Business Ethics

Published: 2018-01-23 16:32:47
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A. Corporate policies

1. Equal opportunity: Principles of ethical backgrounds should be observed by all employees to ensure that goal-oriented employee culture. 

2. Legal issues: employee related standards that include wages, fair treatment and safety should be observed according to the set government averages.

3. Products: Techfite holds the right to provide environmental and ethically standard products without affecting the surrounding environment.

The policies have been made by observing core principles that occur in the production process. Additionally, they also govern all inputs that are required by the company that include human capital and materials. Most importantly, the policies are dependent on the organizational culture and its involvement in the surrounding society (De Cremer, 2009). Notably, Techfite’s move to a multicultural environment will require it to adopt new strategies to ensure that all issues in the new company in Dellberg have been faced competently. As a result, the policies have been made under the following considerations. 

The first policy on equal opportunity has observed issues such as the culture of Dellberg workers. Precisely, Techfite has British socio-cultural and economic backgrounds that are very different from American origins. For example, the issue of employee empowerment will depend on their cultural backgrounds (De Cremer, 2009). As the HR director, I have to consider American cultural values in coming up with incentives and motivators for the workers to ensure maximum empowerment (Kamieniecki, 2006). Issues such as part-time and full-time working hours will depend on the employee culture because they are determined by cultural and social activities. 

The second policy on legal matters needs to be emphasized due to the change in geographical regions. Since Techfite is a British company, most of its corporate policies have been made based on European legal backgrounds. Legal systems in the enterprise sector manage matter such as minimum wages, employee treatment, safety standards, and compensation of workers. The current situation in Dellberg shows that the company is struggling to cater for employee benefits in its budgets. This policy will ensure that Techfite's financial statements have been reconstructed to provide for the workers. Additionally, as an HR director, I will also ensure that the substantial funds catering for high-ranked executives have been revised to make sure that even the low-ranked workers get their share as a factor of employee empowerment. For example, Techfite should consider employing workers from Dellberg due to its bankruptcy rather than outsourcing to reduce wage costs.  

The third policy deals with Techfite's products. Any company has to ensure that products are friendly to the workers, society and environment. Notably, Techfite produces high-tech products that may include the use of dangerous materials. Consequently, it is the work of the human resources department to ensure that the employees are safe. Moreover, the corporate structure should make certain the products are not dangerous to the surrounding business environment. The policy will align with the company's corporate social responsibility efforts. An example is of this policy can be seen in tech companies that use radioactive elements and lack proper disposal methods in the community leading to diseases and heart conditions. 

A (2). Ethical Issues

There are various ethical issues at stake in Techfite's scenario. The first problem is the misuse of resources. Since Techfite is finding it hard to pay worker benefits, then there exists improper leadership that has caused the abuse of resources. After a budget review, it shows that the top executives are enjoying excessive benefits; therefore, leading to fewer benefits and bankruptcy in the firm. Additionally, the budget also constrains benefits for full-time workers resulting in the lack of incentives to motivate the employees. Techfite had promised its sponsorship in a community event, supporting youth development programs, and investing in infrastructure but none of the projects has been accomplished. This practice shows that Techfite suffers from significant misuse of funds. This fact is because when the deals were being budgeted, the company had allocated funds enough to solve the ethical issues but top leadership has spent most of the money. 

The second ethical issue is whistleblowing. Ethically, whistleblowing is significant to ensure that companies accomplish their promises. Since profit maximization drives all businesses, there is the tendency to assume some of the ethical projects with the aim of registering high profits due to competition (Rezaee, 2009). In the case of Techfite, there is the lack of enough whistleblowers to ensure that all actions have been faced appropriately. This aspect shows that there is no effective communication between the workers to make sure that any misconduct has been reported to the management.

Concerning distinguishing the ethical issues from legal matters, Techfite has also suffered from legal matters. For example, the minimum working hours have been reduced which is against the company policies. Additionally, not fulfilling the community's commitments on development and infrastructure is also a legal issue because it had been stipulated in the enterprise's policies. 

Going against the company’s policies is legal issue in that it will breach different contracts that have been presented in the policies. Notably, disobeying the policies will cause a chain reaction amongst the company’s policies. For instance, there are policies that are community related and breaching such policies will lead to legal actions against the company. Ethical issues such as observing environmental pollution there are other external policies involved such as those setting the limits for carbon footprints. As a result, lacking to observe the company policies will lead to unwanted legal issues.  

