Management Ethics Looks at How Managers May Support the Creation of Better Ethical Cultures - Case Study Example

Management Ethics Author Course Tutor Institution Department 11th March 2015 Abstract Management ethics is the area of business ethics that deals with how managers may support the creation of better ethical cultures. The paper discusses the formal and informal means available to a manager for management of ethical behavior within an organization and towards external stakeholders. It cites examples ethical scenarios from a broad range of organizations and studies the ethical organizational culture of Virgin Atlantic, an airline company in the UK, to illustrate these means. Introduction Owners, employees, stockholders and the public are the primary stakeholders in any organizational. Management ethics requires that these stakeholders be treated in utmost ethical manner. A company’s success is not limited to profit making. Good ethics comprises an integral part of organizational success. Good ethics not only requires that employees, whether domestic or foreign, be treated well by the management but also that the company is mindful of the environment in which it operates. Any organization must adhere to ethical interaction within its internal environment as well as with its external environment. A manager’s career success in the long-term is determined to a very great extent by their ethical behavior (Bowie, 2005). In addition to individual ethical behavior of the manager, management ethics requires prudent organizational ethics during the reign of any successful manager. It is, therefore, incumbent on any manager to cultivate better ethical cultures within their organization. The manager must define the codes of conduct and codes of ethics of the organization they lead. He must also ensure that the organization cultivates and keeps a culture of corporate social responsibility among other functions that will create an ethical organizational culture (Bowie, 2005). The paper discusses the means available to a manager in achieving the quest to manage ethical behavior within the organization and with external stakeholders. It will draw examples from Virgin Atlantic, a British airline company with operations all over the world. Codes of ethics and conduct have been matters of concern in the recent past mainly because of increased interest by the public regarding how organizations undertake business. The two issues represent the way in which organizations undertake self-regulation. They establish an image of good behavior to the public and give employees direction. On one hand, the decision-making function of the management is governed by the code of ethics. On the other hand, codes of conduct govern actions. For example, Virgin Atlantic code of ethics stipulates that the company is committed to protecting the environment. Any employee of Virgin Atlantic faced with several options for performing a given task, would be expected to select the one that protects the environment most (Brenner, 2012). Codes of conduct stipulate the standards of interaction especially within the organization. Virgin Atlantic codes of conduct prohibit racial intimidation, sexual harassment and viewing inappropriate material on the company’s computers among other behavior. The ultimate aim of the two documents is to provide a narrow range of employee behavior acceptable by other stakeholders. Whereas the organization’s board of directors draws the two documents, the manager carries the responsibility for implementing and actualizing them (Brenner, 2012). The stakeholders of any organization obtain the sense of direction from the organization’s management. Employees look up to and usually emulate the organization’s managers. The organizational manager’s persona ethics, therefore, play a central part in his attempt to create ethical organizational culture. The manager must possess and exercise ethical characteristics such as trust, morality, responsibility and accountability. The manager must uphold high ethical standards in all his dealings, whether formal or informal. In the informal front, his morals must be unquestionable. He must acknowledge that his private life is under constant scrutiny and surveillance by the organization’s stakeholders especially employees (Jones, 2005). Another platform available to the manager for the creation of an ethical organizational culture is workplace ethics. The primary policy instrument under this platform is an anti-discrimination policy. The system addresses all forms of discrimination that could occur in the organization based on race, gender or any other personal characteristics of the stakeholders. To succeed, the organization’s anti-discrimination policy must get appropriate backing by the management. In addition, it is the management’s responsibility to see to it that all employees thoroughly understand the policy (Carroll and Buchholtz, 2014). Managers at all levels must enforce the anti-discrimination policy in order for it to succeed. They must ensure that all employees take the policies with the due seriousness. The employees must understand that violation of the policy would cause dire consequences. The management must make sure that it installs adequate mechanisms to catch those who break the policy. Virgin Atlantic has developed mechanisms that ensure that the risk of discrimination in the workplace is minimal while ensuring that those that break the policy do not get away with their misconduct. Corporate Social Responsibility is an avenue through which an organization integrates environmental and social concern into its mainstream operations voluntarily. It ensures that the organization goes beyond merely following the guidelines, rules and regulations stipulated by the government to creating shared value by collaborating with stakeholders. It ensures mutually supportive interaction of the organization’s interest and the interests of the wider society. The organization repatriates some income to the community whose resources it utilizes to create profit. The organization benefits through establishing customer relations, human resource and high propensity for additional investment. The public, on the other hand, enjoys improved standards of life as well as low cost of maintaining the environment. The responsibility to actualize an organization’s corporate social responsibility lies in the management (Jones, 2005). The management must draw an elaborate formal corporate social responsibility policy. The process of drawing the policy must involve all stakeholders for the policy to be