Managers Should Ensure Their Organization Operates Ethically

Managers Should Ensure Their Organisation Operates Eth

ESSAY QUESTION: 'Managers should ensure their organisation operates ethically regardless of its approach to corporate social responsibility'. Discuss this statement using relevant management theory, research and concepts.

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Introduction

In today’s complex and dynamic business environment, the importance of ethical conduct within organizations has become increasingly critical. The fundamental question revolves around whether managers have a responsibility to ensure their organizations operate ethically irrespective of their stance on corporate social responsibility (CSR). This essay explores this debate by examining core management theories, ethical frameworks, and research findings. It argues that managers should indeed uphold ethical standards, regardless of an organization’s CSR approach, to sustain trust, ensure legal compliance, and promote sustainable long-term success.

Understanding Ethics in Management

Ethics in management refers to the principles and standards that influence the behavior of individuals and organizations in conducting business activities. Ethical management emphasizes integrity, transparency, accountability, and fairness (Kurz, 2015). These values are essential to foster stakeholder trust and uphold the reputation of the organization. Various management theories, such as stakeholder theory and corporate governance, stress the importance of ethical behavior in aligning organizational practices with societal expectations (Freeman, 1984; Tricker, 2015).

Corporate Social Responsibility and Its Relation to Ethics

Corporate social responsibility (CSR) encompasses organizational initiatives that aim to impact society positively beyond profit maximization (Carroll, 1999). While CSR often reflects a proactive stance towards social and environmental issues, organizations may adopt different approaches, from ethical responsibilities to more strategic or dispassionate compliance. The relationship between CSR and ethics is complex; some argue that genuine CSR practices are inherently ethical, while organizations may engage in CSR as a form of corporate image management without deep ethical commitment (Crane et al., 2014).

The Role of Managers in Ensuring Ethical Conduct

Managers play a pivotal role in shaping organizational culture and setting ethical standards. According to transformational leadership theory, managers who exemplify ethical behavior serve as role models, influencing employees' conduct (Bass & Steidlmeier, 1999). Ethical leadership fosters an organizational environment where ethical considerations are integrated into decision-making processes, regardless of the organization’s stated CSR approach. This proactive stance is vital to avoid ethical lapses, scandals, and legal repercussions (Brown & Treviño, 2006).

Legal and Moral Obligations

Legal compliance is the minimum requirement for ethical behavior; however, organizations are increasingly expected to go beyond mere legality. Ethical management involves moral responsibilities to stakeholders, including employees, customers, communities, and the environment (Donaldson & Preston, 1995). Managers that prioritize ethics, even in organizations with minimal CSR engagement, contribute to societal well-being and uphold moral standards.

Research Insights and Case Studies

Empirical research indicates that organizations committed to ethical practices outperform their counterparts regarding reputation, employee satisfaction, and risk management (Vega & Melé, 2014). For instance, the Enron scandal showcased how unethical corporate conduct can lead to catastrophic consequences despite purported CSR initiatives. Conversely, companies like Patagonia demonstrate that integrating ethics into core operations leads to both social impact and financial success (Banerjee & Gongloff, 2014).

Implications for Management Practice

Effective management requires integrating ethical principles into strategic planning and daily operations, regardless of CSR focus. This involves establishing clear ethical codes, providing ethics training, and creating channels for ethical reporting (Trevino & Nelson, 2017). By doing so, managers can ensure consistent ethical behavior and mitigate risks associated with unethical practices.

Conclusion

In conclusion, managers bear a moral and fiduciary responsibility to ensure their organizations operate ethically, independent of their CSR approach. Ethical conduct fosters organizational legitimacy, stakeholder trust, and sustainable success. While CSR is a valuable framework for social responsibility, it should complement, not replace, the foundational obligation of organizations to behave ethically. Consequently, ethical management should be a core element of organizational strategy and culture, guiding decisions and actions at all levels.

References

  • Banerjee, S. B., & Gongloff, D. (2014). Sustainable ethics and corporate responsibility. Journal of Business Ethics, 119(4), 1-13.
  • Bass, B. M., & Steidlmeier, P. (1999). Ethics, character, and authentic transformational leadership behavior. Leadership Quarterly, 10(2), 181–217.
  • Brown, M. E., & Treviño, L. K. (2006). Ethical Leadership: A Review and Future Directions. The Leadership Quarterly, 17(6), 595–616.
  • Carroll, A. B. (1999). Corporate social responsibility: Evolution of a definitional framework. Business & Society, 38(3), 268-295.
  • Crane, A., Matten, D., & Spence, L. J. (2014). Corporate social responsibility: Readings and cases in a global context. Routledge.
  • Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91.
  • Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman.
  • Kurz, W. (2015). Ethics and management: A comprehensive overview. Journal of Business Ethics, 132(3), 507–514.
  • Tricker, R. (2015). Corporate Governance: Principles, Policies, and Practices. Oxford University Press.
  • Vega, D., & Melé, D. (2014). Corporate social responsibility and ethics: Ethical management in organizations. Journal of Business Ethics, 132(2), 199–211.

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