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Business ethics in the development of strategy - Coggle Diagram
Business ethics in the development of strategy
Business ethics is the application of ethical values to business behaviour. Business ethics is relevant both to the conduct of individuals and to the conduct of the organisation as a whole. It applies to any and all aspects of business conduct, from boardroom strategies and how companies treat their employees and suppliers to sales techniques and accounting practices. Ethics goes beyond the legal requirements for a company and is, therefore about discretionary decisions and behaviour guided by values
The scope of business ethics
At any time within any organisation, the organisational business ethics and therefore the reputation can be seen to be a combination of
Individual and combined values of all the people involved
The prevailing tone of the corporate culture
Codes of conduct that might apply across differing aspects of personal and organisational behaviour
Societal and internal and external stakeholder expectations
Local, national and international law
Stanwick and Stanwick (2014) discuss how the ethical cycle within a business enables employees to understand who they are and to understand their strategic responsibilities from an ethical perspective
This cycle involves decisions being made with an ethical dimension, the results of such decisions being understood and then influencing the next time such a decision needs to be made
There are thee core questions that need to be answered to enable an organisation to make and deliver effective ethical decisions within the wider business context
The individual needs to ask: 'Who am I?
The team or group needs to ask: 'Who are we?'
The organisation needs to ask" 'Who is the company?"
Based on his research, Nicolai Foss (1997) suggests
The decision making process of all managers includes incorporating the goals and objectives of the firm into measurable evaluation points. Within the decision-making context, the decision-maker also needs to integrate ethical issues into the process. By being able to demonstrate its ethical virtues to its various stakeholders, firms incorporate ethical planning as part of the strategic planning process and are then able to generate a positive reputation to the stakeholders
Dimensions of ethics
Chryssides and Kaler (1996)
suggest that the same two core dimensions of ethical behaviour that affect each individual - principles and situation - will also strongly influence the evolution of ethical norms within a business. They put forward five different views of business ethics
Business is business
The aims of an organisation are purely commerical and therefore the maximisation of the perceived expectations will also outweigh any ethical dimension
Act consistently within the law
It is accepted that the law is there to protect the greater good of all concerned and therefore should underpin ethical decision making
Good ethics means good business
This is sometimes known as the coincidence theory and there has been signficant research to suggest that organisational sustainability is closely aligned with the perception by stakeholders of good business ethics
Conventional morality
The business will operate in line with the prevailing moral codes of the society within which it is based; there are a number of easily perceived problems with this view
Universal morality
People in the business world should maintain the same standards of ethical behaviour in business as they would in their private lives. This can be seen to be setting a high ethical standard. However, from the perspective of business sustainability, it would rely upon competitors following similar standards
The purpose of a code of ethics
The use of the word 'code' as in 'code of ethics' would for most people imply voluntary or expected compliance.
There will be principles, standards and expected modes of conduct that the organisation or the profession or sector expects; these will include core beliefs and expectations of the organisation; together with behaviours expected from differing stakeholders
There may well be practical guidelines, which could be as a decision tree type approach or it could be a set of quite specific instructions
The structural requirements will ensure alignment or compliance with the underlying and professional levels of conduct that are associated with our organisation, our sector or our profession
The practical input will be a wide view of how the organisation, sector or profession expects adhering to the code to behave
The personal section may well include specific examples illustrating how people are expected to behave, how they will be judged and the potential organisational and personal consequences of non-compliance
The pressures at the bottom, the combination of societal values and legal requirements, will affect style, impact and veracity of the eventual fate and/or effectiveness of our code