1. Corporate Social Responsibility (CSR):Has now been accepted as a necessity and is often talked about but slow in implementation. Abstract as the term may sound, results have shown that the deployment of effective and successful CSR programs help enhance the brand value of the organization and boost the morale of its employees.
However, the challenge lies in justifying the cost implications and revealing the intangible benefits to the management while pitching for any CSR activity. As they are usually less income generating and more attention generating programs, it would be worth the while to consider activities that could relate in some way to your main line of business. For e.g.
: Intel conducting free computer education programs for the economically backward communities.2. Public Affairs Management:A crucial function, relevant strategizing holds the key to success in this function. As the intermediary between the organization and its external audiences (social and political communities), it is critical that the communication flow within and outside the organization is steady, consistent, credible and positive.
Transparency should be maintained in all public dealings, with stakeholders updated on important business decisions. Managing relations with the government require specialized ‘lobbying’ and decision-making skills to ensure that decisions or disagreements are conveyed at the right time.3. Competitive Intelligence:Should be an ongoing, continuous process and not just when a product launch is due or sales are down.
There is also the misconception that acquiring or sourcing competitive intelligence is a task cut out just for the sales and the marketing team alone. On the contrary, even support functions like finance and human resources should be active on this front. The more we know about the competition, the easier it will be for us to strategize. It is said, “Knowledgeable preparation is everything.
”4. Environmental Intelligence:External environment refers to everything outside a business that is capable of affecting the survival or success of the organization. Knowledge about the external environment contributes to environmental intelligence. It is especially relevant when entering new markets and countries.
Issues like political and regional practices, cultures, physical constraints need to be looked into in detail when considering such moves. Even geographical features like incidence of natural calamities, availability and/or lack of raw material would have its effects on manufacturing and production plans.5. Stakeholder Analysis:Clear knowledge of the different types of stakeholders and their expectations can go a long way in getting their support at critical junctures.
The major stakeholders need to be identified early, as they would be the key influencers in any major business decision. Ideally a SWOT analysis of the various stakeholder relationships conducted from time to time will give an insight on which ones need to be retained, worked on or terminated as per the findings.6. Stakeholder theory of the firm:Balancing the business goals and the altruistic directions would be the challenge for the management of such firms.
The stakeholder theory demands that interests of all stakeholders be considered even if it reduces company profitability. This is sometimes misunderstood, and claimed that the stakeholder theory does not demand that a company focus on profitability. However, the stakeholder theory’s ultimate objective is the concern’s continued existence. Managers are agents of all stakeholders and have two responsibilities: to ensure that the ethical rights of no stakeholder are violated and to balance the legitimate interests of the different stakeholders when making decisions.
The objective is to balance profit maximization with the long-term ability of the corporation to remain a going concern.7. Ownership theory of the firm:The owners’ (stockholders’) interests are the major concerns and business decisions are highly influenced by their choices. Observers have claimed that the Enron and WorldCom scandals serve as evidence of the failure of the ownership theory — that managers primarily have a duty to maximize ownership returns.
However, ownership theory asserts that ownerships advance capital to a company’s managers, who are supposed to spend corporate funds only in ways that have been authorized by the ownerships. As Milton Friedman (1962) wrote, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it; engages in open and free competition, without deception or fraud.”8. Interactive Social System:Business is a part of the social eco system.
Simply put: ‘its money that makes the world go round!” How ever, along with this realization is the need for better understanding of the social commitments and responsibilities that organizations need to adhere to. For e.g. ensuring that production or manufacturing activities do not cause environmental pollution.
It is mandatory to keep society informed about decisions that may affect them in any way. Organized and open channels of communication ensure ‘interactive-ness.’9. General systems theory:For businesses to co-exist harmoniously within the broader framework of society and other factors of external environment, they have to gain social acceptance and instill confidence about the products and/or services offered.
The brand attributes must reflect a commitment to enhancing the quality of life for consumers and society at large.10. Why should business be ethical?Corrupt business practices bring in faster and perhaps larger returns, but also ensure as fast a downfall when exposed! Trust is the foundation of consumer-business relationships and once lost is hard to re-gain. It is also critical for hiring managers of organizations to ensure that new recruits undergo a background check and on joining, are made aware of policy guidelines, code of conduct for business operations.
Ethics are moral principles or beliefs about what is right or wrong. It takes just one rotten apple to spoil the fruit basket!11. Avoid personal gain and selfish interest:It is important to realize that the growth of an organization affects the growth prospects of its employees as well. Hence it makes sense to align one’s personal goals with those of the organization so that there is synchronization of purpose and hence higher motivation for enhancing one’s performance.
