Identifying Ethical Issues, Responsibilities, And Strategies In Corporate Culture: An Essay.

Summary of Ethical Issues in Different Companies

1. The case study has identified several ethical issues that have arisen with five different companies. Give a summary of the different ethical issues that have occurred with these companies?

2. Ethical dilemmas can occur within an organisation which can challenge individual and management decision making. Explain where the responsibilities lie when it comes to managing ethical behaviour. Is it the responsibility of the individual or of management?

3. Using one of the examples profiled in the case study identify what caused the breaches of ethical conduct. In your answer consider elements such as the management style of those in charge and the culture of the organisation?

4. Some organisations promote their corporate culture as one that supports ethical behaviour. Using any organisation of your choice as an example, explain the strategies they have in place to prevent inappropriate and unethical decision making from occurring?

1. Environmental Protection is the ethical issue in The Volkswagen Emissions Scandal. Volkswagen installed software in cars that falsely indicated to the emission testers of the Environmental Protection Agency that they were environmentally friendly. As such, companies should balance their need to make profits with implementing practices of sustainable operations. Also, transparency is required to evade the cases of FIFA Corruption Scandal ("The 5 Biggest Corporate Scandals of 2015", 2017). This is because, the FIFA executives took bribes for them to award hosting and broadcasting rights for occasions like the World Cup. Through the Toshiba Accounting Scandal and Valeant's Secret Division, integrity and trust ethical issues emanated. Toshiba had exaggerated its earnings by $2 billion in seven years. Hence, they were not trustworthy. Valeant failed to uphold integrity by using Philidor to inflate its sales (Goodpaster, 2014). Finally, ethical decision-making must be conducted unlike in the case of Turing Pharmaceuticals and Martin Shkreli. This is because, Shkreli decided to increase the price of an HIV drug by five-thousand percent.

2. All level managers are charged with high standards of ethical conduct. This is because, they make significant decisions that affect shareholders, the company, and other stakeholders. Additionally, the individual employees have some moral duties to accomplish about the co-workers, organization, and their customers. However, most managers believe that ethics encompass the moralities of a person, that is, a private issue between an individual and their principles. Consequently, any misconduct is viewed as a secluded incident due to a rogue worker. Due to this, the management can never bear the misdeeds of its employee. The society needs to realize that the management is fully responsible for all the ethical conducts of their employees (Treviño, & Brown, 2012). Unethical business performances encompass the implicit collaboration of others and replicate the attitudes, values, language, beliefs, and behavioral arrangements that define the organizational culture. Thus, ethics is both a personal and organizational issue. The mangers who do not employ systems that enable ethical conduct and proper leadership are equally responsible like those who regard, implement, and benefit from corporate offenses. To form a successful company, managers must accept and seizure their role in modeling the organizational ethics. Ignoring the ethical conducts of their company put the managers at a risk of corporate and personal liability (Fombrun, & Foss, 2013). Subsequently, the benefits that could have been available for their organizations can be deprived due to sentencing for wrongdoing.

Responsibilities for Managing Ethical Behavior

Employees must work diligently, and be inquisitive of the organizational culture to see if it is consistent with their values. Concerning ethical issues, the responsibilities of the employee and employer are inseparable. The reason behind this is that professional integrity calls for organizational and not individual efforts to be achieved. Good relationships lead to proper ethics, and these can be attained by asking proper questions to get the necessary answers. Moreover, the ethically diligent employees are easily considered during promotions ("Regulatory Responses to Global Corporate Scandals 23 Wisconsin International Law Journal 2005", 2017). Therefore, leaders provide an environment full of respect and integrity, while the workers speak up about any cases of questionable practices and unfairness. Individual employees must be informed that confronting unethical behavior does not imply that they are whistleblowers. Moreover, individuals are responsible for the management of ethical behavior in organizations to protect personal reputations. This is because, some issues might not be offensive to the law, but might disrupt a person’s conscience and disturb the reputation of the firm (De George, 2014). Despite the ethics officers, lawmakers, and educators putting in efforts in the implementation of ethical standards, the managers, and individual employees are responsible for maintaining and creating outstanding corporate cultures.

3. The Toshiba Accounting Scandal was as a result of the closed management system, which proved to be highly insulated. The outside environment was not permitted to provide knowledge or any form of interaction. Consequently, growth was not experienced. There was no indication that the senior officers, executives, or employees got rewards from client companies or pocketed the funds. Hence, those involved were not driven by personal greed, but the executives were driven by the need to make their company seem attractive, while those from the low level intended to retain their jobs. Also, the corporate culture in which the workers cannot performance contrary to the desire of superiors led to the scandal. The executives prioritized the present accounting period’s financial results, compelling their juniors to mend the numbers for their business units (Carson, 2015). Due to their culture, they heeded to the demands of their executives. Also, the internal control systems were weak to recognize the fraud making the manipulation take place for seven years.

