A Role of Ethics and Social Responsibilities in Ma

This essay has a total of 1169 words and 6 pages.

A Role of Ethics and Social Responsibilities in Management


A Role of Ethics and Social Responsibilities in Management.
Ethics can be defined as a process of evaluating actions according to moral principal of
values(A.Alhemoud). Throughout the centuries people were trying to choose between profit
and moral. Perhaps, some of them obtain both, but every time it could have roused ethical
issues. Those issues concern fairness, justice, rightness or wrongness; as a result it
can only be resolved according to ethical standards.

Setting the ethical standards for the way of doing business in corporation is primarily
task of management. Corporations have to maintain the same standards as an individual
person and, in addition, corporations, as organizational units, have their own social
responsibilities toward customers, employees and society. However, any business should
keep it’s original purpose of functioning - making profit. Balancing the traditional
standards of profitability and burden of social responsibilities is not an easy task. In
recent years it has been a trend of setting standards of corporate ethics according to
high degree of morale.

To be able to keep the ethical standards management must follow the law. However, there
are some complications in enforcing it. The law affects and is affected by social forces
and prevailing ethical standards. "Although the law can codify societies ethical

________________________________________________________________________
Alhemoud, Ali " Management Ethics is Smart Business."
values, ethical decision making transcends the law in that 1) the law deals with actions not
with thoughts, and therefore it does not (and cannot) codify all ethical requirements; and
2) an individual or a group may perceive a given law as immoral, not as a guide to ethical
behavior." ( A. Alhemoud). How, then, a company can ensure that its code of ethics is both
followed and enforced ? " ...Defense firm such as General Dynamics and TRW, and an
information company, Dun & Broadstreet, have appointed internal ethics officers or
ombudsmen. Whether employees have faith in these safeguards against corporate retaliation
is hard to tell, though it is one step forward (The Economist August 19 1995)

The ethical codes of corporations that that get so important nowadays also did not come
into being at once. They emerged from individual ethical standards and corporate
consciousness. Moreover, the public demand for prosecution of any violations of
corporate, professional and business ethics has been increased. Finally, mass media made
possible for society reveal secrets that were kept from public before. So, the business
conduct regulations were created to "draft guidelines for ethical conduct, develop a
process for monitoring business practices and recommend ways to correct questionable
activities." (J.Byrne) All these measures were taken to balance various social
responsibilities with the high degree of moral and sense of attainment.

Unfortunately, cooperation of unethical behavior of a manager with a journalist may lead
to an undesirable results. "Early in December 1995 , Smart Money’s editor-at-large James
J. Cramer wrote an article for his monthly column; Unconventional Wisdom,

________________________________________________________________________
Alhemoud, Ali "Management Ethics is Smart Business."

Recommending four $2 to $6 "oprahn" stocks. Trading records show that at the at the
peak, Cramer’s firm had paper profits of more than $2 million on the stocks. The gain
occurred because he had adopted at least three of the "oprhan" sometimes before writing
the article. Cramers article said that he was buying one of the stock but did not disclose
that"(F.Lalli). Clearly, neither the management nor the editors had in any way cared of
conducting the ethical behavior and as the result the innocent investors were hurt.

On the other hand, being ethical can be clever marketing strategy. Increasingly, consumers
are swayed by "non-commercial" factors, such as whether the product harms the environment
. "Firms such as Ben & Jerry’s, an ice cream maker and Body Shop international, a
cosmetics retailer, have enforced their brands by publicizing their ethical
standards...Calmins Engine , a maker of diesel engines , made the product greener while
lobbing for stricter pollution laws. Dp Pont, a leading producer of ozone damaging CFCs,
became an early member of anti-CFCs lobby partly because it knew it was well ahead of its
rivals in developing alternative."( The Economist December 23 1996)

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