Business Ethics and Diversity

Posted: 2 months ago

Ethics
and diversity management :

It is so important for
every business leader to consider how diversity and ethics in business affect
success. There are legal and ethical considerations to take into account when working
with diversity issues. There are also productivity and profitability issues to
consider. No matter how a manager looks at the situation, creating positive
rules and habits around diversity and ethics is good for business.
A question raises in our mind that what does Ethics in business mean?
Business ethics is the study of
appropriate business policies and practices regarding potentially controversial
subjects including corporate governance, insider trading, bribery,
discrimination and corporate social responsibility
Let
us understand Business Ethics
Business ethics ensure that a
certain basic level of trust exists between consumers and various forms of
market participants with businesses. For example, a portfolio manager must give
the same consideration to the portfolios of family members and small individual
investors. These kinds of practices ensure the public receives fair treatment. The concept of business ethics
began in the 1960s as corporations became more aware of a rising consumer-based society that showed concerns regarding the environment, social causes, and
corporate responsibility. The increased focus on so-called social issues was a hallmark of the decade.
Since that time period, the concept
of business ethics has evolved. Business ethics goes beyond just a moral code
of right and wrong; it attempts to reconcile what companies must do legally
versus maintaining a competitive advantage over other businesses. Firms display
business ethics in several ways The following are the types of moralities
in a company
1.   
Personal responsibility.
2.   
Representative or official
responsibility
 
Personal responsibility.
It refers to a man's personal code
of ethics. If a man behaves in honesty, he will behave in a very honest and
straight forward manner. According to Walton, "A morally responsible
executive is one who knows the various kinds of value systems that may be employed
in a particular situation and has a rather clear idea of what values hold
ascendancy (precedence or priority) over others in a conflict. A businessman
may think he is acting ethically but others may not consider his behavior as
ethical.
Representative
or official responsibility

A manager's action often represents
the position he holds or the office he occupies rather than his personal
beliefs. This is so because the manager represents the business. He has to
follow the rules and regulations of the business, e.g. a manager may want to do
something but the regulations may forbid him from doing it and therefore his
hands are tied and he may not do it.
 
Types
of Business Ethics with Examples

 


Following are the types of business ethics
Personal loyalties.
Sometimes personal loyalties are so
strong that ethical standards may not be applied when acting towards a
particular individual. Personal loyalties include the loyalties of a
subordinate to his superior and the superior's loyalty towards his subordinate.
 


Loyalties of a
subordinate to his superior:

If a subordinate has strong
personal loyalty towards their superior, they turn a blind eye towards the
blunders committed by their superiors and attempt to defend their omissions and
commissions. For example, if the branch manager of a bank is sanctioning the loan
without any security and this act on his part may bring disastrous financial
troubles to the organization, his subordinates who were men of high moral
character and who had close connections with the head office did not inform
them of the financial irregularities because of strong personal loyalty towards
their branch manager.
Superior's
loyalty towards his subordinate

If a superior has strong personal
loyalty towards their subordinates, they turn a blind eye towards the mistakes
committed by their subordinates. This is done because the superior does not
want to hurt the feeling of his subordinates because of their close personal
contact. For example, if the subordinates who are close to the manager do not
do their work properly, the manager may not reprimand (rebuke or scold) them
for their poor performance. He may rather defend their poor quality work with
his superiors because of his personal attachment towards his subordinates.
Corporate
responsibilities.

Every individual living in society
has a moral obligation towards it. Corporations are entities that are
"artificial persons", therefore they too have moral responsibilities
towards society. Their moral responsibilities are not necessarily identical
with the personal moral codes of the executives who run them. Every corporation
must have moral codes that help it in deciding matters connected with
shareholders, employees, creditors, customers, government, and society.
Organizational
loyalties.

Some employees have a deep sense of
loyalty to the organization. Their loyalties to their organization are so
strong that they even neglect their own self-interest for the sake of the
organization.
 


Economic
responsibilities.

According to Milton Fried man,
"there is one and only one social responsibility of business – to use its
resources efficiently and engage in activities designed to increase profits
without deception or fraud". Therefore, every business must contribute to the
general welfare of the society by making efficient and economical use of
resources at their command. This type of morality guides individual action
towards the economy in the use of resources put at his disposal.
Technical
morality.

In any country, the state of
technology plays an important role in determining what products and services
will be produced. Technological environment influences organizations in terms
of investment in technology, consistent application of technology, and the
effects of technology. A manager having technical morality will refuse to
compromise with quality. Every organization which is actively engaged in
technological advancement will create more challenging situations for the
organizations because they are not prepared to accept lower standards.
Legal
responsibility

Legal environment provides the
framework within which the business is to function. The viability of a business
depends upon the ability with which a business can meet the challenges arising
out of the legal framework.
DIVERSITY IN MANAGEMENT
Diversity management refers to
organizational actions that aim to promote greater inclusion of employees from
different backgrounds into an organization’s structure through specific
policies and programs. Organizations are adopting diversity management
strategies as a response to the growing diversity of the workforce around the
world
 
Advancements in technology now
allow companies to hire and manage employees from around the world and in
different time zones. Companies are designing specific programs and policies to
enhance employee inclusion and promotion, and retention of employees who are
from different backgrounds and cultures. The programs and policies are designed
to create a welcoming environment for groups that lacked access to employment
and more lucrative jobs in the past
 
Types
of Diversity Management

 
The following are the two types of
diversity management:
 
Intranational
diversity management

Intranational diversity management
refers to managing a workforce that comprises citizens or immigrants in a
single national context. Diversity programs focus on providing employment opportunities
to minority groups or recent immigrants.
For example, a French company may
implement policies and programs with the aim of improving sensitivity and
providing employment to minority ethnic groups in the country.
Cross-national
diversity management

Cross-national, or international,
diversity management refers to managing a workforce that comprises citizens
from different countries. It may also involve immigrants from different
countries who are seeking employment.
An example is a US-based company with
branches in Canada, Korea, and China. The company will establish diversity
programs and policies that apply in its US headquarters, as well as in its
overseas offices
Benefits of having Diverse Workforce
·     
A Variety of Perspectives
Put a variety of world views into
one room, and you’ll come out the other side with better ideas. It’s simple:
When employees of different backgrounds, different cultures, different
nationalities, and different perspectives come together, everyone shares a
slightly different approach to the job and the problem at hand. And that’s a
benefit, as far as your success is concerned.
·     
Increased Creativity
In the same vein, workplace
diversity boosts creativity. Think about it this way: sameness breeds sameness.
If you employ only heterogeneous groups – that is, employees who hail from
similar cultures, perspectives, and socioeconomic circumstances – then you’re
limiting your creativity and innovation. Conversely, employees from diverse
backgrounds will bring diverse solutions to achieve a common goal – your goal
·     
Increased Productivity
workplace
diversity not only breeds creativity, but also productivity. And that’s because
creativity actually leads to productivity: the more diverse your workforce, the
more diverse your brainstorming, the more diverse your solutions, the more
diversely productive your team.
·     
Reduced Fear, Improved Performance
A workplace culture of diversity goes a long way toward helping your employees
feel included, no matter who they are or where they come from. This inclusiveness
helps break down barriers and reduces the fear of being rejected, not only for
who your employees are, but for the ideas they voice