Code of Ethics: a sample case for implementation, purpose and benefits, and steps in strategic formulation and implementation
Ethics in business is primarily an applied ethics. Ethics influences the value system of every organisation and employee by serving as a moral guide or “base” (Sweet 2001). Furthermore, business ethics is a potential vehicle for employee pride and motivation as well as a focus for customer satisfaction (Hall 1991). Ethics is a part of the manager’s responsibility as the ethical environment reflects managerial value system including personal and organisational perceptions and preferences of morality and known to be fundamental on a person’s attitude towards ends and means (McCarty and Bagby 1990, p. 21 cited in Fox 2000, p. 70). Fox (2000) believes that ethics are values that traditionally sprouted from religious or organisational influences and may evolve from personal experiences. There is importance in combination of value systems that leads to generalised principles, which are used as guidelines in making and evaluating decisions and specific cases that require acceptable conduct among people. General theories of business ethics are considered generic and are not directed to specific applications (Walle 1995). In almost all organisational setting, Frederick and colleagues (1994) state that ethical guidelines are expressed in the forms of code of conduct, outlining the organisation’s foremost expectations to every contributing factors such as the employees and other stakeholders. Business ethics further support management strategies, accountability structures, organisational policies, incentive systems, training programs, and decision-making processes. It ensures their unity of work as the common denominator of strengthening the organisation’s essential ethical code of conduct. This paper narrates the case of an up-market eatery. It specifically deals with the stakeholders’ interest in accordance to effective management.
A detailed code of ethics for circulation to all employees
Whereas, this organization recognizes and addresses stakeholders’ interests and needs are considered better than others. It is considered that the stakeholders are any group that is affected by, or can influence, conducts of this organisation. In order to serve the needs and interests of stakeholders or other groups, managers are expected to employ their managerial expertise toward highest standards of effective management and customer satisfaction. Organisational relationships are associated by stakeholders’ interests and managers’ ability to be guided in terms of strategies employed in maximising organisational performance. The influencing ability of stakeholders is high that most managers are required to give in to it. This influential power guides managers to decision making in relation to strategic issues affecting the whole business operations. Managers are often dependent on stakeholders’ interests and act on the applicability of generic strategies. Such interests reflect desires that are subjected to moral evaluation by the manager by looking on ethics on business management. To serve stakeholders’ interests, the following ethical behaviours should be observed:
Þ Stakeholders’ desires are crucial consideration in decision making of managers.
Þ While the organisation requires maximum satisfaction on the employees as well as the customers, the managers in response to the desires of the stakeholders must encourage responsible planning, management, and development.
Þ Strict compliance to individual policies on bribery, extortion, facilitation payments, environmental problems, and human rights are addressed in details.
Þ Sexual and racial discrimination, price discrimination, and destructive products are also firmly avoided.
Þ Integrity and competence are significant managerial factors particularly in performance of their identified duties.
Þ Participation is an important aspect of determining the acceptability of stakeholders’ desires and interests.
Þ Responding to ethical dilemmas is a manager’s or leader’s concern.
Þ Stakeholders’ interests are mainly covered by managerial responsibilities.
A circular to all employees explaining the purpose and benefits of good ethics in managing an enterprise
Re: Stakeholders’ Interest
For: Senior Managers and Employees
Date of Implementation: Immediately
Business ethical practices and principles are important elements in building an ethical working environment with strong corporate guidelines. These guidelines govern the overall condition of the organisation in terms of allowing members of the workforce be familiar with the upper management authorities’ deliberation of ethical behaviours as significant ingredients of business operations.
Generally, ethical codes are used as functional agents that govern the conduct of the members of a particular profession. It guides individuals in making decisions based on sound moral judgment. Codes further enhance working relationships and adjudicate disputes among members of the organisation. General principles of business ethics should guide behaviours in any field and type of business and its operations. Also, these codes are clearly articulated, wide-ranging, phrased in order to accentuate and provide commendation on doing the right thing other than listing a series of prohibitions.
Perhaps, established code of conducts help in ensuring managers’ ability to respond on times when they are struggling on moral crises and confusion. They keep hold of a strong moral compass. In hospitality and tourism industries, holding on to the moral compass of managers is a challenge when they try to serve the desires of stakeholders.
Ethics and quality is equivalent because the production of quality goods and services is a clear manifestation of ethical treatment of the consumer. In this case, serving the desires of the stakeholders is difficult. It exposes the manager to ethical concern on how to come up with balance on customer satisfaction and profitability. The duty of the managers must stick on the basic and personal beliefs of what are right and never entertaining unethical options.
It is acknowledge that most employees prefer to work in a working environment governed and guided by high ethical standards. In addressing ethical dilemmas, managers should stick on managerial foundations and practices and full adherence to morality. Articulating stakeholders’ desires is a challenge yet can be fulfilled successfully through holding and believing into management principles and practices including organisational and individual commitment to morality.
Ethical decision making poses danger on unethical or selfish motives of stakeholders as seen on their unjustifiable desires. Thus, managers should know how to classify ethical dilemmas and react to such in the best and most acceptable ways possible. According to Hudson and Miller (2005), ethical decision making is also expected to be affected by the type of ethical dilemma being faced by, and level of ethical education of the managers. Managers are to be educated and trained to compare outcomes to the various stakeholders for each promising decision and decide on the choice that has the best outcomes for greater number.
