stakeholders, especially customers (Sternberg 1994). According to Goodpaster (1991), business organisations have in place ethics policies that make them take into consideration the expectation of the public as they do their business. CSR has emerged a crucial approach through which companies demonstrate their commitment to contribute positively to the welfare of the society (Porter & Kramer 2006; Crane & Matten 2004). CSR has become a very important source of competitive advantage for firms because people have become more affiliated with organisations that show concern for the societies in which they operate (Porter & Kramer 2006). Serco Group PLC’s CSR initiatives constitute a major source of its competitive advantage in the market. The company’s ethical guidelines and policies enable it to avoid possible legal costs and create an image of a company that is committed to improving the welfare of the society. Developing a safe work environment entails strong focus on attaining moral safety (Reinhardt & Stavins 2010). An organisation that commits to Social Responsibility must engage in active pursuit of psychological, social, physical as well as moral safety in order to avoid any probable rebuff form the society because the infringement of the four basic domains is likely to motivate revenge. Corporate Responsibility encompasses Serco Group’s most important dimensions of sustainable business (Spencer2013). The CSR model of the company directly influences how the company conducts its businesses. Serco Group Company’s CSR model emphasises employee safety in the workplace, environmental protection, energy efficiency and community development, which have been incorporated into the daily operations of the company. As such, organisations usually develop policies and actions that encompass the idea of justice, owing to the fact that injustice triggers outrage among people (Reinhardt & Stavins 2010). By instituting ethical principles and actions, Serco Group justifies it commitment to fulfil its promise to improve the lives of individuals and meet sophisticated ethical responsibility that it owes to its stakeholders in the wider cultural sphere. Serco Group’s ethics principles and code of conduct enforces ethical behaviour that all employees are anticipated to comply with (Serco 2013). The company’s ethical principles illuminate ethical conducts, which reflects the company’s responsible actions aimed at honouring both implicit and explicit dealings with all stakeholders. The main objective behind establishing Serco Group’s ethical principles and actions revolves around creating a moral and ethical environment that would enable the company to establish itself in the public sphere as an ethical organisation. Basically, Corporate Social Responsibility (CSR) is a sub-strategy of the overall business strategy of an organisation (Reinhardt & Stavins 2010). CSR entails integrating social and environmental aspects of the company’s business operations into the general business strategy. Corporate social responsibility has been linked with increased competitiveness of organisations. According to Gilman (2005), the proponents of CSR argue that CSR strategy reduces the cost of doing business. Ethical and responsible business conduct comes with the benefit of saving cost of doing business (Reinhardt & Stavins 2010). Economic scholars have established that companies can reap big from establishing and maintaining sustainable ethical business practices. The advantages of enforcing CSR principles far much outweigh the cost of implementing programmes that reflect the company’s ethical and responsible engagement with the society (Reinhardt & Stavins 2010). According to Miles and Coving (2000), CSR-oriented environmental costs are fundamentally investments by companies, which pay off in future owing to their cost saving nature in the dimension of reduced litigations, insurance expenditures as well as energy costs. Socially responsible companies are usually concerned with the impact of their decisions or actions on the stakeholders. Serco Group Inc. is likely to benefits from pursuing its CSR principles through improved performance of its human resources. Good employee relations in the workplace ensure low employee turnover and high motivation. The values of the company can potentially spur the growth and success of a company. Pursuing CSR principles enables Serco Group Company to foster a culture of ethical behaviour and conduct of all employees, which stimulates high levels of productivity and innovation within the company. Like other large organisations, Serco has acknowledges the importance of clear CSR principles in attracting and retaining its employees. In order to attract and retain the best talents, Serco Group holds on to demonstrating high levels of CSR and business ethics credentials. The company has been able to demonstrate its CSR credentials through active participation in community projects through Serco25. The extensive engagement in no-profit activities like fundraiser campaigns for charities aimed at improving the welfare of communities has propelled Serco Group Company to its commercial success and established the company as one of the most ethical companies around the world. Companies with programmes that facilitate employee volunteering sessions boost the morale of their employees because such volunteer programmes enable workers to gain new skills and experiences. As such, Serco Group significantly increases its competitive edge and reduces its cost of doing business by actively pursuing its ethics and CSR principles. In the present competitive business world, creating a sustainable competitive advantage over rivals is crucial for not only generating reasonable profits to shareholders, but also surviving the threat of competition. Galbreath (2009) argues that “strategy serves as a foundation for a business firm’s creation, while establishing its position in the market, its competitiveness and its on-going existence” (p.113). The failure by a company to honour ethical and CSR promises can prove detrimental to the future health of the organisation as it takes away public trust (Brenkert 2008). In the present world, people only want to associate with organisations that appear to care about communities in which they operate. There are numerous watchdogs such as non-governmental organisations (NGOs) that usually want to ensure that organisations live up to their promises. The advancement in technology has even made it easier for people to know whether a company is working against its ethical and CSR promises. Therefore, companies risk losing their hard-won good public image in the event that they fail to honour their CSR and ethical practice promises. Such organisations are likely to get eliminated from the market through competition by their rivals that stick to their CSR and ethics promises. Not obeying ethics and CSR promises can make a company to lose its customers, which marks the end of organisational reign. Despite its focus on delivering ethics and CSR promises, Serco has been unable to evade the jibes of critics. For example, the company has been accused of performance failure with reference to Sercos Australian Detention Centre, which is an immigration detention centre (OKeeffe 2011). Further, the Department of Home Affairs has indicated its dissatisfaction with the sub-standard housing the Serco Group Inc. provides to asylum seekers in the United Kingdom. The company has also come under fire for failure to demonstrate business integrity in cases where detainees in its centres have managed to escape. Everyone would expect a company that emphasises on ethics and CSR not to falter on matters likely to affect the society in a negative way, thus many would find the company’s critics assertions justified. Stakeholder theory emphasises on moral and ethical business practices of firms and calls on business organisations to demonstrate high levels of concern for their stakeholders (Jensen 2002). However, critics of CSR would argue that Serco has no other social responsibility apart from generating profit for its shareholders. Stockholder theory holds that the main function of a business enterprise is to increase value for its shareholders (Jensen 2002). Friedman (1970) asserts that business organisations have only one responsibility of increasing profits for stockholders. According to Friedman, the only social responsibility of a business enterprise is to effectively utilise its resources to make as much profits as it can for its owners provided its operations do not deter open and free competition and there is no fraud involved in the process. Nonetheless, CSR and ethical business practices have been proven to be key pillars for good market performance of organisations. Serco Group Inc. has created sustainable competitive advantage by ensuring that it conducts its business activities in the most ethical manner that resonates with its ethics and CSR promises. The company engages in development initiatives in communities where it operates, thus winning the hearts of many and establishing its image as an ethical and responsible company. Even though the company has occasionally come under fire from critics, it has managed to survive the threats of competition in the market because of its sustainable competitive advantage built on CSR and ethical conduct of its businesses. Bibliography Brenkert, GG 2008, “Marketing ethics,” Malden, MA: Blackwell. Crane, A & Matten, D 2004, “Business ethics, a European perspective: managing corporate citizenship and sustainability in the age of globalization,” Oxford University Press, Oxford. Desjardins, JR 2008, “An introduction to business ethics, 3rd Edition,” McGraw-Hill, New York. Friedman, M 1970, “The Social Responsibility of Business is to Increase its Profits”, The New York Times. September 13th, 1970. 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