Ethics in Commercial and Non-profit Organizations - Assignment Example

PHI445 Wk5 Final Analysis of Personal and Organizational Ethics and Values between For-Profit and Not-for-Profit OrganizationsThe aspect of personal and organizational ethics and values in for-profit and not-for-profit organizations is a dominant issue that defines modern debates on ethics. Indeed, all organizations encounter ethical dilemmas in their operations, which result to adverse effects on the profitability, goodwill, effectiveness, and organizational success. Notably, there are global standards that define the code of ethics ion the global market. Nevertheless, individual organizations have specific codes of ethics that define their operations. Various management, operational, and strategic issues subject organizations to ethical dilemmas. In the recent past, ethical violations by the management of various corporations have been in the limelight despite numerous efforts to curb unethical behaviors in for-profit and not-for-profit organizations. Ethical dilemmas suffice to both for-profit and not-for-profit organizations. The response, legal, social, or political outcomes of different ethical dilemmas vary between for-profit and not-for-profit organizations. Company Profile (For-Profit) McDonalds is the worlds largest food chain restaurant with its headquarters in San Bernardino, California. The company deals in hamburgers, fruits, fish, desserts, salads, cheeseburgers, chicken, soft drinks, French fries, beef, breakfast, and sides. The McDonald brothers (Richard and Maurice McDonald) started its operations in the UK in 1974. The company expanded its operations to various countries where it operates 1,200 restaurants across the UK and Northern Ireland and more than 34,000 local restaurants and about 1.8 million employees in 118 countries. McDonald opened its first franchisee restaurant in Des Plaines, Illinois. The company serves about 69 million every day (McDonald’s, 2013). Ray Kroc joined the McDonald as a franchise agent and later purchased the chain from the McDonald brothers where he propelled it to global success. The company participates in food retailing and values community service where it engages in community service through sporting activities, charity work, environmental conservation, and inspirational activities that boost the lives of its communities (McDonalds, 2013). The funding sources of the company include sales from the food restaurants and fees, royalties, and rent from the franchisees. The company seeks to increase the pace of acquisitions with a target of 40 new restaurant openings per year from 2014, which will create up to 2,400 new job opportunities annually. Moreover, the company has a mission of manufacturing and selling high quality products with a minimal effect on the environment and the people’s health as it seeks to maintain its position as the pioneer of the drive-thru restaurant concept. McDonalds differs from its competitors in the food chain sector since it takes leases up to 25 years, has a superior covenant strength achieving yields of between 5% and 6%, and all its leases come in the McDonalds Restaurants Ltd name. Moreover, it adopts the concept of Franchising, it is the largest chain of quick service restaurants in the world, values the environment, and abhors corporate social responsibility. The history of the organization started with the founder, Ray Kroc and the current executives continue to build on his legacy by ensuring that the Golden Arches will shine for years to come. McDonalds has 18 executive members with Don Thompson as the CEO and President of the company. The company’s most recent profits stand at $5.5 billion while the company’s recent annual revenues stand at $27.5 billion for 2012. The company is growing in terms of revenue and profit where it has been recording double-digit sales growth since 2008. In 2001, Simon Marketing was running a game promotion for McDonalds. However, as the game promotion became a target of a fraud scheme prompting the FBI to launch investigations in connection with the fraud scheme. The FBI urged McDonalds to continue with the game promotion to facilitate the investigations. This presented an ethical dilemma to the company as the management wondered whether to cooperate with the FBI at the expense of its customers or whether to honor its obligations to its customers by discontinuing the game promotion. Indeed, the need to comply with the law enforcement agencies and the need to honor its obligations to its customers derived an ethical dilemma to the executive management of McDonalds. Ideally, profit organizations have an ethical obligation to cooperate with law enforcers and have an ethical obligation to its customers and shareholders. Cooperating with the FBI meant the continuation a rigged game at the expense of customers. The company responded to this ethical dilemma by continuing the game promotion and supporting the FBI investigations. This response led to the legal and social outcomes. Indeed, the response prompted the filling of a first class lawsuit in Illinois state court for damages on behalf of customers that took part in the game promotions. Moreover, the FBI arrested two women and six men including an employee of Simon Marketing suspected of defrauding McDonalds about $ 13 million. The lawsuit declared the violation of the state consumer fraud act and unjust