Sustainable benefits organizations can determine the ethical capacity. The ability of the organization's ethical duty to do what is right. Some organizations such as Enron, Sathyam, and Tyco, etc. have made false statements of accounts and cheated both the stakeholders and the government. Such problems led to the importance of business ethics in business schools around the world.
Sustainable advantage can be defined as the beneficiary element that determine the long-term objectives of the organization, if it were the targets well-being needs of economic development meets while saving the current generation on the environment, and to meet future generation needs In order also. Currently, a number of factors that determine the sustainability of the organization that its ethics, strategy, employees, etc. present scenario of financial capital, human capital of the organization regarded as a competitive advantage, but it's not sustainable. Sustainability depends on the organization's impact on people, in the form of trust, honesty, integrity, respect, quality and responsibility. Organizations weak sustainability fall back as in the case of Enron and Sathyam.
Enron was an American energy company founded in 1985 by Kenneth Lay after merging Houston Natural Gas and inter-north (citetation). In electricity early 1990 Enron sold at market price. With the US Congress passed a bill regarding the sale of roughly the same time, deregulation of natural gas, which favored Enron to sell energy at a higher price. In 1992, Enron was the largest merchant of natural gas in North America. Online trading model developed in November 1999 known as Enron Online has developed and extended the abilities to negotiate and manage its trading business. 2001 Enron are both owned and operated gas line, pulp and paper mills, broadband devices, power stations and water plants internationally. Enron's stock price of US $ 83.13 and market capitalization exceeded US $ 60 billion and Enron was the most innovative large company in America Fortune Most Admired Company survey so far. At the end of 2001, the Enron scandal was revealed. The Chief Executive Officer Jeffrey Skilling with some of the leaders of the hidden billions in debt and does not address projects. Chief financial officer Andrew Fastow and other executives were able to mislead the Board of Directors and the Audit Committee by the psydo account statements. Once the hoax was published in Enron's stock price of $ 90 per share in 2000 fell to less than $ 1 by the end of November 2001, the decrease in stock value caused by the $ 11 billion loss for its owner. The employees of the organization received a limited amount of their salaries and pensions, when bankrupt. Several lawsuits brought against the company's CEO and other executives.
Similar to the case of Sathyam computers, which is known as the Indian Enron scandal. Sathyam Computers is an IT company that produces software's headquarters hyderbad, India. Chairman Ramalinga Raju produced an invoice sheet, which is a 7000 crore fraud. The chief inspectors were also not able to identify this adjustment. As a result of the fraud, the workers lost their jobs, and the president was jailed for fraud.
These two cases throw a light on an organization, as well as the country's economy or large in the world can affect their unethical practices. This is when the body does not practice ethics will not be sustainable.
Need for Business Ethics: Next
1. Business operates in society
exists independently 2. Each store size is more ethical Average or with regard to social concerns to survive long.
necessary for the operation of 3rd business as a responsible corporate citizen in the country.
Business is part of a subsystem of society, thus contributing to the operation of the welfare society. If you are looking for business social sanctions of the society in which it exists, it would be able to survive, develop and excel activities, because only through social sanctions, the enterprise will search loyal customers. Loyal customers a sustainable advantage and thus able to survive in the market without a crash and die. Large organizations to more interest from the public, the leaders eager to the public, and always strive to maintain a proper picture of the company in their minds.
Now a day's minimizing profit is not the only priority of the business to be sustainable, which can only be achieved ethical practices. Any organization big or small must follow ethical practices because it brings a sense of social responsibility that leads to the sustainability of the organization. Business would also be responsible corporate citizen, which does not allow the narrow mentality goals and motives.
Ethical practices in a country or society depends on various factors, such as religion, beliefs, history, traditions, social customs, and the existing political and economic terms and conditions. For example, in Asian countries such as Japan, China etc loyalty workgroups and companies with strong ethical values. This kind of ethics has been through centuries-old traditions, so people do not think of themselves, but think of the family, the government and with the other hand, ensuring social sensitivity.
the concept of ethics is concerned only with human beings, as only a means to choose liberty and free will. Human beings can distinguish between good and bad, right and wrong, and just and proper. For example, a Japanese employee believes that unethical, for its part, to take part in an interview with another company, when even the current company. So human can fix a target and means required for its implementation. Ethics is science that has become today a series of systematic knowledge, ethical behavior and conduct. Ethics deals with human behavior, which under no circumstances is voluntary and not forced by any person.
Business Ethics and profits
The cases of Enron and Sathyam makes a point that ethics and profits against one another, as when an organization makes ethical short-term gains, and if the organization is unethical It will make a huge profit. The same cases show us one more thing, which makes a huge profit unethically but will not sustain the market. Ethical companies not only profits, but beat competitors and other turbulent changes happening through out the years and contributed to social welfare. Ethical corporate social responsibility, which will enable them to flourish undiminished and profit. Tata Group is one company that follows ethical practices. It is said that the CEO of Tata is also the chief ethics officer. Some ethics policy, and the company include the national interest and support of an open market economy, gifts and donations to social causes, political non alignment, health safety and environmental care, quality of products and services, and the regulatory compliance etc. Ratan Tata current Chairman of Tata group in the aviation industry declined because he was told to bribe then minister to enter the business, which claimed to be unethical and against the policy of the group follows. His predecessor JRD Tata set up the first commercial airlines' Tata Airlines in India, which was later overtaken by the Indian government and named it the Indian airlines. So, in addition to pioneering aviation industry they could not be obtained because they felt it did not keep them, and create a bad image for the company. This is the reason that people are highly respected brand loyalty created by the Tata Group and ethical practices and policies that helped them to survive on the market even though many competitors came from.
