Deciding what is right and what is wrong is not always clear-cut. The subjective nature of ethics creates the need for organizations to define their ethical standards. Company leaders often set the example for ethical standards. As discussed in Chapter 3, the job of the leader is to serve as a role model for employees. This is part of the reason why Martha Stewart’s personal financial dealings are a concern to the company bearing her name.
CREATING AN ETHICAL STANDARD
Creating an ethical standard is an important way for a leader to spread his or her ethical beliefs throughout an organization. Often the ethical standards will cover a wide range of business areas.
Interorganizational Relations
An organization’s ethics policies cover the areas of internal policies, which explain the company’s responsibility to employees. These policies often include equal opportunities, sexual harassment, diversity, and employee safety.
Equal opportunity employment is protected by the Civil Rights Act of 1964, which prohibits employers from discriminating against prospective employees due to their race, religion, gender, or national origin. Today, employers include sexual preference as being protected by this act as well. Many companies have enacted policies of affirmative action to increase the employment opportunities for minorities and women within their organization. The Equal Employment Opportunity Commission (EEOC) enforces equal opportunity employment. Employees who feel their civil rights have been violated can file an official complaint with this organization.
Sexual harassment lawsuits have been much publicized over the past 20 years, and for that reason many companies have enacted stringent policies and comprehensive employee training. These measures have been taken in order to increase employee awareness of what behaviors are not acceptable, as well as to make employees aware of their rights for dealing with sexual harassment by fellow employees.
Diversity in the workplace refers to the numbers of women and minorities employed by an organization. Many organizations hold diversity seminars in order to break down barriers and to increase cultural awareness and understanding among employees.
External Organizational Relations
Many firms also create an ethical standard that covers issues concerning the organization’s effect on the outside world, including its responsibility to shareholders, customers, and the community.
One of the firm’s responsibilities to shareholders is to make decisions with the best interest of the shareholders in mind. Many organizations encourage shareholder activism, which gives the shareholders the opportunity to influence management practices. As ethical concerns have been embraced by shareholders, activism has also included influencing practices such as employee relations, social awareness, environmental practices, and other socially oriented concerns.
An organization has an obligation to its customers with regard to its production practices. Customers expect that a company will not produce a product or provide a service that has inherent defects or safety issues. Companies also will establish a standard for sales practices that discourages deceptive or aggressive sales methods, ensuring that employees understand what is acceptable and not acceptable behavior.
The social obligation that a company has can include environmentally sound practices. Environmental obligations include preventing air, water, and land pollution. A growing movement suggests that a company’s social obligation also includes producing products that somehow benefit society or are not harmful.
Importance of Written Standards for Ethical Policies
Many organizations opt for a written document that not only outlines the company’s ethical policies, but also follows government regulations. This document is then distributed throughout the organization so that there can be no question of what the company policies are. This standard will often include guidelines for internal company behavior as well as for product quality and customer relations.
CREATING AN ETHICAL STANDARD
Creating an ethical standard is an important way for a leader to spread his or her ethical beliefs throughout an organization. Often the ethical standards will cover a wide range of business areas.
Interorganizational Relations
An organization’s ethics policies cover the areas of internal policies, which explain the company’s responsibility to employees. These policies often include equal opportunities, sexual harassment, diversity, and employee safety.
Equal opportunity employment is protected by the Civil Rights Act of 1964, which prohibits employers from discriminating against prospective employees due to their race, religion, gender, or national origin. Today, employers include sexual preference as being protected by this act as well. Many companies have enacted policies of affirmative action to increase the employment opportunities for minorities and women within their organization. The Equal Employment Opportunity Commission (EEOC) enforces equal opportunity employment. Employees who feel their civil rights have been violated can file an official complaint with this organization.
Sexual harassment lawsuits have been much publicized over the past 20 years, and for that reason many companies have enacted stringent policies and comprehensive employee training. These measures have been taken in order to increase employee awareness of what behaviors are not acceptable, as well as to make employees aware of their rights for dealing with sexual harassment by fellow employees.
Diversity in the workplace refers to the numbers of women and minorities employed by an organization. Many organizations hold diversity seminars in order to break down barriers and to increase cultural awareness and understanding among employees.
External Organizational Relations
Many firms also create an ethical standard that covers issues concerning the organization’s effect on the outside world, including its responsibility to shareholders, customers, and the community.
One of the firm’s responsibilities to shareholders is to make decisions with the best interest of the shareholders in mind. Many organizations encourage shareholder activism, which gives the shareholders the opportunity to influence management practices. As ethical concerns have been embraced by shareholders, activism has also included influencing practices such as employee relations, social awareness, environmental practices, and other socially oriented concerns.
An organization has an obligation to its customers with regard to its production practices. Customers expect that a company will not produce a product or provide a service that has inherent defects or safety issues. Companies also will establish a standard for sales practices that discourages deceptive or aggressive sales methods, ensuring that employees understand what is acceptable and not acceptable behavior.
The social obligation that a company has can include environmentally sound practices. Environmental obligations include preventing air, water, and land pollution. A growing movement suggests that a company’s social obligation also includes producing products that somehow benefit society or are not harmful.
Importance of Written Standards for Ethical Policies
Many organizations opt for a written document that not only outlines the company’s ethical policies, but also follows government regulations. This document is then distributed throughout the organization so that there can be no question of what the company policies are. This standard will often include guidelines for internal company behavior as well as for product quality and customer relations.
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