successful. The management, especially the human resource manager, must exercise utmost responsibility to propel the organization towards adopting and implementing the corporate social responsibility. Virgin Atlantic management has drawn an elaborate environment policy aimed at setting the guidelines to achieve low carbon emission in the organization’s activities. In the light of this, the company developed low carbon fuel to reduce air pollution. In fact, the company won the Gatwick Diamond Green Business Award for recycling. In addition, the company has drawn a sustainable procurement policy document that guides its procurement process to see to it that it achieves its goal of corporate social responsibility. The successful implementation of these policies has given the company a competitive edge enabling it to expand from a local to an international air company with operations all over the world. Resistance to change by employees is a problem that raises substantial ethical concerns for managers. The approach employed by the manager to solve this issue could either create an ethical culture for the company or destroy any later attempts to do so. To ensure that resistance to change by employees is handled in an ethical way, the management should see to it that all stakeholders are involved in the process of effecting the proposed change. Management ethics dictates that the views of these stakeholders be put into consideration in the whole process of change. The manager should also realize that there always exists a natural tendency for individuals to defend themselves from losing. An ethical approach to this problem would involve working out ways to minimize loss or top compensate those who lose (Chakraborty, 2005). Resistance by employees to change offers the manager an avenue to exercise personal ethics that helps in the creation of organizational ethical culture. An ethical manager would not equate dissent, doubt, alternative proposals and disagreement with disobedience, disloyalty, and refusal. He should consider that the resistance could be unconscious. In addition, the manager should examine the ramifications of strategies chosen to deal with resistance. Some unethical strategies that do not consider other stakeholders could derail the change completely or undermine its effectiveness (Schermerhorn, 2011). At the center of ethical strategies to deal with resistance are just processes and outcomes that are only attainable through regular and honest communication. Virgin Atlantic management has not dealt with significant resistance from employees to change. The company’s ethical culture stipulates that all stakeholders must be involved in any change process. In addition, the management of the company has made it the policy of Virgin Atlantic to maintain full and honest communication with all stakeholders at all times. A concrete reference to ethical behavior is a must for every employee in an organization. The company’s code of conduct is a perfect example of such a reference. High on the list in the reference document should be the expectation that each worker must show personal concern for the needs of clients and must show respect for colleagues at all times. The communication process must be honest both ways, to and from the management. The employees must be shown that their voices are heard and that when they express legitimate concerns, they will not be reprimanded, or the expression be used against them. These aspects must be clearly documented. When each employee has understood these basics and has signed them off, they will be accountable for their actions. The best avenue to introduce these basics depends on the environment. They could be introduced in new hire packets or individually (Jackson, 2000). Ethical behavior must be automatic and thoughtless. Engaging employees in role playing gets them into the proper mindset to make reliable decisions at all times. The manager can make use of training videos on ethics to install these basics. The videos typically show dramatizations that present examples of good behavior, as well as bad behavior. The videos can be supplemented with acting similar situations in the real world. The process should involve the introduction of varying scenarios of different complexity. The manager could start by introducing a basic scenario such as overcharging a client and gradually increase the complexity to hiring practices and so on. While it is not exclusive to business, when proper ethics is exercised routinely in the place of work, it increases morale since it creates a mutual sense of trust and respect (Hosmer, 2005). To allow diligent workers to report cases of suspected unethical activity without fearing repercussions, it is mandatory for every organization to have a secret whistle-blower feature. Emphasis on training employees for this arena should be put on the importance identifying concrete unethical behavior or illegal acts to prevent false reporting. In addition, honest employees should be placed in the spotlight. Training employees in ethical behavior are highly beneficial for the organization. In addition to saving the company from prospective lawsuits arising from employees’ interaction with clients, it saves the organization the cost of obtaining new customers. Ethical dealings with clients create customer loyalty that results in repeat business and acts as a selling point to new clients. Employees can work with a clear conscience. The trust enables these employees to build their careers and improves the company’s profitability (Schermerhorn, 2011). Organizational culture gives the emotional as well as the intellectual model for the organization’s employees. The immaterial aspects of the organization, which include values, principles and rules that define the behavior, and the personality of a worker are often of more significance than the material factors of the organization. The organizational culture is born and established at the inception of the organization. It is often enshrined in the organization’s mission, and policy and the strategy adopted to achieve the goal of the company. The manager is the symbol of the enterprise, and his beliefs and actions establish the principles and values that define the future development of the company. Creating a new organizational ethical culture is usually not a simple task. The manager must identify the significant barriers and enablers to the change. Employee habit and self-belief often prove to be a major barrier to behavior and practice change. When employees are overloaded with information that they do not have