Term Paper on "Should Corporate Executives Be Bound by Morals and Ethics When Developing a Corporate Strategy"

Term Paper 4 pages (1556 words) Sources: 1+

[EXCERPT] . . . .

Corporate Executives Be Bound by Morals and Ethics When Developing a Corporate Strategy?

There was a time when it was believed that moral and ethics were meant for society alone and did not have a place in business. This belief went on to add that the business environment was different and dictated that corporate strategies were to be guided only by the motivation of profit. The ends justified the means. These practices have been called into question as company after company in the search for greater profits have neglected the ethical side of business that demanded that the search for profit did not have a negative impact on society and environment at least. The drive for short-term profits have blinded the executives to the meaning of the term business and have thereby brought into the limelight the need for greater say for moral and ethics in the development of corporate strategies and business decisions. The concept of business ethics has developed from the need to apply moral philosophies to the business and its environment. It is becoming more and more imperative that the executives of corporate organizations to understand moral principals and how they have evolved over time with respect to the duty to society and the manner in which these responsibilities can be fulfilled in keeping with the expectations of society, as they go about the development of the corporate strategies. (a case for ethics)

Studies have shown that there is a very noticeable loss of confidence in business organizations around the world in general and the United States of America in particular. In 1968 around seventy percent of the people were of the opinion that business executives did make am attempt to strike a fair balance in their business decisions between profits and the interests of the society. By the year 1977 this belief had dropped to fifteen percent of the people and this accelerated drop may have been because more than four hundred major business organizations in the United States of America had confessed to their making illegal election campaign contributions and bribing of officials in the attempts to win business overseas. Equally important business is the fact that many corporate executives seem to have forgotten that ethics and morals in the business environment are more focused on excellence and the high achievements and not misdeeds and malfeasance. (Where Morals and Profits Meet: The Corporate Value Shift)

Unfortunately these corporate executives pay greater attention to misconduct starting from the small deceptions and betrayals that have a the effect of sapping morale and wasting human energy to the more serious forms of wrong acts that have the effect of destroying health, wealth and finally life itself. The issues that run make up the ethical wrong doings that have led to the lack of confidence in corporate executives are many and include falsified books, misleading communications, defective and dangerous goods being shipped out from manufacturing units without warnings and information, abusive behavior, unsafe workplaces, nepotism and favoritism, conflicts of interest, bribery, extortion, unfair and predatory competition, theft and misappropriation of information, irresponsibility towards society and the environment. (Where Morals and Profits Meet: The Corporate Value Shift)

The present beliefs in the role of moral and ethics in corporate strategies are different from what was believed twenty years ago. Corporate executives need to understand that people tend to correlate ethics and business integrity with greater emphasis than profitability and success in markets. Many Management thinkers have made it very clear that core values are essential to organizations with high performance goals. Corporate executives will have to learn soon that good ethics is good for business and incorporate ethics and morals into their corporate strategies. This becomes more and more the need of the hour as the corporate behavior and strategies come under the scrutiny of more and more agencies and public who are likely to go over it with a magnifying glass. (Implementing Ethics Strategies within Organizations)

Many corporate executives have the wrong notion that morals and ethics in business are restricted to the matter of the integrity of the individual and remain a confidential matter between the conscience of the individual and the individual. The issues of ethics in business that result from wrong decision making are thus thrust on the individual. The concept that the organization as a whole is responsible for the wrong corporate strategies is seldom seen with corporate executives. This is a wrong way in going about considering the role of ethics and morals in corporate strategies. It is not often that character flaws in an individual are the cause of anything wrong in the corporate strategies. The business scandals that rocked the United States of America in the 1990s clearly shows that the extremely unethical business practices were a result of the culture of the organizations involved along with the managements guiding values that had its impact on the corporate strategies and resulted in the business scandals. Looking at the example of Enron, it is easy to see that the prevailing corporate culture and the lack of ethics caused the corporate strategy of pushing everything to the extreme limits and these included business practices laws and personal behavior. (Ethics Must Come From the Top)

Year after year the list of companies that go bankrupt is becoming bigger and bigger. Every year both the number of companies and the asset values that are rendered as lost are growing. These lists include Fortune 500 companies that are not supposed to go bankrupt but are doing so. Analysis of the reason for this erosion of companies and assets is seen to come from really a bankruptcy of morals and ethics in these organizations and hence the lack of these vital moral and ethical values in their corporate strategies. There is no doubt that there are a number of other reasons that could lead to a company going bankrupt. These reasons include a bad economy, financial risks that were taken but failed to pay off, accounting manipulations that looked to be smart at that time period, loss of competitive advantage, and a quickly changing market environment. These may have been factors for some of the business collapses seen, but to know the actual situation one needs to probe deep into the hearts and souls of the corporate executives that led these organizations to their demise with their faulty corporate strategies that had no inbuilt ethical and moral values in them. Their strategies being bankrupt in ethics and morals created a corporate culture devoid of any values and thereby created a path to doom. (Leadership: Facing Moral and Ethical Dilemmas)

The September 11th events did have harsh consequences for some business organizations, yet the rash of bankruptcies that were seen after that, were not a result of those tragic events. Again the pointing of fingers at a few individuals who led these organizations that crashed does not seem reasonable on analysis. No doubt the direction the organization was headed would have been known to the chief executives of these organizations, but it would have taken more than just a rotten chief executive to pull down large organizations like a pack of cards. There is no doubt that unethical choices were adopted at the time that the corporate strategy was formulated in these organizations and the lack of ethical values in the corporate culture only made it more easy for it these unethical strategies to be implemented that led to the collapse of these organizations like a pack of cards. The question that needs to be asked in stringer term is whether these organizations were so bankrupt of ethical corporate executives that there was no objection at the time the corporate strategies were formulated. The answer will be more in the positive in many of these organizations. Going… READ MORE

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