A (3). Role of Ethics Officer

The functions of an ethical officer include developing, implementation and monitoring the systems (Rezaee, 2009). In the case of Techfite, the moral officer was not vigilant leading to the ethical issues affecting the company. Concerning part A1 of the questions, the officer's role in developing includes taking part actively in the formulation of new ethical policies to make certain that they resemble the organization's culture. He/she should also review the policies before they are passed for implementation in the firm. This move will reduce cases of error, bias and ensure that they match with the assigned budget. When it comes to application, the ethical officer should follow up on all the policies and make sure that the designated timeframes are being observed. Any errors or changes regarding societal changes should be adjusted.  Another role is monitoring the stated policies and making certain that they have been accomplished according to the corporate plan (Vilcox & Mohan, 2007). For example, Techfite’s ethical officer would have noticed that the policies had not being implemented while trying to monitor their progress. 

A. Corporate Social Responsibility

It is defined as a business model that contributes to sustainable development by ensuring that social-cultural, economic and environmental issues have been delivered competently for the benefits of all stakeholders (Vilcox & Mohan, 2007). 

Socio-cultural issues in the scenario include enhancing employee culture by observing the new American society culture and the sponsoring of community events. Others include supporting youth development and enhancing infrastructure around Dellberg. Techfite should also ensure that environmental issues have been reviewed according to the corporate principles. In the scenario, the environment would be emphasized by the internal and external business environments. For instance, supporting environmental programs in Dellsberg would be a competent opportunity for Techfite’s corporate social responsibility.  

B1. Community Reputation

Techfite should ensure that it improves its reputation in the society. Firstly, the company should prevent the embezzlement of funds since it has indirectly contributed to related ethical problems. By coming up with a competent budget, the company will ensure that workers have enjoyed their benefits and full-time hours have been improved.  Another example is the lack of involvement in community and youth development programs as promised. 

B2. Course of Action

The company's existing environment has significant repercussion on its success; hence, Techfite should ensure that it has improved its relations with the society. In cases like these, some communities strike and refuse to provide human capital and other available resources because the company has not invested in corporate social responsibility. The third example is refusing to develop infrastructure in Dellberg. The lack of sustainable infrastructure may also affect its supply of inputs and outputs in the long-run. Lastly, the firm has not changed its British organizational culture to adopt the new American culture. 

The primary courses of action for Techfite include social and ethical approaches. The first approach is to ensure that Dellberg social practices have been adopted in its policies. They include socio-cultural activities of the workers to ensure that working hours and minimal pays have been set correctly without bias. Additionally, reviewing social structures will assist the company's corporate structure to relate well with current stakeholders. 

B2. Course of Action

Ethical strategies include getting involved in issues affecting the community. In Techfite’s case, it should ensure that the youth development programs have been catered for to create a mutual relationship with the community. Developing programs for the youth will reduce social vices such as crime that will favor the company’s security in the long-run. Additionally, waste from Techfite should not affect Dellberg; hence, the need for environmental programs to reduce pollution. As a result, Techfite’s reputation to its stakeholders and the society will provide a suitable environment for production. 

References

De Cremer, D. (2009). Psychological perspectives on ethical behavior and decision making (1st ed.). Charlotte, NC: Information Age Pub.

Kamieniecki, S. (2006). Corporate America and Environmental Policy: How Often Does Business Get Its Way? (1st ed.). Stanford, Calif.: Stanford Law and Politics/Stanford University Press.

Rezaee, Z. (2009). Corporate governance and ethics (1st ed.). Hoboken, NJ: J. Wiley & Sons.

Vilcox, M. & Mohan, T. (2007). Contemporary issues in business ethics (1st ed.). New York: Nova Science Publishers.

TASK 2

A1. Employee rights 

Based on the scenario, the following rights were highlighted:

1. It is an employee’s right to understand the company’s ethical standard and engage in them competently 

2. It is an employee's right to get involved in ethical decision-making since all opinions matter towards an ethically successful business.

3. It is an employee’s right to understand the desired course of action if the above rights are not experienced at the workplace.

The highlighted employee rights will ensure that all employees will be responsible for their actions. The scenario provides a situation where employees are ethically trained to ensure the overall ethical responsibility of the company. The training will present the employees with a role in making moral decisions. Moral experiences and ideas from different team members will ensure a competent decision. Additionally, understanding moral rights will assist the employees in enhancing their treatment and that of customers according to the set ethical standards. The rights will improve the employee culture since the employers will have a different ideology towards their employees. For example, providing employees with incentives and ensuring social recognition will improve the working condition and ensure profit maximization.

A2. Employees’ Rights and Responsibilities 

Ethical responsibilities include employer’s responsibility towards employees and employees’ rights in the workplace (Pinnington, Macklin and Campbell, 2007). Firstly, employees understanding their rights in the workplace will ensure equal treatment and equal opportunities for promotion. Ethics among the employees will also ensure respect between them (Pinnington, Macklin and Campbell, 2007). For example, cultural differences such as race or religion cannot affect the employees because they have ethical training. Additionally, the employers will respect moral decisions from employees such as breaks for religion or cultural activities without having to deduct pay.