enough time to read the awareness of published guidelines and their assimilation is often hindered. The manager must avoid workload load pressures on employees since it often causes the employees to accept shortcuts in service delivery, a practice that lowers the standards of the provision of services. Differences between the goals of employees and clients in service delivery impede shared decision-making and effective communication especially when they go unrecognized. Also, existing organizational culture can be a significant barrier. The culture may discourage employees from raising concerns about flaws they identify in the standards of service delivery (O’Fallon and Butterfield, 2005). The manager must identify and utilize the significant enablers for creating an organizational ethical culture. First, the manager must recognize that employees and other stakeholders often adopt guidelines and practices that are presented to them as authoritative. Also, guidelines that are relevant to the employees often get their support. Relevant practices have clear potential benefits to stakeholders. Easy to implement guidelines have proved to be more acceptable to employees. The manager should ensure that employees have access to tools of implementing the practices, provide peer support, funding and training to employees to achieve their goals. Another enabler of change in organizational ethical culture is having good role models for the employees. The manager must be in the front line in being a role model to employees both in personal and organizational ethics. He should ensure that new employees obtain role modeling from older colleagues for continuity. The role of education and training in encouraging teamwork and reflective practice cannot be undermined. Education and training offer an effective avenue to challenge employees’ personal values, beliefs, and assumptions. Also, the manager should establish organizational incentives for employees with exemplary performance as well as for clients. The basis of these incentives should be client experience and employees’ outcome and not on financial issues and amount (Chakraborty, 2005). The manager must acknowledge and deal with the impact of new technology on workplace ethics. Studies done have revealed that at least half of employees in UK organizations have engaged in a form unethical behavior that is related to adoption of new technology. Technology has increased the ambiguity in the definition of ethical behavior. Employees increasingly believe that new technology has made the traditional ideas of right and wrong obsolete. Further, technology has presented the managers with a new ethical concern field, that of ethical use of new technologies. The internet, in particular, has proved to be an important issue of ethical concern in the workplace. The concern has been whether it is ethical to regulate communication over the internet or not because doing so could interfere with employees’ privacy. Managers have had to deal with issues arising from new technology. These issues include employee's copying software meant for office use to use in their homes as well as use of office infrastructure to make personal purchases online, both of which are serious ethical issues. Another ethical issue is the tendency of workers to access private files from computers without permission. Also, there have been rampant cases of employees sabotaging data and systems of current employers or even former employers. More and more employees continue to blame technology bugs for their personal mistakes. Copyright violation is yet another ethical issue of concern in the workplace today (O’Fallon and Butterfield, 2005). To deal with the challenge posed by new technology, the manager should integrate training programs on business ethics into their Corporate Social Responsibility policies. The management should also establish advice lines that are dedicated numbers that employees can call to ask ethical questions, to look for confidential advice and to request information. Using the new technology to enhance business ethics especially through using it for ethics training solves the problem from the cause. Globalization and internalization of business have also had their impact on ethics in organizations today. Businesses have continued to expand their operations to international fronts that have necessitated their physical or virtual presence in nations with different ethical cultures. The varying national cultures have made it more complex for managers to create and manage organizational cultures, given the large impact that national ethical cultures have on organizational culture. It is imperative that managers have to deal with a wider network of stakeholders with different values and principles depending on the national principles of their country of origin. Managers faced with such scenarios must be keen enough not to generalize organizational ethical culture for all stakeholders. Rather, he should consider every group of stakeholders as a separate entity and work towards integrating the different national cultures to fit in the organizational ethical culture (Carroll and Buchholtz, 2014). Conclusion In conclusion, a better ethical culture in an organization is the desire and goal for every successful manager. The responsibility to create and develop such a culture lies in different quarters with the major burden falling on the manager. As the overseer of the activities of the organization, the manager has access to several formal and informal instruments to support the creation of a better ethical culture for the organization. These instruments include codes of conduct and codes of ethics, workplace ethics, corporate social responsibility and ethics training for employees. In the attempt to create a better ethical culture for the organization and in providing a conducive environment for the culture to thrive, the manager faces numerous challenges created by factors within and without the organization. The effect of national culture on the culture of the organization, impact of new technologies, and resistance by employees to change among others are some of such factors. How the manager deals with these challenges becomes the primary determinant of whether they will succeed in creating a better ethical culture for the organization or not. References Bowie, N.E., 2005. Management ethics. Brenner, S.N., 2012. Ethics programs and their dimensions. J. Bus. Ethics 11, 391–399. Carroll, A., Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning. 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