Definition of Terms Including Ethics and Social Responsibility - Coursework Example

Contemporary Organizational & HRM Studies Introduction There is a substantial relationship between social responsibility, organization’s ethics and its performance. This is a concern of managers of different organizations. Research evidence suggests that there is a small, but positive relationship between ethical and socially responsible behaviour and the organization’s financial performance (Carroll and Hatfield 1985, p. 446-63). Ethics is discussed on frequently and explicitly addressed in the news when decisions made unethically are found. Sadly, individuals do not hear about ethics ideally, when others are engaging in ethically sound behaviors daily (Griffin 1993, p.167). In the course of this paper, keep in mind that issues, which are legal may be at times held as unethical. This paper looks into definition of terms including ethics and social responsibility. It also discusses what being ethical and socially responsible means for an organization. In the final part, it expounds on whether a company should put ethics and social responsibility ahead of profit making. Ethics are in the definition, an individual belief system consisting of knowing what is precisely right and wrong. Ethics varies from one person to another even within the same organization. Ethics is ideally part of analyzing decisions, actions and beliefs of individuals in any given context. There are many ethical dilemmas arising in a business or organizational setting. Some of these dilemmas are more obvious while some exist as more obscure (Carroll and Hatfield 1985, p. 446-63). There is a absolute basis, which helps to keep decisions made within an organization in perspective. Businesses or organizations should operate in a way that is ethical, legal, profitable, and within prevailing social norms (Griffin 1993, p.167). By operating under the social norms, it means that organizations need to use society in gauging if its decisions made are appropriate. Some cultures define ethical decisions differently from others meaning that the surrounding environment is a desired context. Because all businesses have to make profit, sometimes over emphasis on making money overwhelm the context of ethics (Friedman 1989, p. 11-18). Social norms must always govern what is ethical to compensate individuals. Profit expectations, as well as goal achievement within an organization, must not be reasons for an organization to cut corners and act unethical or to misrepresent facts (Linda 2009, p. 875-897). In understanding ethics definition, it is appropriate to understand its origin. Normally, people within a given society begin developing internal beliefs from the time they grow as small children (Griffin 1993, p.167). Factors for instance the conditions that a person grows up affect ways in which they see the world. For instance, if a child grows up in a household full of violence, they may feel that fighting is a fantastic way of solving problems (Carroll and Hatfield 1985, p. 446-63). The beliefs of the close peers around a person also influences how one sees things. Within an organization setting, many people engage in unethical behavior seemingly thinking that they will not be easily caught. An employee stealing a few dollars from the petty cash may result eventually to taking large amounts from the same (Robin 2007, p. 185-211). On the same note, someone holding lots of authority within an organization may think that they can cover their dirty tracks through lying to subordinates (Davis 1975, 19-24). Some people within an organization may think that acting unethically is appropriate all because they can justify wrongdoing. For instance, incase an employee sees another not being punished for acting unethically they can then feel as if they can do it, as well. Social responsibility, on the other hand, is a term meaning different things to varying individuals. Generally, social responsibility is the organization’s obligation to take action, which improves and protects the welfare of society in general in this case being members operating within an organization (Davis 1975, 19-24). This in turn includes the support of organizational interests. According to the social responsibility concept, a manager within an organization should strive hard to achieve both societal and organizational goals. Current perspectives relating the importance of social responsibility of organizations are discussed through Davis works “model of social responsibility” “areas of social responsibility” and “different social responsibility opinions (Griffin 1993, p.167).” A model of social responsibility developed by Davis Keith provides five propositions describing why and how organizations should adhere to the ideal obligation of taking action, which protects as well as improves the society welfare as well as the organization (Davis 1975, 19-24). It argues that social responsibility ideally arises from social power; organizations shall operate openly in a defined system, with open inputs receipt from society and disclose of its operation publicly, there is a need to calculate the social costs of an activity, service or product, as well as the passing of social costs of the same. The areas that an organization can become involved in protecting and improving the society welfare are diverse and numerous. Some of the highly publicized of the respective