A3. Ethical Business Dilemma

A personal moral dilemma that can measure the company's ethical standards includes a case of sexual harassment or bullying behavior (Fraedrich and Ferrell, 2012). In this case, a superior may harass other low-ranked employees sexually because he/she has a higher status. The lower rank employee may be in a dilemma on whether to report the sexual harassment case to higher superiors because it could affect his/her job indirectly. Such bullying and harassment behavior affect work performance and leads to enhanced stages because only a few lower level employees can risk their job positions to report a case of harassment. 

However, after attending employee ethical training, the employees will have a strategy that will ensure that the harassment has been forwarded to the management without fear of risking their jobs. Moreover, the employer will have training in ethical responsibilities; hence, will understand n employee that is in such a personal moral dilemma. 

A4. Ethical Business Dilemma: Evaluation 

From a utilitarian view, the dilemma presents a decision-making situation that provided maximum utility. Notably, utilitarianism is an ethical approach that claims the action that maximizes utility is the best one. In this scenario, the worker being sexually harassed will ensure that the best action is the one that presents much well-being in the company. 

From a relativistic view, the dilemma may lack absolute truth due to lack of proof or validity. Sexual harassment at times is faked by employees due to cases of jealousy or self-interests. As a result, there should be enough evidence and motive to support the truth. Additionally, not all ethical cultures may consider the personal dilemma as sexual harassment due to values and morals that allow such actions (Garber, 2008).

 

Corporate Structure 

The assessment of the structure of the organization reveals how effective planning and management of the activities of the business can enhance the success of the organization. The operations of a business venture are subjected to a prototypical approach, which is formulated in line with the targets of the firm as well as the environment factors. One of the key contributors of organizational structure assessment is Alfred Chandler who examined the correlation between structure and strategy in an organization. This section examines Chandlerts thesis and provides a review of the implication of structure on organizational performance.

Alfred Chandler established a theory-based thesis that described how corporate structure follows strategy. Chandler evaluated how the structures used in businesses organizations are created to assist in the implementation of strategies. The historian established his arguments based on the evaluation of case studies involving American conglomerates. The research involved dominant firms such as General Motors, Standard Oil of New Jersey, and Sears Roebuck. The mode of implementation of the M-form approach was different for all the organization, but there was a significant correlation. Therefore, Chandler concluded that organizational strategies as the determinants of long-term achievements. However, the attainment of the designated targets requires a comprehensive framework of operation, which Chandler referred to as an organizational structure. Although the thesis has been opposed, the analysis of the study inclines to the current experiences in the business sector in line with the management of capital, customer satisfaction, supply chain, and growth of the firm. Therefore, when Chandler stated that structure follows strategy, he meant that organizational forms are the target-specific derivatives of the strategies associated with the enterprise.

Several studies have linked corporate structure to the performance of the organization. Nakano (2015) carried out an exploratory analysis of the relationship between structure and strategy with a bias to supply chain management to determine how performance is influenced. The study used samples of Japanese corporations to determine how organizational structure determined the level of outcome in the administration of the supply chain. The research found out that the supply chain is an element of the internal arrangement of an organization where the management approach used will determine the level of performance for active or efficient firms.

Al-Kayed, Zain, and Duasa (2014) examined the essence of capital management structures on the performance levels of the Islamic Bank. The aim of their assessment was to establish recommendations that can be used to enhance the capital funds within the bank. The evaluation included two possibilities in capital management: lowering investment returns or high capital ratios. The scholars found that when the macroeconomic environment is controlled then the financial market performance is increased. The findings depicted the postulates of the signaling theory in banks, which ascertained high capital management guarantee performance.

A similar study looked at the capital structure based on the dimension of Agency Theory. Dawar (2014) evaluated the implication of the capital structure in an organization on performance based on the Agency Theory using Indian corporations as the sources of data. The findings showed that leverage has a negative effect on financial performance contradicting the postulates of the Agency Theory. Moreover, the nature of the bond markets defines the capital structure and strategies, which are skewed when contrasted with the emerging or developed economies. Therefore, research recommended the use of analytic approaches based on market performance to improve the output of the corporations in the country.

Moreover, Darko, Aribi, and Uzonwanne (2016) looked at the organizational structure from the corporate governance perspective. The study examined the impact of director and board structure on ownership and control of the businesses. The research used samples from the Ghanats companies listed on the stock exchange. The analysis of the scholarly findings showed that ownership concentration and female representation determined the extent of performance that is achieved. However, the findings did not reveal the correlation between the board or the committee on performance. Nevertheless, the analysis hinted how independent directors as well as the audit team influence performance, which is part of the organizational structure.

