"Rethinking Business E2 (Ethics & Etiquettes) -
How Personal Integrity Leads To Corporate Success"


By

Deepa Gupta
Senior Lecturer
E-mail:
deepa_mukul@yahoo.co.in / deepamukul@gmail.com
Mukul Gupta
Senior Lecturer
E-mail:
deepa_mukul@hotmail.com / mukulgupta75@gmail.com
Department of Management Studies
IILM – Academy Of Higher Learning
Plot No. 17-18, Knowledge Park–II, Greater Noida
 


ABSTRACT

Corporate success, being a dependent variable, has become an increasingly controversial topic, and the growing number of research and studies around the world has focused more attention on the basic assumption of corporate success and its effects. The purpose of this literature is to broaden the boundaries of the debate on corporate success in an era of societal globalization and increase our understanding of its influences beyond the economic sphere. The winners and losers resulting are identified along with evidence of the impact of key variables or factors, which determines corporate success – ethics and etiquettes emerging as major determinants of individual/corporate success. The paper indicates the role, importance, uses and effect of E2- ethics and etiquettes, to result in success; along with a case study to support and understand this approach.

Most companies started ethics programs to be compliant with the Guidelines. Over the past 10 years, it has evolved from a reactive to a more proactive approach to corporate ethics. In the past year, with the recent failure of many global companies due in large part to ethics violations, it has become obvious that proactively managing corporate ethics is good business, and directly affects the bottom line.

Ethics matters because it makes good business sense to "do the right thing". Additionally good corporate ethics results in:

  • Attracting better talent
  • Retaining employees
  • Attracting new customers
  • Retaining customers
  • A Positive effect on ROI
  • A Positive effect on Corporate Reputation

Management Pundits and Practitioners alike have long focused on two main questions –

(1)  What is E2; it means ethics and Etiquettes, in other words what constitutes a legitimate statement of ethical behavior or direction?

(2) How do we go about setting and using E2?

(3) Critically important question that is frequently over looked by those more interested in conceptual sport than in moving strategy from the drawing board to business results – what organizational conditions must be ion place to ensure that ethics and Etiquettes are effectively set and implemented.

For example if a business executive who is having a business lunch with a senior banker for negotiating substantial credit line for procuring material from a Japanese supplier. If the executive can converse about Japan's economic down turn and how Indian business can take advantage of price arbitrage, the chances are that banker is likely to be impressed by his general awareness. It instills confidence in banker that he can be taken seriously and he can be trusted in Business deal. Trust is very important factor in any business situation and ethics, attitude, values as well as Etiquettes helps to win the confidence of prospective business partners or we can say of every one.

The System Perspective of an Organization


Business ethics defines how a company integrates core values - such as honesty, trust, respect, and fairness -- into its policies, practices, and decision-making. Business ethics also involves a company's compliance with legal standards and adherence to internal rules and regulations. As recently as a decade ago, business ethics consisted primarily of compliance-based, legally-driven codes and training that outlined in detail what employees could or could not do with regard to areas such as conflict of interest or improper use of company assets.

Today, a growing number of companies are designing values-based, globally consistent programs that give employees a level of ethical understanding that allows them to make appropriate decisions, even when faced with new challenges. At the same time, the scope of business ethics has expanded to encompass a company's actions with regard not only to how it treats its employees and obeys the law, but to the nature and quality of the relationships it wishes to have with stakeholders including shareholders, customers, business partners, suppliers, the community, the environment, indigenous peoples, and even future generations. European companies especially have embraced this expanded definition of ethics. Among the most important business ethics issues faced by companies are: conflicts of interest, financial and accounting integrity, corruption and bribery, consumer and employee privacy, ethical advertising and bioethics.

