ektaraval

[ektaraval]

leading and managing organisational resources

Overview

The use of a wiki page is essential in developing a portfolio for academic learning and understanding, thus, discussions regarding the same have been covered (youtu.be, 2020). In an attempt to understand "business ethics" and its working philosophy, the goals and fundamentals of the company are very important. Ethics were primarily understood as the simple distinction between “right and wrong”. However, in corporate context, an individual’s code of conduct and actions are guided by their personal mores and surrounding environment. Earlier notions of business were understood as “making profit” only (thehrdirector.com, 2020). This broadly fell into the concept of Friedman doctrine. However, these views were challenged, as society requires businesses to provide goods and services as well as businesses seek to make profit for themselves as well. The domain of "business ethics" also covers its utility for the society by being responsible for its benefit and welfare. This is broadly understood as Corporate Social Responsibility, where an “ethical business” is required to be a responsible societal citizen as well. Here, the triple bottom line focus lies on “people, planet and profit” (thehrdirector.com, 2020).

The role of stakeholders is quite vital for the businesses to maintain their operations and activities in an ethical way. It is a common expectation among businesses and stakeholders alike that violations of ethical grounds and laws are counterproductive for it. "Business ethics" is observed between the organisation and its suppliers, employees, customer base, partners and the shareholders (gartner.com, 2020). It is also associated with governance in organisations and business decision-making. Ethics in business are understood via normative and descriptive means; the latter being used for scientific research and academic depth. Schwartz (2017) stated that descriptive means helps to understand the discrepancy between what ought to happen and what actually happens. Influence of "business ethics" underlies that maintaining appropriate policies is crucial at macro, corporate and individual levels for aiming desired performance.

Functional areas

A business is associated with a number of areas that help in operating itself and managing its activities. These make up the factors that operate within the organisation as well as outside of it. Thus, the functional areas in a business sector encompass “human resource management (HRM)”, finance, marketing, sales, and relationships with other organisations.

In the finance sector, “material wealth” is a prime measure of wins and gains. The neoliberal thought for this growing finance benefits and maintaining ethics refer to growth in the economy by means of providing an increasing number of “services and goods” to people. Similarly, the sector of HRM holds personnel recruitment, their performance management/monitoring, appraisals, workplace safety and the like. The HRM team manages the employees and the unethical or illegal actions within the organisation or those done by the employees/employers themselves (Schwartz, 2017). “Business ethics” focuses on right and wrong within the organisation and this is where the unethically and illegality could be included. An unethical business action is morally incorrect; however, an illegal action is breaking the organisational or the legal regulations. The law binding entities of a nation or the organisation itself focus on the aspects that make an action illegal as well as the moral or ethical connotations of acceptable behaviours. The "business ethics" involved in HRM also comprise of the organisation’s whistle-blowers and the holders of “intellectual property rights”. These are considered as ethical obligations of “organisation’s employees for their employers”. In the context of international companies, trade obligations, international laws, immigration or globalisation operate too. This addresses the "business ethics" in a much more complex way, as it has the liability to be watchful towards the operations in its international zones. Companies use the theories X and Y for their management strategy that helps them to maintain the ethical focus and gain success as well.

Sales and marketing are other important functional areas of a “business ethics” that informs the marketers about values and principles for their actions. Here, the ethical connotations of consequence, deontology and virtue ethics are at play. The marketing mix principles is also a guide that helps businesses to make ethical decisions about a product’s price, marketing and consumer focus (mckinsey.com, 2020). An organisation could be understood as using marketing and sales ethics if they focus on price skimming, for example. In the “business ethics” context, its relationship with other organisations reflects the relationship of suppliers and buyers. Collaboration with other organisations, joint ventures and forming alliances are examples of inter-organisational relationships as well (mckinsey.com, 2020). In this case, there is a risk of unethical partnership as well. The theoretical basis of agency theory and the transactional cost theory are well suited for organisations to have effective relationships and note their opportunistic tendencies. Schwartz (2017) ascertained that the researches on these kinds of behaviours have put forward intentional deceit, shirking and financial double standards as primary risks to look out for by collaborating organisations. This is important to mention that such organisational chaos can become a big issue for the stakeholders. Thus, legal and judicial implications might follow too. Thus, organisations could employ informal or formal means to target these risks and alleviate their grave after-effects. For example, the use of binding contracts and establishing relational or business norms between groups in business collaborations could prove to be extremely useful in managing and maintaining business ethics.

