Human business activities require ethical and responsible behaviour

Human resource management requires several policies and practices for firms to manage their employees as it refers to human behaviour which is complex and unpredictable. However, an aspect that should be adopted in all organisations is an ethical and responsible behaviour to avoid misconduct. If organisations want employees to meet a firm’s objectives it is vital they are managed ethically. Throughout this essay, I will be outlining and analysing a variety of practices and strategies including under the fields of business ethics, corporate social responsibility and globalisation and discuss whether or not they help to champion ethical and responsible behaviour.

Business ethics is regarded as the study of business situations, activities and decisions where issues of right and wrong are addressed (Crane and Matten, 2016). Despite its importance in organisations, it is often claimed as an oxymoron (Collins, 1994) suggesting the two words are contradictory and don’t belong together, this opinion is flawed in that it says there is no ethics in business. Whilst aware of the many corruptions and misconducts that occur in today’s businesses it still has a firm place in industries and helps tackle these issues. Everyday business activities require ethical and responsible behaviour such as trustworthiness and fair treatment of employees’. Ethics is essentially where law ends, for example, there is no law in many countries that prevent animal testing but it is viewed as unethical. Examples of ethical misconduct include child labour, mass layoffs and corporate fraud. As these issues are still present in many organisations across the world it is understandable why some refer to business ethics as an oxymoron.

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Corporate social responsibility (CSR) is concerned with the ways in which managers’ behaviour and actions exceed minimum compliance based regulations (Bratton and Gold, 2012). It is a practice many organisations partake in to prevent morally reprehensible practices which can weaken society and hurt employees. CRS falls under human resource management and helps champion ethical behaviour by seeing how a company can contribute positively to society and responsible behaviour by preventing bad practices such as fraud and corruption. It demands a systemic change in the market economy but must be sustainable. Seemingly, the human resources (HR) work is the key accomplice in installing corporate social responsibility and sustainability activities in any association, as this can be accomplished just when an organization instructs, connects with and engages its whole workforce.

The HR manager has a duty to be proactive in driving the path in building up a far-reaching CSR-empowered culture (Cohen, 2010) Furthermore, yet, this isn’t going on. HR supervisors are engrossed with their customary parts of hierarchical improvement, recruitment and are neglecting to see the open doors that CSR brings for them as experts and for their associations. The challenge is for organisations to develop responsible and ethical practices in all they do. Corporate responsibility must not be window dressing, a publicity exercise focused on peripheral activities such as supporting charitable causes.

 Archie Carrol (1979) proposed a four-part model of CSR stating true social responsibility requires the meeting of all four levels, these included legal, ethical, economic and philanthropic responsibilities. When looking to champion ethical and responsible behaviour we look at ethical responsibility which would be corporations doing what is right and just and philanthropic which include improving quality of life for employees, local communities and society in general. However, this framework has its limitations (Crane and Matten, 2016) as some responsibilities have less priority over others and often the responsibilities conflict. An example of corporate social irresponsibility was the 2013 Savar factory collapse where over 1,000 labourers died due to negligence and not caring for the working conditions or quality of life for the employees, the factory provided garments for companies as big as Primark.

Two different types of strategy are addressed when discussing CSR; traditional and contemporary. Traditional being less effective and more for a company’s brand image, as it is where a company generates its profits without consideration for society, and then distributes some value without any real integration or direct contribution. Alternatively, the contemporary strategy where companies view responsible behaviour as an opportunity to generate profits and are therefore more motivated to integrate CSR into the core of the business. In order to champion ethical and responsible behaviour firms should adopt the contemporary strategy.

Ethics must run throughout business strategy and practices. Achieving this requires a comprehensive understanding of the stakeholders in business activities and a long-term view that considers what a sustainable business model is. Hr’s responsibility for leadership, people management practices and employee behaviours means that it can add value to all aspects of the business, and it must be prepared to speak up on these.

 Most managers believe their organisations show a strong sense of responsibility towards their employees, the local environment and society, although the greatest sense of responsibility tends to be to the customers. Interestingly, employee welfare generally comes higher than maximising shareholder value (CIPD, 2018)

The stakeholder theory introduced by Freeman contributes to responsible and ethical behaviour as it addresses morals and values in an organization. It states firms should not only seek to maximise shareholder returns but also the interests of stakeholders including employees, customers and local communities in order to be sustainable and succeed overtime (Donaldson and Preston, 1995). Donaldson and Preston argue that the theory has multiple distinct aspects that are mutually supportive: descriptive, instrumental, and normative. The descriptive approach is used in research to explain the characteristics and behaviours of firms, including how companies are managed,, the way that managers think about managing, and the nature of the firm itself. The instrumental approach uses empirical data to identify the connections that exist between the management of stakeholder groups and the achievement of corporate goals. Finally, the normative approach, identified as the core of the theory by Donaldson and Preston, examines the function of the corporation and identifies the moral or philosophical guidelines for the operation and management of the corporation.

