Managing Ethical Dilemmas at Work

Background

State the background of the case including context, its origin and any other important details. What is the history of the problem? Who is involved? Is there any missing information which you need to solve the problem?

Estimate

Make an initial estimation of the ethical dilemma present, that is, what the core issues are. What is the main ethical conflict?

List

ist the possible solutions to the problem. !onsider the likely impacts of each of the initial solutions. What are the outcomes of each solution? Who will they affect? "ow will each solution harm or help people?

Impact

Eliminate

#liminate the totally unacceptable solutions eg significant harm to people. With the remaining possible solutions, assess which values are upheld and violated by each solution. What are the significant values and principles which are upheld or violated by each solution? What are the stated organisational values?

Values

Evaluate

#valuate the solutions considering the likely impacts and the values which will be upheld or violated. Must determine which values are most important. Why is one solution better or worse than another? Is there another solution you haven$t considered?

Decision

Make a decision, state it clearly including why it is best, %ustify it and defend it against criticism. "ow will you carry it out? Who will ob%ect to the decision? What are the weaknesses of the decision? "ow will you defend the decision?

The Corporation and External Stakeholders

External stakeholders include customers, suppliers, and the government. They are involved with the company in some form but not employed directly by it. Many corporations feel as though their duty is to create financial value for the shareholders, while they still have a responsibility to the customers. Sometimes competitors are counted as stakeholders - their status being derived from their capacity to affect the firm and its other legitimate stakeholders.

person or organi!ation with a legitimate interest in a given situation, action, or enterprise. ethical "f or relating to the accepted principles of right and wrong, especially those of some organi!ation or profession.

External Stakeholders Stakeholders are individuals or organi!ations with an interest in the success or failure of a pro#ect or entity. External stakeholders in a company may include customers, clients, distributors, wholesalers, retailers, suppliers, partners, creditors, stockholders $shareholders%, communities, government courts and departments $city, state, federal, and international%, banks, media, institutional investors and fund managers, labor unions, insurers and re-insurers, trade associations, competitors, the general public, and the environment $local, regional, and global%. &ifferent stakeholders can exercise different types of power, including voting, legal, economic, and political, and can form coalitions with others. 'enefits of Ethics to External Stakeholders "rgani!ations that do not have an outlook for positive ethical practices as part of their culture usually lead to their own demise, such as in the cases of Enron and (orld)om. "rgani!ations that have integrity and encourage ethical practices as part of their culture are viewed with respect by their employees, community, and corresponding industries. The positive ethical outlook of an organi!ation results in a solid financial bottom line, because of increased sales and a better ability to retain and attract new and talented personnel. More importantly, an ethical organi!ation will be able to retain employees who are experienced and knowledgeable. This human capital results in reduced employee turnover and less time needed to train new employees, which in turn allows for greater output of goods and services.

Supports education for disadvantaged young people. Initiatives range from reading support to charity fundraising.

 Donating unwanted book stock to institutions to provide more access to information.

Corporation and Internal Stakeholders

*nternal stakeholders include employees, managers, and owners+shareholders, essentially people who are effected by wages and #ob stability. Managers may receive bonuses or other perks, resulting in them pushing for the success of the company so they can make money. )onversely, when the business does poorly, they suffer. Stakeholders are individuals or organi!ations with an interest in the success or failure of a pro#ect or entity. *nternal stakeholders include employees, managers, and owners+shareholders , essentially, people who are affected by wages and #ob stability. *ncreasingly, corporations are motivated to become more socially responsible because their internal stakeholders expect them to understand and address the relevant social and community issue. -nderstanding what causes are important to employees should be a priority because of the many interrelated business benefits that can be derived from increased employee engagement $e.g., loyalty, increased retention, higher productivity%. s part of more comprehensive compliance and ethics programs, many companies have formulated internal policies pertaining to the ethical conduct of employees. These policies can be simple exhortations in broad, highly generali!ed language $typically called a corporate ethics statement%, or they can be more detailed policies, containing specific behavioral re.uirements $typically called corporate ethics codes%. They are generally meant to identify the company/s expectations of workers and to offer guidance on handling some of the more common ethical problems that might arise in the course of doing business. *t is hoped that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters. n increasing number of companies also re.uire employees to attend seminars regarding business conduct, which often include discussion of the company/s policies, specific case studies, and legal re.uirements. Some companies even re.uire their employees to sign agreements stating that they will abide by the company/s rules of conduct. 0ot everyone supports corporate policies that govern ethical conduct. Some claim that ethical problems are better dealt with by depending on employees to use their own #udgment. "thers believe that corporate ethics policies are primarily rooted in utilitarian concerns, and that they are mainly to limit the company/s legal liability, or to curry public favor by giving the appearance of being a good corporate citi!en. *deally, the company will avoid a lawsuit because its employees will follow the rules. Should a lawsuit occur, the company can claim that the problem would not have arisen if the employee had only followed the code properly.

