Business Ethics

The fast growth in science, technology, economy, and politics has made ethics and professional standards an important issue which raises the concerns of the public. Ethics and professional standards refer to how an organization combines its core values with its business policies and practices. Ethics and professional standards form the moral foundation upon which an organization or profession or business builds itself decently. Ethics and standards help a company to grow and generate profits. Different business and professional areas have a code of ethics and standards that guides members to keep the profession in good standings with different stakeholders.

Project management is one of the business areas where ethics is very important. In the business world, the recent high-status corruption cases such as TYCO and Enron have brought the role that ethics plays in business under examination. Dubious dealings are presenting ethical dilemmas to businesses, especially in project management. A good example is where project managers get involved in the negotiation of contracts creating a conflict of interest between them and the stakeholders (Brenner, 2006). The ultimate goal of any business is to make a profit. The businesses, therefore, undertake new projects to expand and earn profit. There are various ethical issues that arise in regard to how businesses manage their projects. The decision to undertake a project by a business affects different stakeholders. Therefore, project managers have to make ethical decisions to ensure that the different stakeholders are not affected negatively. Ethics in project management can be summarized into four main areas, according to the project management institute, which includes accountability, respect, equality, and truthfulness (Project Management Institute). The lack of four values leads to making unethical decisions.

Globalization has brought different economies closer and increased awareness about how ethics in project management may differ from one culture to the next. This introduces new challenges, including ethical and professional dilemmas. However, it does not mean that ethics and professional standards are not applied to different cultures. The business is supposed to conduct its projects with the highest ethical and professional standards to ensure that the different stakeholders are not negatively affected by the project.

For a multinational firm with global projects in different locations across the world located in areas with different cultures, it is not easy to determine which ethics and professional standards are to be applied in each location (Global Infrastructure in the financial crisis). First of all, the company has to undertake the process of understanding the ethical issues the projects are facing in different locations. The company also has to understand the values and viewpoints of different stakeholders in these locations. The understanding can be achieved through a selection of methods such as group discussions and surveys involving different stakeholder groups such as the public, project managers, and the local authority. The company then decides which ethical and professional standards can be used from its own code of ethics and the global best practices in project management (Project Management Institute).

The majority of the ethical dilemmas are not obvious and, therefore, require careful thought first. The multinational firms, therefore, have to address the differences in ethical demands at different locations. This is done in an effort to ensure project managers are able to navigate the murky waters of an ethical issue in project management. Firms take various measures to ensure that the ethical issues are solved to the satisfaction of the stakeholders.

One of the methods that organizations use to solve the ethical dilemma caused by having projects in different global locations is establishing standards of ethics to guide their project managers. Project managers also register as members of project management institute a professional body with its own code of professional ethics. The project managers are required to learn and understand this code. The standards supported by code of ethics of project management institute have been identified as important to ensure the integrity of project management.

Another way that companies try to solve ethical dilemmas is by establishing project management offices. The offices monitor the issues that are driving change within the project management profession. These offices help in improving the project management approaches, harmonize project activities in different locations, and helping in the economical use of resources (Monique, Hobbs, & Müller, 2010).

The other method that companies use to manage the ethical issue in project management is through stakeholder management. Projects have different interest groups, including the clients, customers, and the public. Managing stakeholders is one of the biggest ethical challenges. The project manager should communicate all the information they have straightforwardly and fully to all stakeholders using an understandable language as required by Ethical and professional standards. The stakeholders should be informed swiftly by the project manager when ethical issues arise. The project managers should stay vigilant in order to identify efforts by the interest groups to manipulate their decision making in the wrong or unlawful way (Ferrell, Hirt, & Ferrell, 2009).

In conclusion, ethical and professional practices differ depending on the business profession and location. However, multinational firms should always apply the best practices in project management. The companies should use stakeholder analysis, establishing a code of ethics, and establishing a project management office to address ethical issues in a satisfactory manner.

References

Brenner, R. (2006). Dubious Dealings. Web.

Ferrell, o. c., Hirt, G., & Ferrell, L. (2009). Business: A changing world. New York: McGraw-Hill/Irwin.

Global Infrastructure in the financial crisis. (2008). Web.

