Company’s Culture:
Reference: Madsen and Shafritz, "Essentials of Business Ethics”. New York, N.Y., U.S.A.: Meridian, 1990.
Company’s culture can be looked at as a system. There are inputs to it and outputs from it. Inputs include feedback from, e.g., society, professions, laws, stories, heroes, values on competition or service, etc. The process is based on e.g., our values on money, time, facilities, space and people. Outputs or effects of our culture are, e.g., organizational behaviors, technologies, strategies, image, products, services, appearance, etc.
Some Types of Company Cultures:
Reference: Researcher Jeffrey Sonnenfeld
Link: http://www.mapnp.org/library/org_thry/culture/culture.htm
There are different types of culture just like there are different types of personality.
Academy Culture
Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The organization provides a stable environment in which employees can develop and exercise their skills. Examples are universities, hospitals, large corporations, etc.
Baseball Team Culture
Employees are "free agents" who have great skills. They are in high demand and can rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as banking, advertising, etc.
Club Culture
The most important requirement for employees in this culture is to fit into the group. Usually employees start at the bottom and stay with the organization. The organization promotes them from within to high valued seniority. Examples are the Military etc.
Fortress Culture
Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc.
Difference between Ethics and morality:
Reference: The University of Texas at Austin
Topic: Professional Responsibility > Morals vs. Professional Ethics
Link: http://www.engr.utexas.edu/ethics/morals.cfm
Morality can be defined as a set of values held within a person, which are mostly based on religious thought process within a mind of a person. Mostly moral beliefs focus on things those are held to be universal values, such as Truth, Honesty and many others. Morals are an internal measure by which an individual may guide themselves through all rights and wrongs, Do’s and dont’s.
Ethics (professional ethics), is usually an understanding of proper conduct among a group of people working together as associates in some professional environment. Ethics provides a structure by which professionals can act without any headaches given a set of external conditions (Moral obligations). This ethical structure is usually called a Code of Conduct or Code of Ethics.
"Codes of conduct specify actions in the workplace and codes of ethics are general guides to decisions about those actions," explains Craig Nordlund. He suggests that codes of conduct contain examples of appropriate behavior to be meaningful (Craig Nordlund, Associate General Counsel and Secretary at Hewlett Packard).
How does Culture of the Country affect Company’s Ethics?
Reference: The University of Texas at Austin
Topic: Professional Responsibility > Morals vs. Professional Ethics
Link: http://www.engr.utexas.edu/ethics/morals.cfm
Culture can be defined as everything in our surroundings made by people, both tangible items and intangible things like concepts and values. Language, religion, law, politics, technology, education, social organization, general values, and ethical standards are all included in this definition.
Each nation has a distinctive culture, hence distinctive beliefs about what business activities are acceptable or unacceptable. Thus, in international business, one may face values, beliefs, and ideas that may differ from their own because of cultural differences.
Cultural differences include differences in speech and body language. Problems of translation into another language often make it difficult for businesspeople to express exactly what they mean to say.
Many multinational companies have codes of ethics, mission statements, and integrity policies according to their practices. However, when operating outside of their boundaries they face different standards which sometimes conflict with their old standards. In this conflict of standards, the ethical standards might deviate accordingly because ethics depend on two things: First is choosing the right thing to do and second is plan of action must be according to the situation. We always find a harmonious blend of both to be on the safer side.
Example Scenario 1 (Culture vs. Code of Ethics):
Child labour is prohibited in the America, not only by law but also, by the policy of American firms. However, in Pakistan, there is no law against child labour. In fact, child labour in Pakistan, is considered positive as it improves the family's income and keeps children away from the streets and away from worst dangers. Child labour is viewed as an ethical issue from the American perspective. On the other hand, children left on the streets are considered to be the ethical issue from the Pakistani point of view. The American manager confronting the Pakistani manager, both are looking at the same situation but responding oppositely to it. They are behaving in response to their respective cultural standards.
Example Scenario 2 (Culture vs. Code of Ethics):
Language differences also create ethical issues in finance. For example, in Germany, a bribe to obtain a contract in a foreign country can be considered as a mere expense.
Honda Atlas Cars Pakistan (http://www.honda.com.pk):
An Introduction to Honda Atlas Pakistan:
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.
Construction of the factory started on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed. The first car rolled off the assembly line on May 26, 1994. Official inauguration was done by President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto, President Honda Motor Company Limited Japan was also present.
We are dedicated: (Mr.Kawamoto, President Honda Motor Company Limited Japan):
“The use of a term “we” recognizes the importance of each associate who makes up the company. At Honda, each associate has something to contribute to company activities. The use of the word “dedication” recognizes that joy comes from doing something that is considered worthwhile, something to which a person can be dedicated and that is what I think Honda is all about.”