Impact on Decision Making

Ethics are those guiding frameworks that direct the everyday decision-making of businesses. Organisations need to persevere in tough times and be flexible as well as strong in aligning themselves according to the applicable external changes. Here, the Trevino’s Ethical Decision Model would be productive to understand the nuances of decision-making in relation to business ethics (beds.hosted.panopto.com, 2020). The model highlights certain factors namely, the situational moderators, organisational culture, individual moderators and the cognition. These factors are noted when guiding oneself through the ethical dilemmas. Thus, these lead to a decision being made and its subsequent ethical or unethical nature. The ego strength, work characteristics, stage of moral development and job context operate together and determine the final decision and output.  

Decision making during Covid 19

In the face of COVID-19 pandemic, it is essential that relations between the government and the organisations are beneficial and extends their support for the larger good of the business and society as well. In the light of decision-making, some social contexts are important too. “Emotion, community and ethics” make up the prime social elements that need to be incorporated in business decision-making so that the outcomes are ethical (gartner.com, 2020). Businesses also make decisions that could be different according to different situations. Thus, the COVID-19 crisis implores businesses to highlight crisis factors like “safety, continuity and resilience” in their decision-making process. Thus, the “core competencies” of businesses are put to maximum use for the generation of consistent value and revenue. Schwartz (2017) had highlighted the fact that executives in a business would need to change their long-standing methods and means for adapting to their external situations. This would aid them in innovation, manage cyber risks, and open up options for cash flow and profit (mckinsey.com, 2020). Another factor “traditional business value”, calls for the reduction is risks, consideration of costs and revenue generation. Revenue generation is important to keep the organisation viable and be a valuable part of fulfilling societal responsibilities. The organisational mission becomes important if its existence becomes doubtful. It could switch to making similar products in the field and use its primary raw materials. For example, a perfume making company could invest in making sanitizers as well because of the common primary ingredient: alcohol (mckinsey.com, 2020). The combination of these traditional value-based aspects and the non-traditional aspects like social and crisis elements are important for decision-making too.

There are certain questions posed in the front of the board directors and executives of companies. These sheds light on the issue of globalisation and unavailability of materials, focus on marginalising the skills, restrains to change or modify business models adequately and “resilience in supply chains” (thehrdirector.com, 2020). These greater concerns highlight the influence of tougher situations on business and its ethics. This affects employees, the organisational flow of information and the suitable relationships too. In aligning the organisation to modern needs, the realistic factors, of which the organisation is capable, needs to be put forward too. This would create a sense of hope for future growth by being rational and adaptive.

Thus, influence of decision-making on business ethics and the related content have been discussed here with a focus on its functional areas, an overview; further reading suggestions are given too.

Notes

1. Schwartz, M.S., 2017. Business ethics: An ethical decision-making approach. United States: John Wiley & Sons.

2. beds.hosted.panopto.com (2020), Leading and managing organizational resources, Available at: https://beds.hosted.panopto.com/Panopto/Pages/Viewer.aspx?id=f9176e36-d906-4648-9296-80d1aefc20d6&start=undefined[Accessed on: 04/10/2020]

3. Gartner.com (2020), A Framework for Executive Decision Making During COVID-19, Available at: https://www.gartner.com/smarterwithgartner/a-framework-for-executive-decision-making-during-covid-19/ [Accessed on: 04/10/2020]

4. Mckinsey.com (2020), Coronavirus: 15 emerging themes for boards and executive teams, Available at: https://www.mckinsey.com/business-functions/risk/our-insights/coronavirus-15-emerging-themes-for-boards-and-executive-teams [Accessed on: 04/10/2020]

thehrdirector.com (2020), The new role for hr followingthecovid-19pandemic, Available at: https://www.thehrdirector.com/features/cultural-change/the-new-role-for-hr-following-the-covid-19-pandemic/ [Accessed on: 04/10/2020]

5. Youtu.be (2020), An example of an excellent ePortfolio, Available at: https://youtu.be/3_FmRH6Lj5c [Accessed on: 04/10/2020]