Organizational ethics

ORGANIZATIONAL ETHICS Name: Course: Professor Name: (July 25, 2012) Outline Introduction Overview of organizational ethics Ethical Theories Importance of Organizational Ethics Conclusion Organizational Ethics Introduction Organizations have continued to evolve over time, and globalization has led to the spread of organizational activities to most parts of the world. The core business of organizations has, however, remained the same despite the changes that have taken place. Various scandals involving major organizations have led to development of guidelines to govern the operation of organizations in different fields. Ethics, described as criteria that are used by organizations and individuals to manage behavior, have become a major part of these organizations. Although there are no ethical standards agreed upon, there are common grounds that most organizations pin their ethical codes. Organizational ethics is a subject that looks into ethics in organizations, the various theories that inform these guidelines and how these theories are applicable when an organization is faced with conflicting issues. This paper critically discusses organizational ethics. Overview of organizational ethics The core aim of all businesses is to make sure that shareholders get a return from the investments made in the company. To achieve this, employees with the best possible performance are hired by an organization. The interaction between employees, the management of the organization and outsiders becomes a norm for most employees as they are required to perform well in order for the organization to achieve its goals. Under the pressure, employees may act differently from what the organization may expect hence putting into disrepute the organization good will. To avoid such occurrences, it is sensible for the organization to develop guidelines that will ensure that employees always uphold the reputation of the organization. Furthermore, these guidelines ensure that employees do not put the goals of the organization at risk through reckless behavior. These guidelines are formally referred to as the code of conduct for the organization (Collins, 2009). The established guidelines are used by all employees. The management must be able to understand what actions are acceptable in an organization and those that are not acceptable. It is vital for such guidelines to be popularized by the management. All employees must understand the boundary that the organization expects them to keep (O. Ferrell, Fraedrich, & L. Ferrell, 2012). The relationship between employees may also be guided by such rules hence ensuring that there is harmony in the organization. Many organizations have suffered from the recklessness of some the employees. Such organizations include Enron, a giant company that collapsed due to unbecoming behavior from its top management. Organizations have learnt that these mistakes can cost the organization its reputation or even worse, its revenue. Although the behavior of employees is guided by these rules, the behavior of the organization towards the employees must also be guided by some rules. Several theories have been developed that inform company and employee behavior. Ethical Theories Utilitarianism An employee is faced by a myriad of challenges while fulfilling his duties for the organization. Decision making is sometimes required on part of the employee. When presented with a number of options, an employee is required to do what is best for the company. This may, however, lead to large losses on part of the business despite the gains. At this point, it becomes important for the employee to choose an action that does not harm the organization, but one that also benefits the organization. Utilitarianism theory can be applied in such a case. This theory requires that an employee choose an option that causes the least harm while doing the greatest good (Masten, 2012). This means that an employee is guided by the overall happiness of the majority. In addition, the slightest harm principle is utilized. The employee is always required to choose actions that maximize stakeholder happiness. In business, however, the shareholders are a vital part of the business and their contentment is a major business requirement. Using this theory, employees are required to understand how to behave when contrasting issues arise. This ensures that the organizational goals are always given priority over other needs. The organization must develop its ethical code so that it ensures the goals of the business are always addressed. When an employee is faced with a dilemma in which the employees would suffer although the business would increase its revenue margins, the greatest good in this case can be confusing. This is because the least harm principle may contrast with the greatest good. Involving employees and other stakeholders in developing such a code would play a vital role in reducing cases of conflict in the organization. Virtue Theory This is an important theory in organizational ethics. This is because the logic and justification of actions is done on a case-by-case basis. In the wake of changing business environments, it has become important that an individual be able to assess a situation and act in the best manner possible to protect the interest of the business. Analyzing actions for different cases separately enables actions that may be deemed right under once circumstance to be deemed wrong under other circumstance. The organization must ensure that employees and the management act in a virtuous manner. In essence, this means that employees must make decisions on behalf of the organization based on their moral values. Instilling such values in employees can be a daunting task since each employee has principles. These virtues as developed by the organization may include trust and honesty. Workers in a given company must be able to provide accurate information to their colleagues. The relationship between employees is guided by the trust that is developed between them. When employees can be trusted with various responsibilities, achieving organizational goals becomes easier as team work can be enhanced. In addition, all people are aware of their responsibilities towards the company and other employees. Such relationships lead to trust among the employees and, in effect, more productivity as there is harmony. Organizational ethics, therefore, must be able to deal with the development of virtues among the employees. The same applies to the behavior of the organization toward the employees and external partners. An organization, as a virtuous entity, must treat its workers with dignity, paying them their dues on time and not imposing unfair rules at the work place. This will enhance a positive relationship between employees and the organization, especially the management. Deontology Each entity in an organization is governed by set rules. These rules ensure that people do not deviate from the goals of the organization and they continue to build trust towards the company. In organizational ethics, the deontology theory plays a key role since it emphasizes on the set out policy (Masten, 2012). Any action that breaks the set out conventions is regarded as a negative behavior from an employee despite the reasons behind such actions. Organizations are legal entities that are bound by law and are required to adhere to organizational guidelines. This theory enables the management of a company to ensure that employees do not behave in a manner that will lead to legal proceedings or actions against the company. All activities carried out by employees should be within the law and must follow company policy. The behavior required of the employee is, therefore, one that strictly adheres to set out rules. Organizations are also bound by the same theory when relating with other companies. Competition is one of the main aspects of a business and the management is tasked with the duty of ascertaining that the organization has some distinctive feature that makes it the first choice for consumers. In its bid to achieve this goal, the management must be ethical by not tampering with competitors. All actions carried out by the organization to sell its products and improve its reputation must be within the law. These guidelines are informed by the deontological theory. Furthermore, a company, in its accounting report, must follow the required procedures. Various firms have been misled by false figures which are prepared using false data and procedure. This has led to closure of some of the organizations such as WorldCom (R. Duska, B. Duska, & Ragatz, 2011). An organization is, therefore, indeb...