Ethical Responsibilities of the Organization

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Introduction

Today, we are living in the 21st century which is called the era of competition and awareness. In this era, ethics plays a vital role in the growth and efficiency of an organization. Business ethics is an inevitable and crucial aspect of every organization. Ethics is not just about doing something right and wrong. It is something beyond than this delusion. Business ethics is the study and implementation of proper business policies or practices of a business. Previously, business ethics was not considered as much important an aspect of the business and they were only strict to the profits. Due to modernization and awareness business policies have been improved and business ethics has become an important part of the organizations due to corporate social responsibility. It ensures a basic level of trust or honesty among all people of the organization.

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Ethical Responsibilities of the Organization

Organizations are responsible not only for society, but they are responsible for treating their customers and employees well. Employees have a special role in a business because they are part of corporate governance and an organization cannot be imagined without corporate governance. Furthermore, it is the responsibility of the business that they do ethical behavior with employees and make them feel comfortable as they are human resources and contribute to maximizing the production of the organizations in order to achieve goals and vision of the company. Moreover, Social and ethical responsibilities often clash with each other. Violation of these both responsibilities causes disabilities in the corporations. Some examples of ethical problems in businesses are issues in corporate governance, customer issues, marketing issues, environmental issue, and issues in fairness to employees.

My Chosen Organization and Its Ethical Issues

In India, there is a five-star motel near my village. The name of the motel is Golden Saras. It is a family-owned business. A large number of issues are there in that Motel. For instance, poor leadership, poor corporate governance, poor execution etcetera. In other words, there are so many disabilities in the organization that managers are unable to detect. But the key issue of this corporation is the lack of fairness for the employees. Because of all this, the business is failed to achieve its desired goals and facing heavy losses for so many years. In 2018, all the employees of the motel had gone on strike who were at the bottom level of the organization and were not happy with the management.

Moving further, this situation is ethically problematic as I have mentioned previously that a corporation is responsible for its employees along with consumers and society. In Golden, Saras people are not treated as human resources as they are forced to work more than their capacity. There are so many dimensions which are involved in this problem for the unfairness with employees. Those dimensions are as per described below.

1. Violation of Open Communication

The owner is the supreme power in the Motel and he takes all the decisions of the business. Employees have no participation in the decision-making process. Simply, the owner takes decisions, the operational manager implements all the decisions in the organization and all the employees follow those decisions without making any arguments or questions. In addition to it, those employees who work at the bottom level of the organization, they cannot talk directly to the owner which develops a communication gap between top management and lower management of the business. It is an abuse of rights of the employees as they work like slaves there.

2. Poor Leadership

Leadership plays a vital role in the betterment of the employees. Leaders understand employees and their problems. Leaders support employees as much as they can and in return use employees in an ethical way. But, due to poor leadership, no one understands employees and their situations.

3. Discrimination

Discrimination is on a large scale in that business. There are a number of factors that are used to discriminate against employees.

  • Age: 95% of employees of the organization are below the age of 35. This is because they can do more physical and mental work as compared to senior employees.
  • Gender: There is no female employee in the Motel as they think females are not safe if they work with males and they cannot work as a man.
  • Disability: There is no worker with physical disability and organizations do not hire disabled people with disabilities.
  • Religion: The owner of the motel is Hindu by religion and the upper management team is also from the same religion. 70% of employees are Hindu there.
  • Nepotism: Nepotism is also a reason of discrimination in Golden Saras. Those people who work there, they ask managers to hire their relatives and friends. They do not hire people by advertising and no vacancy can be found there.

4. Poor Wages

All the employees are working there on very low wages because most people are from nearby villages and they do not argue much about their salaries as they want to get work near their home. So that they can live with their families in their ancestors’ homes. Also, pay rates are not categorized in India. Small family-owned businesses do exploitation of the employees.

5. Abuse of Monthly Salary Law

In India, most people get a salary once in a month. The first week of the month is declared salary week by Indian law. But in Golden Sara’s manager often distribute salaries after the initial weakness of the next month and sometime in the last week of the next month.

So, all these issues which are mentioned above are involved and responsible for the unfairness with employees. It is a violation of Corporate’s ethical responsibility. Apart from that, it is a violation of the law of the country.

