Lean Improvement Techniques for of Industrial and Ethical Issues - Case Study Example

Management Lean improvement techniques to the study of Industrial and ethical issues Lean Improvement Techniques for Study of Industrial and Ethical Issues A company, as defined by law, is only a name on a piece of paper. The company acts and conducts itself according to the employees that work in that entity. In ethical thinking there should be no distinction of rank within a company. There are times when executives can be held directly responsible and at the same time, there are cases where employees are acting unethically without the executives knowing. Neither title of executive or employee equates to moral perfection. Therefore, when a company has acted irresponsibly, its employees must be held liable in a proportionate amount. As for the future of ethics in business, if employees started to think more in long term benefits and profits, many of the ethical dilemmas today would be greatly reduced. A business today uses the measuring stick of profitability. There needs to be a shift to the thinking of total utility for the social community in order to weigh business decisions. Opponents would argue that this is a long-term plan that requires too many radical changes in the face of business. Also, there is no way that an industry wide standard can be set since there are too many types of corporations. Plus, companies have different needs and every moral rule is subjective according to the type of business that everyone conducts. Although there are no industry standards that are feasible, it is possible for every company to examine their practices as well as the attitude of their employees. There will be companies that find that they are doing fine with employees that are aware of their moral values. Yet other companies will find that they do have areas that need improvement. It is steps like these that start implementing changes. Once a few companies start to see the benefits of changes, it can help to encourage other companies to follow suit. After all, mistakes in one department can cause the deterioration of an entire corporation. When the costs that are possible are taken into account, the changes required to rectify this are small in comparison. Purpose, People, Planet, Probity (or Purity or Principles): 4 P model This 4 P model is not a process or technique - it's the character or personality of a good ethical manager or leader or organization. The four corner stones of sustainable success in any modern business venture, and is a maxim for today's management and organizational philosophy. Probity means honesty, uprightness - it's from the Latin word probus, meaning good. 'Purpose' is an apt replacement for 'Profit' and thus makes the acronym appropriate for use in not-for-profit organizations. Profit-focused corporations can of course substitute 'Profit' for 'Purpose'. The aim of all good modern organizations is to reconcile the organizational purpose (whether this be profit for shareholders, or cost-effective services delivery, in the case of public services) with the needs and feelings of people (staff, customers, suppliers, local communities, stakeholders, etc) with proper consideration for the planet - the world we live in (in terms of sustainability, environment, wildlife, natural resources, our heritage, 'fair trade', other cultures and societies, etc) and at all times acting with probity - encompassing love, integrity, compassion, honesty, and truth. Probity enables the other potentially conflicting aims to be harmonised so that the mix is sustainable, ethical and successful. Traditional inward-looking management and leadership skills (which historically considered only the purpose - typically profit - and the methods for achieving it) are no longer sufficient for sustainable organizational success. Organizations have a far wider agenda today. Moreover, performance, behaviour and standards are transparent globally - the whole world can see and judge how leaders and organizations behave - and the modern leader must now lead with this global accountability. From a business perspective, working under government contracts can be a very lucrative proposition. In general, a stream of orders keep coming in, revenue increases and the company grows in the aggregate. The obvious downfalls to working in this manner are both higher quality expected as well as the extensive research and documentation required for government contracts. If a part fails to perform correctly it can cause minor glitches as well as problems that can carry serious repercussions. Being more ethical and responsible now produces clear measurable outcomes.More and more leaders of businesses and other organizations are now waking up to the reality of social responsibility and organizational ethics. Public opinion, unleashed by the internet particularly, is re-shaping expectations and standards. Organizational behaviour - good and bad - is more transparent than ever - globally. Injustice anywhere in the world is becoming more and more visible, and less and less acceptable. Reaction to corporate recklessness, exploitation, dishonesty and negligence it is becoming more and more organized and potent. Employers, businesses and organizations of all sorts - especially the big high profile ones - are now recognising that there are solid effects and outcomes driving organizational change. There are now real incentives for doing the right thing, and real disincentives for doing the wrong things. As never before, there are huge organizational advantages from behaving ethically, with humanity, compassion, and with proper consideration for the world beyond the boardroom and the shareholders: 1. Competitive advantage - customers are increasingly favouring providers and suppliers who demonstrate responsibility and ethical practices. Failure to do so means lost market share, and shrinking popularity, which reduces revenues, profits, or whatever other results the organization seeks to achieve. 