Managing Business Ethics; Straight Talk about How to do it Right

Introduction section

Modern ways of managing businesses emphasizes on the ideas used in managing customer relations based on the provided business concepts. Great responsibilities are realized in managing applicable decisions that drive the business entity into greater positions within the market environment. Ethics and ethical decision making presents one of the biggest challenges within the business world.

Currently, there are so many scandals realized within big and small business Companies worldwide. This calls for the management team within these companies to consider observing closely business ethics as one of their major principles towards achievement. For the success of any business entity to be realized, implementation of business codes of ethics must precede any form of decisions and actions.

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Employees should be recruited based on their willingness to comply with the Company’s business codes. Ethical decisions are in-built and most of the time requires employees to adhere to their instincts developed through various stages of growth. This makes tremendous contributions towards making of right decisions (Gentile, Parks, and Piper, 1993).

Each management board faces different challenges which at times exposes them to some threat on the quality their management skills. All legal decisions designed by managers are never sometimes ethical. However, managers can employ ethical corporate culture by drafting clear code of ethics to all employees and ensuring that they practice them until the rules become part of their lifestyle.

Code of ethics provide expected guidance to employees and hence save them energy and time they could use in going after managers for further guidance. One of the new managers in Galvatrens Company questions the credibility of the whole management team and wonders why they could not unearth such an act of retaliation amongst employees (Seglin, 2002).

Background section

The case study discusses the issue of ethical behavior in the business world, specifically in the Galvatrens Company. In this case the management board is alerted about some unethical behavior that had taken place within the Company without top management’s consent.

One of the divisional sales managers prepared some scandalous act within the distribution channel which was discovered by one of the junior employees. The junior employee Mr. Mike acted in line with the principle of beneficence whereby he considered the Company’s interest first. On realizing this, the divisional manager decides to terminate the junior employee for the purposes of covering up the whole issue.

This scandal is however recorded by the plaintiff and presented before the court of law. The question in this case concerns the analysis of business management ethical behaviors that were ignored by the management. There were complains that Galvatren’s management had not incorporated efficient channels that could be used by junior employees to report unethical business behaviors.

The management of the Company decided to change guard without first dealing with the problem at hand, hoping that the new CEO would perfect his duties enabling the Company to soar. However, this called for complete change in the predominant culture within the company that could allow for the expansion of product portfolio.

The issue here is the creation of efficient communication links that would facilitate relationship between employees and the employer. There was some breakdown in line of duty which made the scandal to be covered for long time before Mike Field came clean over the issue. This made the company experience departure of most customers including some experienced employees. They all based their complains on the widespread unethical business behaviors within the Company.

Business Ethics presents a wide topic that calls for lengthy discussion and analysis within major and minor business companies. The issues are numerous depending on the regional set-up and the international business ethics laws that must be practiced. The case study also shed some light on the importance of ethical corporate behavior.

Clear objectives and responsibilities of Galvatren business Company are covered by the study. This includes ethical responsibilities of various managers within the Company. Success of any business entity is however, dependent on the level of business Ethics being practiced (Trevino and Katherine, 2007).

Analysis Section

The board of Directors from Galvatren Business Company operated under some sought of pressure which rendered them ineffective in balancing their personal responsibilities and those of the Company. Greg Wilson acted on the principle of autonomy which was seen as overtaking the Company’s management mandates, this is because he decided to personalize the identified problem. Principles and strategies that any business Company operates under should be worth of respect from all employees and should also have the capability of contributing towards profit. Some business entities however, focus rather on how to satisfy consumers.

The foundation of socialism argues that business Company’s should be established for the purposes of serving common good of both the consumers and the employees. Galvatren Company should adopt business codes of ethics that lead towards adoption of good organization culture; this provides them with opportunity to focus on making profits as well as driving towards the common good of customers and employees (Trevino and Katherine, 2007).

In the Business world, there is the principle of enlightened self-interest which tends to offer safety against egocentricity. It addresses the realization that it is in the best interest of an individual to consider first the interest of the whole organization from where he/she works.

This is evident on the steps that were taken by Mike Field who blew the whistle on some filthy actions that were taking place within the organization. He refused to be part of such a conduct and instead brought it to the attention of the Company’s management (Sheridan, 1996). Protecting whole interest of the organization results into protection of one’s integrity and own interests as seen in this case study.

The case study reveals that informed self-interest could have the possibility of achieving recommendable and acceptable goal. The case in Galvatren Company shows the difference existing between those that serve the Company for self gain and those serving with integrity. Some management employees are only concerned with linking employees with responsibilities but do not themselves provide any intrinsic benefit to the Company.

The bottom line of enlightened self-interest is that the Company’s benefits are given first priority since it is of benefit many individuals. Informed decisions are what constitute strong values of a well built organization (Sheridan, 1996).

The issue of operating businesses from the management point of view involves lots of theories that give contradicting views. However, the problem with these theories can be dealt with through the use of business models within the Company. First, the consumer interests and needs should be given priority by employing appropriate culture within the Company as suggested by the CEO.

