BE&CSR, Chapter Six.pptx for business students

BE&CSR, Chapter Six.pptx for business students

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  1 Chapter Six Creating anEthical Organization
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  2  Is itpossible to create an ethical organization? Can we make a corporation realize its objective of catering to the interests of all its stakeholders and yet keep its activities unblemished? In the present context, it appears that it is a task laced with insurmountable problems. People seem to have lost faith in corporations and look suspiciously at their goals and deeds. They believe that the potential for organizations to behave unethically has no limits. In today’s business world unethical practices seem to be commonplace and almost taken for granted. People hear and read day after day that corporations suppress evidences of the ill effects of their products on consumer health, dump polluted chemical wastes into rivers etc. INTRODUCTION
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  3 THE PROBLEM ISNOT WITH CORPORATIONS, BUT THE PEOPLE WHO RUN THEM
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  4 REASONS FOR THEFAILURE OF CONVENTIONAL MEASURES Identifying the real villain in ethical infractions in mega corporations is still more difficult because their activities are characterized ‘by a high degree of complex interdependencies’, which not only creates a governance problem, but also a difficulty in identifying any particular actor when things go wrong.
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  5 Taking into accountthe reasons for the malpractices in the context of various studies that have been conducted, they offer three alternatives:  (i) Selection of managers should emphasize pro-social intrinsic preferences to ensure the conditional cooperation of other employees;  (ii) stronger emphasis should be placed on fixed salaries to reduce the temptation to cheat; managers must be paid a fair market wage for their overall performance; and  (iii) employees’ willingness to contribute to corporate virtue by identifying and admonishing anyone resorting to fraudulent accounting must be strengthened by participation possibilities and self governance. This promotes self-monitoring and sanctioning in an informal way, and to that extent, reduces the tendency to break rules.8 SUGGESTIONS TO IMPROVE CORPORATE VIRTUE
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  6 ROLE OF CORPORATEGOVERNANCE
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  7  Ethical behaviourin organizations can be encouraged in a number of ways, most of which are executed by the HRM department through its roles in training, communication and discipline. A sound ethics programme should include the following six components: DEVELOPING AND EXECUTING A COMPREHENSIVE ETHICS PROGRAMME
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  8  formal codesof conduct;  ethics committees formed with a view to developing ethical policy for the organization and also investigating ethical infractions by employees;  ethics communication system that would include the facility for employees to post queries, get advice, or report any wrongdoing;  an ethics office with officer(s) to oversee the process and facilitate the communication of the policy to employees;  ethics training programs meant to make workers conscious of ethical issues that are likely to arise at the place of work; and how to deal with them effectively; and  a disciplinary system that would ensure prompt, decisive and impartial dealings with violations. We will deal with each of these six components of an effective corporate ethics program in some detail.
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  9  Code ofconduct: A code of conduct is a written document, inspirational in content and specifies clearly what is acceptable or unacceptable behaviour at the workplace and beyond, when employees represent their organizations outside.  ETHICS COMMITTEES: These committees may formulate ethics policy, develop ethical standards, and in the context of these norms, evaluate the company’s compliance with them. Ethics committees are formed in many organizations that are exclusively devoted to the pursuit of ethics at their work places.
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  10 ETHICS COMMUNICATION SYSTEMS: Ethicscommunication systems play a crucial role in making an ethics programme successful. Ethics communication systems should allow employees to make enquiries, get advice if needed, or report wrong doing. It is absolutely necessary to have a system in place to communicate and educate employees about the company’s ethical standards and policies. ETHICS OFFICE/OFFICERS Ethics officers are usually “responsible for assessing the needs and risks that an organization-wide ethics programme must address, developing and distributing a code of conduct or ethics, conducting training programme for employees, contin…….
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  11 establishing and maintaininga confidential service to answer employees’ questions about ethical issues, making sure that the company is in compliance with government regulation, monitoring and auditing ethical conduct, taking action on possible violations of the company’s code, and reviewing and updating code." ETHICS TRAINING PROGRAMMES One of the important components of a corporate ethics programme is the training given to employees, aimed at ensuring their ethical behaviour in an organization. The basic objective of such a training programme is to offer assistance to employees to understand the ethical issues that are likely to arise in their work environment, and how to deal with such issues.
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  12 DISCIPLINARY SYSTEM DISCIPLINARY SYSTEM: Just working out a code of conduct or of ethical behaviour will serve little purpose in an organization. If it is not properly enforced, it becomes mere window-dressing and will not help in achieving the company’s mission of enhancing ethical decisions and behaviour. THE END