2. Better staff attraction and retention - the best staff want to work for truly responsible and ethical employers. Failing to be a good employer means good staff leaves, and reduces the likelihood of attracting good new-starters. This pushes up costs and undermines performance and efficiency. Aside from this, good organizations simply can't function without good people. 3. Investment - few and fewer investors want to invest in organizations which lack integrity and responsibility, because they don't want the association, and because they know that for all the other reasons here, performance will eventually decline, and who wants to invest in a lost cause' 4. Morale and culture - staff those work in a high-integrity, socially responsible, globally considerate organization are far less prone to stress, attrition and dissatisfaction. Therefore they are happier and more productive. Happy productive people are a common feature in highly successful organizations. Stressed unhappy staff are less productive, take more time off, need more managing, and also take no interest in sorting out the organization's failings when the whole thing implodes. 5. Reputation - it takes years, decades, to build organizational reputation - but only one scandal to destroy it. Ethical responsible organizations are far less prone to scandals and disasters. And if one does occur, an ethical responsible organization will automatically know how to deal with it quickly and openly and honestly. People tend to forgive organizations that are genuinely trying to do the right thing. People do not forgive, and are actually deeply insulted by, organizations who fail and then fail again by not addressing the problem and the root cause. Arrogant leaders share this weird delusion that no one can see what they're up to. Years ago maybe they could hide, but now there's absolutely no hiding place. 6. Legal and regulatory reasons - soon there'll be no choice anyway - all organizations will have to comply with proper ethical and socially responsible standards. And these standards and compliance mechanisms will be global. Welcome to the age of transparency and accountability. So it makes sense to change before you are forced to. 7. Legacy - even the most deluded leaders will admit in the cold light of day that they'd prefer to be remembered for doing something good, rather than making a pile of money or building a great big empire. It's human nature to be good. Humankind would not have survived were this not so. The greedy and the deluded have traditionally been able to persist with unethical irresponsible behaviour because there's been nothing much stopping them, or reminding them that maybe there is another way, but no longer. Part of the re-shaping of attitudes and expectations is that making a pile of money, and building a great big empire, are becoming stigmatised. What's so great about leaving behind a pile of money or a great big empire if it's been at the cost of others' well being, or the health of the planet' The ethics and responsibility zeitgeist is fundamentally changing the view of what a lifetime legacy should be and can be. And this will change the deeper aspirations of leaders, present and future, who can now see more clearly what a real legacy is. One of the most important things that is ideal for a company to be able to conduct its own investigation as well as its own punishments. After all, it would be best for a company to determine what specific departments are responsible rather than having a court of law impose a burden on every employee in its corporation. Yet, since there are ethical issues of dishonesty and secrecy involved, Companies should conduct a thorough analysis of their employees as well as their own practices. It is through efforts like these that a corporation can raise the ethical standard of everyone in their organization. The company executives would have to encourage their employees to voice their concerns in regards to the advancement of the company. Through open communication, a company can resolve a variety of its ethical dilemmas. The question that naturally arises, in debating corporate responsibility, is what types of checks and balances can be employed within a company to ensure that a corporation and all of its agents act in an ethical manner. The two sides that must ultimately be balanced are the self-interests of the company, with main goal of maximum profit, and the impacts that a corporation can cause on society. To further strengthen this need, one could argue that there are very few business decisions that do not affect society in way or another. In fact, with the plethora of corporations, society is being affected on various fronts; everything from water contamination to air bag safety is a concern. The biggest problem that all of us must contend with is that every decision that a business makes is gauged by the financial responsibility to their corporation instead of their social responsibility to the local community, Expectations of employees - research survey How are UK organizations faring in responding to employees' increasing work expectations and ethical considerations' A survey among 22,480 managers published by the Chartered Management Institute and Remuneration Economics on 28 June 2006 suggests that UK organizations are not finding it