General Motors became a “centralized organization, so decision-making authority is concentrated in the hands of top-level managers, and little authority is delegated to lower levels” (Ferrell et al., 2015, p. 199). Centralized organizations have little upward communication and top-level manager may not be aware of problems and unethical activities. According to Ferrell et al., (2015), it has been noted that “centralized organization may exert influence on their employees because they have a central core of policies and codes of ethical conduct” (p. 201). Conversely, to survive at GM employees praised the CEO intelligence and carried out their orders by keeping a low profile, and never made waves. GM rewarded employees who followed the old traditional ways and those that challenged their thinking lost promotion opportunities or their jobs. However, General Motors experienced conflict between corporate management responsibility and social responsibility. Consequently, General Motors “attempted to implement a new mentality upon its management in a short period of time” (Goussak, Webber, & Ser, 2012, p. 49) by changing the company’s environment, but
Chief Ethics Officers (CEOs) may not have been very popular around a decade ago, but the demand for such a position is beginning to grow within larger companies. From this point forward, when I mention CEOs in this paper, please understand that I am referring to Chief Ethics officers and not Chief Executive Officers. CEOs began appearing in corporate America around the same time as the inception of the Federal Sentencing Guidelines for corporations. According to these guidelines, the companies who have instituted compliance and ethics programs within their institutions wouldn’t have received as severe a punishment as those without the programs in place[2].
Moral and ethical leaders are essential for any successful business because these leaders are the essential links between the organization’s objectives and its stakeholders. Leaders are the face of any organization, and their actions reflect the values and the ethics the organization they represent. Therefore, if a leader’s action and decision is ethical, the stakeholders and other organizations will respect the leader and the organization. Recent history has shown that ethical behaviors are important in sustaining businesses; large corporations such as Enron, Chevron, and Worldcom, destroyed people’s lives through unethical business behaviors (Josephson, M., 2013). If these corporations and its executives have operated morally and ethically, they would have been able to avoid bankruptcy and escaped going to prison (The Economist, 2002). Having ethical leadership in organizations will help to eliminate the negative impact executive’s gre...
Nortel Networks Corporation, also known as Nortel, was an international telecommunications company in Ontario, Canada. It was founded in Montreal, Quebec in 1895. During the height of its success, Nortel made up more than one third of the total worth of all similar companies in Toronto and they employed 94,500 team members worldwide. (Gillies, 2009). On January 14, 2009, Nortel filed for protection from all its debts and creditors in the United States, United Kingdom, and Canada in attempts to remedy its debt and financial obligations (Gillies, 2009). Late in 2009, the Nortel disclosed that it would end all business transactions and sell off all of its parts. The period of bankruptcy protection
According to Byrne (2002), a strong organisational culture that reflects moral values will have a potent, positive impact on its position within the industry. Business ethics derived from corporate culture has come to be considered a management discipline as managers are the ones who regularly faced with ethical decisions within the company, which may affect the business’s social responsibility. Hewlett Packard (HP), a multinational information technology company, as a leader in its market demonstrated its strong commitment to ethical integrity and business culture under the management of Carly Fiorina who stated “Some of the most important choices I ever made were firing people who weren 't conducting themselves with integrity.” This establishes that a business with the right management structure with a strong commitment to the business culture can in fact remain competitive without tarnishing the reputation. This can be contrasted with the actions of the tobacco company R.J Reynolds, who neglected to follow its business culture when they were caught in a cover up scandal. It was revealed the company had hidden knowledge about the addictiveness of the nicotine within their cigarettes in order to maintain their profits and improve the bottom line (Stephen E. Brimmer, 2007). Although some companies are able to maintain a competitive spot in the market, corporate culture is sometimes overlooked as unethical decision making can be seen as a solution to short run business problems in order to maximize
Roth was in charge of emergency of Nortel, be that as it may it was affected by both individuals and capital business sector forms. Roth settled on the choice to change Northern Telcom to Nortel and put resources into the web notwithstanding doubt and uncertainity from numerous individuals. The Board of Directors of this organization didn 't know about the money related status of the association which demonstrates that the executives, Roth as CEO, and workers didn 't know about great business hones. Business includes a system of human communications (Collins, 2011). The ascent of Nortel was to some degree from the consideration the organization got from the media and the financial specialists. This consideration affected the choices that Roth
