SMRT

Concepts of Ethics and Governance at SMRT Corporation Ltd

Question:

Discuss About The Social Responsibility International Business?

The report discusses the various concepts of ethics and governance at SMRT Corporation Ltd, which is one of the major multi-modal transport operators in Singapore. The company serves millions of people by providing the most comprehensive transport networks and assists them to reach from one place to another with ease and effectiveness. While management the values and ethics, the company has faced several problems related to the corporate governance and ethics. Several arguments will be made considering the ethical culture, ethical climate and ethical leadership managed within the organization. The report will discuss the major problems faced by the company such as misinterpretation of records regarding maintenance of transport network, flooding of the tunnel and even the death the two maintenance staffs due to lack of safety. According the article presented in Straits Times, SMRT Corporation Ltd cannot comply with the laws, rules and regulations to maintain the safety of workers, which resulted in unethical business practices, poor ethical climate and culture (Smrt.com.sg 2018). It can be proved that the unethical business practices have arisen due to the lack of safety, poor culture and ethical climate, all of which are related to the cultural issues and challenges within the organization. I can agree that the concepts of business ethics will explain the systematic cultural issues that may arise due to lack of ethics and governance within the organization.

The ethics and governance issues were related to the ethical culture, ethical climate and ethical leadership. The major issues faced by the company included falsification of documents, lack of safety of transport network that resulted in poor safety regulations and even took the lives of two workers. Another issue was the flooding of the tunnel, which created problems during the transportation management and even made many people suffer while moving from one place to another. These showed that the business ethics were not maintained properly, which even created complexities to the culture of the organization (Stevens 2008).

According to Gillies (2012), there are probabilities of falsifying statements and records though it might not be the actual cause of flooding of tunnel at Bishan. Based on the author’s responses, the concept of relative likelihood showed that without making any proper assumptions or proofs, it would be inappropriate to derive a conclusion and state that the falsification of documents could be the cause of tunnel flooding at the station. The company neglected checking the water drainage pump systems and not maintenance works were conducted and even there was no track access approvals that were issued for the staffs (Gillies 1971). Thus, it could be understood that SMRT might have done this for own benefits because it focused on more revenue generation. Thus, the focus of the company was on the revenue generation rather than the safety and convenience of workers and passengers. This, it is proved that the corporate values and ethics were not properly maintained (Treviño & Brown 2004).

Problems Faced by SMRT Corporation Ltd

According to SMRT’s CEO Desmond Kuek, there were several cultural issues and one of the major issues was the falsification of documents where quarterly maintenance on Bishan MRT’s water pumps was not conducted properly and without the findings only, the records were submitted. As the maintenance manager and the staffs were not enough responsible to conduct the findings, they were suspended because of the inaccurate functioning of the pump system. The former CEO focused on generating more revenue rather than maintaining the records properly. It neglected the maintenance of records, which took the lives of two workers and could have jeopardized the lives of many people (Trevino & Nelson 2006). This not only hindered the cultural values but also prevented maintenance of corporate ethics properly.

Other than the falsification of records, there were other issues too such as fake records and submission to the higher authority without providing any maintenance records of the water pump system. The entire team who was responsible for maintaining the records was termed as fake and careless. Though reports were presented that the maintenance had been going on well, still there was no work progress done for more nearly a year. accounting to the Executive Ethical Leadership Reputation Matrix, the ethically silent leaders are considered as moral individuals who have gained ethical leadership reputation for guiding the employees in the right direction. The previous CEO  was more concerned about the profit level achieved by the company and thus the safety level was not considered, which not only resulted in the death of a couple of workers but also hindered the safety of passengers (Friedman 2007).Based on the various reports, no such track access approvals were found related to the water pump system maintenance at the concerned station. The team consisting of the maintenance staffs did not bother to work properly and records had been submitted without conducting any survey or assessment of the drainage system, which was found to be the major cause of tunnel flooding. Based n the records, the pumps were not activated as well on the dates where it was stated that the team had worked. A leader must be ethical in terms of the corporate governance and ethics and must hold the various traits like the integrity, trustworthiness and honesty (Chin, Hambrick and Trevino 2013). The previous manager of SMRT lacked these traits, due to which decision making was inappropriate and the organizational behaviors were not managed properly too. An ethical leader should possess a good character, ethical standards and expectations so that the staffs abide by the organizational policies and rules to ensure successful business functioning. By maintaining good leadership skills, the manager would gain reputation and even strive for success in business. According to Desmond Kuek, ethical culture was not present within the workplace, due to which, the team comprising of the maintenance staffs were neglecting their roles and responsibilities. This further deteriorated the organizational culture and hindered the maintenance of corporate values and ethics in business (Hartman & Desjardins 2008).   

Corporate Ethics, Cultural Issues, and Challenges at SMRT Corporation Ltd

Ethical climate means maintaining a moral atmosphere of the work environment and enabling integrity by the managers of the organization that are considered as core values.