Monique, A., Hobbs, B. J., & Müller, R. (2010). Identifying Forces Driving PMO Changes:Summary Report. Web.

Project Management Institute. (n.d.). Project Management Institute Code of Ethics and Professional Conduct. Web.

Summary

Corporate social responsibility may be described or referred to as the unspoken contract, which exists between a business society and society. This relationship is based on the kind of business that organizations operate within a given society. It is worth appreciating that corporate social responsibility is an important aspect when it comes to running and operating business enterprises. This is because corporate social responsibility gives businesses an opportunity to offer back to the society what they have offered the society in return. This is the goodwill that exists that ensures that as the organizations pursue their goals, they interact with others inside a larger context of the society to meet their goals.

Thus, corporate social responsibility is a key point in the business world since it enables the companies to get corporate objectives with the social challenges which are facing the environment in which they operate. In essence, research confirms that corporate social responsibility has got benefits that enhance the productivity and profitability of an organization in the future. What is important is to understand the fact that this should be a long term initiative that should be set up by organizations to work towards initiating forums that ensure progress is realized.

Key learning point’s

Corporate social responsibility is a subject that still remains to be controversial in the general society. However, it is worth noting the fact that despite being controversial, it is a very critical aspect of organizational progress. Organizations intertwine with the societies in which they operate in mutually beneficial ways driving social progress and affluence. Companies create most of the jobs, wealth, and innovations that enable the larger society to prosper. They are the primary delivery system for food, housing, medicines, medical care, and other necessities of life. Without modern-day corporations, the jobs, taxes, donations, and other resources that support governments and nonprofits would decline significantly, negatively affecting the wealth and well being of society as a whole. Businesses are the engines that propel us toward a better future.

Why is Social Responsibility important?

CSR is important because it influences all aspects of a company’s operations (Werther & Chandler, 2010). Increasingly, consumers want to buy products from companies they trust, suppliers want to form business partnerships with companies they can rely on, employees want to work for companies they respect, large investment funds want to support firms that they perceive to be socially responsible, and nonprofits and NGOs want to work together with companies seeking practical solutions to common goals. Satisfying each of these stakeholder groups allows companies to maximize their commitment to their owners, who benefit most when these groups’ needs are being met.

CSR is increasingly crucial to success because it gives companies a mission and strategy around which multiple constituents can rally, the business most likely to succeed in today’s rapidly evolving global environment will be those at best able to balance the often conflicting interests of their multiple stakeholders. Lifestyle brand firms, in particular, need to live the ideals they convey to their consumers. It is important to recognize that CSR is not just about doing the right thing. This is because corporate social responsibility also offers benefits that are directly enjoyed by the business (Werther & Chandler, 2010). Building a reputation as a responsible business differentiates your business and may create added value and marketing capital.

Critical Analysis

Many consumers prefer to buy from ethical businesses and increasingly prefer to invest in them. Companies often favor suppliers who demonstrate responsible policies, as this helps them to minimize the risk of any damage to their own reputations. Companies increasingly want to demonstrate their CSR by occupying sustainable buildings (Yakovleva & Natalia, 2005). In the business world, customers have a tendency to prefer to deal with responsible and caring companies. For example, sales of ‘environmentally friendly‘ products continue to grow, and these products often sell at a premium price.

Social responsibility examines the direct benefits of CSR, which include: a good reputation makes it easier to recruit employees, employees stay longer reducing the costs and disruption of recruitment and retaining, employees are better motivated and more productive, corporate social responsibility helps ensure you comply with regulatory requirements, activities such as involvement with the local community are ideal opportunities to generate positive press coverage, good relationship with local authorities make doing business easier, understanding the wider impact of your business can help you create profitable new products and services and CSR can make you more competitive and reduce the risk of sudden damage to your reputation.

Practical Implications

Business is a critical factor in the world’s economic and social development. Business interactions with society go beyond economic impacts on nations that include the supply of goods and services, generation of profits, provision of jobs, tax payments, and trade development (Yakovleva & Natalia, 2005). Consequences of business operations affect the interests of society not only through products and services supplied but also through impacts on traditions, culture, and social constructions. As a business grows in size and expands geographically, more groups of society are affected by business operations. These affected groups feel that the business has an obligation to share its profits and benefits with society as the society helps to sustain its existence and operations. Today, society expects the business to act in a way that would satisfy society’s interests and share benefits with those members of the society who are not business shareholders.

