The top leadership

The task of achieving profits and putting the company in a competitive market position falls to the top leadership of a business. But given that a free-market economy is characterized by competing commercial interests, this reality is typically not realized without difficulty. An organization's business ethics are a crucial component, thus it's critical that the top leadership prioritizes them (Terris, 2005, p. 4). Business leaders won't want to see a decline in the value of their shares, therefore market mechanisms like the stock market are good indicators of the ethical standards in a firm. However, there is also the dilemma that a complacent leadership may result in a negative public opinion and this has been used as an incentive by business leaders to institute unfair and unethical business practices and operations in their organizations. For this reason, the best strategy that an organization can adopt is to ensure that there is a recognizable and effective organizational culture that determines the actions of important decision makers as well as any other entity affiliated with the organization (Terris, 2005, p. 19).

However, organizational culture should not be viewed simply as a concept that affects an individual company. Business organizations have come to occupy a central role in the society with multinational companies being considered as vital components of the global structure of the economy and society. Adherence to a code of ethics with other players in the economy is something that the top leadership of an organization should aspire to engender within the employees. Such a perspective expands the perspective of an organization’s role to include other crucial stakeholders such as employees (Terris, 2005, p. 23). For this reason, the leaders of an organization should always strive to institute policies that serve to reflect cooperation and collaboration with the necessary players. From this perspective, profit-making becomes a by-product of a process that creates a fair environment that satisfies crucial stakeholders within the context of the established law. Business executives of the infamous Enron Company failed to uphold this wisdom which led to their fall from grace. Their pursuit for profit superseded their responsibility to practice business in a fair way.

The history of business ethics in America has been one that has sought to repair some of the ills that arise due to capitalism. The expression of capitalism has created the tension between liberty and profits and this is reflected in the fact that there are many scandals that have far-reaching consequences in the 21st century (Terris, 2005, p. 34). The growth of business ethics as a dominant player in the corporate culture of the American society has served to make business more efficient. For capitalism to flourish, businesses have to be given the fair opportunity to conduct their operations in a way that will generate success and create value for the customer. In one aspect, this has been made a reality. However, business ethics have developed in a way that is predominantly beneficial to the organization (Terris, 2005, p. 38).

In contemporary times, business ethics has come to be seen as a simple public relations strategy designed to create leverage for an organization. Business leaders have developed manuals and code of ethics for their organizations, but it is clear that the profit motive is the dominant theme for all business activity. The concept of business ethics has been portrayed to be a factor that limits productivity and the over-arching aim of making the shareholder happy. Globalization, spurred on by capitalism, has made it easy for organizations to downsize their operations in America in search of cheaper labor abroad (Terris, 2005, p. 40). Such tactics have affected entire communities and states in a way that has raised tension among in the court of public opinion. The result of the recent presidential election reflects this attitude. Additionally, the 2008 Global Financial Crisis also betrays the efforts of executives to instill a code of ethics in business operating in the financial sector. The common thread among these events is that business ethics cannot override the need to go for bigger profits even when it means there will be dire consequences for those who are powerless to stop the intentions of big organizations (Terris, 2005, p. 45).

Welfare capitalism is a concept that arose as a result of the need to ensure that the labor strife between workers and organizations was settled as quickly as possible. Organizations began to take a fresh approach to capitalism by embracing human relations as a way of creating a sense of ownership among the management of an organization as well as the workers. It is a concept that was designed to increase employee representation in the company’s decision-making processes. Additionally, it was also designed to ensure that there was greater transparency with regards to the wage structure as well as employment practices (Terris, 2005, p. 36). It was a marked departure away from a system that had treated the employer as being an outsider. It is also a system that has developed to become an important aspect of the contemporary economy. In the present day, many organizations as reflected in the technology sector have come to embrace revolutionary tactics that are geared towards making the employer happy and productive. Welfare capitalism has made concepts such as ‘work-life’ balance to be an important aspect of business operations (Terris, 2005, p. 38).

Howard Bowen’s analysis on the evolution of the business environment with regards to the adoption of social responsibility concepts has been proven to be prophetic at the very least. Business in the 21st century has come to embrace terms such as Corporate Social Responsibility (CSR) as being integral to their businesses and corporate strategy (Terris, 2005, p. 43). These are elements that have been spearheaded by the demand to ensure that organizations are mindful of the effect of their actions on the environment. For a long time, organizations have handled such public relations problems as chronic liabilities. However, organizations have come to realize that it is to their advantage that they maintain a carefully detailed narrative of their actions so as to inform the judgments of the general public. It is now rare to find an organization that has not embraced a public relations strategy that is part and parcel of their advertising campaigns (Terris, 2005, p. 45).

It should also be noted that organizations are now implementing other strategies with the genuine intent of helping their communities as well as the environment. It is not clear as to the nature of their effectiveness considering that there is a lack of established standards and practices with regards to CSR. Organizations will tend to operate in a field that they are well conversant with or have important connections. Multinational corporations are now faced with the responsibility of contributing to global problems such as climate change, poverty, and disease. These are all elements that were recognized by Howard and had come to be a present reality. The general feel, however, is that the best way to measure the impact of CSR is to assess community impact as this is a big marker of measuring business ethics as well (Terris, 2005, p. 43).

References

Terris, D. (2005). Ethics at work: Creating virtue in an American corporation. UPNE.