Record - New Directions in Strategic Management and Business Ethics of the relationship between strategy and ethics: stakeholder theory. Given the decline in business ethics and recent corporate scandals it is Barnard laid down some of the founding principles of strategic management in his . All individuals have morality, a basic sense of right and wrong in relation to a. Ethics in business and management (including strategic management) deals with moral issues (beliefs, norms, values, etc.) arising from.
They prefer to work in groups, and are group oriented rather than being individualistic [ 5 ]. An egalitarian leadership style democratic approach is best suited to this generation because they do not particularly conform well to hierarchies.
Gen Y also has been classified as exceedingly narcissistic. Taking into account the personal characteristics of this generation, it can be said that they show very distinct differences when it comes to business life.
In being more open and transparent, they become more likely to discuss work activity with a wider range of people both in public and in private. Additionally, they are the most at-risk group of the four generations, as they are more likely to observe misconduct and experience retaliation after reporting it. However, there is some encouraging news about the youngest generation.
This age group is moving into the labor force during a time of major demographic change and sixty-year-olds are working beside yearolds. Freshly minted college graduates are overseeing employees old enough to be their parents. And new job entrants are changing careers faster than college students change their majors, creating frustration for employers struggling to retain and recruit talented high-performers.
Unlike the generations that have gone before them, Gen Y has been pampered, nurtured and programmed with a slew of activities since they were toddlers, meaning they are both high-performance and highmaintenance. They also believe in their own worth. They don't know how to shut up, which is great, but that's aggravating to the year-old manager who says, 'Do it and do it now.
However, its use in business appeared after World War II within the changes taking place throughout the world which was leading to a competitive environment.
The changes in firms and in technology ended up with an increment in the competition which caused an unstable environment [ 8 ]. Many scholars have studied strategy as a concept in field of business [ 9 - 12 ]. Therefore, strategic management is defined as the implementation of business strategy which has been developed [ 7 ].
Strategic management analyzes the internal and external environment of an organization to enhance the use of resources to attain its organizational goals. It also helps organization to deal with change [ 7 ].
Incorporating Ethics into Strategic Management with Regards to Generation Ys View of Ethics
Throughout the strategic management literature, it is mentioned that organization is an open system which survives within an independently given environment [ 13 ]. It is crucial for managers to sustain accordance between organizational needs and environmental constraints [ 14 ].
Thus, it can be stated that strategic management forms a framework for organization. While forming the framework, the most familiar method is SWOT analyses which points out the strengths and weaknesses of an organization through internal analysis and also determines the opportunities and threats waiting by external analysis [ 15 ].
This would help managers to figure out their business strategies and long term plans.
- Business Ethics - A Successful way of conducting business
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Also, it would enable them to adapt to changes taking place in their environment which may help to gain competitive advantage.
Through the environmental scanning, managers are able to formulate and implement strategies. For the last step, they should evaluate and control whether these strategies enable them to attain their goals which are set in their plans [ 16 ].
After environmental scanning is completed by using SWOT analysis, the organization should formulate their strategies. In this phase, the organization should define its mission and vision statements clearly. Also, it should determine its objectives, strategy and policy guidelines. Mission describes the purpose of the organization, it reflects its present situation whereas vision defines what the organization aims to become, it reflects its expected future state [ 16 ].
Following, this they should implement strategies and policies in action to realize their objectives. By measuring the performance of the organization, the evaluation and control stage would be completed. The aim of strategic management is to increase the performance of the organization. It helps organizations to enhance their effectiveness and efficiency. Therefore, the last step which is evaluation and control would let managers to see if the whole processes succeed or not.
Ethical strategic management Ethics has become a hot topic in business world due to the scandals such as Enron, WorldCom which have occurred in recent 20 years. Ethical issues have become crucial for businessmen and managers in order to save their organizations and to provide them with a good reputation [ 17 ]. Providing ethical behavior is one of the aims of managers. However, there are many organizational and situational factors which affect ethical behavior in an organization [ 18 ].
Even, the managers should use ethical way of thinking while making decisions.
Ethical decision making has also gained importance in business world. To prevent unethical behavior and ethical lapses, managers should be able to use ethical decision making models.
The situational and organizational factors which lead to ethical or unethical behavior are also impactful in ethical decision making [ 18 ]. As being the strategic decision makers, managers are always questioned whether their responsibilities are limited with shareholders or they have broader responsibilities.
Strategic managers should consider all stakeholders while making decisions about the welfare of the organization. For organizations to exist and improve themselves, they should take stakeholders and ethical issues into consideration [ 17 ]. Hosmer stated that ethics can be regarded as a good investment [ 19 ]. In his view, it helps organization to have good relationship with its internal and external stakeholders since it enables to build trust among these. One of the organizational aims is to increase sales, productivity and enhance the performance.
Therefore, implementing ethics and social responsibility in strategies or long term plans can help organizations to enhance their performances. Since employees are influenced by the characteristics of their own organization [ 18 ], implementation of ethics in organizational infrastructure and strategic management is crucial.