Reflections

Business is working towards increasing its positive inputs into society through making voluntary contributions to education, health, social services, arts, and culture as well as aligning its practices in accordance with societal norms and expectations in the areas of employee relations, impact on the environment, supply chain and many others that were previously considered to be spheres of economic and legal consideration. A concept of corporate social responsibility suggests that business has no obligation to contribute to social progress beyond economic transactions of a firm (Yakovleva & Natalia, 2005).

Corporate social responsibility implies that businesses should consider the interests of those affected by business operations and respond to their desires and concerns. Corporate social responsibility explores the relationship between business and society in the context of satisfying society expectations, achieving social goals, and bringing benefits to society that, in many cases, implies voluntary actions, which are prescribed by moral and philanthropic values rather than by legal requirements. Thus, companies have to meet a variety of responsibilities assigned to them by law, shareholders, other stakeholders, and the society at large in order to undertake their duties legitimately. This will eventually form the foundation of progress, which is aimed at within the corporate sector.

References

Werther, W. B., & Chandler, D. (2010). Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. California: SAGE.

Yakovleva, & Natalia. (2005). Corporate social responsibility in the mining industries. New York: Ashgate Publishing, Ltd.

Evaluation of company Q’s attitude toward social responsibility

Company Q’s attitude towards social responsibility can be described as negative. It is clear that the company is highly sensitive to its performance and almost all of its efforts are directed towards profitability. Theoretically, corporate social responsibility concerns a company’s ability to take responsibility for its impact on the society in which it operates (Bhattacharya, Sen &Korschun, 2011).

Although it appears that corporate social responsibility concerns an expensive company’s self-regulation mechanism, it is important to note that it develops good relationships between the company and the society, creating a positive image that improves corporate performance (McWilliams & Siegel, 2011).

The aim of corporate social responsibility is to embrace responsible actions as well as encourage positive impact of the company on a number of parties, including employees, investors, consumers, the environment and communities.

By offering a limited amount of health-conscious and organic products, company Q seems to be concerned with the health issues of the society. However, it is also worth noting that the company is not willing to provide these products, especially because it has started the program only after the issue has been raised by the community.

In addition, the health-conscious and organic products are only provided in limited amounts, yet the community requires these products to cater for its health needs. Moreover, it is clear that the company does not trust its employees. By believing that the employees are a threat to its survival, the company indicates that it does not train the employees to behave responsibly at the workplace, which indicates a negative attitude towards corporate social responsibility.

It is also worth noting that the company’s decision to throw away its day-old products instead of donating to the local food bank does not help the society. In fact, the company is only concerned with making profits and is not concerned with the society in which it operates.

Although it is important to close its outlets in the high-crime areas to reduce the loss of products, it is worth noting that the company has a role to play in reducing the crime in the area. Instead of closing the shops, the company should have considered other methods such as working with the administration, the community and the police service to determine better ways of improving the state of security in the region. Overall, it can be noted that the current attitudes towards social responsibility in Company Q is negative.

Improving corporate social responsibility

An important action that the company can take is to develop a new program or approach that will allow it to change its attitudes towards social responsibility. First, the company should consider developing better relationships with the society, especially by providing healthy food and organic food products in order to improve the wellbeing of the society.

Secondly, it is recommended that the company consider training its employees to act responsibly, especially when dealing with customers and well as improving their attitudes towards the company. In this way, it is possible to ensure that the employees are trusted while at the same time improve the company’s image in the public.

Thirdly, the company should liaise with the society and the administration in the efforts towards increasing security in the area rather than closing its business. For instance, it should provide some financial support to the administration to establish security measures such as a police station in order to improve the security of the area. In this way, the company will not close its shops in the high-crime areas.

References

Bhattacharya, C. B., Sen, S., &Korschun, D. (2011). Leveraging Corporate Social Responsibility: The Stakeholder Route to Business and Social Value. Cambridge: UK: Cambridge University Press

McWilliams, A., & Siegel, D. (2011). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review 26(2), 117–127