Honda’s Philosophy:
Reference: Honda World (The power of Dreams)
Link: http://world.honda.com
Basic Principles
Respect for the Individual.
Company Principle
”Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality yet at a reasonable price for worldwide customer satisfaction” (Honda Corp.).
Management Policies
Reading Honda’s philosophy certain main points are extracted:
Proceed always with ambition and youthfulness;
Respect sound theory, develop fresh ideas, and make the most effective use of time;
Enjoy your work, and encourage open communication;
Strive constantly for a harmonious flow of work;
Be ever mindful of the value of research and endeavor.
Honda in terms of Corporate Code of Ethics:
(A panoramic view):
Note: This is an external view of the Company, i.e. a third person’s general audit on Company’s overall disposition in this locality (Pakistan).
- Honda and social responsibility:
Reference: Honda World (The power of Dreams)
Link: http://world.honda.com
Honda recognizes its social responsibility as a corporate citizen to find solutions to environmental and safety issues. They are working to reduce their impact on the global environment at all stages of their operations, from development and production to sales. By implementing policies to improve the efficiency with which they use energy and other natural resources, reduce the harmful emissions and increase the fuel efficiency of their products, and create Green Factories, they are helping solve the world’s environmental problems.
As a manufacturer of mobility products, they also consider it as a responsibility to create cars that are safer not only for occupants, but for pedestrians as well. They are committed to promoting safer driving and to making mobility safer for everyone.
A routine example: Examining the braking standards applied by Honda in their cars, such as latest ABS-4-Wheel Disc braking system in a standard cheap sedan tells an ordinary driver like me, that Oh! its really something in this much money.
Honda's Environment Statement (as stated by Honda Atlas, Established and announced in June 1992, http://www.honda.com.pk):
- As a responsible member of society whose task lies in the preservation of the global environment, company will make every effort to contribute to human health and the preservation of the global environment in each phase of its corporate activity.
Only in this way will we be able to count on a successful future not only for our company, but for the entire world.
-
We should pursue our daily business interest under the following principles:
- We will make efforts to recycle materials and conserve resources and energy at every stage of our products’ life cycle from research, design, production and sales, to services and disposal.
- We will make every effort to minimize and find appropriate methods to dispose of waste and contaminants that are produced through the use of our products, and in every stage of life cycle of these products.
- As both a member of the company and of society, each employee will focus on the importance of making efforts to preserve human health and the global environment, and will do his or her part to ensure that the company as a whole acts responsibly.
- We will consider the influence that our corporate activities have on the regional environment and society, and endeavor to improve the social standing of the company.
HONDA as an element of our society:
Honda Organization is a part of a large society and is accountable to this society for its actions.
Diagram below explains how traditionally and conventionally ‘Honda’ reacts to the Social responsibility in Marketing Department:
Honda Company is currently fulfilling three of the most conventional duties with respect to its social interaction and its current disposition:
a- Profit Responsibility:
Company serves it as a duty to maximize profits for their owners or stockholders as any other company would.
b- Stakeholder Responsibility:
Here the Company focuses on the obligations an organization has, to those who can affect achievement of its objectives.
E.g. customers, employees, suppliers distributors.
Building from the fundamental beliefs of Respect for the Individual, the Honda Company Principle was stated in 1956. In 1962, the principle was expressed in English as “Maintaining an international view-point, we are dedicated to supplying products of the highest efficiency yet at a reasonable price for worldwide customer satisfaction”.
What does Honda say about Stakeholders Responsibility?
Reference: Honda world, Conduct Guideline
Link: http://world.honda.com/conductguideline/
“We must be aware that we can grow more quickly and utilize those core values that are not already realized, by constantly creating occasions for a meeting of minds globally, understanding, supporting in a patient and constructive manner. Using this approach, we can anticipate and satisfy customer expectations, remembering that our first customer is our nearby colleague. The same transparent behavior and honest approach should be used with external partners, such as suppliers, journalists and dealers, because only a constructive trusting relationship can help overcome difficulties. When we achieve this, society will recognize and appreciate the uniqueness of our organization and team spirit. A spirit, which embodies our common feeling of ‘Hondaness’.
Respect for the Individual also defines our relationship with those for whom and with whom we do business:
• Our customer – everything we do must exceed their expectations; satisfying the customer is our top priority.