Corporate ethical values are one of the dimensions of ethical behavior in business and they also lead to ethical behavior in an organization. Other factors which increase ethical behavior are the code of ethics, ethical leadership and support of whistle blowing. Code of ethics whether being principle or policy based statements influences the corporate culture and determines the procedures and guidelines for ethical behavior. There are various positions or departments such as ethics committees or chief ethics officers in organizations to provide ethical behavior and to prevent unethical acts.
Also ethics trainings programs are included in most of the organization to enhance ethical behavior [ 1720 ]. Besides these organizational factors, individual factors such as personality and moral development are also effective in creating ethical behavior [ 171821 ].
Also, managers should make ethical decisions when they encounter with ethical dilemmas or conflicts. They may use ethical decision making based on models or ethical approaches. It is expected for managers to be ethical by using justice approach which would lead to equality and fairness in the organization among employees in terms of salary, promotion and treatment [ 17 ]. If an organization is an ethical one by providing the requirements, then the employees would be more motivated and be willing to work more efficiently and effectively.
This would also enable firm to increase its performance and efficiency.
Managers consider ethics as a business issue such as costs, profits and growth. In the planning stage, they should consider all stakeholders of the organization and ethics. Ethics should be incorporated in their corporate strategy. Ethics in planning process would enhance the trust of stakeholders which would result with commitment and higher performance. This would even help the organization to gain competitive advantage.
According to him, ethics should be implemented overall management of the firm [ 19 ]. Incorporating ethics and social responsibility in corporate strategies and strategic management would enable the organizations to be good citizens [ 19 ].Business Ethics
Even though being a good citizen may increase the costs of the organization, it may increase its performance as well. It may increase the costs since implementing ethics training programs or recruiting experts such as ethics chief officer will be recorded as expenses for the organization. However, all these steps regarding to incorporating ethics in the organization would bring a good reputation for the company. A good reputation increases the motivation and strengthens trust of employees which would lead to higher job satisfaction and performance.
It would also attract high quality of employees. Scholars found out that people have higher tendency to work in ethical organizations. At the same time, it will take attention of the customers and society which will enable the promotion of the organization.
Studies indicated that most American firms which has superior reputation based on their ethical acts, have the superior financial performance [ 17 ]. If the strategy development models do not consider ethics and ambition, then it would be high likely for that organization to experience unethical behavior [ 22 ].
For example, as a strategic managements model, personal and organizational balanced scorecards can be taken into account as Rampersad did. Rampersad developed and used these models to point out the importance of ethics in strategic management model in his study [ 23 ]. He linked the critical factors to performance measures in his own model. Personal ambition and personal behavior should be balanced to lead to ethical behavior.
Business Ethics - A Successful way of conducting business
Personal ambition, goals and organizational ambition, goals should be in accordance with each other. Concordance between values, mission and vision of the organization and the employee should be provided to have ethical behavior. All the factors encouraging ethical behavior are part of strategic management. Even though most organizations mentioned that they are ethical in their mission statements and implement code of ethics, practices and managerial ethics in strategies and infrastructure of the organization, it is still questionable whether they perform ethical acts in real life.
This should go beyond the statements or strategies by being realized in real life through the decisions and the moves of the organizations. Methodology Research goal As a research method, interview is used.
An interview is held with each respondent. Each interview is recorded and then converted into transcripts. The confidentiality of the respondents is provided and they are being informed about the confidentiality of their identities to make them feel comfortable which will enable the researchers to get impartial results.
Questions regarding their perception of ethics and business life are asked to each of the respondents. Their answers which are transcribed are analyzed by the researchers.
Sample and data collection Sample of the study consists of 8 people who are all members of Generation Y and who are working. There are 4 male and 4 female who attended to the study.
The questions which are given below are asked to each respondent. It is actually a structure of moral principles and code of conduct applicable to a business. Business ethics are applicable not only to the manner the business relates to a customer but also to the society at large. It is the worth of right and wrong things from business point of view.
Business ethics not only talk about the code of conduct at workplace but also with the clients and associates. Companies which present factual information, respect everyone and thoroughly adhere to the rules and regulations are renowned for high ethical standards. Business ethics implies conducting business in a manner beneficial to the societal as well as business interests.
Every strategic decision has a moral consequence. The main aim of business ethics is to provide people with the means for dealing with the moral complications. Ethical decisions in a business have implications such as satisfied work force, high sales, low regulation cost, more customers and high goodwill.
Some of ethical issues for business are relation of employees and employers, interaction between organization and customers, interaction between organization and shareholders, work environment, environmental issues, bribes, employees rights protection, product safety etc.
Follow health, safety and environmental standards. Continuously improvise the products, operations and production facilities to optimize the resource consumption Do not replicate the packaging style so as to mislead the consumers.
Indulge in truthful and reliable advertising.