Ethical theory in business tends to be absolutist in nature is making normative ethical decisions based on objective rules. It maintains that some things are always right and some things are always wrong. They are fixed for all time, places and people (Bowie, 2010). This approach which also derives from Kantian ethics contributes to ethical and responsible behaviour as it allows moral rules to be evaluated and treats people equally as it is universally applicable. However looking at Kant’s principle of universalism it is unlikely people come to the same conclusions and not everyone deserves to be treated the same way. An alternative to this is ethical relativism which claims morality is dependant on context and subjective, it is dependent on the person making the decision and culture of the country. This approach has a gap between what is ‘good’ and what is ‘socially acceptable’ in a culture, however, it does allow for more diversity.

As the economy is internationalised, globalised markets make effective regulation difficult because law and politics are bound to a countries border. In a globalised world, the effects of regulation can be limited. Morality is concerned with norms and beliefs that are embedded in a society which define right and wrong for an individual or community. This makes it challenging to champion ethical and responsible behaviour globally as morality is subjective and differs across the world; for example, in some countries child labour is acceptable whereas in the UK we class it as immoral unethical practice. The rights of employees are not standard everywhere and laws in low developing countries tend to be less strict, this causes problems when corporate social responsibility is concerned as it leads to cases such as the Savar factory collapse.

Workplaces are becoming more diverse as there is a growth in the mobility of workers from different backgrounds. It is important for managers to take positive approaches to equality and diversity as it can benefit the organisation. Discrimination in the workplace comes in many different forms whether it is ageism, sexism or even reverse discrimination. To tackle this firms introduce codes of conduct within organisations, run diversity programmes, equal opportunity programmes and provide the relevant training. These strategies are needed to build cross-cultural competencies including the ability to adapt to change and learn sensitivity to other cultures.

 Globalisation has many positive impacts on stakeholders as it provides greater profitability, reduces costs and can bring cheaper products to consumers. However as mentioned previously employee rights are viewed differently in different countries and therefore managers need to understand cultural morality in the country beforehand. The real challenge is not so much being able to compete in a global market but creating a ‘global mindset’ (Carrell, Elbert and Hatfield, 2000)

 In 2007 a research was conducted to discover how many women held positions of power in the FTSE 100 (Crane and Matten, 2016) the results were as follows:

 

 

 

 

 

 

From the table, it is clear gender discrimination is an ongoing unresolved issue therefore it is clear there are weaknesses in the practices as companies still continue to hire more men than women. Having an equal opportunity policy is not good enough to stop discrimination. A practice that is used to champion discrimination and ethical behaviour is an Affirmative action plan. Affirmative action (AA) is a government programme designed to redress historical injustices against specific groups my making special efforts to provide these groups with education and employment. (Carrell, Elbert and Hatfield, 2000). It is effective in that it ensures diversity remains in and helps disadvantaged people who in the past may have faced oppression and therefore started ‘late in the race’. However, despite its benefits for promoting ethical and responsible behaviour, some believe AA is simply reverse discrimination and indirectly reinforces stereotypes and racism (Bratton and Gold, 2012).

Equal opportunities in organisations are vital to keep staff motivated as well as to create an ethical and responsible culture. There are 3 different perspectives that can be adopted to achieve this. The Liberal Perspective ensures that procedures are fair so that all individuals can compete freely for social and economic rewards. The Radical Perspective is where policy makers should be concerned with the outcomes rather than the process. Hence ‘positive discrimination’ should be enforced or ‘affirmative action’ policies. e.g. Norway 2003 legislation for 40% of women to be directors. Lastly, The Reactionary Perspective, firms should not intervene in labour markets at all. ‘Natural Selection’ will eventually create a level playing field (Croucher, Leigh and Muller-Camen, 2008). Despite a decline in memberships trade unions actively advocate for the equal and ethical treatment of workers and for organisations to conduct operations responsibly. “The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts (collective bargaining) with employers” (Anbouli, 2016).

One problem with business ethics is the gap between rhetoric and reality. (George, 1987). Good things tend to happen to companies and individuals who consistently act ethically, however, the reality is that business isn’t nearly as bad as some critics make it out to be or nearly as good as its apologists contend. Ethics may not be as important to success as moralists make out.  The crucial point is that the moral obligation to live according to ethical principles is not dependent on whether it’s advantageous

In conclusion, business ethics and corporate social responsibility help to champion ethical and responsible behaviour in the workplace through a number of ways. Including understanding the needs of stakeholders and the social and community responsibilities a firm has. Globalisation has helped to tackle ethical and responsible issues as it allows companies to adapt to different cultures whilst providing customers with cheaper goods. However, these practices and strategies have implications of their own. Unethical and irresponsible behaviour is still occurring which means the strategies and practices may not be as effective as people think. The gap between rhetoric and reality is present in many companies as they say they will do good only to look good but don’t actually actively integrate their companies into society.

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