Managing Ethics in Business - Essay Example

Introduction Business ethics is a form of the art of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and actions, known as ethicism, is increasing.Simultanously, pressure is applied on industry to improve business ethics through new public initiatives and laws (e.g. higher road tax for higher-emission vehicles). Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have redefined their core values in the light of business ethical considerations. The emergence of business ethics is similar to other management disciplines. For example, organizations realized that they needed to manage a more positive image to the public and so the recent discipline of public relations was born. Organizations realized they needed to better manage their human resources and so the recent discipline of human resources was born. As commerce became more complicated and dynamic, organizations realized they needed more guidance to ensure their dealings supported the common good and did not harm others so business ethics were born. Now 90% of business schools now provide some form of training in business ethics. Today, ethics in the workplace can be managed through use of codes of ethics, codes of conduct, roles of ethicists and ethics committees, policies and procedures, procedures to resolve ethical dilemmas, ethics training, etc. Benefits of Managing Ethics in the Organization Attention to business ethics has substantially improved society. Ethics programs help maintain a moral course in unstable times. Ethics programs cultivate strong teamwork and productivity. Ethics programs support employee growth and meaning. Ethics programs are an insurance policy -- they help ensure that policies are legal. Ethics programs help avoid criminal acts “of omission” and can lower fines. Ethics programs help manage values associated with quality management, strategic planning and diversity management. Ethics programs promote a strong public image for an organization. Business Ethics Applied In a Real World Organization To the task of identifying the ethical issues and dilemmas with in a real world organization, I have chosen “Wal-Mart” for this task, here is a short historical back ground of Wal-Mart. Back Ground of Wal- Mart Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores. It is the worlds largest public corporation by revenue. It was Founded by Sam Walton in 1962 and it was incorporated on October 31, 1969. It was listed on the New York Stock Exchange in 1972. It is the largest private employer in the world and the fourth largest utility or commercial employer, trailing the Chinese army, the British National Health Service, and the Indian Railways. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, as well as the largest toy seller in the U.S., with an estimated 22% share of the toy market. Wal-Mart operates in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. It has wholly-owned operations in Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-Marts investments outside North America have had mixed results: its operations in South America and China are highly successful, but it sold its retail operations in South Korea and Germany in 2006 after sustained losses. Wal-Mart has been criticized by some community groups, womens rights groups, grassroots organizations, and labor unions, specifically for its extensive foreign product sourcing, low rates of employee health insurance enrollment, resistance to union representation, and alleged sexism. Ethical Dilemmas within Wal- Mart Stores, Inc. Wal-Mart has been subject to criticism by various groups and individuals. Labor unions fund and lead community groups, grassroots organizations, religious organizations, and environmental groups in protests against Wal-Mart , the companys policies regarding business ethics, and Wal-Mart customers. Other areas of ethical criticism include the corporations foreign product sourcing, treatment of product suppliers, environmental practices, the use of public subsidies and the companys security policies. Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency. Employee and labor relations With close to two million employees worldwide, Wal-Mart has faced a torrent of lawsuits and issues with regards to its workforce. These issues involve low wages, poor working conditions, inadequate health care, as well as issues involving the companys strong anti-union policies. Critics point to Wal-Marts high turnover rate as evidence of an unhappy workforce, although other factors may be involved. Approximately 70% of its employees leave within the first year. Wages It is reported that in 2006, in Wal- Mart full, time hourly associates received, on average, $10.11 an hour.It was further calculated that working 34 hours per week an employee earns $17,874 per year and claimed thats about 20 percent less than the average retail worker. (The number of hours the "average retail worker" worked was not specified) Another report from further opines that this pay is "over $10,000 less than what the average two-person family needs. It was also reported that, in 2001, the average wage for a Wal-Mart Sales Clerk was $8.23 per hour, or $13,861 a year, while the federal poverty line for a family of three was $14,630. Working conditions Wal-Mart has also been criticised regrading poor working conditions of its employees. For example, a class action lawsuit in Missouri asserted approximately 160,000 to 200,000 people who were forced to work off the clock, were denied overtime pay, or were not allowed to take rest and lunch breaks. On October 16, 2006, approximately 200 workers on the morning shift at a Wal-Mart Super Center in Hialeah Gardens, Florida walked out in protest against new store policies and rallied outside the store, shouting "We want justice" and criticizing the companys recent policies as "inhuman”. Child labor violations In January 2004, the “New York Times” reported on an internal Wal-Mart audit conducted in July 2000, which examined one weeks time-clock records for roughly 25,000 employees. According to the Times, the audit, pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals, including 1,371 instances of minors working too late, during school hours, or for too many hours in a day.There were 60,767 missed breaks and 15,705 lost meal times. Ways To Manage Ethical Dilemmas While managing ethical dilemmas, the following guidelines ensure the ethics management program is operated in a meaningful fashion: 1. Recognize that managing ethics is a process. Managers tend to be skeptical of process-oriented activities, and instead prefer processes focused on deliverables with measurements. However, experienced managers realize that the deliverables of standard management practices (planning, organizing, motivating, controlling) are only tangible representations of very process-oriented practices. For example, the process of strategic planning is much more important than the plan produced by the process. The same is true for ethics management. Ethics programs do produce deliverables, e.g., codes, policies and procedures, budget items, meeting minutes, authorization forms, newsletters, etc. However, the most important aspect from an ethics management program is the process of reflection and dialogue that produces these deliverables. 2. The bottom line of an ethics program is accomplishing preferred behaviors in the workplace. As with any management practice, the most important outcome is behaviors preferred by the organization. The best of ethical values and intentions are relatively meaningless unless they generate fair and just behaviors in the workplace. Thats why practices that generate lists of ethical values, or codes of ethics, must also generate policies, procedures and training that translate those values to appropriate behaviors. 3. The best way to handle ethical dilemmas is to avoid their occurrence in the first place. Thats why practices such as developing codes of ethics and codes of conduct are so important. Their developments sensitize employees to ethical considerations and minimize the chances of unethical behavior occurring in the first place. 4. Make ethics decisions in groups, and make decisions public, as appropriate. This usually produces better quality decisions by including diverse interests and perspectives, and increases the credibility of the decision process and outcome by reducing suspicion of unfair bias. 5. Integrate ethics management with other management practices. When developing the values statement during strategic planning, include ethical values preferred in the workplace. When developing personnel policies, reflect on what ethical values youd like to be most prominent in the organizations culture and then design policies to produce these behaviors. 6. Value forgiveness. This sounds rather religious or preachy, but it’s probably the most important component of any management practice. An ethics management program may at first actually increase the number of ethical issues to be dealt with because people are more sensitive to their occurrence. Consequently, there may be more occasions to address people’s unethical behavior. The most important ingredient for remaining ethical is trying to be ethical. Therefore, help people recognize and address their mistakes and then support them to continue to try operate ethically. References 1. William H. Shaw. (2005). Business Ethics. McGREW-Hill. 2. Marlene Caroselli. (2003). The Business Ethics Activity Book. 3. R. C. Sekhar. (2002). Ethical Choices in Business. Read More