any easier to retain key staff, despite all read about corporate social responsibility and a supposedly greater corporate awareness of people's wider needs at work: UK executives are apparently resigning in increasing numbers, despite benefiting from the largest movement in earnings since 2002. According to the research, labour turnover amongst UK organizations has jumped from 7.6 to 11.9 per cent, for the 12 months to January 2006. Their desire to change jobs is evident even although bonus payments are more frequent and benefits packages are improving. The survey's findings, while ostensibly focused on pay and staff turnover, there are clear evidence that vast numbers of managers and staff are unhappy at work and that traditional financial incentives are not the solution. Key findings include: Talent turnover - 55 per cent of organizations admit they have staff retention problems, a figure that has doubled in the space of 3 years. They blame restructuring programmes (20 per cent), office location (15 per cent) and competition from other organizations (57 per cent) for their difficulties. Career more important than cash - the average earnings increase is 5.7 per cent (the highest rise since 2002) but executives are increasingly likely to demand changes if they are not happy with their current role. Last year 4.9 per cent of the UK's 4.6 million managers demanded job transfers, up from 1.4 per cent in the 2005 survey and 37 per cent left their employer because of a 'lack of career opportunities'. Bonus levels - nearly 80 per cent of organizations gave bonuses in the year to January 2006. The value of bonuses for UK managers is also up, worth 10.9 per cent of their salary, compared to 10.4 per cent in the previous year. Resignation rates have increased in the year to January 2006 as organizations fail to meet the needs of their staff. The survey of 22,480 individuals shows that despite an increase in earnings, the UK's executives have become frustrated by company pay structures and a lack of job satisfaction. The 2006 National Management Salary Survey, published by the Chartered Management Institute and Remuneration Economics, reveals a labour turnover rate of 11.9 per cent, compared to 7.6 for the previous year. Resignations stand at 4.6 per cent for managers, compared to 3 per cent in the 2005 survey and requests for internal moves have climbed to 4.9 per cent, from a low of 1.4 per cent twelve months ago. This desire to change jobs comes despite employers offering an average increase in earnings of 5.7 per cent - the highest annual increase since 2002. The findings reveal that the average total earnings for managers in the UK are '47,055, with managers in the North West bottom of this year's 'earnings league table'. At '41,329 their earnings represent a 33 per cent difference against the top earners (Inner London at '55,302). Over the year to January 2006, 79 per cent of organizations gave bonus payments to their staff, compared to 70 per cent in the previous year. This wide-scale distribution represents a return to the heights of 2002, the last time more than three-quarters of UK employers made bonus payments to all executives. The average managers' bonus is now worth 10.9 per cent of their salary, compared to 10.4 per cent the previous year, and directors' bonuses were worth 38.9 per cent of their salary (38.6 per cent in the previous year's survey). However, despite the increase in earnings, the UK's employers are finding that financial rewards alone do not retain people. More than half the organizations (55.1 per cent) reported retention problems in the 2006 survey (up from 45.4 per cent, last year) and 6 in 10 admitted difficulty recruiting. Asked to explain these retention and recruitment problems, many organizations cited dissatisfaction with the working environment and the ethical considerations, frustrations with company pay structures and a lack of skills or development opportunities: Adverse environments - 20 per cent (of organizations) said restructuring or job insecurity caused uncertainty. 15 per cent suggested staff were unhappy with office location or relocation plans and 9 per cent focused on the lack of facilities available at work. Distribution of pay - 39 per cent claimed they lost staff because of the salaries on offer and many organisations also identified dissatisfaction caused by the distribution of bonus payments. Although the overall incidence of bonus payments in organisations is high (79 per cent, as stated above) this year's survey shows that 62 per cent of managers received a bonus, compared to 69 per cent last year. The proportion of directors receiving bonuses has, however, increased to 85 per cent, from 77 per cent. Truncated training - over one third (37 per cent or organizations) admitted they offered little in the way of career development or training, and of these organizations, 29 per cent suggested structured training was not open to all staff (up from 23 per cent last year). More than half (53 per cent) also said they could not find staff with the required specialist skills. Jo Causon, director, marketing and corporate affairs at the Chartered Management Institute, says: "The reported increase in resignations and ethical questions are a matter for concern, especially as organizations continue to identify skills gaps in specialist areas. Of course, a certain amount of labour turnover can be a good thing, but if the current trend is allowed to continue it could breed dangerous levels of uncertainty and impact on the strategic development of UK organizations." Organizational behavior is about people at work in all kinds of organizations and how they may be