Need and Objectives:

  • To recognize that the actions of individuals (especially, those who manage) can make a difference in performance and goal achievements.
  • To consider some assumptions about people in the work place.
  • To envision the challenges involved in being a manager.
  • To identify ethical issues that must be confronted.
  • To identify methods for determining appropriate ethical actions.
  • To consider managerial actions when individual dis-integrity (dishonesty) by employees occurs.
  • To review the obligations employees have for honesty and ethics.
  • Most important to question the value of ethical behavior.

So to build high performance teams in our organization, we require to follow ethical behavior. For this purpose we need to give answers of following eight key questions like:

1. Is organizational employee's missions, goals and priorities are clear?
2. Is organization comprises the right and honest players?
3. Do those players have clear, ethical roles and responsibilities?
4. Are members committed to winning as teams?
5. Do they have an agreed upon each other self respect?
6. Is there a sense of shared ownership and regard for team results?
7. Are they comfortable in dealing with team conflicts without any biasness?
8. Do they or organization self assess behavior and progress periodically?
9. Do they use the remedial techniques?

CONCEPT:

Ethics: - To understand the concept of ethics, we require management perspective. Attention is focused on the attitudes, experiences, expectations, needs, problems and changes in individuals and groups as they interact at work. Answers are sought to such questions as, "why do people do the things they do while at work? Why do people work, anyway? What effects do groups have on individual behavior? Are managers and non-managers alike or different in their work motivations and responsibilities? To whom do those who manage have obligations and responsibilities? How should managers go about performing their duties effectively and efficiently? What changes and trends are occurring today within organizations that have a bearing on people at work? Why do people frequently resist change and ethical behavior?"

Early managerial concern seemed to concentrate on increasing productivity, not on taking care of people. In the early part of this century, management pioneers such as Frederick Taylor, Frankgilberth and their contemporaries applied scientific methods to design jobs and work conditions for optimal productivity. Work patterns were designed for efficiency. Incentives offered to workers were primarily monetary. It was believed that every worker could be good at some thing; it was management's job to help each individual find the best place to work. Since it was felt that managers had a responsibility to provide the very best working conditions to the employees so that they can perform their maximum. Because it was felt that happy workers would be productive workers. Allowing and encouraging employees to work together in groups with personal integrity and ethical behavior.

Ethical behavior means getting the "right" kind of behavior from people as individuals and groups. Experts predict that organizations and work relationships will change significantly in the coming days. One expert 'Canter' has written that there are already greater numbers and variety of channels for taking actions and influencing others than in the past. Relationships for influencing others are seen as shifting from the vertical to the horizontal – from the chain of command to peer networks. Top-down authority is becoming less important, and teamwork is taking its place. The distinction between managers and those managed is diminishing, especially in terms of information, control over assignments, and access to external relationships. This means that managers must use persuasion and participation more and commands and directions less.

As a result of many changes taking place and predicted for the future, decisions about ethical behavior are becoming increasingly complex. Ethical behavior is activity that results in the right thing being done. But what is the right thing? Some times it is dictated by our culture. Most of the time, though, employees of an organization must determine; for themselves what is right or wrong. In our rapidly changing world, there are many situations in which no absolutely clear, indisputable course of ethical action exists. How can we determine what the ethical correct course of action is? One way to seek the ethically correct action is to ask: where can I look for guidelines on what's right and what's wrong? A starting point might be what does the law say about this? Some times this is the only question that needs to be asked because constitutional laws, statutory laws, court decisions, and executive orders may clearly dictate what must be done. For example, in America, discrimination on the basis of race, color, religion, sex, or national origin is prohibited by the civil rights acts of 1964. Some authors think that laws are dependent upon too heavily as behavior guidelines. In business field they propounded four codes of ethics like:

- A description of organizational values and principles.
- Standards of relationships among Directors, Shareholders, Stakeholders, Managers, Employees, Regulators and Customers.
- Standards of behavior which includes provision on compliance, on conflicts of interest and corporate opportunities, on competition interplay, and on disclosure,
- And the implementation or enforcement framework it means tightening up on ethics.

