Hi again franklorenz-ga! Thanks for being so patient with my clarifications.
The format of the answer for the discussion of the connection between
business and ethics will first show a backgrounder of the study or
article and then the conclusion. The resources will also provide the
theory or findings as evidence to show the connection between business
and ethics. Since ethics and value management cuts across different
segments of society some will be focused on workplace productivity,
the environment, etc.
I will try to provide small snippets from the documents I will cite
but I highly recommend that you read each of them in their entirety to
get a better grasp of the concepts presented.
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BUSINESS ETHICS:
1. Northern Telecom:
Background: ?Northern Telecom (Nortel), a $10 billion multinational
telecommunications corporation headquartered in Canada, initially
approached the question of business ethics from a programmatic basis,
consistent with that of many other North American multinational
corporations.?
?After careful consideration, Nortel decided to define its business
ethics objectives based on a stakeholder approach. The decision to
adopt a stakeholder approach was based on several factors. During the
sensing, participants were asked to evaluate the company's commitment
to ethics and corporate responsibility and to explain the basis for
their evaluation. Repeatedly, the theme of business ethics defined in
terms of the company's commitment to key stakeholders emerged across
all functions, management levels and geographic locations. Secondly, a
review of numerous codes of conduct from globally operating companies
reinforced the stakeholder idea and helped allay concerns of global
transferability. Finally, the stakeholder concept is well established
in the field of business ethics as a framework by which corporations
can identify and respond to societal obligations.?
Model/Measurement: ?Once the stakeholder commitments had been
established as Nortel's corporate responsibility objectives, the
function launched several key initiatives to improve the corporation's
performance. Two of the most critical initiatives were the launch of
an ethics training program and a confidential advice channel.?
?With elements of the ethics program established, the Business Ethics
function wanted to monitor the company's progress in achieving its
stated objectives. However, in order to effectively monitor the
progress of the initiatives and to keep management focused on the
ultimate program objectives, the function needed to develop
quantifiable outputs and measures.?
Conclusion/Theory: ?The authors feel that by utilizing a quantifiable
approach to assess the corporation's commitment to stakeholders,
Nortel will be in a unique position to monitor its performance in the
field of ethics and corporate responsibility.?
?Longer-term, the authors hope to apply this model across a major
sample of corporations. The objectives of this analysis would be to
determine the characteristics and factors behind corporations with
superior results. Does the presence of codes and training actually
impact performance, or is such success solely attributable to
executive leadership or other factors? ?
?QUANTIFYING CORPORATE RESPONSIBILITY: A PROPOSED APPROACH?
http://www.itcilo.it/english/actrav/telearn/global/ilo/code/quantify.htm#The%20Northern%20Telecom%20(Nortel)%20Approach
2. Ford's River Rouge Factory:
Background: ?McDonough is the brains behind the $2 billion overhaul of
Ford's River Rouge factory, a smoking, groaning 1,000-acre hulk atop
the Michigan mud flats. In its heyday, in World War II, 120,000 people
worked there.?
Result: ?But the principal color on McDonough's palette is green, and
it has been applied lavishly to the Rouge. Birds have flown back to
nest in the 1,500 trees that have replaced large tracts of asphalt. A
454,000-square-foot carpet of native grasses is draped over the roof,
soaking up rainwater and cooling the building as the water transpires,
while cutting down on runoff. As a result, stormwater treatment is
expected to cost only $13 million a year for the plant, compared with
$48 million for a conventional system of pipes, according to
McDonough.?
Theory/Conclusion: ?He says the key to getting business to go green is
to make the sustainable technology so profitable that cost-conscious
executives can't afford not to change.?
?Making the business case for going green?
http://www.csmonitor.com/2001/1018/p17s1-sten.html
3. Equal Exchange:
Background: ?When you buy a pound of gourmet coffee for $8 or $9, as
little as 40 cents of that may go to the farmers who grew it. Much is
siphoned off by middlemen in the export country, known to Latin
American farmers as "coyotes," who offer the lowest possible price -
leaving some 20 million coffee farmers trapped in poverty. But some
are fortunate. They do business directly with Equal Exchange, a
fair-trade company in Canton, Mass. By cutting out the middlemen,
these farmers reap as much as 50 cents extra per pound. They're people
like Don Miguel Sifontes in El Salvador. "We used to live inhouses
made of corn husks," he told Equal Exchange. ?Now we have better work,
better schools, homes of adobe, and a greater brotherhood of decision
makers.?"
Result: ?For 13 consecutive years, the company has grown steadily,
with 1998 sales of $5.7million, up 18% from the year prior. It has
been profitable 10 of the last11 years - and when it suffered a small
loss in 1998, it still paid shareholders a dividend.?
Theory/Conclusion: Fair Trade - ?It's a way of doing business that
defines supplierwelfare as part of business success?with the goal of
building a more just system of trade between consumers in the north
and producers in the south.?