motivated to work together in more effective ways. By studying these behaviors individuals become more aware of your business ethics and are able to positively find ways to transfer your employee's attitudes and behaviors into more positive experiences personally and for the company. Most organizations realize that being ethical is good business practice and pays in the long run. To be ethical requires treating others -- customers and employees -- properly and fairly. A company that is interested in growth and profits must establish relationships with customers and employees based on trust. Improvement of the employer-employee relationship is important to both parties for several reasons. First, employee productivity increases when employers treat their employees with more respect. Second, employees may find that increased ethical behavior on their part actually results in higher compensation. For example, many companies are involved in relationship marketing, which is the process of creating and maintaining long-term relationships with customers. Relationship marketing, which can help a company increase its profits, requires the cooperation of employees. Employees that perform their jobs conscientiously and diligently are frequently rewarded with higher wages. Third, even if there is no material gain, ethically appropriate behavior provides a sense of self-satisfaction. Therefore, it is advantageous for every organization to maintain high ethical standards and thereby foster trust between a company and its employees. In today's business organization workers should have their own basic rights. Organizations should be set to award raises, vacation time, insurance, liability, and to be treated equally as every employee on the job. Unionizing and receiving fair, equitable treatment is necessary and should be enforced on every organization that will also create a good firm. However, it may be wrong believe that managers in charge should have the right to monitor a workers e-mail and telephone conversations. Managers should build trust with their workers and realize that there the people producing the labor. Virtually all studies of employee satisfaction show that local managers and supervisors more affectively do influencing employee attitudes than by any other force with in a business or organization. Positive attitudes, behaviors, and language are the most critical ingredients, supported by constant application, interpretation, and example provided by organizational leadership. Some of the principles that are pretty powerful techniques to redirect redefine and refocus towards ethical issues how employees think, speak and behave and achieve in their work environment: 1. Managers should be more constructive. This means that daily, managers should seek to make and solicit positive, constructive ethical suggestions to their employees. They should seek out useful questions to answer everyday and critique performance constructively. 2. Managers should be positive. By teaching others to have fun and celebrate some success every day is positive behavior. Using positive language and reducing the negative language in a group should eliminate negative emotions amongst the team and or company. 3. Managers should be outcome focused. Learn from positive lessons from adverse situations and focus on today and tomorrow. This will commit the manager to a forward momentum that each employee can follow. 4. Managers should be reflective and seek to learn everyday. Managers should be pragmatic. If management makes forecasts achievable you are helping others achieve their goals. 5. Managers should relentlessly seek positive incremental improvements everyday. Help the employees break down problems into solvable parts and inculcate moral ethics in them. The employees who are satisfied in their jobs will be more motivated to perform effectively and there is a scope to gain more and more knowledge, update with new skills and they perform different tasks that require different skills. They are able to perform a complete piece of work. This gives a sense of completion and responsibility for the product Lastly abiding by the ethical principles is a must for multinational companies. Knowing where to locate and purchasing inputs from countries were the cost of productivity is favorable will better the company in many ways. Multinational companies should attract to locations were labor cost is low and occupational skills are high. The result of that method will increase the companies' productivity and profitability. Also knowing how to treat workforces in the company that's operated can benefit heavily on the firm. Treating the workforce the best way that you can will only higher productivity and profits made. Therefore, multinationals should control the relationship between the business system and society. References Pava, Moses. 1995. Corporate Responsibilities and Financial Performance. London Quorum Books Velazquez, Manuel. 1992. Business Ethics: Concepts and Cases. New Jersey Prentice Hall Publishing Blankenship A B, and Doyle J B. Marketing Research Management. The American Management Association, 2001. 11-12 Chartered Management Institute. 2 Savoy Court, Strand, London. www.managers.org.uk Maslow, Abraham. "Basic needs." Workforce 81:1 (2002): 49 EBSCO. University of Phoenix Online collection. Retrieved January 9, 200413 Sharan M B, and Surar Damodar. Management Through Interpersonal Relationships. Jaico Publishing House.Mumbai:2003.15-17 McShane-Von Glinow (2003). Organizational Behavior, Second Edition.University of Phoenix Custom Edition e-text. The McGraw-Hill Company. 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