Ethical environment in the organization means the commitment to employees to provide the environment for professional growth while encouraging individual creativity and responsibility. To the communities being served, security pacific pledges to strive to improve the quality of life through participation in community services. This commitment promises resource utilization and the observance of laws and regulations. Security pacific obligates itself to its shareholders to provide consistent growth and a superior rate of return on investment, to be leader among the financial institutions, to protect stockholders investments, and to provide full and timely information. A code of ethics might also include directives for dealing with conflict of interest, confidentiality of corporate information, misappropriation of corporate assets, bribes, kick backs, political contributions, insider trading, government contracts, testing, privacy and industrial espionage. A code might spell out penalties for violation of the guidelines. Penalties can include such actions as termination, suspension, probation, demotion, and oral reprimand.

Although not every company puts its codes of ethics in to writing, it is usually advisable to do so. The need for written policy is especially urgent in companies without a strong tradition of ethical behavior to draw upon or in which a new way of thinking needs to be established. Training programs on ethics, particularly for the new employees of an organization, are becoming commonplace. After employees receives written code of ethics and hear the codes discussed, the employees sign statements indicating they have read, have understood, and are committed to abide by the standards established.

We can assess ethical behavior in our business operating free of corruption, by getting following results:

1. High-level accountability in our corporate house.
2. Appropriate communication.
3. If company's rewards and incentives are aligned with the ethical standards.
4. Follow profits with principles.
5. Empowerment of each and every part of organization like women, old age people, people from various religions or various nations etc.
6. Fair and transparent dealings and evaluation.
7. Consistent enforcement of code of ethics.

Few Facts regarding Ethics:

Employees in different age groups place differing priorities on abiding by the guidelines established. Older workers interpret ethics codes more stringently than do younger workers.

The size of the organization in which individuals work also seems to make a difference in acceptance and implementation of standards. People working in small organization seem to be more strict in matters relating to faulty investment advice, favoritism in promotions, permitting dangerous design flaws, misleading financial reporting, misleading advertising, and defending the healthfulness of smoking and drinking. On the other hand, people working in larger organizations seem to act more demandingly on padded expense account, tax evasion, favoritism in bidding, insider trading, discrimination against women, and copying computer software.

Professional groups usually have codes of conduct and members are expected to follow those laws. For example Rotary International Club (a world wide service and civic organization), churches (Institution), and schools. These organizations teach their own ethical guidelines.

Family is a very important source, which influences codes of conduct. Some feel that ethical training from family, religion and education has less impact today than in previous years.

ETIQUETTES:

Most of us have an impression that the Etiquette is putting the napkin properly round the neck and using the right fork to consume every morsel of food, and most importantly, not making noise while eating! Well all these are important yet they are not entirely the case of Business Etiquette. Etiquette is essentially presenting oneself in a fashion that conveys a fine civil sense. It is important to understand that social skills are important to create the right impression on the person with whom we are likely to have business dealing or just to have interaction. Social skills comprise of the ability to converse intelligently and transact purposefully with an individual or a group of individuals.

People and their perceptions play a vital role in the success of any corporate. So if any body lack in etiquettes, ethical behavior, table manners, smart dress code, social skills and value to principles and life, may loose potentially worthwhile business profitable alliances. Behavior is perceived as reflection of individual's attitude and values. With the help of Business Etiquettes we can get valuable advantage in conducting ourselves properly in business situations.

Fact regarding Etiquette:

There is a new concept related to Etiquette i.e. Techno Etiquette and it has assumed great importance in today's world. Technology is a disguised curse and speed is the concomitant result of technology. We are literally inundated with communication tools – fax, tale-conferencing, e-mail and voice mail, to name a few. Sadly we sacrifice face-to-face communication for speed of communication. The human element of 'connectedness' is lost in the labyrinth of technological sophistication. This can lead to a major communication break down and it is imperative that etiquette is given its due to avoid disasters. To communicate effectively in the digital age, we need to be master of techno-social etiquettes to stay ahead of the pack.