After an hour of the strike, the manager came to talk to the employees as there was no employee in the motel and customers were upset and angry on the top management team. Furthermore, all those people who were working at the top level of the organization were under pressure and they were trying to control the situation. The manager was continuously trying to convince the bottom level employees by giving them a lot of offers like he will increase their salaries, will reduce their working hours, and will give them leave for urgent work as well. But employees were full of rage. As a result of this, they denied the manager to go back to work. Then, the owner came to talk to the employees and they discussed all their problems with him. He assured all of them that he will call a meeting immediately and will try to solve all their problems as soon as possible. Also, he assured them that any type of discrimination or violation in the organization will not be accepted and if still, upper team members will do that so they will get fired. After two hours everything got sorted and workers got ready for going back to work. Within a few minutes, everything was normal. All the workers got their salaries but later there was no improvement in the organization and upper-level employees were still discriminating against the lower-level employees.

According to me, all the decisions taken by the owner were effective in that particular situation. He had only option to agree with the demands of the employees. This is because, if he would have refused to obey the demands of the employees, then, it would not be in the favor of his business and he had to close the motel until they hiring of new people. It could cause heavy loss to the owner and was not good for the image of the Golden Saras. He took very effective decisions immediately to escape from that situation of and to bring people back to work instantly. On the other hand, his decisions were not ethical as he was only concerned about his business not about the employees. He assured employees that he will take strict action and all the problems will be solved soon. But it was just a lie to get them back to work,

This issue requires an ambitious and self-motivated leader to make critical decisions and strict rules should be implemented to avoid the law breakage in the organization. Also, all the decisions should be taken through a decision-making process which is very useful for every organization to take critical decisions. According to this process, firstly, the leader or owner should perceive the problem properly, and then they should make some research by themselves regarding that problem. Secondly, they should call a special committee of wise and experienced employees to discuss the problem with and to find the solution. To avoid errors in the decision-making process they should ask all the committee members to give previous as well as current information about the issue. Rather than, making decisions on employees’ personal beliefs, all the committee members should be asked to come up with some evidence for supporting their statements or arguments. Then, they should discuss with committee members that what can be done immediately. After discussing all that with committee members, a solution should be formed and implemented into the organization.

This approach will actually work in practice because leaders include various leadership approaches according to the situation for the overall development of employees as well as the company which can detect disabilities of an organization. According to Sabir “A leader is someone who knows the way, goes the way, and shows the way”. Honesty, accountability, integrity, inspiration, confidence, commitment, good communication, passion, decision-making capabilities, delegation, empowerment, creativity, innovation, and empathy are some characteristics that a good and ethical leader has for the betterment of the organization. If all these characteristics will be in practice, it will create a greater work environment, detect problems, and will motivate all people of the organization to attain greater outcomes. Moreover, if the laws of the business will be strict nobody will do the courage to break it. Otherwise, they have to face the consequences. Additionally, decisions taken by decision-making forces will be effective and accurate.

Conclusion

In conclusion, business ethics is very important to tackle the ethical problems of an organization and to run it smoothly. Along with social responsibility, businesses are responsible ethically. In addition to it, employees are a very essential part of the organization. Also, people are human resources, not machines. Furthermore, it is recommended that there should be no discrimination on the basis of age, gender, religion or disability and everyone should get equal opportunities in the organizations. Moreover, employees’ salaries should be distributed on time so that they can feel secure. Apart from that, rules and regulations should be strict enough and a leader should be appointed to make ethical decisions and to implement the rules properly in the organization.

References

  1. Baumann-Pauly, D., Wickert, C., Spence, L.J. and Scherer, A.G., 2013. Organizing corporate social responsibility in small and large firms: Size matters. Journal of Business Ethics, 115(4), pp.693-705.
  2. Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, USA.
  3. Grosser, K., Moon, J. and Nelson, J.A., 2017. Guest editors’ introduction: gender, business ethics, and corporate social responsibility: assessing and refocusing a conversation. Business Ethics Quarterly, 27(4), pp.541-567.
  4. Sabir, A., 2017. A Leader: One, Who Knows the Way, Goes the Way and Shows the Way. European Business & Management, 3(5), p.82-85.
  5. Sung, S.Y. and Choi, J.N., 2014. Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations. Journal of organizational behavior, 35(3), pp.393-412.
29 April 2022

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