Term Paper: Business of Ethics the Importance

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[. . .] Company property is less likely to "disappear" if a worker thinks of his place of business as "his" company. Rivalries between personnel can be more easily channeled into healthy competition. And of course, the worker who takes pride in his company will deal better with outside clients, as he will take pride in "his" work. The companies reputation will be enhanced and profits increased.

Pride also has other rewards in terms of corporate effectiveness. Pride in his own achievements, and in those of his coworkers and managers, will inspire an employee to work harder. Ethical treatment, fairly and evenly applied, will ensure that all parts of an organization pull their weight, and that the whole operation functions smoothly. Input from personnel can lead to the modification of outdated or cumbersome systems. An ethical entity respects the suggestions of its employees because they are right and not because they come from certain favored employees, or from managers of a certain rank. An ethical company is a flexible company, and a flexible company is one that can more easily adapt to changing conditions. The market is littered with the carcasses of corporations that had become too hidebound to see the wave of the future either in terms of their product or their internal organization. According to Mayo, Fayol, and Maslow, Efficiency without Effectiveness is Too rigid, too rigorous, and workers...become too righteous. It was learned that the service delivery systems at that time needed modification. Effectiveness became valued and urged by the human relations practitioners who encouraged more responsive working conditions where the workers would identify with the process and organization."

Burke, p.4)

In other words, always "going by the book," is not ethical if it leads to calcification and an inability to respond to the demands of the moment.

And the company that is both efficient and effective is also economical. The same strict adherence to high ethical standards that solidifies a business's organization and creates a team, also contributes to a better and more judicious use of resources. "Economy, the third tool of management, is an element of both efficiency and effectiveness, but stands alone as an important management value because it alone encourages, really urges, the wise and frugal use of resources." (Burke, p.4) Again, the employee who takes pride in his company will be more careful to budget his time and watch his expenditure. The company's success is his success, and so he will manage his resources as if they were his own. Long lunches when the boss is away may be fine in a corporate environment where the higher-ups spend all afternoon inside a trendy restaurant, but castigate ordinary employees for being five minutes late. However, in an ethically run business; a business in which standards are applied equally and appropriately across the board, even the lowliest of employees will feel that he is doing his duty by adhering to the schedule. There is no unnecessary waste, no feeling that an employee is just getting his due or that "they're all doing it." The saleswoman who lies to her clients, tricking them into believing that they're getting more than they paid for is no better than the corporate CFO who fudges the books and deceives stockholders when quarterly earnings don't meet expectations. Such conduct has repercussions all around. While there may be short-term gains in terms of higher stock dividends for the executive, and a larger commission check for the saleswoman, the long-term impact is always negative. Seeing the financial picture only for the moment will lead to fiscal hardship further down the line...as companies such as Enron and Adelphia have discovered to their cost.

But what is most remarkable about the programs currently being implemented by such global powerhouses as Sears Roebuck, Columbia/HCA Healthcare, and the United Technologies Corporations is indeed the broad scope of their endeavors in the world of business ethics. Efficiency, Effectiveness, and Economy may well build a smoothly running and ethical machine, but it is a machine that remains business-oriented nonetheless. With today's environmental groups, civil rights organizations, anti-child labor crusades, animal rights activism, and so forth, any company that wishes to pursue a position of prominence in the global market must take a stand on the issues. Sears has its own university in Illinois where managers are indoctrinated into the finer points of ethical behavior, and are made to sign annual pledges to demonstrate their full and unending commitment to the company's code. (Brasnahan, p.4) The evasion of scandal by means of ethical practice is seen as more important, and more productive, than undercover tactics meant to skirt the law and cover up the more unsavory aspects of traditional corporate technique.

This strongly moral approach to business ethics is given pride of place at Columbia/HCA, a national healthcare enterprise that was formerly plagued by scandal, and charges of fraud and improper billing practices. (Brasnahan, p.4)

In July of 1997, the Board of Directors brought in Alan R. Yuspeh as its new Senior Vice President of Ethics, Compliance, and Responsibility. Immediately, Yuspeh set about giving meaning to the words in his corporate title. He drafted a code that was distributed to all of Columbia/HCA's 285,000 employees. At the top of the list were compassion, honesty, integrity, fairness, loyalty, respect, and kindness. (Brasnahan, p.5) Good, solid, old-fashioned values, but longtime strangers to the dog-eat-dog corporate world. Yuspeh's program insures that his entire workforce is well-versed in relevant healthcare laws and regulations. As at Sears, a hotline answers employee questions and concerns. But Columbia/HCA's program goes a step further, enlisting the aid of the latest technology in ensuring compliance with its high ethical standards. At the push of a button, Yuspeh can monitor training and compliance at any one of the company's three hundred hospitals. These new policies go a long way toward guaranteeing that Columbia/HCA's clients get the care and attention they deserve. A little bit of Norman Rockwell's old family doctor is being put back into the confusing and often overwhelming world of modern, high-tech, high-priced healthcare.

Compassion, honesty, integrity - what could be more basic? Well how about a nice, square deal. That's exactly what Patrick Gnazzo, Vice President of Business Practices aims to give his customers at the United Technologies Corporation. One of the largest and most diverse companies in the world, UTC has boldly decided to go where no company has gone before. It has dispensed entirely with business's most ancient rule - caveat emptor. Rather than misrepresent their company's products, services, and capabilities just to clinch a deal, Gnazzo has instituted a policy wherein UTC employees freely and honestly divulge information. Both the strengths and weaknesses of the firm are fairly represented. If a product can't be delivered by a certain date, that is admitted. If another company has a superior product, that is admitted as well. (Brasnahan, p.6) This open approach works well in a world of jaded consumers. Customers find full and unabashed disclosure refreshing and strongly appealing. The practice charms both UTC employees and outside clients. Personnel feel pride in working for an organization whose achievements are untainted by doubletalk and subterfuge. Customers like the honest advice they receive. This instills customer loyalty. A client might actually pay a higher price just to receive the kind of service and treatment available from UTC rather than save a little money at a competitor. Old-fashioned values do have a place in the modern world.

Thus, solid business ethics are more important than ever in today's global economy.

Voracious competition has produced a race of corporate profiteers who feel nothing but contempt for the people they purport to serve. Case after case of scandal and corruption has created an ever-growing class of educated consumers, wary of the latest trick. International expansion brings executives and run-of-the-mill employees into contact with peoples of widely differing backgrounds and points-of-view. In view of these two developments, honesty and plain-dealing are more essential than ever. Companies that implement ethics programs and stick to them, reap the rewards of client and employee satisfaction and loyalty. A contented employee contributes to the company's bottom line by his increased productivity. A contented customer contributes to the bottom line by being a loyal patron. But ethics is much more than a matter of economics. Kindness, compassion, and treatment of clients and personnel as human beings fosters a spirit of cooperation, a spirit of individuals and corporations working together to build a better world in the twenty century. The old saying has never been more true - "An ounce of kindness will get you a pound of love." Today's corporations may not quite have our love...but they're working on it.


Brasnahan, Jennifer. "For Goodness Sake." Enterprise Magazine. June 15, 1999.

Burke, Frances. "Ethical Decision Making: Global Concerns, Frameworks, and Approaches." Public Personnel Management, Winter '99, Vol. 28, Issue 4, p.529fl. 1999.

Kanchier, Carole. "Knowing… [END OF PREVIEW]

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