• Our business associates, including shareholders, dealers, suppliers – those who conduct business with our company should get something positive from that experience.” (Quoted from Honda Press Conference, The News, 15th Sept, 1996).
c- Societal Responsibility:
Societal responsibility refers to duties that organization has to perform:
In this area Honda has worked for preservation of the ecological environment, and General public satisfaction.
2- Marketing Ethics in Pakistan (in terms of Honda Marketing Plans):
Reference: MARKETING ASSOCIATION OF PAKISTAN
Link: http://www.map.org.pk/codesofethics.htm
Honda World | The Power of Dreams
Link: http://www.world.honda.com
MARKETING ASSOCIATION OF PAKISTAN was formed in 1967, as the professional body of marketers. Besides individual members almost all major manufacturing and trading organizations in the country are its members. These include both multinational and local companies. Honda being one of its members is very seriously following the ethical trends and they are truly abided by the ethics in marketing here in Pakistan.
Honda’s Marketing Principles (as stated by MAP):
Honda marketing strategy is based on principles mentioned by Pakistan Authority of Business Ethics (MAP). On the one hand, these principles guarantee the rights of consumers, and to be offered products and services that can be safely used. On the other hand, these principles also hold the corporate rights of the company, allowing them to operate under conditions of economic efficiency, resulting in the generation of profits that are essential for the long-term survival and growth of business.
Undertake socially responsible marketing:
Ensure concordance to high standards of safety and environmental concern, and avoidance of deceptive practices and bad sales that can result in psychological and social problems amongst common public in Pakistan.
Educate consumers and / or encourage education of consumers:
Either providing them clear or complete information, or encouraging individuals and / or consumers and the “mass-media” to do so. This would enable consumers to make more clear choices of products and services, with full knowledge of the benefits and features that a product or service has to offer.
Ensure freedom of choice with respect to products and services:
Letting consumers make up their minds based on reason or logic for making a purchasing decision. Misleading information must not be used to create false images in the minds of consumers and influence their right of free choice/selection.
Offer authentic innovation:
Not using some minor alterations in design and features to create a second degree product, but offer considerable and tangible improvements in products or services that result in real benefits to the consumer.
Listen to the voice of the consumer:
Provide consumers with a facility for communicating their feelings with regard to products and services they buy or use, and listening to their genuine complaints.
Protect consumers and the community from potential harm:
Restraining the propagation of potentially harmful products or services, and clearly highlighting the possibility of such harm if ever involved, on product literature or packaging.
Preserve healthy competition:
Not creating monopolies directed against consumers or other companies, and allowing normal competitive forces to enter the market.
Conclusion:
In every aspect, and in concordance to every principle offered by MAP, Honda seems to fit as a healthy and optimized Organization, totally abide by the governing business ethics in Pakistan.
Honda’s internal code of ethics
(An internal interpretation):
Note: This is an internal view of the Company, i.e. how the Company itself relates to ethics and what measures would they take in favor of doing the most acceptable and avoiding all that can be categorized as unacceptable.
Reference: Honda world, Conduct Guideline
Link: http://world.honda.com/conductguideline/
Social Ethics of the Company:
Respect for Social Standards: As a member of Pakistani society, Honda will behave ethically and in accordance with the community in which it operates.
Respect for Islamic roots: Discrimination (Racism):
In order to make sure Honda is a fair, discrimination-free company, they practically accept the uniqueness and differences of people around the country and act in accordance to the principle that all people are created equal. As taught by Islam, this ideology is though well prevalent now in every culture and dogma.
Prevention of discrimination:
They occur not to discriminate according to place of birth, nationality, beliefs, religion, sex, race, ethnic origin, age, physical or mental disability, education, or status within society.
Prohibition of Use of Discriminatory Language:
People under name Honda will not use words/expressions considered discriminatory or that may be interpreted as discriminatory.
Honda Atlas and Child Labour:
Pakistan vs. Child Labour:
Reference: Free the Childran Organization
Link: http://www.freethechildren.org/youthinaction/child_labour_the_situation.htm
Child labor is a big problem in most third world countries, but possibly the most known in Pakistan. Child labor is scattered all over Pakistan, but it has the greatest impact on a north-western city called Sialkot. Sialkot is an important center for the production of goods for export, especially sporting goods. 1994, it brought about $385 million into the Pakistan economy.
Child labour is prohibited in Pakistan’s constitution. Legislation has been passed, but no significant action has been taken to implement it.
Honda’s perspective on Child Labour:
Though there are 348 employees working at Honda, none of them is under 18. Actually this is a minimum first condition to be met, in order to work as an employee at Honda Atlas Corporation. Fortunately Honda is out of the bounds of the crisis child labour topic has brought, and from sensitivity and irrationality it up brings along with distress in society.
