Designing an Ethics Program - Essay Example

Running Head: ETHICS PROGRAM Ethics Program and Section # of The need for ethic program in an organization In the 21st century the demand for the business which is conscious and well aware of the ethical principles and morals is increasing. Business ethics covers all the aspects of the businesses such as the conduct of the individual, the organizations and the conduct of the individual related to the firm. The pressure has been increasing on the firms for maintaining their ethical code of code and to implement their ethical program. This is done through new laws and regulations. There are businesses that try to gain short term profits by performing in an unethical manner however they don't realize that this act can undermine the economy as a whole (Boulton, 2006). There are many forms of business ethics such as the philosophy of the business. By this we mean that if the sole purpose of the firm is to maximize the wealth of its shareholders then they will not consider the interest of anyone else. Then there is the concept of corporate social responsibility which considers the rights of company and the society as a whole. Then there are ethical issues pertaining to the intra industry competition, corporate governance and the misuse of the ethics for one's own benefits. In order to overcome such ethical issues companies focus more these days towards the formation of their ethical program in the organization. They are diverted towards promoting non social values by addressing such issues on their company websites under headings such as social responsibility charters and the codes of social conduct and so on. There are mainly three ways in which the company can make this ethical program. Benefits to the company One such business is ABC manufacturer of cereals offering products for children and family. The company also sells frozen waffles and pancakes. It is very important for them to generate an ethics program as over the years it has been seen that businesses and governments have to confront public, political and legal reactions in cases of misconduct. Compliance with the company's policies, regulations and procedures is an effective tool for the smooth functioning of the organization as well as its reputation of the business. Customers also perceive you positively. Successful organizations particularly lay special emphasis on it due to its benefits. It reduces widespread risk. It is sign of good corporate governance; it will facilitate the company in achieving its goals and long term prosperity. It will promote the values of the organization and help it in maintain its ethical health (Fraedrich & Farrell, 2008-09). There are mainly three ways in which ABC can make this ethical program. ABC can form specific rules and guidelines in order to regulate their standards for example a written code of conduct or it can form a statement which comprises of the missions and values of the business. Then there are some firms that apply corporate philosophy such as Hewlett Packard did, they defined it as HP's way of doing business. Like Hewlett many business organizations use this approach. Research has shown that there are a lot of benefits of such a program such as the prevention of misconduct, this will save the monetary losses and also gain customer trust. The business will be adaptive to organizational change. By implementing the rules they can come up with various other ways of mergers, acquisitions and adapting new technology. Prevent them from getting fines of billions of dollars and penalties which can be very costly. It will help boost the relationship with the stakeholders. Stakeholders are all the groups related to the business that have some form of interest in the business. The company will be able to get away with the corporate scandals if they have a defined compliance and ethics program. Moreover external auditors go through the compliance culture of the company while performing the audit of the company. They have their own criteria which audit the company on their own criteria such as discrimination laws, environmental laws, and employment laws and so on. The ethical practices of accountability, conflict identification and the case of transparency should not be taken by granted by any business. This is why ABC too has defined ethical code of conduct and culture in the organization (Buerstatte, 2004). Ethics in an organization comes from the top management. The CEO and the senior HR management account for 77% and 75% in writing down the code. The chairman contributes 58% and other senior executives make 42%. Together they all give their contribution and a code of ethics is formed. As a company you need to set an example at the top most level so that others in the firm can follow them. If that is not the case then it will be a really difficult task to convince your employees on the implementation of such a program in their day to day dealings. ABC has a well designed ethical policy with standards of behavior in a company which covers all the aspects such as labor, production, and environment and so on. Employee Morale The ethics program will drive up the employee morale and commitment towards the organization. This is directly related to the level of profits earned. A happy and satisfied workforce will tend to contribute the most to the productivity than a worker with low morale and motivation level. But one thing to consider here is that the higher profit itself should not be the criteria for you defining your ethical program. While formulating the strategy at ABC the company heads will look at the bigger picture of social responsibility towards the society as a whole. As far s employee morale and ethics is concerned then the way you treat your employees is how they will treat you. Therefore you may not want to address to them disrespectfully or fail to trust them. There are issues of discrimination, sexual harassment, respecting employee's privacy, health and safety, employment laws, relationship between the employee and the supervisor and so on in the business. The code of compliance at ABC includes rules for all these. The more you show them care and concern and security the more input they will be willing to make towards their work (Lewis, 2009). Business productivity As a business ABC has to see that the product that they are manufacturing doesn't harm the consumers in anyway. As a company they have some duties towards the society and the individual. The product they sell should not be defected or expired; the product testing should not be made on any animal. The ingredients used should meet the quality standards and should the manufacturing. Apart from that there is an ethical relation between the company and the society such as keeping in mind the pollution and environmental laws, recycling and the use of user friendly products. Such acts reflect that the company is not operating merely for profit but for the betterment of the society as well and they care about the well being of their customers. When certain standards are applied for a product then the quality will improve and so will the reputation of the company. There will be standardized high quality product and customer satisfaction which matters the most. Implementation of the ethics program will generate feedback from the customers and other stakeholders and will increase brand loyalty and sales for the company. This will make work much more organized and effective which is taking care of interests of all who is concerned. Basic principles of the ethics program While formulating the ethics program for ABC the first thing one is to decide that how does it want others to perceive the company while doing that and coming up with appropriate policies it is recommended to go through the following five principles The purpose of ABC: this will include vision and the values that the top management wants to ingrain in the other