Introduction of Business Ethics

Ethics refer to the way individuals differentiate between right and wrong. Ethics in business means when employees of the business take a decision based on their ethics. This ethics in business is also influenced by the culture of the business. Decision to behave ethically in an organization is a moral decision that brings numerous benefits. Firstly, it encourages the employees to stay in the organization since they know that the working environment is good and ethical, this reduces the labor turnover and recruitment costs while on the other hand it increases the productivity of labor because they are motivated to work.

Secondly, being ethical will give the firm a competitive edge that will create a good image in the minds of customers that could lead to higher sales and profits. Thirdly, investors are also most likely to invest in an ethical firm this means that the share prices will remain high and the chances of takeover will be reduced. In a nutshell we can see the immense benefits that being ethical can bring to the organization. Especially in today’s world where everyone is informed about ethics and there is higher level of competition in the market. (Fortune.com, 2018)

Orion Analytics (OA) has been offered a great opportunity of working in the Middle State. The task is to provide procurement services to the government for the coming 10 year. The state has great consideration of business ethics because it believes that it will help it bring long term investments in the country in the future. The king is quite optimistic about appointing OA to run the new PA, however, his son is skeptical because of the scandals that have been taken place in the UK. Because of the mixed views that the State has about how the performance of OA will be OA has great expectations to meet. The challenge is that OA will need to have a proper conduct when it comes to accountability, employee treatment and transparency of operation.

Procurement services means that OA will search for work from external sources for instance, acquiring goods and services or competitive bidding process. The company needs to operate in an honest way since any ethical misconduct would lead to huge losses. There needs to be transparency of operation to make sure that nothing is happening behind closed curtains. Some examples of issues that could rise if this isn’t in place are that the bidder might collude in order to reduce competition or they might get inside information that could be used to their advantages.

There needs to be proper accountability of everyone in the company. Accountability assures that employee will not get involved in any accounting fraud because they are answerable to someone above them. An example of accountability issue that could rise in this case is that employees may come up with inflated or false invoices just for their own advantage. Moreover, shadow vendors may be created. Treating employees in an ethical way is crucial for business as this ensures long term success. Furthermore, if employees are treated in an ethical manner this will create a good culture in the company.

The quite recent scandal of Samsung that has a great market share might contribute in decreasing level of trust. Samsung’s head Lee Jae-Yong was caught offering bribes and hiding assets overseas. This has led to great loss for the company and he too in jail. This case is a perfect example of unethical conduct by the company. Transparency of operation and accountability was lacking in this case.

Well Fargo is also another example of business scandal that took place. In 2016 it lost numerous customers because it was caught creating millions of fake accounts moreover, in 2017 it was revealed that it charged 570,000 customers for an insurance service that they never bought. Once again this provides a clear picture of how important accountability and transparency of operations is.

Operating in an ethical manner is crucial for OA in the states. There are numerous ways through which OA can ensure its ethical operation. Firstly, OA needs to fully understand the laws and regulation of the States. It should meet all the laws specially the anti corruption laws.

Secondly, a written document should be published for the OA Company’s operation in the state. That should have all its code of accountability, transparency and employee treatment. This will ensure that no one in the company could ignore these laws that could result in future harm for everyone.

Thirdly, an ethics line should be created. This is so that every major person involved in the operation of the company could ask any questions or report any sort of violations whether potential or current. This would help in monitoring and accountability.

Fourthly, this needs to be understood that there are actually cases where employees get involved in unethical cases unintentionally. This happens when employees have limited experience or due to many other factors. In this case the company can reduces such chances by hiring a supervisor that visits the employees periodically to review their practices. There also needs t be frequent internal auditing of all the financial records as well.

Moreover, meetings should be hosted monthly so that a quick feedback can be taken from all the employees about how the operations are going. Also any grievances or issues that might lead to unethical behaviors can be sorted out before hand.

Furthermore, a strict action should be taken against any of the employees who were proved to be guilty of any unethical laws. This will give a lot of benefits to the company because it will make sure that no unethical employee is a part of the company and also it will discourage such future activities in the company. (Coca-colacompany.com/, 2018)

A culture of trust, honesty and integrity should be created in the organization. Regular seminars or training programs should be hosted in the company so that the entire workforce is encouraged to follow such practices.Lastly, communication and awareness campaigns should be a regular part of the company operations. There should be no end to the communication of a company’s ethical policy.

The leader that would be best suitable in leading an ethical company should be the one that has democratic skills. This is because this sort of change requires a leader who is open, friendly, persuasive and open to feedback. There needs to be good communication at all levels in the organization. An autocratic leader will not be really helpful since the environment of comfort needs to be created in the organization on the other hand, laissez faire style cannot be adopted because checks are crucial. Two of the scandal cases that were discussed above included Samsung’s and Well Fargo cases.

In the case of Samsung proper accountability and check was lacking that led to problems for the entire organization. Financial accounts should be audited on regular basis and if any issue is found that should be solved to avoid future harm. The leader of Samsung was also found guilty of offering bribes this means that he himself had lower ethics. Ethics can be boosted by awareness campaigns that differentiate between right and wrong in an persuasive manner so that more people change for better.

The second case was of Well Fargo. Here the company was being dishonest and was cheating on its customers by charging them for things they were not using. This can be prevented once again by making sure that the importance of gaining customer satisfaction is highlighted in the organization’s culture. They should not opt for losing their long term benefits for just short term profits. Perhaps a proper check and control from the top management in this case could have made sure that no such cases could take place. (White, 2014)

PA organization should carefully design its code of conduct and make sure that it is followed by everyone is the organization. As already mentioned the son of the king is not that optimistic about the decision of giving OA the duty of performing procurement services hence great care needs to be taken. Lessons should be taken from previous scandal cases and they should be avoided in all cases. A good handling of ethics can result in enormous benefits for both the states and the company. Since now technology has improved a lot its benefit can be taken in order to increase the communication levels and generally the operation of an ethical conduct in OA.

References of Business Ethics

Coca-cola company.com/. (2018, August 22). Ethical Business Conduct. Retrieved from https://www.coca-colacompany.com/stories/ethical-business-conduct

Fortune.com. (2018). About Your Privacy on this Site. Retrieved from http://fortune.com/2017/12/31/biggest-corporate-scandals-misconduct-2017-pr/

White, T. B. (2014, June 1). Implementing an effective corporate ethics policy. Retrieved from https://www.fm-magazine.com/issues/2014/jun/20149701.html