ETHICAL PRACTICE AND SOCIAL RESPONSIBILITY

Last week we learned about the trials of management in the 21st century. One of the significant challenges in management today is ethical practice and social responsiveness. Managers must ensure that when making decisions for the organization, they make ethical decisions and also be concerned with the effects of that decision to the community and society as a whole. Below is an interesting article from Citeman Community discussing how to incorporate ethics in organization. I believe that this article will provide you with further information on ethics.

Institutionalizing Ethics

by V S Rama Rao on June 8, 2012

Business ethics are increasingly addressed in seminars and at conferences. Managers, especially top managers do have a responsibility to create an organizational environment that fosters ethical decision making by institutionalizing ethics. This means applying and integrating ethical concepts with daily actions. This can be accomplished in three ways:

• by establishing an appropriate company policy or a code of ethics,
• by using a formally appointed ethics committee, and
• by teaching ethics in management development programmes;

The most common way to institutionalize ethics is to establish a code of ethics, much less common is the use of ethics board committees. Management development programmes dealing with ethical issues are very seldom used, although companies such as Allied Chemical, International Business machines, and General Electric have instituted such programmes.

The publication of a code of ethics is not enough. Some companies require employees to sign the code and include ethics criteria in the performance appraisal. Moreover, certain firms connect compensation, and rewards to ethical behaviour. Managers should also take any opportunity to encourage ethical behaviour and publicize it. On the other hand, employees should be encouraged to report unethical practices. Most important, managers must be a good example through ethical behaviour and practices.

A code is a statement of policies, principles, or rules that guide behaviour. Certainly, codes of ethics do not apply only to business enterprises; they should guide the behaviour of persons in all organizations and in everyday life.

Simply stating a code of ethics is not enough, and the appointment of an ethics committee, consisting of internal and external directors, is considered essential for institutionalizing ethical behaviour. The functions of such committees may include:

• holding regular meetings to discuss ethical issues.
• dealing with grey areas.
• communicating the code to all members of the organization
• checking for possible violations of the code
• enforcing the code
• rewarding compliance and punishing violations,
• reviewing and updating the code, and
• reporting activities of the committee to the board of directors.

more at http://www.citeman.com/21223-institutionalizing-ethics-2.html#ixzz1ylbsiXBU