CASE STUDY:

Lewfrankfort, CEO  & Chairman of 'COACH', a premier retailer of leather accessories in America, is a good example of an effective ethical-strategic-conflict manager. In the early 1990's COACH's continued rapid was in question as it faced stiff competition not only from traditional rivals but from a number of high-energy upstarts. Frankfort knew that continued growth depended on strengthening the company's ability to bring new products (of good quality & without cheating) to market more quickly and with greater consistency.

 For this Frankfort had to inject more design merchandizing muscle in to his organization. To do this Frankfort brought on board new senior level design and merchandizing talent but these people were lacking in etiquettes and because of which they always raise finger on each other with typical arguments. Actually there were glaring cultural and societal differences between the forces of creativity and lot of ego clashes among people.

Solution:

Frankfort confronted both groups and told them, in effect, to "get your act together". He asked the warring executives and their respective teams to sit down together to honestly and openly identify the issues that divided them and to develop a plan for resolution. As Mr. Frankfort was a very impartial follower of ethic, etiquettes, and values; so no body can refuse his order. He decided to give incentives also according to the performance of employees very straightforwardly. He was the personality known for his principles and his words.


As a result both groups began to realize that without continued collaboration and cooperation, the success of their company as well as their jobs was at risk. The silos were broken down and the bickering stopped. The same theme is explained in the above figure.

Best of all, new styles began to hit the shelves at regular intervals; people started believing in Frankfort and his commitments. So COACH was able to maintain its rapid growth in the phase of much tougher market conditions.

So we can say Ethic in Business is really about WHO YOU ARE. The indifferent attitudes of owners or principal shareholders, stakeholders and even managers and employees led to the closure of business and loss of revenues and jobs.

Conclusion:

"Ethics demands that you put the interest of the corporate house above than your own". 

The basic unit of human Behavior in the work place is the individual employee. When the employee goes to work for an organization, an agreement occurs (sometimes the agreement is sub conscious commitment). The employee agrees to provide certain knowledge, skills, energy, and years of life, efforts, and emotions in return for salaries, wages, benefits and other rewards. As a result of this exchange, both employee and organizational needs are met. An organization develops a code of ethics and will provide a meaningful source of direction for its workers. It is normally assumed that an organization has obligations for its employees, shareholders, customers, suppliers, the government, local, regional and international communities, and other interest groups. Ethical Behavior or Social Responsibility is doing the thing that will benefit each of these publics to promote the common good. Employees, of course, are responsible for behaving honestly and ethically for their employer.

Actually human element in our social transaction is not entirely lost. We all are made of stuff like emotions, feelings and understanding. Hence, Ethics and Etiquettes will still continue to be the distinguishing badge of success.

Technology can be good servant but can't be the Master. The Human being with Ethics and Etiquettes will still continue to be Master after all !!!!

References:

1. Stephen R Robbins, "Management", fifth ed., Prentice Hall, ND, 1998.
2. A N Tripathi, " Human Values in Engineering Profession", monograph published business management centre for human values, IIMC, 1997.
3. SK Chakraborty, "Ethics in management", Oxford university press, Delhi1995, pp. 7
4. Sherry Baker, "Ethical Judgment", pp. 52-53.
5. Norman R Augustine, "The cost of being ethical, Integrity at work", east west books, Madras, pp.13-14.
6. www.amzon.com  
7. www.melcrum.com
8. www.csreurope.edu  
9. www.ethicsorg.edu
10. www.asianphilantrophy.org
 


Deepa Gupta
Senior Lecturer
E-mail:
deepa_mukul@yahoo.co.in / deepamukul@gmail.com
Mukul Gupta
Senior Lecturer
E-mail:
deepa_mukul@hotmail.com / mukulgupta75@gmail.com
Department of Management Studies
IILM–Academy of Higher Learning
Plot No. 17-18, Knowledge Park–II, Greater Noida
 

Source: E-mail December 22, 2005

   

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