enrichment. Ultimately, the court ordered the company to return any extra sales received from the promotion. Company Profile (Not-for-Profit) Bill and Melinda Gates founded the Bill & Melinda Gates Foundation, a not-for-profit organization and one of the largest private foundations across the world in 1997. The foundation supports charity work in more than 100 countries. Bill and Melinda Gates, and Warren Buffett are the trustees of the foundation who holds the donated investment assets and receives contributions from Warren Buffett. The trustees have a mandate to manage the investment assets and remit the contributions to the Bill and Melinda Gates Foundation to enhance the attainment of its charitable goals. The organization donates at least 5% of its investment assets to charity on an annual basis. The organization seeks to enhance education, poverty eradication, and healthcare across the globe. The Bill and Melinda Gates Foundation have been operating in four divisions since 2006. Indeed, the company works with partner organizations worldwide to tackle critical problems in four program areas that include the Global Health Division, Global Development Division, United States Division, and the Global Policy & Advocacy Division. The Global Development Division of the organization seeks to eradicate extreme poverty in the developing nations while the Global Health Division seeks to harness advanced science and technology to save lives in developing countries. The United States Division seeks to enhance U.S. high school and postsecondary education and support vulnerable children and families in Washington State. Ultimately, the Global Policy & Advocacy Division aims at building strategic relationships and promoting policies that will foster charity work. Bill Gates and Melinda French families adopted the values of volunteerism and civic engagement. Their first project that included bringing the Internet to public libraries emanated from the Microsoft experience. The Bill Gates and Melinda French families realized and started helping millions of children who needed simple medical treatments in the 1990s through supporting groups who were saving lives around the world. The initial name of the organization was William H. Gates Foundation and only changed its name to Bill & Melinda Gates Foundation after merging with the Gates Learning Foundation in 2000 where Gates added US$126 million into the organization. Today, the foundation works with thousands of partners in Africa, India, Europe, South America, and in the United States. Ideally, the organization’s mission statement confirms that the foundation seeks to reduce inequities around the world through the four divisions named above. Indeed, its goal is to find solutions for people with the most urgent needs, wherever they live. The foundation operates under the Gates family’s belief that all lives have equal value where it helps all people to lead healthy and productive lives through the values of volunteerism and civic engagement. Seattle, Washington is the headquarter of the organization though it has regional offices in East Coast Office –Washington, D.C., India Office- New Delhi, China Office – Beijing, China, and Europe Office – London, United Kingdom. The funding sources of the Bill & Melinda Gates Foundation are invested endowment funds from Warren Buffett, charitable contributions from individuals and companies, and grant commitments from partner organizations. The Bill & Melinda Gates Foundation has been a 501(c) (3) private non-operating company since August 2006 where the foundation have had an endowment of $31.9 billion and had made grant commitments of $11.1 billion over the course of its existence. Currently, the company employs about 1,194 employees. In 2007, an article in Los Angeles Times exposed the ethical dilemma that the Bill & Melinda Gates Foundation were facing. The ethical dilemma related to the consistency of the foundation to engage in socially responsible investments. The Los Angeles Times article criticized the Bill & Melinda Gates Foundation for investing in companies that contributed to the environmental and health problems that the foundation is attempting to reduce. Ideally, the Bill & Melinda Gates Foundation donate $218 million into polio and measles immunization and research for thousands of sick children in Nigeria’s Niger Delta. However, the company also invests about $423 million in an oil plant that causes flares in the Niger Delta. The flares cause many illnesses like respiratory diseases and cancer. As such, the investment options of the foundation are not consistent with its values and beliefs that seek to enhance good health and poverty eradication in the Niger Delta. This led to an ethical dilemma. The company responds to the ethical dilemma by funding inoculations to protect health. This leads to social outcomes where the oil workers at the oil plants foster prostitution and the spread of HIV and teenage pregnancy among the poor workers. Moreover, the oil boreholes lead to the spread of malaria and other waterborne diseases that the Foundation fights. The bright, sooty gas flares from the oil plants lowers the immunity of the residents. This has a social impact of degrading the mission of the organization. Nevertheless, this investment led to an increase in endowment that allows for the continued funding of foundation programs and grant making. Read More