?Leading the Way to Fairer Trade Practices?
http://www.inc.com/articles/1999/12/15823.html
4. Energy Efficiency in Buildings:
Background: ?This paper describes case studies of companies that
undertook to increase the energy efficiency of buildings, and thereby
inadvertently increased worker productivity. Energy-efficiency
retrofits for existing buildings, and new buildings designed for
energy-efficient performance, have very attractive economic returns.
For example, a three-year payback, typical in lighting retrofits, is
equal to an internal rate of return in excess of 30 percent. This
return is well above the ?hurdle rate? of most financial managers. The
same retrofit may also cut energy use by 50¢ or more per square foot,
which has significant positive effects on the net operating income of
a building.
However, these gains are tiny compared to the cost of employees, which
is greater than the total energy and operating costs of a building.?
Studies were made on the following companies;
a. Reno Post Office
b. Boeing
c. Hyde?s Tools
d. Lockheed?s
e. West Bend Mutual Insurance
f. Wal-Mart
g. ING Bank
Theory/Conclusion: ?Energy-efficient building and office design offers
the possibility of significantly increased worker productivity. By
improving lighting, heating, and cooling, workers can be made more
comfortable and productive. An increase of 1 percent in productivity
can provide savings to a company that exceed its entire energy bill.
Efficient design practices are cost-effective just from their energy
savings; the resulting productivity gains make them indispensable.?
?GREENING THE BUILDING AND THE BOTTOM LINE?
http://www.rmi.org/images/other/GDS/D94-27_GBBL.pdf
5. Merck:
Background: ?Merck was highly aware of the corrosive effect of
corruption on local economic and social development, on foreign
investment, the environment, productivity and even public health. So
in its foundation?s social responsibility mission to support foreign
communities, Merck launched the Gulf Centre for Excellence in Ethics
in 1998, a pilot educational institute in Abu Dhabi, United Arab
Emirates (UAE), to see if it could raise business standards in the
region by promoting organisational ethics.?
Theory: ?If, in time, business transactions became more transparent,
Taylor and his colleagues reasoned that their products would gain
ground by competing on a more ?level playing field?. And, if they
could gain traction in a challenging environment like the Arabian
Gulf, it might even serve as a prototype for other regions. (Indeed it
did. Merck has subsequently funded ethics centres in South Africa,
Colombia and Turkey.)?
Results/Conclusions: ?For Merck?s part, it also proved that working
toward such social goals could provide business benefits as well. More
important than any early commercial gains, the company?s ethics
initiative undoubtedly helped it secure better access and
relationships with key healthcare decision-makers in the UAE and other
Gulf markets, which will serve it well for years to come.?
?The Gulf Centre also provided early valuable lessons on building
capacity and awareness for Merck and the ERC?s subsequent expansion
efforts.?
?Confronting corruption: the strategic value in building civil society?
http://www.ethicalcorp.com/resources/pdfs/content/200412642331_Merck%20Case%20Study%20-%20Jonathan%20Levine.pdf
6. Business Continuity:
Background/Theory: ?This white paper explores the connection between
ethics and business continuity. This paper outlines the considerable
risks that result when the ethics component of an organization's
business continuity activities are not carefully considered. For
senior executives of publicly held companies these risks include
significant new personal liabilities that are the consequence of
recent legislative initiatives regulating corporate governance
activities. This paper concludes by describing clear steps that senior
executives can take to ensure that the exposure to these risks is
minimized to the fullest extent possible.?
Conclusion:
1. Paying attention to ethics opens to successful business continuity programs.
2. Systems of Procedural checks are valuable tools.
3. Senior management take an active part in business continuity programs.
?Business Continuity and Ethics: Minimizing Future Risks?
http://www.emc.com/solutions/continuity/pdf/h990.pdf?emccomjsessionid=361451082529979089
7. Stakeholder Concept:
Background: ?Many companies are choosing to make an explicit
commitment to corporate social responsibility (CSR) in their mission,
vision and values statements. Such statements frequently extend beyond
profit maximization to include an acknowledgement of a company's
responsibilities to a broad range of stakeholders, including
employees, customers, communities and the environment. This strategy,
by which a company's core values -- independent of specific strategic
goals -- serve as the guiding force in determining a company's mission
and vision, as well as its day-to-day policies and practices, is often
described as a ?values-based business approach.?"
Theory: ?In Western Europe, Japan, and North America, an increasing
number of companies are finding that it makes good business sense to
fully integrate the interests and needs of costumers, employees,
suppliers, communities, and our planet ? as well as to those of
shareholders ? into corporate strategies. Over the long term, this
approach can generate more profits and growth. Sometimes referred to
as the ?stakeholder concept?, it implies that management task?s is to
seek an optimum balance in responding to the diverse needs of the
various interest groups and constituencies affected by its decisions,
than is by those that have a ?stake? in the business. By including
societal actors ? not just financial interests ? the stakeholder model
assumes that enterprise has a social responsibility.?
?Corporate Ethics as a Factor for Success ? the Measurement Instrument
of the University of Agricultural Sciences (BOKU) Vienna?
http://www.boku.ac.at/mi/fp/texte/ethics.pdf
Finally, the last two companies to be studied here are worth noting
since even though the models do not directly contribute to the
company?s bottom line, the program models they initiated are worthy of
mention for their innovativeness and the goodwill that the company
will benefit from a particular community.
