QUESTION:
Briefly explain the
definition of Business Ethics Management and its components.
ANSWER:
Business ethics management is
the direct attempt to formally or informally manage ethical issues or problems
through specific policies, practices and programmes. There are nine components
of business ethics management.
First is a mission or values
statement. These are general statements of corporate aims, beliefs and values.
For example, the global pharmaceutical company GSK has a mission ‘to improve
the quality of human life by enabling people to do more, feel better and live
longer’.
Second is a code of ethics.
There are explicit outlines of what type of conduct is desired and expected of
employees from an ethical point of view within a certain organization,
profession, or industry.
Third is a reporting/ advice
channels. Gathering information on ethical matters is clearly an important
input into effective management. Providing employees with appropriate channels
for reporting or receiving advice regarding ethical dilemmas can also be a
vital means of identifying potential problems, and resolving them before they
escalate and/or become public. Some of organizations have therefore introduced
ethics hotline or other forms of reporting channels specifically for employees
to notify management of ethics abuses or problems and to seek help and guidance
on solutions.
Fourth is a risk analysis and
management. Awareness of reputational and financial risks has been one of the
key drivers of increased attention to business ethics. Managing business ethics
by identifying areas of risk, assessing the likelihood and scale of risks, and
putting in place measures to mitigate or prevent such risks from harming the
business has led to more sophisticated ways of managing business ethics,
although as yet, most companies have not developed an integrated approach to
risk and ethics.
Fifth are an ethics managers,
officers, and committees. In some organizations, specific individuals or groups
are appointed to co-ordinate and/or take responsibility for managing ethics in
their organization. A growing number of large corporation also now have an
ethics committee, or a CSR committee, which oversees many aspects of the
management of business ethics. For example, the UK supermarket J. Sainsbury plc
has a board-level Corporate Responsibility Committee with responsibility for
recommending corporate responsibility policy, and agreeing and approving the
annual corporate responsibility report.
Sixth is an ethics consultant.
The initial growth in this sector was driven by environmental consultants who
tended to offer specialist technical advice, but as the social and ethical
agenda facing companies has developed the consultancy market has expended to
offer a broader portfolio of services including research, project management,
strategic advice, social and environmental auditing and reporting,
verification, stakeholder dialogue, and others.
Seventh is an ethics education
and training. These provisions might be offered either in-house or externally
through ethics consultants, universities and college, or corporate training
specialist. Many academic writers have stressed the need for more ethics
education among business people, not only in terms of providing them with the
tools to solve ethical dilemmas, but also to provide them with the ability to
recognize and talk about ethical problems more accurate and easily.
Eighth are stakeholder
consultation, dialogue, and partnership programmes. There are various means of
engaging an organization’s stakeholders in ethics management, from surveying
them to assess their views on specific issues to including them more fully in
corporate decision-making. Just as importantly though, it is evident that if
‘good’ business ethics is about doing the ‘right’ thing, then it is essential
that organization consult with relevant stakeholders in order to determine what
other constituencies regard as ‘right’ in the first place.
Ninth is auditing, accounting,
and reporting. Finally, we come to a set of closely related activities that are
concerned with measuring, evaluating, and communicating the organization’s impacts
and performance on a range of social, ethical, and environmental issues of
interest to their stakeholders. These aspects have not pioneered in the US, but
rather in Europe.