areas are consumer affairs, urban affairs, employment practices and environmental affairs (Griffin 1993, p.167). Although numerous organizations are involved in activities, which are socially responsible, there is more controversy persisting about whether these involvements are indeed appropriate or necessary (Linda 2009, p. 875-897). Within the context of an organization, organization’s expectations are to have formal ethics as well act ideally as socially responsible. The problem in this concept is that the ethics of an organization is a mixture of diverse sets of ethics (Sethi 1975, p. 58-64). This is the reason as to why it is critical to have individuals in an organization as employees (Davis 1975, 19-24). It is also equally critical, for an organization should promote and respect ethics of varying individuals for a harmonious working environment. Ethics is practically not just talking about what is the right thing; it is also doing and practicing what is right in all decision made within the organization. Social responsibility for instance can be an excellent example classified as ethical behavior (Griffin 1993, p.167). However, an organization cannot afford going around doing virtuous deeds to the people to remain ethical or socially responsible especially if there is no pay off. If the organization were to lose a lot of money in doing fantastic and promoting ethics and social responsibility without any gains, then it would in future cease to exist, leave employees jobless and hurt customers (Davis 1975, 19-24). There are people arguing that social responsibility is evident only when organizations go beyond what is optional, and create a benefit for the others other than the organization. Additionally, companies may at times not benefit from various forms of social responsibility meaning that this does not make sense for a given organization. It is, therefore, arguable that instead of concentrating on ethics and social responsibility, what organizations should do is focus on what they can ideally do best as an organization and give back probably what they can (Linda 2009, p. 875-897). A good example of social responsibility in organizations is from projects, which raise money for the needy, research on diseases that require volunteer workers from the community, engaging in recalling dangerous products, promoting recycling, and free services offering to the disadvantaged. Conversely, it is arguable that a company should put ethics and social responsibility ahead of profit making. There are many arguments against and for businesses acting on ethics and social responsibility (Robin 2007, p. 185-211). The popular argument supporting the respective activities by organizations is that because an organization is a subset of society and exerts a momentous impact on society, it ideally has the responsibility in helping improve the same society (Griffin 1993, p.167). Additionally, it is arguable that profitability and growth of an organization go hand in hand with social responsible and ethical practices in relating with employees, community and customers. Regardless of the argument, managers of an organization should support and make a concerted effort generally perform all legal and socially responsible activities. This is to mean that they should put ethics and social responsibility ahead of their efforts of making profits for the given organization (Davis 1975, 19-24). In fact, Federal law requires that organizations perform particular socially responsible activities if they are to operate within a particular location. In fact, many government agencies established and are maintaining the development of such business-related legislation making sure the laws governing organizations abide by the ethics and social responsibility. A outstanding example is the Environmental Protection Agency within any given country or region, it does indeed have the role and authority to demand organizations adhere to particular socially responsible standards of the environment even if it means compromising their profits (Griffin 1993, p.167). Adherence to such legislated social responsibilities is the representation of the minimum social responsibility performance standard, which leaders of an organization must ask and answer (Muel 2000, p. 201-67). However, the organization should also look into activities, which contribute to its success while making outstanding contributions to society welfare. Many approaches exist that an organization can take to facilitate ethical behaviors and maintain social responsibility (Linda 2000, p. 653-78). One of the best approaches is to making sure that the underlying organization culture promotes strong values. For instance, people should not be punished because of coming forward with their problems. Actually, they should be allowed to freely, communicate their problems anonymously. This is a terrific way of organizations (Davis 1975, 19-24). In any case, profitability cannot come just by pressing employees to unhealthy work practices. In stead, it can come in the organization appreciating the employees’ needs, therefore, motivating them and improving their performance. For instance, having a phone number that employees can call or having a suggestion box in an ethical practice better than to force people to work without a say in the organization. It is suitable for an organization to allow employees share all ethical concerns especially with