Corporate governances actually illustrate that no entity or agent is immune from fraudulent practices (Arjoon, 2005 p 342-344). Therefore, it is crucial for an organization to have a stable ethically healthy corporate culture, Patagonia is "doing things right" by influencing the actions of the workforce. Through the integration of ethical conduct in an organization, employees see the complexity of making ethical choices; also, it helps the staff understand what an ethical decision entails and how to talk about hard ethical choices and taking responsibility for making moral choices carefully and
In the past decade, concern with the ethical accountability of companies has continued to grow. Consumers increasingly look to support and buy from companies that make ethical decisions. The government has also created new legislation that requires a certain level of ethics and creates encouragement for companies to go as far as to create ethics programs. The idea of “business ethics” is not new, but there is more pressure now than ever before on companies to prove they are making an honest effort to be ethical. This additional pressure on companies can be largely attributed to a change in the neoclassical view of a company as only needing to take care of stockholder interests by creating profits (Wines & Hamilton III, 2009). Today, people view the organization as a complex unit made of up many different groups that must be considered. This new definition of an “ethical corporation” requires not only compliance with the law, but also consideration of the ethical implications of all actions (Epstein & Hanson, 2006; Thornton, 2009). “Ethics are a system of moral principles and behavioral norms intended to express and support an underlying set of values” (Post, Lee, & Sachs, 2002). Following the meanings given by several professional sources, business ethics is defined as the study of moral standards in the context of all business situations (Columbia University, 2008; Knapp, 2001; Crane & Matten, 2007). Because of this change in consumer and regulator concerns, a corporation cannot survive unless it takes care of and strives to respect the interests of all of its stakeholders by applying ethical standards to actions (Post, Lee, & Sachs, 2002).
Ethical behavior cannot be successfully shaped and maintained in isolation. Therefore, the internal controls characterized by individual attributes must be usually consistent with organizational structure, organizational culture and societal expectations. These four components are key elements for designing an environment supportive of theses ethical conducts (Cooper, 2012 pg. 164).
According to Ferrell (2004), “Organizations create ethical or unethical corporate cultures based on leadership and the commitment to values that stress the importance of stakeholder relationships. Establishing and implementing a strategic approach to improving organizational ethics is based on establishing, communicating, and monitoring ethical values and legal requirements that characterize the firm's history, culture, and operating environment” (p. 129). Ethics programs ensure satisfactory relationships with all stakeholders by aligning with all of their demands and needs, and determine conduct with customers and relationships with regulators, shareholders, suppliers, and employees (Ferrell, 2004).
I discovered how sticking to one’s morals should be the topmost priority for everyone involved in business, whether personal or professional. Regardless of what the consequences may be, the intensity of the problem, and the complexities it may bring, sacrificing one’s integrity should never be an option, as integrity goes hand-in-hand with the morals of an individual (Duggan & Woodhouse, 2011). They further go on to say that having individuals take part in building a code of ethics that supports employee integrity, they will act ethically. Also, I believe that companies should place more emphasis on the moral behavior of their employees, and clear-cut policies should be set regarding such ethical situations. Furthermore, I realized how serving justice while making decisions really helps in the long run, and that opting to go for the ideal rather than they deserved is not always the best option, and could hurt a company in more than one
From reading this case, we realize the company did not apply the managing ethics competency in building its goals and structure. Managing ethics competency involves the o...
Being ethically sound is an important part of being an organization, through having policies in place on how things should be and the expectations of employee’s behavior benefits organizations. Suar, D., & Khuntia, R. (2010) expresses personal employee values and unethical practices at work behaviors all influence organizations. As a manager it is important to understand the influence that ethics has on the way on organization runs, and the problems an organization could face when dealing with unethical behavior.
The area of “ethical structures” is intended to support organizations’ ethical concerns across organizations. There is a need for ethical structures that surround the modes in which organizations strive to inculcate corporate and business ethics. Without them there are no supports in place to create ethical processes and evaluate ethical performance. This area serves as a support that the organization and its staff should be able to relate to at the strategic, tactical and operational levels of business practices. It is a point of reference to other stakeholders in the marketplace and society.
Ethics are defined as moral principles that govern a person, or groups, behavior. This simple explanation of ethics becomes extremely complex when adding additional variable such as an organization and its financials. Are organizations that primarily focus on their monetary situation maintaining their moral principles? Finding a correlation between corporate ethics (also referred to as social responsibility) and a firm’s fiscal performance is not easy feat. There are various viewpoints to question of the affect of the general ethical theory of corporate social responsibility. Weighing the possibilities of either a positive impact or trade-off leaves every organization in a puzzled state as they undergo their day-to-day operations.