5.5: Responsibilities and Ethical Issues Today World
Mangers these days have to face both social and ethical issue and dilemmas. Our next examination is on the 3 current issues- social responsibility and managing moral lapses, social entrepreneurship & promoting positive ethical and social changes.
Managing moral lapses & social irresponsibility
Even when the public outrage over the Enon era misdeeds, unethical & irresponsible practices by the managers of all kind of enterprises have not gone away, but as you have observed with few questionable behaviours which had taken place at the financial services organizations such as Lehman Brothers and Goldman Sachs. But what is more noticeable is that what is going in offices, in trenches, in stores and warehouses. There is a survey which says that among five thousand employees forty five percentage of them has admitted that they fell asleep during work. And 22% of them have admitted that they spread rumours about their co workers, 18% admitted that they snooped, not only that, 25 among them takes credit on others behalf.
This kind of behaviour is not only seen in works and offices. In every part of society this type of practice is evident. In a study of Centre for Academic Integrity it is seen that about 26% of universities and colleges have admitted that serious cheating occurs in exams & surprisingly 56% has admitted cheating in the written tests. Not only were the business students the greatest cheaters this is also relevant within journalism students who have admitted that they have also cheated. SIFE in its survey has found that nineteen percent will admit that a classmate had cheated. What is more frightening was ‘acceptable’ according to today’s students. 23% of them have said that violence towards another person on a certain level is acceptable.
Now the question is what does these statistics tells about what mangers of upcoming generations have to face in future? It is obvious that the mangers in the upcoming years will have to face difficulties in maintaining ethics within the business because their employees will gladly accept and practice unethical behaviour. So now what steps the mangers have to take? There are two actions that can save them- ethical leadership & protecting employees who report wrong deeds.
After Mr Herb Baum became the CEO of the Dial Corporation, Reuben Mark the CEO of competitor Colgate-Palmolive, called him and informed him that he has a copy of Dial’s Strategic Marketing plan which came from a Dial Salesman who is at present in the Colgate Palmolive. Then Mark told him in return that he neither intends to look at this nor he had already looked at that and he will soon return it. He himself planned to deal with the said new salesman. According to this illustration mangers should always give ethical leadership no matter what. As it is told and observed earlier that the manager’s work and deeds has great influence on the employee’ thoughts and decisions and it are through the managers efforts that they start behaving ethically. When these mangers tells lies, does unethical work, cheats or misleads the organization what kind of impression does it have on the employees? In Exhibit 5.9 a details suggestion are given on how mangers can lead their firm.
Protection for the employees who raises ethical issues
Now what can an employee do when he sees others behaving unethically and doing immoral activities? What are the steps in that case you can probably take? Many of them could not take steps because of the fear of risk. This is the reason that mangers should protect the employees if they speak against unethical behaviour and assure them that there will be no risk on their sides. These employees are known as Whistle Blowers and are very important part of an organization. One of example of such is Sherron Watkins, the vice president of Eron; she gave a letter to the chairman mentioning her concerns related to the accounting practices of the company. However researches tells that most of the employees who sees wrongdoing does not react to it or do not have the guts to fight against it. This is the only thing that mangers have to take into consideration. How can the managers behave or take steps so that they can assure the employees no risk of fighting back and encourage them to take a stand against wrong doings and unethical deeds?
They can set up a toll free ethical hotlines. For example dell has its own ethics hotline where members of Dell can call to report problems that the organization will after that investigate. There should be an ambience where the employees can react to wrong doings and have the courage to act soon as they see unethical activities. It is important to take every whistle blower seriously. The Sarbanes Oxley provides legal protection regarding this issue. The manager who is against any employee, who protests against wrong doings, will be given a penalty of 10 years of jail. But in spite of this law many employees have been fired from their respective firm for fighting against unethical activities. So you can call this not an exact solution but the step is at least right and it needs modifications.
In the world social problems are too many but the solution to these problems are little. But still many organizations and communities are working on it. Reed Paget the founder of Belu, British packaged water, made the company world’s first carbon neutral. These bottles are made from corn & are easily decomposable.
Some of its profits also go to those parts of the world where there is lack of water supply. Paget is a great example of social entrepreneur who works not only for his firms but also does ethical activities for the whole society in some way and keeps on the dream of changing and innovating the society. You can say what corporate entrepreneurs are to the firm social entrepreneurs are to the society. These social entrepreneurs have dreams to change the world and make it a better place to live in. One example of such entrepreneur is AgSquared whose goal is to help poor farmers that makes about 90 % of the total farms in US. He keeps check on the farms, seed qualities; water supply and every other thing related to fertilization of crops and encourage good farm practices in those farms. Also they use ingenuity and creative to develop the society. Seattle based company PATH is a global non-profit firm that uses different low cost technologies to provide medical emergency facilities to the poor and needy developing countries. In collaboration with different social groups PATH has started developing different life saving ideas that will help the poor and needy which includes clean birth kits, disposable vaccination syringe and clear medical kits and many other life saving goods. PATH’ aim is to create an innovative global solution.
What we have learned from the social entrepreneurs? Though many firms have taken initiative to work ethically and make a different environment within the firm, but there is more that they can learn from the social entrepreneurs. In case of PATH it may be a simple collaboration with social groups but it should be also taken as an example. So one of the solution to the problem is individuals in an organization can be trained and encouraged to follow such entrepreneurs and make a way lot difference to the society.
Business promoting good social changes
Target, since 1946 has contributed five percentages its total annual profit to support social needs which adds up more than dollar 3 million each week. It is not the only company with such efforts, there are many more organizations in USA and outside who are promoting such positive changes within the society through their ethical activities. They are all investing a part of their profit in such social activities. The organizations can do such things in 2 ways- through their employee’s efforts and corporate philanthropy.
It can be a good way for the organizations to address social problems in the society. The universal AIDS RED program and PINK campaign for the breast cancer program are two ways to support the society by the companies. There are organizations who donate to different social causes that customers and employees care about. 3 large companies, Walmart, ExxonMobil and Bank of America has donated more than dollar 734 million. Many others have also funded and founded their own foundations and supported some social cause. The Google’s foundation which is named as DotOrg has about dollar 2 billion which is supposed to be used in supporting 5 areas. This includes preventing diseases, empowering the poor, investing in small business in underdeveloped countries, creating renewable energy.
Employee Volunteering Effort
This is another effective way through which organizations can indulge themselves in social causes. For example Molson Coors’s 11 member executive groups spent a day in building a house in the Las Vegas which was built for humanity and for the poor. PricewaterhouseCoopers members renovated a school in Newark. The Committee to the Encourage Corporate Philanthropy tells that more than ninety percentages of their members had programs & half of them encouraged volunteerism through creating volunteer programs and giving paid time off. Every Wachovia member is given 6 paid days offs every year so that they can volunteer their community. According to researches it has been found that such activities benefits the society as well as creates motivation and dedication among the employees to work.
Links of Previous Main Topic:-
- management and organizations a managers dilemma
- Understanding managements context constraints and challenges
- Managing in a global environment
- Managing diversity
- What is social responsibility
Links of Next Fundamentals of Management Topics:-
- Case application 1 lessons from lehman brothers will we ever learn
- Case application 2 green up on aisle two
- Managing social responsibility and ethics
- Chapter 5 summary by learning outcomes
- Chapter 5 preparing for my career
- Managing change and innovation
- Managers as decision makers
- Foundations of planning
- Strategic management