Ethical considerations are often wide ranging and relatively global in their appeal. We are all increasingly seeing a moral imperative to protect the environment. Ethics are often dependant on national culture. For example, in the UK bribery is culturally frowned upon where in some countries it is the way that business is done. Companies based in these countries have an ethical dilemma. Do they stick to the rules of the game and use the bribe to secure contracts or do they loose those markets?
Analysis of Milton Friedman
At first sight, it would seem that the words of Friedman point towards a capitalist system which focuses purely on money and nothing else. However, after extensive reading of the topic, it would seem that Friedman was certainly right when he suggested that “there is one and only one social responsibility of business” since the qualifiers which are given for this are quite extensive. It can be shown that “the rules of the game, free competition” and not deceiving the employees are not only rules which keep business from exploiting others; they are also good business decisions for companies like GE and many others (Colvin, 2006).
Of the three qualifiers to making profits, the first one is the process of “staying within the rules of the game”. These rules have certainly changed drastically over time and the idea of exploiting workers for all they are worth is clearly not within the rules. It would seem that neither ethics nor social responsibility has a lot to do with it. The case of being good to employees makes fundamental business sense (Torrington and Hall, 1995). In the long term, employees who are secure in their jobs are likely to work harder and be more productive than employees who feel insecure in their employment. Similarly, employees who are paid well and rewarded with bonuses for good performance and motivational rewards will naturally perform better than employees who are only given a basic salary and no chance to increase their income as a direct result of the hard work they put in for their company (Boxall and Purcell, 2003).
Conflict between Personal & Organisational Ethics & Values
For individuals there may be times when the applied ethics and values of the organisation conflict with the ethics or values that the individual holds. This may present a bigger problem when the individual has responsibility (for example as a Manager or L & D Professional) not only will that individual need to model the behaviour associated with the organisations ethics and values, but also ensure others do so to. At these times of conflict there may be an issue of real conscience with which to deal. Does the person stay and influence the organisation or leave?
At times when your personal values and organisational values or ethics seem to clash the existence of professional instituted ethics and values through codes of practice can prove useful support, either to allow you to stand back and be more objective when things have become overemotional or to have the reassurance that you are not alone in your belief system.
ethical dilemmas for individuals working in the Human Resources Department where the interests of the organisation as a whole may be in conflict with the interests of individuals working for the company. Karen Legge (1978) descibes this conflict as Deviant Innovator.
Ethical Decision Making
The UK institute of Business Ethics suggests a simple test for the ethical decision making in business.
Transparency
Effect
Fairness If you can honestly answer yes to each of the above questions then you are likely to be making an ethical decision.
Concludes with a personal plea for HR specialists to be responsible for raising awareness, facilitating learning and ensuring that standards of ethical conduct are practised within human resource policies and practices.
Professional Codes of Ethics
In 1974, a Manchester surgeon, Thomas Percial published the first formal code of ethics for the medical profession. Percial’s desire to codify, and to give people, concrete rules to work with.
Most modern codes are based on the three foundation principles of Percival’s 1974 code:
- Promote common standards.
- Minimise the strife and confusion that individual representation can result in.
- Encourage a framework that allows honourable professionals to provide a common standard of service to customers (or patients) regardless of where they are working.
Most professional organisations now have a code of ethics or conduct that sets out the moral code and value code for its members, together with a complaints procedure to deal with members who breach the code.
Ethics in Reward
This is certainly reflected in the way the Department for Work & Pensions manages and handles the bonus structure of various employees. A similar structure is used for employee recognition in many other companies. In terms of links to the mission of the company to the reward system, Welch (2005, Pg. 16) says that “Every decision or initiative was linked to the mission. We publicly rewarded people who drove the mission and let go of people who couldn’t deal with it for whatever reason.” In fact, Welch considers letting go of the individuals who are not a good fit for the company as a favour to them since it allows them to pursue other interests which may be better for them.
An ethical dilemma a decision of conscience occurs in use of the theoretical model which only rewards top performers is not an effective one since it is a recognised that the majority of work in an organisation is not done by the top twenty percent or indeed the bottom ten percent but the middle seventy percent of employees who form the back bone of the company (Grote, 2002).