Sometimes there is disconnect between the company/s code of ethics and the company/s actual practices. Thus, whether or not such conduct is explicitly sanctioned by management, at worst, this makes the policy duplicitous, and, at best, it is merely a marketing tool.

Flexible or home working across the business supports the work-life balance of employees, enhances performance and productivity and reduces employee stress

Corporate Governance: From the Boardroom to the Marketplace

system by which corporate are governed and controlled. *t is balancing the interests, the framework of rules and practices by which a board of directors ensure accountability, fairness and transparency etc rules, processes, levels by which a company is governed for stakeholder satisfaction and society at large. 1. 2elationship with stakeholders 3onesty, integrity, fairness. 2esponsibility, independence, #udgement, transparency, reputation and accountability. *ndependence , free from personal interest, relationship etc.

4actors influencing corporate governance "rgani!ation structure 4inancial structure should be visible *nstitutional environment

)orporate 5overnance in *ndia Shareholders + investors grievance committee 2isk management + monitoring committee 4raud monitoring committee

)hallenges faced by )orporate 5overnance *neffective leadership 6ack of competency of board of directors 2esponsibility + authority not defined properly 6ack of time and interest of board of members Si!e and cost of the board 2ecruitment of members of board

)S2 , T3E 3E 2T "4 )"27"2 TE 5"8E20 0)E

)S2 in corporate governance $7rinciples *n -0 5lobal )ompany% 7rinciple 19 Support and respect the protection of internationally proclaimed human rights 7rinciple :9 Make sure that they are not complicit in human rights 7rinciple ;9 Employment enhancing 8ocational Schemes

7rinciple <9 0o e.uivalent forces 7rinciple =9 Effective abolition of child labour 7rinciple >9 Elimination of discrimination in employment and occupation 7rinciple ?9 Support a precautionary approach to environment challenges 7rinciple @9 -ndertake initiated to take environmental challenges 7rinciple A9 Encourage environmental friendly techni.ues 7rinciple 1B9 )ontribution to 7M 0ational funds

CII Code recommendations (1997)

1. 2.

3. 4. 5.

6. 7. 8.

9.

0o need for 5erman style two-tiered board. 4or a listed company with turnover exceeding 2s 1BB crores, if the chairman is also the M&, at least half of the board should be independent directors, else at least ;BC. 0o single person should hold directorships in more than 1B listed companies. 0on-executive directors should be competent and active and have clearly defined responsibilities like in the udit committee. &irectors should be paid a commission not exceeding 1C $;C% of net profits for a company with $out% an M& over and above sitting fees. Stock options may be considered too. ttendance record of directors should be made explicit at the time of reappointment. Those with less than =BC attendance shouldnDt be re-appointed. Eey information that must be presented to the board is listed in the code. udit )ommittee9 6isted companies with turnover over 2s. 1BB crores or paidup capital of 2s. :B crores should have an audit committee of at least three members, all non-executive, competent and willing to work more than other non-executive directors, with clear terms of reference and access to all financial information in the company and should periodically interact with statutory auditors and internal auditors and assist the board in corporate accounting and reporting. 2eduction in number of nominee directors. 4*s should withdraw nominee directors from companies with individual 4* shareholding below =C or total 4* holding below 1BC.