the authority above when there are ambiguities relating to the right thing to do. Organizations also should have a code of ethics existing as a written document ideally for employees to read and act on (Linda 2000, p. 653-78). Develop mission statements, brochures, and other media expressing the company beliefs. Higher authorities in any given organization should possess the organizations beliefs as well as demonstrate some values, which they want to see employees have. Concentrating on this instead of giving too much focus on profitability is what brings in more productivity through sheer relations within the organization (Ross 1988, p.56). It also allows for teamwork, a tool that has always played a greater role in productivity. Otherwise, from such, profitability aligns itself without any strain within the organization strain. Social responsibilities to organization’s employees extend generally beyond terms of the formal contract and give recognition to the employees as a human being. It is mandatory that every department within an organization be treated equally (Thomas 1998, p. 56-61). By allowing all employees to feel equal, it is a treasure for any organization. With social responsibility, it drives in a sense of recognition in employees, and this develops into increased productivity. Social responsibilities are extremely critical to an organization in creating a strong image to the organization (John 2003, p. 16-24). The right image is rather more valuable than the immediate profitability because it works better for future’s sake of the company. Friedman in his argument on the same admits that it is all right for an organization to sacrifice potential profit to hail as a decent human being (Muel 2000, p. 201-67). For instance, in the case of United States, suppliers of products after the hurricane disaster had to look human enough by not increasing their prices of products even if they had bought them at a higher price (John 2003, p. 16-24). In this case, they would rather provide the goods at a cost than seem unethical by increasing prices to victims who at the time need their support. Social responsibility also can feature in any given organization in which the owner takes charge of his responsibilities other then running away from the same. The owner of a particular company cannot escape obligations by simply hiring someone to run the company (Griffin 1993, p.167). For instance, you might think that a criminal boss who organizes the same can avoid responsibility of a murder by hiring men to do the job; however, it will prove to you in the end that this will affect the company and literally affect the boss. Ethics in an organization plays a critical role in social responsibility (Thomas 1998, p. 56-61). The most crucial issues involved in this are the safety and health of every employee. Great leadership in an organization involves the establishment of safety and health as a value affirming that the ideal safety is appropriate for the organization. It is a responsibility of an organization to offer all its employee peace of mind, therefore, making it a social responsibility as well as an ethical practice (Boje 1991, p. 106-126). In return, an organization is rewarded by the employees through their hard work and long-term leadership and growth, which surpasses profitability because it strengthens the operations of an organization. Social responsibility also call for fair treatment of all employees within an organization as well as respect for all individuals, while being ideally mindful of ways that would help their employees’ in fulfilling family responsibilities. This involves the creation of a better place of employment for the employees (John 2003, p. 16-24). In setting foot on such approaches, this works out for the better for the organization because it rewards organization hardworking employees and devoted ones who would make any sacrifice just to see the organization prosper and meet its goals. It might be true that there are crude ways of ensuring that an organization makes enough profit but literally, this is usually short-lived (McGuire and Schneeweis 1988, p. 854-72). An organization would better invest in future goals and objectives because these are what hold the organization in operation for the entire duration. However, there are other arguments, which do not support this stand, in this case arguing that the sole reason why a company exists is a profit making and not much to do with ethics and social responsibility. Granting that an organization’s is a profit making, the organization has no option other than engaging in all practices, which will make money as much as possible (Griffin 1993, p.167). In this case, therefore, many organizations stick to finance, marketing as well as operations management instead of wasting time with ethics. Milton Friedman an Economist, once articulated this view in his essay, which is extremely popular with business partners, “The Social Responsibility of an organization is increasing its Profits (McGuire and Schneeweis 1988, p. 854-72).” As per Friedman’s argument, corporate officers in an organization do not have any obligation of supporting social causes within a society for instance hiring unemployed employees in that society to reduce poverty, or reduce pollution coming from their production beyond the mandated by law (Friedman 1989, p. 11-18). He says that the sole task of that the organization