More often than not, the moral ordeals that are faced by managers are difficult to describe as they are complex and complicated (Marnburg 2005). These ordeals might occur instantaneously and involve several factors of people, things, or circumstances. Interpreting and understanding managerial pursuits including complying or defying the desires of stakeholders is based on the manager’s own set of expectations toward behaviour that is or is not match with their individual standards and values. While managers are often subjected to ethical dilemmas where they need to lie, break certain law, cheat subordinates, and the likes, they feel that they need to occasionally participate in such behaviour as it is an implicit part of the working setting (Marnburg 2005). However, it is argued that such practices are simple yet open violations of moral standards.
Reacting on stakeholders’ desires as example of workplace ethical case needs a concrete instrumentation based on virtues of justice, integrity, competence and utility. These virtues are expected in a manager’s complete personal disposition. For Fleckenstein and Huebsch (1999), the idea of impartiality, sound judgment, and correctness is exemplified in justifiable decisions that are made in response to some desires of stakeholders. Utility is a virtue that projects the principle of efficiency by providing the greatest amount of good to the greatest number. If managers are able to consider these virtues, identifying the merits of stakeholders’ desires is easier, thus, facilitating accountable and ethical decision making. Choosing what is good to the majority of stakeholders is prioritised if and only if the means used justify the end.
Through participation, there are more opportunities of accumulating choices and solutions that a manager can choose in response to a moral dilemma. The consensus of other members of the management is needed in organisational ethical cases. It is expected that managers are able to communicate to other managers on issues affecting the workplace especially on cases where a certain department is governed by two or more managerial figures. The concept of who is to be blame or is anyone to be blamed is also considered. Relationships on individual’s performance and certain ethical dilemma are apparent, where “moral voice” is quite strong. The behaviour being shown by the superiors in every moral situation in the organisation is often associated to outcomes. For example, a neglect of duty or lack of knowledge of operational and managerial matters is referent to coming up with poor judgments and decisions. No one is claiming or forcing managers to pursue in rationality, efficiency, and profit given the unconditional circumstance. However, it is the ethical codes that manipulate managers on how to act, what to do, or when to do things according to what is perceived to be standard and acceptable. Sometimes, managers become schizophrenic on their personal value systems (Pruzan 2004). But then again, it is always the ethical codes and the belief of what should be the most appreciate action based on morals are to be considered. This is also applicable on the instances of integrating managerial duties to stakeholders’ desires. Managers need to identify specific situations where temptations and potential dilemmas exist and the common reaction is for them to act according to clear corporate code of conduct for all the employees to understand, abide, and emulate. Wong (1998) affirms that an individual’s line of thinking about work ethics serves as his/her basic compass that will navigate him/her to act in accordance to what is right. The ethical beliefs of an employee affect their ways on coming up with rational judgment on any work-related concerns.
A brief report on the steps involved in strategic formulation and implementation
Before the application of the detailed code of conduct, drafting copies of codes of ethical conduct and are to be distributed as guidelines to employees in overcoming ethical dilemmas; involving employees to scheduled seminar-workshop and training programs concentrated on enhancing ethical behaviours; or providing in-house advisors who can be directly consulted during urgent ethical cases; and so on (De Mesa Graziano 2002).
There is always consultation among parties involved. Communication is very relevant. The duties of managers are always bounded on standard management principles and practices. Research and development efforts are encouraged so as to determine weak areas and loopholes of the said code of conduct. Responding to the its weaknesses will lead to more effective organisational governance provided that the desires of stakeholders are classified based on merits of desires on whether or not valid or invalid, etc.
Feedback systems are also available. All parties concerned and affected are always open to communicate and air their issues pro or against the circulated code of conduct. Memorandums and formal letters are to be addressed to HR department with quick actions and resolutions.
All in all, the code of conduct application will take effect after its official publication among all employees and other parties affected within the bounds of the organisation. It is then expected that such code of conduct are strictly implemented and reap positive results.
References
De Mesa Graziano, C (2002) ‘Promoting Ethical Conduct: A Review of Corporate Practices’, Strategic Investor Relations, Fall, 29-35
Fleckenstein, MP and Huebsch, P (1999 March) ‘Ethics in tourism-reality or hallucination’, Journal of Business Ethics, 19: 1, 137-142
Fox, J (2000) ‘Approaching managerial ethical standards in Croatia’s hotel industry’, International Journal of Contemporary Hospitality Management, 12: 1, 70-74
Frederick, RE, Hoffman, WM, Kamm, JB, and Petry Jr., ES (eds) (1994) Emerging Global Business Ethics, Quorum Books, Westport, CT
Hall, SSJ (1992) Ethics in Hospitality Management: A Book of Readings, Educational Institute of the American Hotel and Motel Association, East Lansing, MI
Hudson, S and Miller, G (2005) ‘Ethical Orientation and Awareness of Tourism Students’, Journal of Business Ethics, 62: 4, 383–396
Marnburg, E (2006) ‘”I hope it won’t happen to me!” Hospitality and tourism students’ fear of difficult moral situations as managers’, Tourism Management, 27: 4, 561–575
Pruzan, P (2004) ‘The question of organisational consciousness: Can organisations have values, virtues and visions?’ Here and Now Online Magazine 4U [online] (cited 18 November 2008) Available from <http://www.herenow4u.de/eng/the_question_of_organizational.htm>
Sweet, W (ed.) (2001) The Bases of Ethics, Marquette University Press, Milwaukee
Walle, AH (1995) ‘Business ethics and tourism: from micro to macro perspectives’, Tourism Management, 16: 4, 263-268
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