Ethical values in organization
How to guide the behaviour
By Johan Magnusson
Business ethics scandals are today’s top stories. Everyday there are cases where companies act with lack of respect, fairness, and/or moral. It exist, sometimes less obvious and sometimes more obvious for various reasons. Not every ethical dilemma has a right solution. It is common that managers just hike through ethical dilemmas without giving it a second thought to it. To deal with ethical dilemmas, in order to feel safe and to prevent wrong decisions, guidelines are of huge importance to guide the behaviour. Through ethical programs, guidance in ethical dilemmas can be made. There are many definitions and descriptions of ethical programmes in the literature. The one I address in this paper is based on McDonald and Nijhof (1999, p. 133) definition: "ethics programmes are referred to as a coherent set of actions directed primarily at the operational level in order to stimulate morally responsible behaviour of persons in a specific organisation."
I will describe ethical programmes background and benefits, preconditions, organizational actions that can be used in order to achieve morally responsible behaviour among decision-makers and other members of the organization. After that, some brief explanation of guidelines to manage ethics in organization will be discussed and finally I will present the summary and conclusions.
Background and the benefits of ethical programmes
Companies have implement ethical programmes for various reasons. Some companies have been motivated to do this due to external pressure caused by unethical behaviour, caused either by them selves or by another part. These are forced implemented ethical programmes. The problem that could occur in these cases is that the programs might not be long-term focused. They implement an ethical program, just to solve a specific issue, and to improve their public image (McNamara 2002). Off course this is not the case every time, but might be since short-term focus is very common among corporations in order to satisfy their stakeholders. Internal motivated programs originated by the company itself have according to McDonald and Nijhof (1999) the purpose to guide decision-makers to act in a morally responsible manner. They are usually built upon internal values that are perceived as central to the organization, not only based on external values and beliefs system.
The benefit deriving from ethical programs are many. Through the history there are many corporations that have been acting with a lack of ethical awareness. Ethical awareness at the corporations will finally improve the society as a whole, since then it is not only economic criteria that will guide the business decisions (McNamara 2002). It is a fact that corporation has the largest influence on the society, and through ethical decision-making they can
improve the society. According to McNamara (2002) ethics program may help to maintain a moral course in turbulent times, where there are no clear moral compass to guide leaders. This is also applicable for new employees, since they might also need a moral compass, and/or need to be socialized into ethically correct behaviour. The implementation of ethical programmes at the workplace raises also the issue about different values and norms among employees, and the program could help to manage the diversity among their employees. This is particularly true today, since it is crucial to understand and manage highly diverse values in the workplace. When this is done, non-legal behaviour and decisions may be prevented, and therefore could hindering the company from fines and costly trials. The program could also work as motivator for the employees and stimulate productivity and teamwork. In order to gain these benefits, explained above, more practical information is needed. This is what next following sections will deal with.
When discussing business ethics, one has to be aware of three different levels political (macro), organisational (meso), and individual (micro) level (McDonald and Nijhof 1999). They stress the importance of taking all these levels under considerations, since all are intertwined and relates to each other. A company's influence on the political level, also referred as macro level, is small. To be sure that an ethical programme to be effective, the focus should be at the conditions at the organisational and individual level since these may be influenced, and the political level should be considered as a contextual factor.
In order to implement an ethical programme to stimulate moral responsible behaviour, McDonald and Nijhof (1999) addresses two conditions on the individual level. First, managers have to be able to act in a morally responsible way, and second they must have the intention to act in a morally responsible way. The conditions at the organisational level all have to do with the ability to act in a morally responsible way, such as formal and informal organisational norms, procedures for decision-making and distribution of resources. When these conditions are met, managers have the ability to act in morally responsible way. In order to stimulate the managers to act in a morally responsible way, certain organisational actions have to be undertaken.
The first step towards an ethical climate in an organisation is generally taken by the development of codes of ethics. By the development and communication of the code of ethics, the awareness for the formal and informal norms is stimulated (McDonald & Nijhof 1999). According to Chonko, Loe & Wotruba (2001) codes of ethics serve as three major purposes in organizations. These include demonstrating a concern for ethics by the organization, transmitting ethical values of the organization to its members, and impacting the ethical behaviour of those members. Their findings of their study were that ethic codes can impact managers in their judgement and decision-making, but only if the manager is familiar with the code's content and intentions. This conclusion means that it is very important that the organization's members actively take part in the process of the development of the ethic codes. McDonald and Nijhof (1999) emphasize the support from top management in the development of the ethic codes, and especially in the implementation of it. If the managers do not stimulate ethical behaviour, then everything is lost. According to Hoffman (1995) it is
very common that the management does the development of the ethical codes. Instead he stresses the importance that the whole organization should be involved in the development process. Just like McDonald and Nijhof (1999) stress the importance of the manager’s role, Hoffman emphasizes the importance of all the organization's members.