employees of the business and also as part of their organizational culture. This will comprise of the defined acceptable and unacceptable rules. The employees are going to carry on these values for the progress of the goals and mission of the company. Therefore they should be clearly stated and explained to them. Give the employees the pride they want. The pride of working for ABC so that they can carry on that dignity and work in an ethical manner. Develop patience and target the long term success of the business. Failure to do so will tempt you to choose the alternative ways for short term success and gains which will instigate to take up unethical approach towards work. Stay patient and committed towards what you have outlined. If you fail to stand by your word and commitment then all will go in vain and no one would take the rules seriously in the organization. Having a clear perspective in this world of uncertainty can help the firm in making the most effective and informative decisions. It should reflect the goal of your business and your approach of reaching those goals. The values are the reflection of the policies of the company and they make up the organizational culture. Therefore you need to be very honest in drawing your policies. These compliance rules and laws are not fixed they need to be adaptable and able to accept the changes that are constantly being made in the external environment and nay kind of change in the program if needed (Buerstatte, 2004). Monitoring the program The ethics program is designed in order to monitor the company's laws and relevant regulations and to promote this culture. This is formal job for which there are specialists employed by the business. The chief of ethics or the compliance officer will be assigned the duty to monitor the program at ABC. He will be responsible for the implementation or to include any kind of change in the code of conduct or any other procedure of the company. He can make recommendations to the CEO of the company as well as the Audit committee and the senior management of ABC in case of any training given to the employees or giving them any incentive to work to perform their duties in compliance with the ethics program. After the program is formulated there has to be employee orientation so that each employee is clear what is expected out of them and if there is any formal training required then they should be given that. After taking the necessary implementation plans he has to monitor and evaluate the effectiveness of the program. If there are any cases of misconduct and any illegal act and criminal act then he will take necessary steps to modify the program in order to avoid such mishaps in the future (Fraerich & Farrell, 2008-09). There are other ways to monitor and control the ethics program such as by having annual culture surveys. This could be done online as well or you can have interviews or may be focus groups. Here you interact with the customers, vendors and all the other business partners. The concerns from the survey results will be addressed and steps would be taken to incorporate them in the ethics program for maximum satisfaction to all the stakeholders. In monitoring there will be a certain evaluative assessment plan. Another way is to compare your standards with other businesses in the industry and set a bench mark. This will help to improve your own system and implementation. Then there are employee attitude surveys taken in organizations, those will help to review the results of the employees and their view. This could be done via questionnaires, There will be open talk which means employees will be encouraged to give their feedback and discuss problems with the supervisors, the company realizes the fact that employee will encounter problems in implementing certain practices for which they will need guidance. Employees also have their own representatives in the drawing of code of ethics of approximately 15%. However this can vary with the policy of each company. There are substantive tests to check the employee performance and compliance with the law. Failure of monitoring system There are weaknesses of the monitoring system as according to a survey carried out in US most of the companies fail to monitor their ethics or compliance program. This could be due to many reasons. Among the 83% of the firms that responded in the survey around 25% stated that they were not able monitor their program. One of the reasons for this failure was that most of them reported to the senior management about the issue when the damage was already done. At this time the board would react rather than taking any preventive measure to resolve the issue. 35% of the companies stated that companies from outside manage their program. Those companies don't know you that well therefore they can miss on a lot of information. It is due to this reason that in-house monitoring system is the most desirable one. In the in house system too it depends that how dedicatedly the officer is performing and is committed to his work. Ignorance or laid back attitude again can create problems and reduce the effective of the program. No proper evaluation testing plan can lead to failures. No timely surveys can lead to failures. Sometimes there is an over emphasis of the rules. For example an employee might consider everything to be forbidden in the organization and therefore will not be able to respond to any decision. Misconduct also arises due to the peer pressure and because there is a lot of pressure from the organization itself (Boulton, 2006). For example the pressure on the employee to meet a certain target and to achieve that the employee ends up going against the code of conduct due to the amount of pressure he was going through. Then there can be deliberate ignorance of the standard rules. Some firms use is only as a tool for "window dressing" and do not realize the true essence of it. An effective program Business ethics has gained a lot of importance these days. Therefore almost all the businesses have their code of conduct and laws to avoid any fines or legal constraints. An effective ethics program for ABC will focus more on developing a strong organizational culture and leadership skills rather than emphasizing the written code of conduct. The compliance standards should have the capability to control the system and minimize and eliminate the criminal conduct. There has to be a communication method of interacting with the employees for guiding them and taking their views. The program will have monitoring and evaluating system. The mechanisms and standards should cover all the aspects and responsibility towards the employees, customers, other businesses and the society as a whole. There has to be timely evaluations for any kind of changes in the program as per the need. ABC is a flexible and adaptive organization. It will incorporate any changes with time in the program. ABC's focus will be on the organizational culture of trust and compliance. This will ensure cooperation from the employees too. However maintaining this culture is a challenging task and it is not possible without the support of the senior management of the company (A Framework for thinking ethically, 2009). References: A Framework for thinking Ethically. (n.d.). Retrieved October 29, 2009, from Santa Claura University: http://www.scu.edu/ethics/practicing/decision/framework.html Buerstatte, G. E. (2004). The E in marketing: Ethics in the age of misbehavior. Journal of Healthcare Management , 11-21. Boulton, W. R. (2006). Xerox 2000: Leadership through Quality. Thomas Walton Center . Lewis, J. (Aug 2008). Improving morale and motivating employees. Hudson Valley Business Journal, 9. Understanding the Importance of Business Ethics in the 2008-2009 Financial Crisis - Business Ethics: Ethical Decision Making and Cases, 2009 Update, 7e, O.C. Ferrell, John Fraedrich, Linda Ferrell - Cengage Learning Read More