Building an Ethical Organization An ethical organization is one that acts according to a prescribed set of guidelines that differentiate ethical from unethical behaviors. Identifying an organization as “ethical” means, primarily, that the organization is structured in such a way that unethical behavior is not tolerated or not accepted. Organizations that are otherwise “unethical” either have violated trust relationships with the public, and are presented as villains in the public eye. This may either be due to the nature of the industry (an industry that the public, by a majority, sees less than ideal) or to the nature of the business itself, operating within an industry that is elsewise “good” for the public.
In terms of an ethical organization, certain kinds of organizations, and in specific industries, are categorically praised, such as nonprofit charitable foundations. In the following explication of a human service organization, which provides funding and financing for nonprofit subsectors, it shall be made clear what makes an organization ethical as opposed to unethical, and how these normative judgments may be applied to real-life organizations serving similar functions. A.
Description of Organization My organization is a national, nonprofit funding and financing agency that offers millions of dollars in loans to nonprofit organizations. Let it be named the Gregory Smith Foundation (GSF). It accomplishes this through a number of financing, advocacy, and consulting services: an array that ensures continued success for its clients even through changing financial climates. By providing loans and credits to nonprofits, my organization seeks to make the world a better place, primarily through the organizations GSF serves. GSF does not serve organizations whose cause does not seem worthy, appropriate, or consistent with their own values.
Giving the financial resources these organizations otherwise would not have, GSF allows each client to meet their financial needs. Specifically, GSF develops relationships between clients and financial institutions who ultimately offer their clients the loan package. GSF organizes financial training workshops for newer organizations, provides business analysis, structures capital investments, provides advice, conduct research, guide strategies, and offers consultations. Each of these services adds some value to their clients and their relationship with the nonprofit sector. Moreover, by focusing on the broad capital needs of so many organizations and nonprofits, GSF is able to diversify its client base so that it too survives through changing times.
B. Mission Statement The Gregory Smith Fund acts to foster strong, durable relationships between the nonprofit sector and financial institutions that otherwise would not give funding to some of the most generous and charitable organizations. This mission statement accomplishes three things. First, it states a primary action that the organization takes, and this action is presumably ethical. It is ethical because the organizations the fund helps are presumably ethical.
GSF connects the nonprofit sector with the financial institutions on which it could not live without. Without the loans and capital structures to carry out its most ambitious projects, the nonprofit sector would quickly diminish in scope and influence, thus lessening the beneficial effects of charity and generosity. Second, to the community the mission statement states clearly that GSF is here to help continue the existence of the nonprofit organizations working in the area. The public should respect the role of GSF in their community as a public good: that is, so long as the nonprofit sector is engaging in and accomplishing projects designed for the public good, GSF is doing right by helping finance these projects.
Third, the mission statement gives a reason for GSF to exist: namely, a fix to a problem that would, if GSF did not exist, cause further problems for those GSF serves. In addition, by injecting morally positive language like “charitable” and “generous”, the mission statement ties the reason for the organization to exist to the kinds of moral and ethical values it seeks to promote to the public.
As a result, organizational success is clearly connected to the moral success of its mission, and the moral triumphs it seeks to promote. C. Values Statement As an organization, and as individuals, the Gregory Smith Foundation value service, human dignity, responsibility, social justice, hope, and charity. We strive in all ways to make the world a better place than how we found it. We work for the advancement and interests of our world’s most generous and charitable people who, like us, hold themselves accountable to the people they serve and the world they hope to perfect. This values statement establishes three things.
First, it explicitly states the organization’s values, which include service and human dignity, both of which are essential to the purpose of GSF and to how many people in the public view “ethics” in the organization. Promoting these selfless ideals like social justice, charity, and service, GSF is clearly an organization whose morals are not up for questioning. This, it is presumed, will lead to other nonprofit organizations, like GSF, to provide analogous kinds of financial services to local nonprofits, in an effort to make the world a better place. Second, like the mission statement, the values statement establishes the actions necessary to achieve the values mentioned in the statement.
This includes “advancing” the interests of nonprofits and holding both the organization itself, as well as its clients, accountable for staying true to these values. Of course, this plays into the idea behind the ethical organization, insofar as GSF is likely to refuse to work with anyone who it deems is not engaged in the sort of activities that advance the public good through the kinds of values explicitly mentioned in the statement. Third, these values tie directly into the organization’s mission statement with respect to how it serves human beings.
Of course, while GSF deals with and works with organizations to accomplish noble goals, GSF provides a service to human beings through helping nonprofits gain the financing they need to make a difference. For instance, by valuing service, GSF works actively to encourage service by making money more available to those who serve others in the context of a nonprofit organization.
In that way, GSF is working based on one of its core values: service. An ethical organization, in addition to having legitimate ethical values, follows through on these values and achieves them in reality. By explicating the nature of the organization (GSF), its mission statement, and values statement, it should be clearer how an organization might go about promoting its image as an agent of positive change in the world. The ethical organization, whether a nonprofit such as GSF or a corporation such as Microsoft, depends on the setting of legitimate organizational values, like mutual respect, responsibility, and honesty.
However, it also depends on the achievement of these values through action in reality. It is not merely enough to structure the organization around the noblest of intentions. Identifying an organization as “ethical” means, primarily, that the organization is structured in such a way that unethical behavior is not tolerated or not accepted. Organizations that are otherwise “unethical” either have violated trust relationships with the public, and are presented as villains in the public eye. GSF is an ethical organization not only because it seeks to achieve noble social goals, based on lofty ideals and values, but also because it explicitly believes in these values and is willing to change its organizational behavior in order to reflect changes in the real world.