Ethical standard refers to standard principles that encourage the greater values of trust, fairness, and benevolence. Ethical standards may relate to responsibilities for some professionals.
Ethical standards vary based on industry and a person's moral compass. Different industries have ethical standards that determine how a person must act to be respected within the field. Those who work in medical and financial fields often have more strict ethical standards and guidelines than other professionals do (Berman 2015).
Most people also have their set of ethical standards that refers to how they are comfortable in acting in everyday life. It also reflects their belief system that drives many of their actions and overall attitude in the circumstances.
The objective of charitable organizations is to carry out their duties in an ethical way, which mainly concerns to being socially responsible. However, it is required on their part to have well-articulated investment policy that is capable of making difference in delivering the mission of organization. The decision-making process regarding investment should be aligned with objectives of Better Day ahead. Proper policies should be in place regarding short term, endowment funds and operating funds. Policies and procedures concerning expenditure of charitable funds and the same should serve as document for guiding the management for undertaking the investment decisions (Bodie 2013).
IMA Committee on Ethics
The IMA Committee on Ethics encourages organizations and individuals to adopt, promote, and execute business practices consistent with high ethical standards, by providing valuable insight in response to our changing profession. The Committee upholds IMA's Statement of Ethical Professional Practice and provides subject-matter expertise to members of IMA for resolution of ethical conflicts. Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values and standards that guide our conduct (Butler & Wilson 2015).
IMA's overarching ethical principles include Honesty, Fairness, Objectivity, and Responsibility. Members shall act by these principles and shall encourage others within their organizations to adhere to them.
A member's failure to comply with the following standards may result in disciplinary action, which includes competence, confidentiality, integrity and credibility.
Moreover, the ethical issue, in this case, is an irresponsive use of the privilege of overdrawing cash balance when donations are running low. This privilege was meant for meeting the uncertain financial insurgencies of the organization. However, the president used this opportunity for acquiring office equipment and expanding operations (Maier et al. 2016).
Investment policy followed by the organization is the main issue in this regard. Investment objective of non-profit organizations should be defined in such a way that it is aligned with their philanthropic mission. It needs to comply with the ethical behavior of staffs, board members and management. Due to lack of monitoring and creative ethical standards leading to lack of ethical base is an attribute that results in organization not achieving success. Investment policy statement should incorporate the objective of the organization that would provide guidance for managers in taking decisions. Sine carrying out the work reflects the success of organization and it is the employees and leaders who are responsible for fulfilment of ethical standards. Maintaining negative bank balance is not suitable for any business including non-profit organization. Henson being the president of Better Days ahead is responsible for expanding the operation of business (Flynn & Hodgkinson 2013). His activity cannot be considered as unethical as the amount is used for carrying out fundraising activities. Although, the Company is involved in charitable activity, it can find out many ways for improving its productivity. It can also be seen that the impact of negative bank balance due to excessive loan amount seems to be outweighed by making use of loan for increasing the fund raising potential.
In conclusion, manager or worker, they have to implement the way of ethics in doing business work. Some of the company already implements company policy to smoothing the way of work. It can be said that the investment policy of better Day ahead is unethical, as eventually it would hamper the credibility of company, which would ultimately cause the business to lose its clients and wind off. In my opinion, unethical behaviors can damage a company’s credibility, causing the business to lose customers and ultimately shut down. However, business owners and their management teams can work with employees to prevent unethical behaviors. It is required by the organization to maintain the image as charitable organization that does not intend to make profit and delegates its responsibilities and duties in ethical way.
Berman, E. (2015). Performance and productivity in public and nonprofit organizations. Routledge.
Bodie, Z. (2013). Investments. McGraw-Hill.
Butler, R., & Wilson, D. C. (2015). Managing voluntary and non-profit organizations: Strategy and structure. Routledge.
Flynn, P., & Hodgkinson, V. A. (Eds.). (2013). Measuring the impact of the nonprofit sector. Springer Science & Business Media.
Maier, F., Meyer, M., & Steinbereithner, M. (2016). Nonprofit organizations becoming business-like: A systematic review. Nonprofit and Voluntary Sector Quarterly, 45(1), 64-86.