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Running head: CREATING THE ETHICAL-BASED WORKPLACE Effects of Global Ethics Chris Allen Southwestern College Ethics in the Global Marketplace – 560 Dr. Roger Fuller December 22, 2013 1 2 CREATING THE ETHICAL-BASED WORKPLACE Creating the Ethical-Based Workplace One important element of marketplace management, which could have an effect on the greater success of an organization, is ethical decisions that are being made by individuals involved within an organization. Every organization, at some point, will be faced with ethical challenges that they will need to address and how they address them could have an effect, either positive or negative, on that organization. It is important that organizations take into consideration their actions as they can have an effect on many related parties, such as employees, customers, and other stakeholders. This paper will take a look at some of the factors that surround ethical actions that could assist and understand some of the aspects that organizations face with considering ethical responsibility. When setting ethical standards or goals, an organization or managing party will need to develop the framework of ethics. How are ethics going to be viewed and what is the purpose for pursuing ethical excellence. From there, setting and developing a culture of ethics standards will ensure that everyone within and surrounding the organization will know what is expected of them and how decisions should be made. All members of an organization should understand what is expected from them, but what sort of responsibilities do the members and organization have towards aspects outside the workplace. Corporate social responsibility and environmental sustainability are two areas that will be looked at when discussing the topic of marketplace ethics. Finally, a look at whether pursuing ethical excellence is something that should be considered a responsibility to all organizations or if there are times where certain organizations are not set up to handle all positive ethical practices. 3 CREATING THE ETHICAL-BASED WORKPLACE Creating a Framework of Ethics In short, ethics refers to the understanding of what is right and wrong and can be defined by Webster’s dictionary as “the branch of philosophy dealing with right and wrong and the morality of motives and ends” (Shaughnessy, 2002, p. 20). It can be assumed that most employees know the difference between right and wrong, but why do they feel that way? Is it merely because it’s the right thing to do or does a threat of punishment affect an employee to act in an ethical manor. DesJardins (2011) provides three examples to ethical constructs: utilitarianism ethics (decisions based on the overall consequences of our acts), deontological ethics (decisions based on moral principles), and virtue ethics (how various character traits can contribute to, or obstruct, a happy and meaningful life” (p.24). Understanding these three examples can greatly help an individual form their ethical framework. A framework can also assist an organization develop and maintain an ethical culture within the workplace. Developing a Culture within the Workplace When establishing an ethical culture within the workplace an organization is setting the standards and responsibilities that are to be followed by members of an organization. Since not all ethical choices are black and white and negative actions can be harmful to an organization, leaders can choose to establish a code of conduct which can be used to outline what principles are to be followed by employees of the organization. There are two approaches to developing code of conduct: compliance approach and cultural approach. A compliance approach is put in place to help avoid any legal issues that can come with wrongful actions. The State Services Commission of New Zealand (2002) defines a compliance-based approach as a strict adherence to administrative procedures and rules (often detailed in legislation, which define what public 4 CREATING THE ETHICAL-BASED WORKPLACE servants should do and how. The other approach is a cultural approach which takes into account the many different cultural differences between co-workers and others the organization does business with. Corporate Social Responsibility Along with managing and overseeing what an organization is doing internally to set ethical standards, it is also important to also consider finding ways to benefit the surrounding society in which the organization operates. This focus of finding ways to be beneficial to surrounding communities is known as corporate social responsibility. Bowen (1953) describes corporate social responsibility as “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of actions which are desirable in terms of the objectives and values of our society (p.6). In short, social responsibility is the responsibility for organizations to not just look at financial interests as the only means for successful operations, but also look to the society in which it operates. As many organizations look for economic returns to shareholders, corporate social responsibility offers a possibility to enhance public selfimage (Freeman & Hasnaoul, 2011, p.421). Environmental Sustainability Another responsibility that is becoming increasingly monitored is that of environmental sustainability. Many organizations are seeing the benefits of having their operations be more environmentally friendly. This can be seen in recent studies which show organizations prior to 2011 thought that implementing sustainability operations were more of a hassle than good, but post-2011, organizations the main reason for pursuing sustainability was to lower operational cost and improve efficiency (Holden, 2012, p.6). Environment sustainability is very similar to 5 CREATING THE ETHICAL-BASED WORKPLACE corporate social responsibility in the idea that by pursuing ways to cut cost and be more efficient, their public image in attempts to benefit the environment puts them in good light with the public. Although environment sustainability is a positive idea on how to benefit many parties, without proper management and vision, many plans for sustainability are not successful as originally thought. Holden (2012) states, “companies often struggle to bridge the gap between the fuzzy rhetoric of sustainability and the concrete realities of implementation”, and “[a small number of surveyed companies] indicated that any competitive advantage had actually been achieved as a result of their organizations’ sustainability practices” (p.8). It should be understood that being sustainable isn’t always the easiest route to take, but through proper instillation of practice can lead to many benefits including lower costs and better public image. Economically Viable? Although there is a general understanding that organizations have a better chance at being successful through high ethical decisions making related to corporate social responsibility and environmental sustainability, many organizations believe that it is just not optimal for their operations and the cost of implementing these ideas is more costly in the long run. O’Toole and Vogel (2011) define conscious capitalism as “the integration of “social responsibility into mainstream practices” (p.61). This is the idea that organizations are trying to implement responsible operations because it is the proper thing to do. O’Toole and Vogel (2011) believe that conscious capitalism is a very plausible action, but many factors can affect an organization’s ability to perform these actions, such as size and type of business. Others, however, believe that it is a strict responsibility for organization to try to optimize conscious capitalism. Branson (2011) who is a speaker to businesses of all sizes addressing conscious capitalism principles in attempts to show that it is possible to for all organizations to succeed financially and socially. 6 CREATING THE ETHICAL-BASED WORKPLACE Conclusion Creating an exceptionally ethical organization is something that has to have a structure design for implementation. Starting with setting the standards of how employees and members of the organization are expected to act by implementing a code of conduct. Creating the code of conduct and encouraging proper actions within the workplace can make it a better and more rewarding place to work for all the employees. Ethical actions don’t just stay within the workplace, but can also branch out to local communities through corporate social responsibility. Corporate social responsibility is not only beneficial to communities, but can also help a business’s reputation within the community. And finally, when thinking about ways to cut costs and preserve the environment, sustainability plans can assist any business when properly implemented. It is clear that these ideas can all benefit an organization, but only with proper guidance and support for the programs can an organization be successful with their goals. 7 CREATING THE ETHICAL-BASED WORKPLACE References Bowen, H.R. (1953). Social responsibilities of the businessmen. New York, NY: Harper and Row. Branson, R. (2011). Screw business as usual [Kindle version]. Retrieved from Amazon.com. Freeman, I. & Hasnaoui, A. (2011). The meaning of corporate social responsibility: the vision of four nations. Journal of Business Ethics. 100(3). P.419-443. Holden, G. (2012) The state of state of sustainability. Research Technology Management. 55(6). P.7-9. DesJardins, J. (2011). An introduction to business ethics (4th ed.). New York, NY: McGraw-Hill. O’Toole, J. & Vogel, D. (2011). Two and a half cheers for conscious capitalism. California Management Review, 53(3), 60-76. Shaughnessy, A. (2002). Workplace ethics. Printed Circuit Design. 19(6). P. 20-25. State Services Commission. (2002). Compliance-based versus integrity-based ethics management: a typology. Retrieved from http://www.ssc.govt.nz/node/574.