It could be stated that after the flooding of tunnel, the transportation facilities broke down, which created chaos among the passengers. They faced difficulties to move from one place to another but the company provided some alternative measures to make sure that the passengers could be safe (Kolk 2016). SMRT provided shuttle buses for the commuters due to the closure of multiple MRT stations. Until the maintenance work was carried out, shuttle bus services were provided to ensure that the passengers could reach their destination properly.  It could be understood that the providing of shuttle bus services tend to be quite effective, because with the stations closed, many passengers thought that they could not reach their destination place (Carroll and Buchholtz 2014). The company rather rectified its negligence in work by providing them shuttle services so that they could at least reach their homes safe and sound. Thus the cultural values and corporate ethics were maintained, which might have caused high level of satisfaction and positive mindset among the passengers (Khan, Muttakin and Siddiqui 2013).

It could be argued that the shuttle bus services were not at all effective, because due to the traffic jams all over the roads, the passengers could not reach their destination on time. The shuttle buses were fully packed and many people could not even board those, which left them devastated emotionally. The entire scenario could have been something else, if only the former CEO of SMRT made decisions ethically by maintaining positive behaviors and through gaining moral awareness (Ferrell and Fraedrich 2015). The company’s focus should have been on the delivery of proper services to make travel convenient for the passengers and not about gaining high level of profit only. Due to the poor organizational culture, the staffs did not perform their roles and responsibilities properly and the maintenance records were not provided too (Nica 2013). Few of the cultural issues that were pointed out had been not providing rewards to the employees for their performances, poor organizational structure and culture and lack of training programs for the employees. Thus, it could be argued over the fact that a proper ethical climate was not managed, which deteriorated the moral atmosphere of the working environment and created multiple cultural issues (Crane and Matten 2016). These were not expected from a reputed organization like SMRT and it showed that the corporate ethics and governance had not been in place.

• It is recommended to provide the rail and water maintenance staffs with proper training sessions, because it is one of the top most priority of the organization to ensure proper corporate governance and maintenance of values and ethics.
• Investigations should be made at regular intervals with the involvement of an investigation team to supplement the audit system of SMRT.
• It is also recommended to improve the quality control monitoring to manage the maintenance of records and handle critical systems with ease.
• The manger must manage ethical training to make the staffs well informed about their roles and responsibilities and create higher work responsibility ethic among them.
• Paying good amounts of wages and rewards along with praising of their performances should keep them motivated towards their goals and objectives.
• Corporate social responsibilities hold ethical responsibilities and so the manager must undertake measures by going beyond legal ethics, though maintaining the organizational policies at the same time to maintain a behavior that could be morally acceptable to the different stakeholders in business.

Conclusion

The entire report discussed the concepts of ethics and governance considering the business organization SMRT Corporation Ltd in Singapore. From the report, information obtained showed that there were several cultural and ethical issues that deteriorated the company’s image and reputation. The corporate ethics were not maintained that further questioned the leadership skills, based on which arguments had been provided. One of the major issues was the falsification of records and even submission of the maintenance records that showed proper functioning of the water pump system. It was later found that the water pump system was not functional, which flooded the tunnel and even caused the death of two staffs. Though there were no other harms, still it hindered the safety level of both the staffs and the passengers. The former CEO was more concerned about revenue generation and the staffs were not monitored properly, which raised ethical concerns and even resulted in cultural issues. Few recommendations to resolve these kinds of issues included training provided to the staffs, investigations to improve the audit system and enhancing the quality control monitoring.

References

Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Chin, M.K., Hambrick, D.C., and Trevino, L.K. (2013), "Political ideologies of CEOs: Illustrative evidence of the influence of executive values on corporate social responsibility", Administrative Science Quarterly

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Friedman, M 2007, 'The social responsibility of business is to increase its profits', in WC Zimmerli, M Holzinger & K Richter (eds), Corporate Ethics and Corporate Governance, Springer Berlin, pp. 173-8.

Gillies, D.A., 1971. A falsifying rule for probability statements. The British Journal for the Philosophy of Science, 22(3), pp.231-261.

Hartman, LP & Desjardins, J 2008, Business ethics: Decision making for personal integrity & social responsibility, McGraw-Hill irwin, Boston.

Khan, A., Muttakin, M.B. and Siddiqui, J., 2013. Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy. Journal of business ethics, 114(2), pp.207-223.

Kolk, A., 2016. The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.

Nica, E., 2013. Social Responsibility, Corporate Welfare, and Business Ethics. Psychosociological Issues in Human Resource Management, 1(1), pp.9-14.

Smrt.com.sg. (2018). SMRT Corporation Ltd. [online] Available at: https://smrt.com.sg/ [Accessed 27 Feb. 2018].

Stevens, B 2008, 'Corporate ethical codes: Effective instruments for influencing behavior', Journal of Business Ethics, vol. 78, pp. 601-9.

Treviño, LK & Brown, M 2004, 'Managing to be ethical: Debunking five business ethics myths.' Academy of Management Executive, vol. 18, no. 2, pp. 69-81.

Trevino, LK, & Nelson, K. A. 2006, Managing business ethics: Straight talk about how to do it right, 4 edn, John Wiley & Sons, New York.