Environmental Protection:
To help Honda actively promote environmental protection, it will take part in seeking the means to protect the environment.
Processing of waste and pollutants:
Honda wants to strive to minimize and properly process waste and pollutants at each step of their activities, in development, production, service, and, disposal.
Efficient use of natural resources and recycling:
They will strive to make efficient use of energy and other natural resources, and continue to advance their recycling efforts.
Legally required measurements, recording and reporting:
Even though this standard is not really practiced in Pakistan, Honda will conduct measurements, recording and reporting on the environment related to soil, underground water, air, noise, smells, etc., not required by environmental laws applied in Pakistan but by company rules.
Contributions to Society
In order for Honda to be a good corporate citizen with strong roots in the community and society, they actively participate in activities that contribute to the well being of society.
Community Participation:
They say that its their best wish to become active members of the local community and participate in local activities.
Social welfare:
They also have a kind heart for poorest and actively support people with mental and physical difficulties.
Disaster relief:
They do have courage to actively support disaster relief activities.
Volunteer activities:
Chief Executive Atlas Honda ponders on activities to encourage, support and participate in volunteer activities.
Honda Respects the State Law (Compliance to law):
Honda assumes itself to strictly abide by the law.
Reference: Honda world, Conduct Guideline
Link: http://world.honda.com/conductguideline/
Respect for the Law:
Proper understanding of the law:
They will understand and abide by applicable laws; stay informed of any revisions to the law and takes the necessary action.
What will they do in case of unclear interpretation?
Whenever there is a doubt about the aspect of the law, they will consult with the legal department, and government bodies.
What will they do if the law has been violated? (With respect to business ethics)
Whenever a violation of the law is noticed, they will immediately report to or consult with the supervisor or the legal department, or make a proposal to the Business Ethics Proposal Line.
Notification to government agencies:
They will anyway make notifications to government agencies as required by law.
Ethics at the Workplace:
Reference: Honda world, Conduct Guideline
Link: http://world.honda.com/conductguideline/
Respect for Company Rules:
Proper understanding of company rules:
They will understand all related company rules; stay informed of any revisions and takes the necessary action.
What will they do in case of misconduct?
Whenever there is a doubt about company rule, they will consult with the department that created the rule to confirm proper understanding.
What will they do if rules have been violated? (With respect to business ethics)
Whenever a violation of a company rule is noticed, they will report to supervisor or make a proposal to the Business Ethics Proposal Line.
Business Transactions:
To make sure Honda maintains a fair and sound relationship with its business partners, they will conduct fair, sound transactions.
Selection of business partners:
When they need to purchase products or services, they will select a business partner by comparing and evaluating in thorough manner and the also consider the terms and conditions offered by various business partners.
Prohibition on excessive gifts and benefits (Bribery is disliked here):
In their dealings with business partners, they will neither offer nor accept gifts or benefits beyond that normally considered appropriate.
Exploitation of positions and authorities:
They have a strict eye on to never exercise positions or authorities inappropriately to get improper benefits from business partners; and also they will never give business partners improper benefits.
Relationships with Governmental Agencies:
Honda as representatives of an independent corporation, keep their relationships with government officials in a straightforward and sincere manner.
Abiding laws and regulations for ethics:
They act in a manner that doesn’t manipulate with government official ethics under the relevant laws and regulations.
Disliking on excessive gifts and benefits:
They say, they will not offer government officials any gift or benefit exceeding the socially accepted limits.
Management of Information:
Its about how Honda treat the flow of information through the entire Company. In order for Honda to properly manage customer- and business partner-related information, they make it sure to pay the utmost attention to the appropriate handling of confidential information.
Management of Information Security:
They will appropriately manage information security such as the locking of storage cabinets, and carefully managing computers and security passwords.
Confidential Information Disclosure Prevention:
They will not release confidential information or personal information regarding customers, business partners, and associates.
Safety and Hygiene:
They will strive to provide a safe, hygienic and comfortable work environment for every Honda associate.
Providing for a comfortable working environment:
They will provide a comfortable working environment by maintaining an orderly, well-organized and clean workplace.
Respect for smoking rules:
Honda even finds it important to fine-tune themselves by looking so precisely on small things like respecting rules and etiquette regarding smoking.
Accident prevention:
They will strive to manage potentially dangerous processes and areas to prevent injuries on the job and be very empathic to employees.
Action to be taken when an unsafe operation is discovered:
Whenever an unsafe process or area is noticed, they will immediately report to the supervisor.
What to do in case of disaster:
According to Honda whenever a disaster occurs, priority must be given to protecting human life and preventing the disaster from worsening.