Corporate esponsi!ilities to"ards Cons#mer Stakeholders and the Environment

*S" :>BBB 5uidelines9 2ecognise )onsumers as Stakeholders and F)onsumer *ssuesG

*S" :>BBB provides guidance on criteria for social responsibilities of an "rgani!ation The clause >.? of *S" :>BBB 5uideline is related to that n organi!ation is expected to fulfil its 2esponsibility towards its )onsumers )onsumer is one of important stakeholders of organi!ation who uses or consumes product and services for personal purposes. Seven )omponents of )orporate 'ehaviour towards )onsumers, namely1. 4air marketing, factual and unbiased information and fair contractual practices :. 7rotecting consumer health and safety ;. Sustainable consumption <. )onsumer service, complaints and dispute resolution =. )onsumer data protection and privacy >. ccess to essential services ?. )onsumer education and awareness Environment and )S2 Environmental good practice is also about business efficiency - it/s about the best use of valuable raw materials, and feeding the benefits of action straight through to the bottom line. growing body of environmental legislation also threatens to present you with fines and a damaged reputation for any environmental incidents on one of your sites. nd in any case, if you haven/t studied your process to identify where waste occurs, you/re probably losing out on around 1C of your overall turnover that could be switched straight from the trash heap to the bottom line. Please your customers! )ustomers are becoming increasingly demanding. s awareness of the global scale of environmental problems grows, they are looking for companies to present them with purchasing decisions which can be taken without compromising the future. Reduce your costs! (asted energy, wasted water, raw materials that are paid for and then thrown away, potential environmental accidents leading to fines - all these are costing your business money. Hou want to optimise your efficiency - and it can be a lot more creative and about improving .uality than you would ever think. Manage Risk! (hether your business believes it/s in the Exxon 8alde! stakes, it can certainly be at risk of falling foul of a growing body of environmental legislation. nd being seen as a convicted polluter can have all sorts of impacts in terms of whether you come to be seen as a supplier of choice by your corporate customers - many of whom are now beginning to consider supply chain issues in their own environmental policies. What are the issues?

)ontribution to greenhouse gas emissions through energy use and other parts of your process -se of raw materials, both non-renewable resources which by definition are not sustainable in the long term, and as importantly renewable resources which are produced in a fashion which is not currently sustainable. 7otential for environmental accidents - releases of pollutants into air, water or land.

$al#es%Based Moral &eadership' C#lt#re' Strateg( and Sel)% eg#lation

6eadership and Strategy 6eadership is a shared process, although the values and behaviors of company founders and )E"s often frame and set the cultural tone for the organi!ations. starting point for identifying a leaderDs values is the vision and mission statement of a company. 4rom a stakeholder management, value-based assessment, a )E" and other organi!ational leaders would demonstrate the following skills9 &efine and lead the social and ethical, as well as the competitive, mission of organi!ations 'uild and sustain relationships with stakeholders Talk with stakeholders, showing interest and concern for otherDs need beyond the economic and utilitarian dimensions &emonstrate collaborations and trust in shared decision making and strategy sessions Show awareness and concerns for employees and other stakeholders in the policies and practices of the company n emerging body of literature and practice describes leadership from a deeper spiritual and value-based perspective.

Theological and philosophical literature has helped redefine leadership to include new concepts and vocabulary that capture the human and spiritual domains from which business leaders already work.

6eadership styles9 Manipulator 'ureaucratic

 7rofessional Transforming

Seven symptoms of the failure of ethical leadership9 Ethical blindness Ethical muteness Ethical incoherence Ethical paralysis Ethical hypocrisy Ethical schi!ophrenia Ethical complacency

Strategy influences the goals and ob#ectives of the company and its stakeholders. Sets the overall direction of business activities 2eflects and models activities that management values and prioriti!es Sets the tone and tenor of business activities and transactions inside the organi!ation

)orporations formulate at least four levels of strategies9 Enterprise )orporate 'usiness 4unctional The strategy management process involves9 4ormulating goals 4ormulating strategies

 *mplementing strategies )ontrolling strategies Evaluating strategies naly!ing the environment

Culture and el! Regulation corporationDs culture is the shared values and meanings its members hold in common, which are articulated and practiced by an organi!ationDs leaders. "rgani!ational cultures are9 8isible and invisible 4ormal and informal "rgani!ational cultures can be studied by9 "bservation 6istening to and interacting with people "ther ways Signs of cultures in trouble or weak cultures include9 n inward focus short-term focus

Morale and motivational problems Emotional outbursts 4ragmentation and inconsistency )lashes among subcultures *ngrown subcultures &ominance of subculture values 0o clear values or beliefs