The theory suggested by Welch (2005) recommends that half of all rewards, training opportunities, bonuses and awards must go to the middle seventy percent and department managers must spend most of their time trying to groom and develop this section of the organisation.
Ethics in Resourcing
Similarly, a corporation may be faced with the issue of removing people from one department while simultaneously hiring individuals in another. While such a move may benefit the company overall in terms of how a department can be a cost centre or a revenue centre for the business, it can be very damaging for morale in the department where layoffs are taking place (Torrington and Hall, 1995). At such times, communications become a key element since employees have a right to know why such decisions are being made by the company (Beardwell and Holden, 1997). In an ideal world, the company would have to not fire anyone but because business decisions have to be made while looking at the bottom line, the effect of such decisions must also be calculated carefully.
In such cases, the company and the management should seek ways in which termination can be minimised by internal transfers or restructuring.
Ethics in Learning & Development
Similarly, in an organisation, preferential treatment may be given to incoming recruits or those who have recently joined the company for training opportunities while the individuals who have been with the company may be ignored. It could be towards the benefit of the company to get the new comers up to speed as quickly as possible but the social responsibility of updating the skills of other employees must also be taken into account while people are selected for training from within the company. Welch (2005) supports the idea of using training as a reward since recognition and training for better posts within the company is an opportunity which must be extended to everyone.
In such a case, it is important for a Personnel Manager to bring the situation to the attention of Senior Management and show them the benefit of training those who have been with the company for many years.
All companies whether in the private and public sector also have the social responsibility of ensuring that their actions and practices do not hurt the society at large. The reason for the focus on corporate social responsibility is the emergence of the ethical consumer that has changed the rules of the game. An ethical consumer is a responsible buyer who does not want to help those companies who are not ethical themselves. This consumer will make many buying decisions which are greatly influenced by the operations of the company from which the purchase is being made. Of course there are as many personal definitions of ethical actions as there are individuals therefore the more bases a company can cover, the better off it will be (Ethical Consumer, 2006).
Generally speaking, such consumers will not purchase buying goods or services from any organisation which does not ensure that its products do not exploit labour, do not harm animals or cause water and air pollution. Such consumers
can be found in increasing numbers in Europe and the UK since the availability of information about various companies has become common place. In fact, it has come to the point that companies themselves publish corporate social responsibility reports as marketing tools (Ethical Consumer, 2006). It is a good business decision to be an environmentally friendly, socially responsible, charitable company since it makes the employees feel good about working for the company and it makes the consumers feel good about buying from the company (Burlingham, 2003).
Conclusion
In conclusion, while Friedman certainly paid due attention to the concept of making money and getting as much profit from business as possible, the rules of the game, the idea of fair competition and the concept of not deceiving others certainly create a very broad vision of social responsibility. This vision extends from the individuals working within the company in various departments to the broader view of entire sections of the company which may be unfairly treated in some situations. In fact, by adding the value of not cheating others, Friedman extends the concept of responsibility to include all others who are part of the group which makes up the stakeholders in any organisation.
This section in first person conext, reflecting what you have learnt about the HR profession, conclusion but not a reflective statement. Ask yourself the question do you agree with Friedman is HR just there to make money?
References
Beardwell I. and Holden L. 1997, Human Resource Management: A contemporary Perspective, Pitman.
Boxall P. and Purcell J. 2003, Strategy and Human Resource Management, Palgrave & Macmillan.
Burlingham, B. 2003, ‘The Coolest Small Company in America’, Inc,. vol. 25, no. 1, p. 64-72.
Colvin, G. 2006, What Makes GE Great? Fortune. 153(4): 90-96.
Ethical Consumer. 2006, ‘Why Buy Ethically?’, Ethical Consumer Magazine, [Online] Available at:
Grote, D. 2002, Forced Ranking: Behind the Scenes. Across the Board. 39(6): 40-46
Torrington D. and Hall L. 1995, Personnel Management: HRM in Action. Prentice Hall.
Welch, J. 2005. Winning, HarperCollins.
Torrington D. Hall L. & Taylor S. Human Resource Management. Prentice Hall. 6th edition
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