The third purpose that Chonko et al. (2001) emphasize, impacting the ethical behaviour of those members, is critical in decision-making processes. The codes of ethics is first supposed to be established, then transmitted and finally to be practiced. However, to influence the behaviour of the personal, only written codes of ethics might not be enough. Ethics officers, ethical committees and ethical hotlines should be established to assist, support and to guide ethical behaviour (Hoffman 1995). One of the primary functions of an ethic officer is to proactively encourage responsible ethical decision making throughout the organization. The ethic officer oversees the corporate ethic program and helps to steer the company around the pitfalls. An ethical officer might not have the most delightful work, since sanctions towards non-ethical behaviours might sometimes have to be carried out. However there are also dangers with having one person responsible over the guidance for morally responsible behaviour, since other part of the organization might neglect ethical consideration in their own decision making process. This can partly be solved with ethical committees, who are represented by personal from the whole organization. By having these committees represented with personal from the whole organization an ethical climate might be easier to achieve. Ethical hotlines might have the same function as the previous ones; it does not stimulate own ethic decision-making. However if a person is confronting an ethical dilemma, a second person to discuss with might be a good help. There has to be a visible support from the top management if their effort is supposed to be effective. They also have to have some kind of neutral position in the organization and they have to have access to everybody in the organization (Hoffman 1995).
In order to secure that the codes of ethics is understood by every member of the organization, ethics training is an important element (McDonald and Nijhof 1999). Ethical skill is a prerequisite, and it might stimulate them to integrate ethical issues in their decision making process. Individual training, seminars, and/or workshop are very helpful in communicating the message of the code of ethics. These meetings allow employees to dialogue with each other about the importance of ethics and especially about ethical issues that relates to their daily operations. The seminars should clarify the ethical values and enhance ethical awareness in the organisation. However, only awareness is not enough. As I mentioned before it has to be practiced. Ethical reasoning has to be transferred into ethical action.
In order to stimulate an ethical programme, resources have to be distributed. If the corporation does not do this, the ethical programme will probable only be a piece of paper. As I mentioned before ethical training, hotline, codes does not develop by themselves. The company has to distribute resources in order to stimulate and implement the ethical programme. McDonald and Nijhof (1999) emphasize the financial resources as key to success. The possibility to neglect a contract due to ethical reasons is very important. As I have mentioned before, morally responsible behaviour has to be build into the decision making process.
All previous mentioned organizational actions have the purpose to give the manager the ability to act in a morally responsible way. However there are also personal intentions that matter for the success of the ethical programme. In order to stimulate personal intentions it is
common with a reward system, where ethical correct behaviour is rewarded and unethical behaviour is awarded with penalties. Also an ethical audit may reinforce the personal intention among the employees. According to Hoffman (1995) it is a process for analysing and measuring the firm's activities in certain ethically sensitive areas. By spreading this audit throughout the organization, ethical awareness could be attained which could lead to ethical correct actions among the employees.
Guidelines for managing ethics
According to Norcia & Tigner (2000) making ethical decisions in business takes time, care and effort. Especially since the number of decision makers is increasing. The implementation of an ethical programme, consisting of ethical audit, ethical committees, ethical officers, and codes of ethics etc. should be an ongoing process, since moral learning has to be an ongoing process. "One should not only do the right thing, but also keep on doing it" (Norcia & Tigner 2000, p. 12). McNamara (2002) is also emphasizing this, and points out the important process of reflection and dialogue. The dialogue could be implemented in the decision making process through group decisions. Through decision making in-group, different perspectives and interest has to be taken under consideration.
In order to act ethical, few mistakes might be the outcome in the beginning. McNamara (2002) emphasizes the importance in allowing mistakes. The important is to try and support ethical behaviour.
Summary and conclusions
It is a fact that ethical programmes are becoming of greater importance in today's business environment. It is not only important for the company, it is important for the society as whole. Managers is facing a complex decision making process, a guide is needed in order to coordinate the behaviour towards a morally responsible one. In order to implement an ethical program, considerable efforts have to be undertaken by the organization and its members. The effort might be the reason why some companies do not succeed. They do not take it seriously.
In order to implement an ethical program to guide the behaviour, the organization has to be aware of the preconditions: political, organizational and individual level. Since the political level only functions as the context, the development of the programme should be focused on the organizational and individual level. The company who wants to undertake an ethical programme has to give the organizational members the ability to act ethically responsible. This is done primarily in the first step through the development and communication of code off ethics and conduct. This code, usually formal stated on the Internet and/or brochure, has to be supported by various other elements in order to influence the decision making process. Ethical officers, committees, audits, training and hotlines are actions that have to be undertaken by the organization. It is not only organizational actions that has be supported by the company, managers has to support the program. If they do not, the rest of the organization will not do it either.
In order to achieve long-term influence and effects on the behaviour, this ethical programme has to be an ongoing process. Despite that manager is facing ethical dilemmas in their daily
duties, they might not be aware of it. Through ethical awareness continuously achieved through workshops, training, committees and/or audits, ethical dialogue, reflection and action can be attained. Ethical based decision-making has to be integrated within the daily duties.
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* Norica, V. D., Tigner, J. (2000). Mixed motives and ethical decisions in business.
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