Bonus linked to company performance is one such way, managements recognize and award such employees. This leads to a win-win situation for the organization and the employee.12. Promote personal morality:Ethical practices of a company irrespective of what is stated in the policies depend on its implementation and personal value systems of the employees.
It is therefore important for managers to exhibit high standards of personal moral values in their dealings with colleagues and team members as it is, while dealing with external audiences (customers and other stakeholders.) This will encourage peers and sub-ordinates to conduct themselves in a similar manner, which will in turn encourage ethical business practices within and outside the organization. 13. Avoid conflict of interest:One’s personal career growth is dependant on the growth of the organization.
Hence any activity which hurts the cause of the organization will only serve to undermine one’s own efforts at personal success. Appropriate checks are necessary from time to time to review actions that may seem detrimental to the performance of the team and organization. For e.g.
an employee may desire to pursue higher studies on a part-time or after office basis. As a manager, one could recommend to the management that the organization funds the course of study; thus ensuring employee loyalty rather than misuse of company time and resources. And the conflict no longer exists.14.
Personal spirituality:Spirituality is a good thing, if practiced within accepted bounds. Excessive leanings could disturb business practices; and if it does so, should be checked. Most times, spiritually inclined employees are found to be more ethical and open in their approach and behavior. They also tend to generate positive vibes and create a pleasant work atmosphere.
Spirituality is not to be confused with religion. While respect for all religions is the norm, excessive promotion of any particular one is usually discouraged within the business organization.15. Whistle blowing:According to the Government Accountability Project, “The legal status of whistleblowers – employees who disclose corruption in the institutions where they work – is often the litmus test that shows whether an organization takes corruption seriously.
” It is also said that suppressing information about malpractices is as bad as doing it. The only reason information is suppressed is because the employee does not trust the higher authorities. Keeping channels of communication free and open within the organization helps build the trust levels among employees.16.
Corporate Culture:Knowingly or unknowingly, each employee plays a part in the formation of the corporate culture. While the guidelines and mandates are laid down by the senior management team members in the beginning while setting up the firm, gradual changes set in once it becomes operational. Very often, new employees bring in practices from their previous organizations which may or may not suit the current one. It is therefore necessary to re-instill the corporate values and code of conduct through various communication activities (emails, forums etc.
) from time-to-time. An interesting fact about corporate cultures is that the same company in different parts of the world may exhibit different cultural practices. This is due to varying influence of the local culture on the organization. However, if the corporate values remain consistant, it speaks very highly of the organization.
17. Building ethical safeguards into the company:Regular audits and system checks could help detect lapses, if any. Similarly, availing feedback from employees and other stakeholders (on conditions of anonymity) could also help keep corruption and malpractices away from the organization. Employee and customer satisfaction measures are a viable source of ethical safeguards.
Managers can design an organizational structure that ensures that unethical behavior is discouraged. Rules that promote ethical behavior and punish unethical acts encourage employees to behave in a socially responsible manner.18. Bribery:It goes hand-in-hand with inefficiency and corruption.
There is just one rule for bribery: don’t accept or pay. If there are well managed systems and processes in place, bribery could be curbed. Companies get into an ethical and legal dilemma while doing business in countries where bribery is an accepted form of incentive to accelerating the business process. In such circumstances and in such regions, ethics governing the use of bribery or the general standards of doing business in that society are the result of decisions made and enforced by people deciding what is appropriate.
The Foreign Corrupt Practices Act tries to address this concern.19. Globalization:Entry into new markets creates multiple challenges. In certain cases, even after extensive positive feasibility studies prior to entry, companies fail and pull out after a while, due to low customer engagement.
Any new entity will have to establish its brand equity with the local community even though it may be a very know brand at its home base. Other than products and services, new entrants are measured by their corporate culture and business practices which may or may not gain social acceptance. It is important to remember that globalization integrates not just markets and economies, but also societies.20.
Human Rights:From a business and management perspective, human rights are referred to as social accountability. Compliance with health, hygiene, safety, and environment laws, respect for basic civil and human rights, working towards the betterment of society in general. Simple welfare measures like refraining from utilizing child labor in manufacturing and production houses contribute to implementation of human rights. These measures may or may not be directly linked with processes leading to generating profits for the organization, but go a long way into building credibility and brand equity.
21. Sarbanes-Oxley Act of 2003:Devised to increase corporate accountability, the Act came into being after the Enron and WorldCom accounting scandals. Regular third party audits would hopefully question practices overlooked internally. Transparency of operations with regular updates to stakeholders would also serve to boost investor confidence and belief.
Despite the introduction of this Act, accounting and investor scams still abound. Beyond a point these measures are only as reliable as the individual’s personal morals.22. Public Policy:Implemented by the State governments, it can affect business organizations on issues like healthcare and general welfare policies of the company.