ethical policy become a problem when companies are unable to do business at home, so the other societies where the ethics policy, liberal or works in their favor. At home they are not allowed to sell products because of unethical use of unsafe products, but can be sold in other countries where ethical standards allow them to buy these products. This is particularly pharma products. Some plants emit polluting gases created in the neighboring countries, because the ethical standards do not allow home working in the factory business. These gases emitted pollutants hazardous to humans and the environment. Yet it is ethical in some countries. These types of questions are transferred to the cultural contradictions and exploitation. These are issues that are difficult for leaders and businesses to solve. Therefore, the company's responsibility to the country, but they are four main groups of the society, employees, customers or consumers and investors. (For example, drugs)
influencing business ethics:
leadership, strategy and performance, individual characteristics, corporate culture and the environment
Leader is a person who drives the people towards a common goal. Leader can be good or bad, big or small needs and opportunities arising out of a particular time and place. Not every driver should be considered as a perfect decision-making, because all their decisions will depend on the nature of a person other than an individual basis. Character includes a person's innate talents, learned and acquired properties that were imposed on the life and experience them. The leaders of models and mentors in their followers, therefore, follow the path set by their leaders ways. In a large organization considered to be the head of the executive and supervisory senior-level managers or CEO. The CEO must have a strong commitment to ethics and ethical behavior and provide constant leadership in renewing the values of the organization. They play an important role in creating, maintaining and changing the culture of ethics. It is necessary for the driver to set a good example and follows ethics. One of those good leader JRD Tata, who set a good example for his successor, and still follow. Where are the good leaders are good ethical practices in business.
Corporate governance: a set systems and processes that the company follows to ensure that the interests of stakeholders. The affected shareholders, employees, customers, creditors and the community.
according to John Elkington Sustainability three components of the triad concept of their economic, social and environmental. According ELKINGTON the company did not have a goal to achieve profits, but also to extend the target set by adding environmental and social values. Thus, sustainability has become the new target of the organization.
Environmental aspects of the natural resources.
economic point of view: the next generation.
Social perspective: over exploiting employees and does not provide gender equality in employment, child labor, employing caste creed and religion-based employment.
organizational culture: the number of shared values, beliefs, goals, norms etc that prevails within the organization.. The organizational culture emphasis on ethics, but as a woman can change, as in the case of Tyco organizational culture supports unethical practices. If the company huge profits in unethical ways, and individuals who join the organization also practiced unethical thing to survive the company. As in the case of Enron, where many executives and managers knew the company in the next few illegal and unethical practices, but the executives and the board of directors did not know that ethical decisions and ethical corporate culture. So they fall back, and the drivers will have to pay in the form of fines and imprisonment.
Business ethics is the application of ethical principles of the organization or enterprise. The body produces or their own ethical cultures, but it is an ethical culture is said to be involved in the concept that we are all ethical, and not what is right for the organization itself. The employees of the organization to the same ethical principles. The organization provides a certain social, ethical responsibilities, such as those are not harmful for the stake holders, the public and society. "Business as that treats their employees with dignity and integrity reap rewards high moral and productivity" (Frederic, Post and Davis).
There are three main types of ethical issues that arise in the business they are, face to face ethics, corporate ethics policy and ethics functional area. Face to face ethical issues happen among the employees of an organization's own everyday organizational life. the employee faced with ethical conflicts when it comes to personal standards different from what the job demands. Corporate ethics policy issues happen in the core operations of the company. The top level management, ethical practices, including the Board of Directors and Chief Executive Officer in charge of the organization. Functional area ethical issues arise in all functional levels of the organization. For example, the accounting department if unfair pressure on employees to an audit report that has changed or not shown in the current accounts of the organization would be called unethical because it does not follow the standards set by the organization and policies.
causes unethical issues:
There are many reasons for an organization to follow unethical practices are personal gain and selfish interests, competitive pressures profits, business goals and personal goals, cross cultural contradictions. When an employee gives more importance to greed or concern for personal gain rather than other concerns, regardless of whether the damage can not be called unethical practices arise from the organization for personal gain and selfish interests. When a company is tough competitors is limited or static markets; you can engage in some unethical practices just to the business, or protect their profits. If your organization uses some dishonest means to achieve its goal, which is accepted in addition to arousing interest in ethical issues in business objectives and personal goals. Here, the organisaiton aims to interfere with the personal goals of the interested parties. Under these circumstances, the persons in question, you have two options, either to follow the ethical aspects of the organization or "blowing the whistle" on the body.
environmentally linked to the exploitation of natural resources in business. The company should ensure that natural resources are not being used; You must maintain your resources so that future generations can enjoy them as we are. One example is the restriction of fishing in the North Sea, to maintain the availability of declining cod fish for consumers.
Economic aspects of sustainability linked to economic growth and decline of society. The short-term assets by companies such as bribery and cartels only a short time, it will never reach the attitude of the unions for a long time sustainability of the environment in which it is embedded. If the organization does not pay taxes to behave unethically said the same in the case of organizations which do not give donations to public institutions such as schools, hospitals, police and other justice systems.
Social perspectives of sustainability refers to the social future of an organization that is able to give.
Business ethics if practiced properly organization would give effect to the parties concerned (which includes employees, customers, shareholders, banks and other lending institutions, government) personal political level, the social level and the internal political level.
Source by Anjaneya Reddy