Business ethics programs
Business ethics programs are desirable since they help companies to put in place operational mechanisms that ensure that they work in line with the ethical standards of business operation. As observed in the case, the Nike Company has been on the limelight for the enhancement of unethical standards of operation in its firms. Most of the ethical issues that surround the operation of the company concern its efforts to minimize the cost of production by venturing into countries in which the company could easily implement managerial activities that amount to the breach of ethical standards of operation.
The question that ought to be asked is whether the company can manage to minimize the cost of production without opting for sweatshop labor that has subjected the company to immense criticism from diverse consumer and human rights groups. The other issue that has faced the company concerns the lack of fostering environmentally sound conditions in a number of its plants (Ferrell, Fraedrich & Ferrell, 2011).
The fact that the company has been in the spotlight over its production practices means that the image of the company is a subject of discussion in the industry and the markets in which it operates. There is a considerable level of negative impacts on the image of the company. In such a case, ethics auditing is a critical step for the management of Nike. Ethics auditing would aid in bringing out the actual activities that lead to breach in business ethics in the operation of the company. Ethical auditing acts a basis on which the company assesses its practices. The real practices and activities that are deemed unethical and undesirable are brought in the limelight, thereby necessitating a course of action from the company (Swanson & Fisher, 2008).
Ethics often begin with the readiness of the company to accept and own responsibility for any misdeeds that are done by the company. The fact that the unethical practices in the company have gone on for an extended period of time as brought out in the case implies the failure on the part of the company to hid to the claims of the breach of business ethics. Given the scale of resentment against the breach of the labor rules and standards, there have been forms of both direct and indirect action as a form of resentment against the ethical breaches.
Streamlining the corporate image of the company through streamlining ethical practices begins with the engagement of all the stakeholders; internal and external. Both are critical in pointing out the nature of unethical practices and the suggestion of the mechanisms that can be taken to restore business ethics in the operations of the company (Parboteeah & Cullen, 2013).
Contemporary business environment
The increase in the amount of competition in the contemporary business environment has necessitated companies to embrace business ethics and corporate social responsibility. Business ethics often go along with the embrace of issues of sustainability in the advancement of business activities by companies. Companies do a lot of investments in molding their corporate images through the establishment and the subsequent enforcement of corporate social responsibility programs.
Social corporate responsibility practices ought not to come as mitigation measures to allegations of ethics breaches as exemplified in the Nike case, but they have to prevail as continuous programs that enhance the relations between the firm and its stakeholders. Most of the ethical issues in the case can be attributed to the treatment of ethics and corporate social responsibility in the company as secondary issues. This can be justified from the explanation of the development of ethical issues in the organization and the nature of response by the company to allegations of lack of adherence to ethics in the activities of Nike (Ferrell, Fraedrich & Ferrell, 2011).
The pace of development of the company denoted the fact that Nike is a well-established company as a multinational company. To this degree, the company is treated as one of the biggest competitors in the sportswear industry. Therefore, the company needs to have put in place an ethics communication and training program to aid in addressing business ethics in its operations. Such a program is meant to identify all the stakeholders of the company and their role in promoting the ethical code of operation in the company.
In order to develop an operational environment that fully embraces business ethics, the program has to involve customers, suppliers, employees, the media and organizations that monitor business ethics and the entire corporate world. All these stakeholders play a role in the identification and embrace of ethical standards in the course of operations. All the stakeholders must be allowed to raise their concerns at any given point. The concerns have to be given attention (Treviño & Nelson, 2011).
Ethical standards are developed and form part of the key considerations in the practices of the company. The ethical standards entail all the standardized specifications that are entailed in the products and the production process of the products. It also covers the marketing practices of the company. Changes in the ethical standards of operation for example labor law amendments are easily identified and incorporated in the practices of the company. Such a program helps in drawing away ethical issues and streamlines the image of the company (Ferrell, Fraedrich & Ferrell, 2011).
As noted in the earlier discussion, ethics auditing is a crucial activity in the enhancement of ethical codes of operation of business companies in the market. Ethics auditing helps a company to identify the level at which it has attained progress in operating along the stipulated ethical codes in business operations. Ethical auditing is a process that has to be objective if the company has to fully streamline its operations in order to safeguard and enhance its corporate image in the market.
It is important to note that the ethical audit was one of the critical steps that were taken by Nike at the time when the company was facing immense criticisms. The approach that was taken in ethical auditing by Nike implies that the company likened the process to the management of the lost reputation, a factor that eliminated objectivity in the audit (Ferrell, Fraedrich & Ferrell, 2011).
Nike could have benefited from the ethics audit that was conducted earlier if the audit was conducted in an independent manner. This means that the company could have embraced an external audit that brings out issues as they are. Such an audit is quite transparent since it is not likened to the controls that emanates from the pressure to protect the image of the company through the concealment of a number of open facts. Social accountability is attained when all the issues in the audit report are given attention and incorporated in the operations of the company (Mruthyunjaya, 2013).
The ethics auditing process
The ethics auditing process is a comprehensive activity that ought to capture a number of key fundamental activities of the company. A comprehensive audit process for Nike should focus on the following areas:
- There has to be an audit purpose. The audit purpose is the leading statement, which brings out the key reason why the company should embrace the audit.
- The second critical part of the audit process is enlisting the objectives of the audit. This comes from the purpose and enlists a number of critical reasons for ethical auditing. Most objectives have to revolve around the cultivation of a business environment that embraces social accountability.
- The enlisting of the key areas that have to be explored in the audit comes third. This is a comprehensive and critical step since it is the main area of the audit. All aspects of organizational management in which ethical issues emerge should be enlisted here. These include the critical areas of human resource management and the main areas of corporate development in the company. This emanates from the fact that Nike has a large employee base and its capacity of operation has also widened, implying that it has an active corporate environment.
- The evaluation tools should then be enlisted to assess the level of adherence to ethical standards in each enlisted area of business functioning enlisted under.
- In order to enhance the role of ethics audit in the management of Nike, there has to be a part on recommendations that should be derived from the evaluation in order to guide the company in its quest to embrace business ethics.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business ethics: Ethical decision making and cases: 2011 custom edition (8th ed.). Mason, OH: South-Western Cengage Learning.
Mruthyunjaya, H. C. (2013). Business ethics and value systems. New Delhi: PHI Learning Private Limited.
Parboteeah, P. K., & Cullen, J. B. (2013). Business ethics. New York, NY: Routledge.
Swanson, D. L., & Fisher, D. G. (2008). Advancing business ethics education. Charlotte, NC: IAP.
Treviño, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right. New York, NY: John Wiley.