RUNNING HEAD: Management and Accountability Professional managers need to weigh all their decision against the backdrop of legal implications, ethical considerations and societal values. This would ensure that they become accountable for the consequences of their actions and that those actions are beneficial to the society and for themselves. Key words: Management, accountability, ethics, legal, societal, corporate responsibility. Management and Accountability Introduction Growth of businesses in size was responsible for separation of ownership from professional management, according to Heald (2005, p. 55-64). While owners may claim profits of a firm, professional managers lay down its policies, thus leading to separation of ownership and control.
However, quoting Berle and Means, Heald pointed out that over the time, professional managers could exercise control neither for the benefit of the owners nor for themselves since typical large corporations have greater obligations towards community in which they operate (ibid. p.56). Thus, corporate social responsibility in legal, ethical and societal matters took center stage in the professional managers’ conduct. Legal, ethical and social accountability To cite an example of legal accountability, a manager in charge of a hazardous production facility is legally bound to ensure that people working under him/her are not forced to risk their lives in discharging their duties.
If an enclosed space such as a chemical tank needs to be entered into for inspection, repair or maintenance, the law provides for strict adherence to safety procedures for shutting down the tank, bringing the concentration of hazardous gases to acceptable levels, providing safety gear such as masks and oxygen supply to workmen, and above all, documenting the entire process under signature of an authorized person. A manager, who insists on following this procedure irrespective of any pressure from higher authority for adopting shortcut methods to expedite the repair work, is executing a legally sound decision.
Ethical accountability demands a manager to be conscious of the ethics of a decision in pursuit of profit either for self or for the firm. If a manager decides against outsourcing goods at cheap prices from firms that are known for exploiting child labor, his action is ethically accountable. In another example, Thain John as CEO of Merrill Lynch, spent lavish amount to refurbish his offices and awarded huge bonuses even while laying-off a large number of employees, at a time when the firm was making losses and its share price was plunging (Hill & Jones, 2003, p.
347). His decisions were unethical since accountability demands that a professional manager should desist from self-aggrandizement at the cost of stakeholders. Coming to social accountability, many green-field projects involve displacement of local people and severe disruption to their routine life-sustaining activities like farming. Accepting social responsibility as cornerstone of good corporate citizenship, managers at Tata Steel in India get involved extensively in rehabilitation of displaced persons.
The programs include housing, providing healthcare/education/vocational training free of cost, and guaranteed employment for at least one member of each family. These decisions, implemented by the top managers over the years, ensured that Tata Steel discharges its duties to the society and is in-turn benefited by a steady supply of trained manpower, which values the social-contract relationship with the firm (Company profile, Tata Steel). Conclusion While Milton Friedman may have made the famous dictum that “the social responsibility of business is to increase its profits”, professional conduct demands managers to verify all their decisions against the background of legal, ethical and social accountability. References Berle A.
A. and Means G. C. “The modern corporation and private property”, New York, 1933. Heald, M. (2005) “The social responsibilities of business: Company and community, 1900-1990”. Transaction publishers, New Brunswick, New Jersey. Hill, W.L. C. and Jones, R. G. (2003). “Strategic management theory: An integrated approach”, South-Western Cengage Learning, Mason, USA. Tata Steel, Company profile. Retrieved from: http: //www. tatasteel. com/Company/profile. asp