Abou-El-Sood (2017) also examined the success of organizations in line with corporate governance structures. The research that was founded on the capacity of banks to manage financial risks and capital strains involved the U.S. banks data between 2002 and 2014. The scholar found out that the structures that were characterized by stakeholder concentration, managerial ownership, and small size of the management board were associated with high performance stable financial adequacy. The effect of capital stability assists in managing risk strategies emanating from the external environment factors.

Furthermore, Grassa (2016) carried out a study whose aim was to evaluate the ownership, income, and insolvency structures associated with Islamic banks. The focus of the study was the correlation between the property concentration and the revenue structure and insolvency. Using the data from Islamic banks between 2005 and 2012, the scholar undertook a quantitative analysis where the three-staged least-square approach revealed the magnitude of the interrelation. The findings showed that income structures define insolvency exposures for those firms adopting the concertation of ownership approach, which has a significant implication on the performance levels. The reason presented in the study was that deposits, which depend on income approaches, as well as the high number of shareholders, determine the strategic decisions undertaken in an organization.

On the other hand, Afrifa and Tauringana (2015) measured the extent of performance among the small and medium-sized firm listed in the U.K. corporate sector. The study was biased to the governance structure and the outcomes after a specific financial period. The research revealed that the performance of SMEs depends on the alignment of internal factors such as corporate governance, the size of the board, the age of the CEO, and tenure of the board of directors. The factors affect the outcome of the SMEs differently, which calls from strategic management f the affairs of the firms.

Also, Reddy and Locke (2014) analyzed the relationship between organizational structure and the level of performance. Three key elements evaluated in the study included ownership, capital, and governance. The samples included the business entities operating in New Zealand. The findings depicted the approach to governance defines the agency costs associated with management practices. On the other hand, the for cooperatives and mutual firms, internal borrowing was preferred to outsourcing when seeking additional funds. The two perspectives from the results were found to have as significant implication on performance.

Finally, another essential study regarding the structure of organizations and performance levels included the assessment of knowledge-practice diffusion. Lupton and Beamish (2014) evaluated several multinational corporations with the objective of determining how their structures altered the standard of knowledge and practice dissemination. The research revealed that the mechanisms used to share knowledge emanate from formal and informal structures within the MNC frameworks. The study recommended that the use of knowledge brokers and metric analysis can be the best approach to prevent structures that limit the sharing of knowledge. Nevertheless, the results also depicted how the level of performance can be improved when the organization can consider the structures that generate mutual dependencies.

In conclusion, the success of a business enterprise depends on the structure, which informs the strategy and subsequent implementations. Several organizations have adopted different structures in the management of internal affairs in line with dimensions such as customer, capital, ownership, culture, and leadership. The combination of substructures assists in building the complete structure that defines the organizationts strategies. The nature of the framework that the organization uses determines the level of performance based on the set targets and indicators. Chandlerts thesis forms the baseline for the elements that firms need to consider while establishing, implementing, and sustaining the organizational structure. However, organizations should be keen to identify the emerging trends and incorporate relevant changes to guarantee performance continuity.

References

Abou-El-Sood, H. (2017). Corporate Governance Structure and Capital Adequacy: Implications to Bank Risk Taking.T International Journal of Managerial Finance, 13(2): 14 t 21.

Al-Kayed, L., Zain, S., & Duasa, J. (2014). The relationship between capital structure and performance of Islamic banks.T Journal of Islamic Accounting and Business Research, 5(2): 158 t 181.

Afrifa, G. A.T & Tauringana, V. (2015). Corporate governance and performance of UK listed small and medium enterprises.T Corporate Governance, 15(5): 719 t 733.

Darko, J., Aribi, Z. A., & Uzonwanne, G. C. (2016). Corporate governance: the impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange.T Corporate Governance, 16(2): 259 t 277.

Dawar, V. (2014). Agency theory, capital structure and firm performance: some Indian evidence.T Managerial Finance, 40(12): 1190 t 1206.

Grassa, R. (2016). Ownership structure, deposits structure, income structure and insolvency risk in GCC Islamic banks.T Journal of Islamic Accounting and Business Research, 7(2): 93 t 111.

Lupton, N. &T Beamish, P. (2014). Organizational structure and knowledge-practice diffusion in the MNC.T Journal of Knowledge Management, 18(4): 710 t 727.

Nakano, M. (2015). Exploratory analysis on the relationship between strategy and structure/processes in supply chains: Using the strategy-structure-processes-performance paradigm.T The International Journal of Logistics Management, 26(2): 381 t 400.

Reddy, K. &T Locke, S. (2014). The relationship between ownership structure, capital structure, and corporate governance practices: A case study of co-operatives and mutuals in New Zealand.T International Journal of Managerial Finance, 10(4): 511 t 536.

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