 Many beliefs &ifferent beliefs &estructive or disruptive cultural heroes &isorgani!ed or disruptive daily routines

Establishing codes of ethical and legal conduct, implementing stakeholder management assessments, and enacting ethics programs can help a company financially and morally. Ethics codes 8alue statements that define an organi!ation "mbudspersons and peer review programs To manage the legal and moral aspects of potentially problematic activities Ethics programs nother method for handling moral .uestions

Spirit#al &eadership )or !#siness trans)ormation

'efore a definition of spirituality in leadership can be provided, one must first examine the meaning of the two key aspects of the phrase9 the IspiritI and the Ileader. Thus, the spirit relates to the deeper sense, meaning, or significance of something. Thus, the leader is one who influences followers to think or behave in some way. )ombining the two terms suggest that the leader who incorporates spirituality into his or her leadership will be one who causes others to seek out and understand their inner selves and who fosters a sense of meaning and significance among his or her followers.

Spiritual leadership involves the application of spiritual values and principles to the workplace. The spiritual leader understands the importance of employees finding meaning in their work and demonstrates a genuine concern for the IwholeI person, not #ust the

employee. Spiritual leadership tries to assist others in finding meaning in their work by addressing fundamental .uestions such as9

(ho are we as a work team, department, or organi!ationJ *s our work worthyJ (hat is our greater purposeJ (hat are our values and ethical principlesJ (hat will be our legacyJ

The spiritual leader strives for a workplace that is truly a community, consisting of people with shared traditions, values, and beliefs.

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Spirituality in leadership cannot be understood apart from the more general issue of spirituality in the workplace because spirituality plays an increasingly important part in the workplace. Many employees look to the workplace as a means of finding meaning in their lives. *n today/s world, many employees regard their workplace as a communityKeven as other IcommunitiesI that give meaning to people/s lives are strained or ripped apart by modern styles of living. The pattern of individuals/ affiliation with formali!ed religion and religious institutions has undergone a dramatic change in recent years. 'eginning in the 1A>Bs, a general sense of dissatisfaction and scepticism about organi!ed religion became common, particularly among younger people. *n the subse.uent years, rates of attendance at religious services and active involvement in religion declined worldwide. lthough the ma#ority of people today will selfidentify as a member of some religious faith, many still do not attend formal religious services and have only a tenuous connection with a particular church, synagogue, etc. Thus, many people appear to be estranged from formal religion, which takes away another potential avenue to a sense of self-worth, identity and spiritual growth.

"() ,)')-I" *- PIRI"#$%I"& I' %)$.)R (IP

Since there has been little empirical research regarding spirituality in the workplace or spiritual leadership, it is difficult to say precisely what the benefits $or costs% of spirituality in leadership will be. 3owever, enough conceptual and empirical research has been conducted to suggest several potential benefits of incorporating a spiritual dimension into leadership. 4rom the perspective of followers, incorporating spirituality into leadership has the potential to create a workplace that is more humane and that provides a sense of community and shared purpose. 4rom the perspective of the organi!ation, incorporating spirituality in

leadership may lead to greater perceptions of trust, organi!ational support, and commitment among employees, which could have positive effects on organi!ational performance. 3owever, spirituality in leadership should not be thought of as a IdeviceI for developing positive organi!ational outcomes, but must instead be a genuine philosophical belief on the part of leaders.

*rgani+ational Excellence and Emplo(ee Well!eing thro#gh ,#man $al#es

"rgani!ational excellence is difficult to define and even more difficult to achieve. (hether excellence is defined as profitability, market share, customer+employee satisfaction, or product innovation, it is commonly sought by leaders, but rarely found. Het, twenty-first-century leaders continue to search for excellence like knights of yore searching for the holy 5rail, experimenting with change processes in an oft never-ending se.uence of flavour-of-the-month interventions. &uring the course of the past two decades Luality )ircles, Self-directed work teams, total .uality management, process improvement and reengineering have been fre.uently used by leaders in their attempts to create excellence. That part of an employeeDs overall well-being that they perceive to be determined primarily by work and can be influenced by workplace interventions.G 3uman 8alues at (ork $38(% focuses on how you can work in accord with your own spiritual view of life and five 3uman 8alues that are found cross-culturally in all spiritual traditions9 Truth 2ighteousness 7eace 6ove 0on-violence