Protection of Privacy
To make sure Honda emphasizes the privacy of individuals, they will do their utmost to respect and protect privacy.
Respect for Privacy Protection Laws:
They strictly abide by the laws protecting individual privacy. Every worker and associate at Honda has his/her own private life and the company respects it.
Prevention of Unauthorized Revelation of Private Information:
Before providing private information to a third party, they usually first obtain the approval of the person concerned.
Communication
As a highly accountable company, who says welcome to any auditor to turn pages on their white book of records, they will value communications with society, news bureau or any community.
Conclusion:
After putting the core conventional ethics charts, rules and regulations concerned with it as a norm to measure the potential of Atlas Honda Corporation, I admit that Atlas Honda; if not up to the mark of perfection, is still a very sophisticated and ethical Organization.
Let’s look at some summarized information hereby:
Many ethicists assert there's always a right thing to do based on moral principle, and others believe the right thing to do depends on the situation, ultimately it's up to the individual. That is exactly why we have to find a middle way, compromising little of both aspects and still choosing what is right ethically and also very accordingly to the situation.
This is understandable in the example of Atlas Honda here. Their inclination towards choosing the most rational and acceptable confirms with the idea that there's always a right thing to do based on moral principles. Company’s management could think of a middle way however; for example they could have employees under 18. There has arisen a bad repute against child labour in Pakistan recently due to international pressure but still in Pakistan it’s not that impossible. As a matter of fact poor people never wanted their children to sit at home and eventually do nothing for the welfare of the family. No matter what pressure and condemnation media and authorities put on the label of child labour, parents would never want their kids to sit unemployed at home. Atlas Honda abides by each cultural standard and by every law enforced by Islamic state of Pakistan. Deliberately, Atlas Honda confirms with the new definition of Corporate Ethics as defined by Pakistani society and Laws.
Atlas Honda taking the safer path doesn’t exhibit the trait of underage employments.
Corporate ethics and its fundaments:
If we extract an infrastructure of what generically an Organization must be in order to exhibit some ethical disposition, I have summarized the following points that are no less than some hereditary traits Atlas Honda got from its ancestor Honda Japan:
Management discipline: There is a complete hierarchy of Managerial posts at Atlas Honda and they work day and night to bring the Company up to marked ethical standards. Managers have learnt the fact how ethical philosophy should be laid down in the roots of management.
Strong teamwork and productivity: Honda Atlas with its hard working managers emphasizes on the importance of the word “WE” in their philosophy. They manage their employees with empathy and nice rewarding schemes; injecting the spirit of dedication into them. Implementation of ethics by managers and streaming down this positive effect to employees helps to maintain a moral path in times of havoc.
Strong public image:
Atlas Honda has earned a pretty good image in Pakistani society. Their public support in form of charitable funds, disaster relief and other volunteer services on cause have enhanced their imagery in minds of common people. Atlas Honda gives a very humble and gentle temperament towards the society it works in.
Visionary policies and obeying rules and regulations:
From business transactions, safety and hygiene, management of information to carrying out company laws at all costs without thinking twice; Atlas Honda is really fulfilling the mission statement of the company. Ethics are merely an element of every procedure carried out in this organization. A company without vision is nothing and if some visionary coarse is followed; policies and laws are first to adhere with. After all they are the building stones for the company.
Stakeholders’ responsibility:
As mentioned above in the article, Honda has hard coded policies regarding interaction of the company with stakeholders. Respect for the Individual also defines their relationship with those for whom and with whom they do business. Everything they do must not only fulfill but exceed customer’s expectations; actually satisfying the customer is their top priority.
References
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1- Reference: Carter McNamara, Complete Guide to Ethics Management
Online Library at http://www.managementhelp.org
2- Reference: Madsen and Shafritz, "Essentials of Business Ethics”. New York, N.Y., U.S.A.: Meridian, 1990.
3- Reference: Ethics Framework diagram from Chapter4 in ‘Business Ethics Notes’ subscribed to students at;
Link:http://www-rohan.sdsu.edu/~renglish/370/notes/chapt04/Chapter
4- Reference: Mark Pastin, The Hard Problems of Management
5- Reference: Researcher Jeffrey Sonnenfeld, Business Ethics
Link: http://www.mapnp.org/library/org_thry/culture/culture.htm
6- Reference: The University of Texas at Austin
Topic: Professional Responsibility > Morals vs. Professional Ethics
Link: http://www.engr.utexas.edu/ethics/morals.cfm
7- Honda Atlas Cars Pakistan (http://www.honda.com.pk):
8- Reference: Honda World (The power of Dreams)
Link: http://world.honda.com