During Tanaka’s resignation, he apologized to the stakeholders and shareholders for having overstated their earnings by $2 billion for seven years. The organizational culture encouraged the employees to do the unethical transactions. The environment tolerated the mending of the books of account as the management did not bring in measures to manage the bad conduct. From the scandal, it is evident that even the best of people in organizations can take cues from others to act in a certain way without seeing the ethical consequences. Therefore, this scandal could not have occurred if the managers realized that they supervise the culture they create. Putting their interests first instead of the organization’s leads to high chances of corporate failure. The unreported fraudulent practices at Toshiba made the employees lose their confidence in their leaders (Crane, & Matten, 2016). Consequently, they ended up being unethical as they could conduct the illegal transactions with high skills.

4. In Campbell’s Soup Company, many strategies have been implemented to avert the occurrence of unethical and inappropriate decision-making. Through its former CEO Douglas Conant, it was able to link corporate profitability and trust. This saw a 10-year about-turn program implemented to build trust leading to high employee engagement and increased profits. Also, the strategy of support groups and employee engagement programs has helped in eliminating the chances of unethical decision-making. To this effect, Campbell is committed to the growth of women in their organization. Furthermore, Campbell’s initiated the healthier lifestyles strategy to enable their employees and management to be ethical. For instance, encouraging the management and employees to engage in physical activities, healthy feeding habits, management of weight, quitting smoking, and lowering their stress levels. Similarly, the leaders employ utmost integrity in their actions. Hence, people can believe and follow them. They adhere to the values of their companies, which adds to the sincerity of corporate policies and initiatives (Gerard, 2012). If the top executives exercise what they address, employees can achieve the goals of the company bringing forth new product concepts.

Similarly, the strategy to nourish the lives of people through employee recognition for a job well done is a strategy to enhance ethical decision making. The use of handwritten notes to thank the employees at Campbell’s is an effective way to improve their ethical conduct. Their leaders say that their training is based on finding the wrong, but they also celebrate what is good. Campbell transformed its culture into their long-term goals enabling the employees and leaders to unite in the main areas of growth. By engaging talent, their leaders, and the community through meetings, and continuous coordination with human resources management they can bear ethical behaviors in their organization ("Campbells 2016 CSR", 2017). Also, the strategy of building capability and awareness by training their employees on self-awareness and unconscious biases enables an in-depth behavioral change. The program Inclusive Leadership: Discovering Unconscious Bias in 2015 was implemented to enable the employees to appreciate the growing diversity of the workforce and influence the abundance of the differences. The first recipients of this training were the human resources professionals and other leaders, who then rolled the programs to the employees.

References

Campbells 2016 CSR. (2017). Campbellcsr.com. Retrieved 20 May 2017, from https://www.campbellcsr.com/people/diversity.html

Carson, T. (2015). Journal Of Business Ethics, 43(4), 389-394. https://dx.doi.org/10.1023/a:1023013128621

Crane, A., & Matten, D. (2016). Business ethics (1st ed.). Oxford: Oxford University Press.

De George, R. (2014). Business ethics (1st ed.). Harlow: Pearson.

Fombrun, C., & Foss, C. (2013). Business Ethics: Corporate Responses to Scandal. Corporate Reputation Review, 7(3), 284-288. https://dx.doi.org/10.1057/palgrave.crr.1540226

Gerard, J. (2012). Labor Relations Best Practices: Campbell Soup Co. | i-Sight. I-sight.com. Retrieved 20 May 2017, from https://i-sight.com/resources/best-practice-campbell-soup-co/

Goodpaster, K. (2014). Conscience and Corporate Culture. Philpapers.org. Retrieved 20 May 2017, from https://philpapers.org/rec/GOOCAC

Regulatory Rejoinders to Global Corporate Scandals 23 Wisconsin International Law Journal 2005. (2017). Heinonline.org. Retrieved 20 May 2017, from https://heinonline.org/HOL/LandingPage?handle=hein.journals/wisint23&div=27&id=&page=

The 5 Biggest Corporate Scandals of 2015. (2017). Fortune.com. Retrieved 20 May 2017, from https://fortune.com/2015/12/27/biggest-corporate-scandals-2015/

Treviño, L., & Brown, M. (2012). Managing to be ethical: Exposing five business ethics mythologies