Needs of the society are taken into consideration while drafting these policies, but the implementation is dependant on political influences of the policy makers. The private sector can also play a role in influencing policy changes if it directly affects them.23. Monetary Policy:It is primarily concerned with the management of money supply and its expenditure in the country.
It is meant to control inflation and work towards stabilizing the economy by managing interest rates. It is regulatory in nature and in times of recession, monetary policies are tightened with the objective of bringing about price stability in the economy.24. Social Assistance Policies:These are targeted mainly towards the lower socio-economic groups of the society.
These policies were introduced with the view of enabling a standardization of acceptable income levels as recognized by law. The policies include offering assistance for women or migrants on issues of employment support, healthcare, childcare and other welfare rights etc.25. Equal Employment Opportunity:Generally serves to avoid discrimination among employees or potential employees on the basis of age, race, gender, marital status, disabilities, etc.
The extent to which it is practiced varies from country to country. For e.g. while personal details (age, marital status, etc) are not revealed in US and most European resumes, companies in Asian countries insist on the information.
26. Deregulation:Regulation mainly exists for social or ethical reasons. For e.g.
air transport in the US was regulated largely due to safety concerns for the passengers. Deregulation brings in new entrants and competition, which in turn can raise the efficiency levels. However, most entrants in a hurry to enter often underestimate the costs of running a business in a previously regulated area. Though initially they may acquire eager customers who previously lacked choices, it is often found that they revert to the earlier player (now the underdog) on sympathetic or comfort grounds.
Fully accepting new players take time.27. Environmental Protection Agency:Most countries have their own EPA or Environmental Protection Agency which regulates environmental degradation (air, water pollution, waste disposal, deforestation etc) caused by manufacturing and production units of business organizations. The major source of influence for global environment agreements is the United Nations.
It is felt that most environmental damages are done in developing countries where the environment laws are weak and implementation even more lax.28. Ecologically sustainable organization:Organizations are expected to preserve ecological factors while achieving sustainable growth. Environmental protection and preservation is a prime responsibility and measure likes pollution-free technology and re-cycling of industrial wastes prevents degradation.
Organizations that conserve and enhance the natural resources so that ecological processes are maintained, contribute positively to the enhancing the quality of present and future life. They implement ecologically sustainable growth practices. It is generally accepted that sustainable development mainly concerns three interdependent and mutually supportive areas: finances, social responsibility and ecology.29.
Research and Development:Organizations which invest in research and development are clearly committed in enhancing product quality and offering customers better options. It also portrays stronger and longer commitment to the communities they engage with, thus enhancing their own brand equity. Stockholders too, consider investments in Research & Development as an assurance on the quality policies of the company and their readiness to prevail over competition. The time lag between developing a prototype and the actual product launch is crucial else competition could respond faster with their own versions prior to the actual launch.
While Research and Development has been found to be most profitable in mature, slow growing markets, a high investment together with high marketing costs will lower profitability and returns.30. Spam:It is usually considered bad email etiquette and a general waste of storage space as they contain either heavy graphics or detailed attachments. In most organizations spamming is not allowed through office mail or to official accounts.
It is considered as misuse of official time, resources and systems. Spamming has found business value as a form of mass email marketing methods. It is generally not appreciated as target audience research is hardly ever considered; instead entire databases are purchased and used for promotions. References Case Studies in Global Accountability Practice, No 1, October 2008.
Government Accountability Project (p 2) Retrieved on December 10, 2009 from:http://www.google.co.in/url?sa=t&source=web&ct=res&cd=5&ved=0CB8QFjAE&url=http%3A%2F%2Fwww.
oneworldtrust.org%2Findex.php%3Foption%3Dcom_docman%26task%3Ddoc_download%26gid%3D215%26Itemid%3D55&rct=j&q=whistleblower+policy+US&ei=ZpggS5_LBIqTkAXhzYjlCg&usg=AFQjCNEGYkLNTvhzOL5EZQjL3mvQJb_7Sg Daniels J., Radebaugh L.
H., &Sullivan D.P.(2007) International Business – Environment and Operations, New Delhi, Pearson Education.
H. Jeff Smith (2003). The Shareholders vs. Stakeholders Debate, MIT Sloan Management Review, Retrieved December 11, 2009 from: http://sloanreview.
mit.edu/the-magazine/articles/2003/summer/44411/the-shareholders-vs-stakeholders-debate/M. Friedman, “Capitalism and Freedom” (Chicago: University of Chicago Press, 1962), 133 Shahid Ansari, Teaching Note: Systems Theory and Management Control. Retrieved on December 10, 2009 from:http://faculty.darden.virginia.edu/ansaris/systems%20theory%20and%20mcs-tn.pdf
