Wheelen and Hunger (2007) argue that when an organization is faced with difficult decisions, it should recognize that the decision-making process does not only affect the company and the employees, but it also affects the company’s stakeholders, and the public. The decision arrived at should cater for the interest of everyone involved and be embraced by all for the betterment of both the company and stakeholders. This paper will explore the ethics, social responsibilities and corporate performance in the strategic management of the organization. It will further explore how some corporations have overstepped their evolvement of the ethical perspective and the preventive measure to curb this kind of situation all through the program.
In their daily engagements, individuals are expected to exercise ethical conduct and proper moral judgment in making decisions. A high degree of complexity arises with this principle when individuals develop varied perceptions or what constitute right or wrong, and the values they subscribe to such as honesty, and morality. This dilemma is heightened in face of differences in individuals’ economic, ethnical, and cultural diversities.
As such, some people regard acting right highly while others believe that it is morally satisfactory to act in an ethical manner only when your actions are not monitored or revealed to the public. Incorporating individuals’ moral conduct in any establishment exerts a major influence on the process of making crucial decisions. This is because of personal biases, which mostly interfere, or lead to eruption of a backlash in the implementation and development of a company’s goals and objectives. According to Pearce and Robinson (2008), ethics as a moral principle that reflects people’s beliefs regarding actions of a group of people or organization that may be right or wrong.
Organizations are faced with the difficult task of making decisions for their stakeholders. These responsibilities are crucial since they need to make the finest decisions for them. In addition, the decisions arrived at should be ethical so as not to jeopardize the companies’ reputation. Organizations are obligated to operate in a manner that upholds the principles and beliefs about the behavior in a society (Wheelen & Hunger, 2007). Incidences such as layoffs, business closures, lack of humanity and humankind, dishonesty, withdrawal of information, distortion of information and facts, breach of contract, failing to consult, and notify people affected by change need to be addressed in a courteous way to the community and the stakeholders since they directly affect them (Pojman, & Fieser, 2007).
The ethical act of informing the stakeholders about the company’s issues enables them to be both psychologically and physically prepared for the upcoming events as opposed to sudden acts that could lead to eruption of anger or hostility toward the company. This is the entire meaning of the social responsibility, which a company holds to the community. The modern business is not as such concerned with making profits as it is with the abrupt shift in business. The shift can affect the communities where their needs heavily rely on the business.
Organizations have the ethical responsibility of ensuring that what the company believes to be correct and appropriate business behavior and requirements that go beyond legal requirements (Pearce & Robinson, 2008). Ethics are the foundation upon which organizations establish their goals and objectives. They also give direction that by which organizations reach their vision and mission by making the right decisions and the actions they take. Ethics assist in minimizing personal conflicts by ensuring adherence to cultural and social beliefs in formulating plans. The other role of ethics is to provide a rationale for a range of modern ideas for business, work and processes that widen corporate and individual priorities, hence enriching the company’s profit.
The Toyota motor crisis is one of the crises that affected clients a great deal. When the clients stopped purchasing their automobiles due to tire problem, their finances deteriorated, and there were massive layoffs. This affected the corporation’s stakeholders. The managers and the top executives involved denied the claims in public and hid the company’s deteriorating finances (Wheelen & Hunger, 2007). Contemporary leadership styles should be employed to relate ethics in the organization. It should avoid subjective ethics that are not governed by law. The leadership should encourage stakeholder opinion which conforms to the market. It must also reflect the people’s attitudes which are particularly visible in the behavior of clients and employees.
The leaders of any corporation should shun any decision that appears to be subjective and led by excitement and urgency. They should understand the ethical contract and its implication in any situation. The leaders should review the previous situations such as the one that brought about risks. They should check the law to see which boundaries are affected by the said decision. The decision should not, however, be based wholly on the law (Pearce & Robinson, 2008).
Any organization that desires to succeed in any modern business undertaking must practice the philosophy of good ethical management and organization. In addition, the company’s behavior and performance need to be transparent, where the whole world and society can see and judge its leaders and the organization. Company’s leaders must take the initiative of being ethical accountability.
Pearce, A., & Robinson, B. (2008). Formulation, Implementation and control of competitive strategy with Business. New York: McGraw-Hill/Irwin.
Pojman, L. P., & Fieser, J. (2007). Ethics: Discovering right and wrong. Belmon, Calif: Wadsworth.
Wheelen, T. L., & Hunger, J. D. (2007). Strategic management and business policy (9th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.