is maximizing profit for the business, subject to all prevailing law limits and “rules of the game”, which ensure “free and open competition without fraud or deception.” Friedman in this case advances two key arguments for his position (John 2003, p. 16-24). First, executives and directors in an organization are not qualified as ethically fit but only for maximizing profit. He says that Business people who hail within an organization hold the expertise of making money only, not at developing social policy (Friedman 1989, p. 11-18). They lack the training and perspective of addressing prevailing complex social problems that should be left to social service agencies and governments. His idea, therefore, provokes organizations to concentrate on profitability rather than ethics and social responsibility (Ross 1988, p.56). Additionally, and more fundamentally, his argument says that officers have no right within their jurisdiction to do anything other than maximizing profit. If they invest funds from the organization in training the chronically unemployed within a society or reduce emissions relatively below legal limits, this in effect levies a “tax” on the organization’s owners, customers and employees in order to fulfill this social purpose and to him, this is not what the executives were called for (Boje 1991, p. 106-126). They do not have any right to spend the stakeholder’s money on projects relating to social welfare. Literally, if these people are to contribute corporate money for arts or other community development projects, the whole idea should be eyeing to increase the profits of the organization, perhaps through attracting employees or relatively improving the image of the company in that given society. An outstanding example is the Hurricane Andrew that last year hit Southern Florida. The hurricane cut off all routes and communication to the outside world. This created a desperate need and demand for portable generators. The generators had long been dead stock in many outlets in that region, because people were contented with other sources of electricity. Legally, there is nowhere in the law of business within this region prevented the suppliers to charge exorbitant prices on these generators. Since the price gouging is ideally legal, the companies, therefore, too this opportunity to maximize their profits by selling the available generators, which had long held their capital and out of this made massive profits. Out rightly, in such circumstances a successful business should not go for ethics but aim at increasing profits instantly. Albert Carr’s, on the other hand, in his essay; “Is Bluffing in business ethical?” reflected that deception, for instance, is a legitimate approach in business with an aim to increase profits (Albert 1990, p. 2-8). To him Business is like playing a poker game. It is a win-loose situation, and every move counts on the progress of business. There are rules within the business of which they create room for ethics, but within the same rules, it is permissible for organizations to bluff to mislead others and make the best out of that. In fact, an organization should do so if it does not want to risk loosing the game. The ethical rules according to him, therefore, do not have any application in business. Using examples in the 1960s era, he wrote and defended “food processors” using “deceptive packaging of their products”; “automobile companies”, which “for years neglected the individual safety of automobile-owning families,” and “utility companies”, which “elude government body’s regulations to extract large payments from electricity users.” All this is profit making and any organization should seek to practice the same when such circumstance come knocking (Albert 1990, p. 2-8). References Albert, Z 1990, Is Business Bluffing Ethical, Harvard Business Review, January-February, 2-8 Boje, D 1991, Organizations as Storytelling Networks: A Study of Story Performance in an Office-Supply Firm, Administrative Science Quarterly, Vol. 36, 1991: 106-126 Carroll, A and Hatfield, J 1985, an Empirical Examination of the Relationship between Corporate Responsibility and Profitability, Academy of Management Journal, June: 446-63 Davis, L 1975, Five Propositions for Social Responsibility, Business Horizons, June: 19-24 Friedman, M 1989, Freedom and Philanthropy: An Interview with Milton Friedman, Business and Society Review, Fall: 11-18 Griffin, R 1993, Management 4th Edition. Geneva: Houghton Mifflin, p.167 John, H 2003, Why Business Ethics, Carnegie Mellon University, 16-24 Linda, K 2009, Behavioral Ethics in Organizations: A Review, Journal of Management, 6(3) 875-897 Linda, N 2000, Ethical Leadership or Leadership in Ethics, Australian Journal of Early Childhood, 2(3) 653-78 McGuire, J and Schneeweis, T 1988, Corporate Social Responsibility and Firm Financial Performance, Academy of Management Journal December: 854-72 Milton, F 1970, the Social Responsibility of Business Is to Increase its Profits, New York Times Magazine (September) 7-8 Muel, K 2000, Developing a Measure of Unethical Behavior in the Workplace: A Stakeholder Perspective, Journal of Management 2(3) 201-67 Robin, S 2007, Clarity of ethical rules for open-minded discussion to resolve ethical issues in Chinese organizations, Asia Pacific Journal of Human Resources, 3(1) 185-211 Ross, T 1988, Ethics in American Business. 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