Second, the principle of enlightened self-interest advocates for service to all with lots of consideration. The two principles can be applied in Galvatren at the same time. Placing customer interests and needs first implies that Galvatren could actually serve with due diligence everyone that it affects. This kind of service favors the business with its environment

Business organization can simply loose societal approval when it experiences trouble with the labor force, or its lack of popularity in its own backyard. It also loses reputation by not adhering to government’s policies, business regulations and code of ethics. This can be very detrimental since it affects the market success of the organization.

This shows that good reputation and public relations must precede good and quality production or services. Corporate social performance impacts organization’s profit levels by influencing its reputations. This acts as a direct influence on the company’s competitive advantage and ability to attract and retain experienced and talented employees (Weiss, 2006).

The company experienced exit of experienced staff and even at one point could not secure MBA students for interviews. In relation to this, it is important to note that the image of the organization is what attracts job applicants; they are often attracted to companies that portray good public image. Organizations that enjoy good reputation have the ability to pull high quality applicants. Most of the employees are even willing to take low wages just for the sake of being identified with organizations that have strong public reputations.

The image’s ability to attract quality and experienced personnel leads to more positive consequences hence improvement on the organization’s profitability. The consumer’s decision on what services and products to go for is mainly influenced by the brand of the company. Consumers sometimes are forced and willing to buy products from organizations with poor brand name only when the prices are low, conversely they tend to reward good image by paying high prices for their products (Cherenson, 2002).

The manner in which the organization treats employees and how it conducts its business publicly have the ability of differentiating its brand from other related organizations within the same market set-up, hence builds the consumers loyalty towards it. Precise and clear definition of organizations image usually communicates and creates renewed belief and confidence within the consumer. This is a good determinant of the organizations success (Velthouse and Yener, 2007).

Appropriate application of Company’s code of ethics as applied by Mr. Chip leads to good business. This prevents the organization from being victim of unnecessary fines. Strong marketing ethics within an organization leads to high level of trust between the organization and the market environment. This shows that improved internal and marketing ethics enhances the level to which an organization retains and attracts more customers.

This in turn leads to higher revenue collections hence improvement in profitability. Ethics teaches managers on the culture of doing the right thing for the benefit of both the company and the consumers. Management ethics may vary widely depending on various factors such as; individual organization, region and the type of industry

The new CEO Mr. Chip with the help of the new management team was able to assess the situation within the Company and hence made more formidable and appropriate ethical decisions. These included reinforcing the channels of communicating confidential reports, expanding the business beyond its normal production, improving the relationship between employees and customers and new avenues of solving conflicts within Galvatren Company.

These programs could be initiated through designing ethics training program of which all managers and employees are encouraged to go through. This would allow the employees to perform extra research work on ethical practices and business models employed by other similar Companies (Velthouse and Yener, 2007).

Conclusion

Not only are business ethical decisions morally correct, but also form vital part of business profitability. Ethical conduct ensures that the organization maintains it customers and even attract more. It saves the company from running bankrupt by ensuring that only right employees ready to perform and do right tasks are maintained within the organizations (Trevino and Katherine, 2007).

Management position presents one with the opportunity and responsibility of making right decisions which are not only beneficial to the Company, but also to the general society.

Application of business code of ethics and conduct in management has great impact on organization’s performance since it dictates on the level of its corporate reputation. Sound financial position of an organization and its progress is determined by its ability to respond positively to its own employees, surrounding community and the environment.

Success of any business is also determined by the ability of the company to attract both consumers and talented employees. However, the possibilities of unethical behavior by those in the management team have the potential of reducing the company’s corporate reputation.

The management qualities as well as the quality of goods and services remain an important factor that determines the length of time an organization can last within the market. All the drivers of financial excellence in an organization are basically linked to the extent on which the company utilizes its code of ethics in managing their social and physical relations.

References

Cherenson, M. (2002). Cash Doesn’t Carry Corporate Reputation for Potential Employees. Public Relations Strategist, 6 (8), 2 Gentile, M., Parks, S., & Piper, T. (1993). Can ethics be taught? Boston: Harvard Business School.

Seglin, J. (2002). Good for goodness’ sake: what we mean when we talk about ethics. CFO, the Journal for senior financial executives, 18 (10), 75-77

Sheridan, C. (1996). Enlightened self-interest. Retrieved December 8th, 2010 from http://www.youknow.com/chris/essays/growth/selfinterest.html

Trevino, L. K., & Katherine, A. (2007). Managing Business Ethics: Straight Talk About How to Do It Right. Pennsylvania. John Wiley & Sons, Inc.

Velthouse, B. & Yener, K. (2007). Ethics in Practice: What Are Managers Really Doing? Journal of Business Ethics, (70), 151-163.

Weiss, J. W. (2006). Business Ethics: A Stakeholder and Issues Management Approach. Canada. Thomson South-Western.

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