8. Misima Mines Limited
Background: ?In the late 1980s, one of the world?s largest gold mining
corporations, Placer Dome Inc., opened a gold mine that eventually
employed 700 people. The subsidiary operating company, Misima Mines
Limited (MML), upgraded the road in order to transport workers from
their remote villages to the minesite.?
?By the mid to late 1990s, the geological data was predicting the end
of the mine?s economic viability. Management had to start planning for
closure. It was clear that government would be unable to maintain much
of the infrastructure the company had put in place or upgraded. One
economic consulting report predicted that without mining jobs, the
local economy could contract to one third of its current size.?
Solutions:
a. ?In terms of human capital, a good start had already been made by
the Christian missionaries whose schools had created a relatively high
level of literacy on the island. The company took things further by
helping employees get certification in various skilled trades and
professions such as accountancy, nursing and engineering.?
b. ?In terms of social capital, MML started working from the
grassroots up. The first task was to familiarise village level leaders
with the Western-style, long-term strategic planning processes used by
the company and senior levels of government. The company hired an NGO
named Harmony Inc. to help local leaders develop the skills needed to
create strategic plans for each village and then take them to higher
levels of government.?
Conclusion: ??Increasing human capital and social capital are the keys
to an ethical exit strategy. Global corporations can rarely avoid
creating some dependence when they first enter a community. If they
start planning early, however, they can create the social conditions
that will strengthen the community?s capacity to solve its own
problems. Most remote, rural areas will never become economic
powerhouses like the great cities. However, with knowledge, internal
co-operation, and links to the outside world, they can improve their
prospects in a sustainable way. Global corporations have a vital role
to play in building such human and social capital but they cannot do
it alone.?
?Case Studies: Ethical exit strategies?
http://www.ethicalcorp.com/content.asp?ContentID=436
9. OneWorld Health ? (Non-Profit Company)
Background/Model: ?She has come to the simple conclusion that if the
companies can help those most desperate for drugs ? without damaging
their bottom line ? then everyone wins. OWH has created a model by
which pharma companies can do just that, using their dormant
intellectual property. Hale explains, ?The potential drugs are
identified by companies as being of very low value, so they are doing
nothing. We?ve created a way for them to come alive and have value;
when everyone?s just for profit no-one finds these leads particularly
promising.?
?The drugs to which Hale is referring are remedies for parasitic
diseases such as leishmaniasis, Chagas disease, schistosomiasis,
African sleeping sickness, malaria in pregnant women and diarrhoeal
diseases.?
?Requesting that intellectual property be shared is another method
used by OWH to persuade pharma companies to part with such
information. The idea is that each party can use the IP for its own
requirements. The pharma company develops the drug for selling to the
section of society that can afford it, while OWH utilises it for those
who have a desperate need, but no money.?
Conclusion: ?By enabling pharma companies to utilise non-profit making
IP for the greater good, and by helping these companies profit from
the developments made to the drugs, OWH has set up a sustainable cycle
of aid, where everyone wins.?
?Sustainability is also key to the process of manufacturing the drugs,
which OWH aims to carry out in the very developing countries they are
trying to help.?
?Case Studies: Pharma without the profits?
http://www.ethicalcorp.com/content.asp?ContentID=1282
-------------------------------------
Our next articles will provide to different discussions of models used
in business ethical systems. Since this are usually articles that
enumerate steps and elements plus provide illustrations, it will be
better for you to go directly to the articles and read the details.
?The Corporate Citizenship Company Approach to Social Reporting?
(Includes links to Summary Charts)
http://www.corporate-citizenship.co.uk/social/approach.asp#assumptions
?Monitoring, measuring and reporting corporate social responsibility?
(MS Word Required)
http://www.corporate-citizenship.co.uk/publications/download2.doc
?Measuring Organizational Integrity, and the bottom line results one can expect?
http://www.ethicaledge.com/quest_7.html
?The ROI of an Effective Ethics Program?
http://www.hr.com/HRcom/index.cfm/74/B2D16A42-9825-4907-98F4D5F7A92383DF
?Measures for Corporate Responsibility Program Effectiveness?
http://www.ethicaledge.com/Measures_Business_Ethics_Program_Effectiveness.htm
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The final section deals with what is called spirit in business.
Usually such rallying of the business spirit includes terms such as
team empowerment and organizational motivation. I was not able to find
a unifying term for this since different companies and theorists have
different strategies to create such programs. Our last articles shall
provide discussions of the different methods of rallying the business
spirit and how it contributes to the success of an organization.
1. Shared Ownership
Theory: ?Giving employees a feeling of ownership in the company is the
first step to energizing them. By following up with rewards for
outstanding work and tying incentives to business values and goals,
you can keep employees happy and productive.?
?Motivate to Retain and Gain?
http://www.gesmallbusiness.com/magazine/2001_spring/s2001_motivate_to_retain.jsp
2. Team Empowerment
Theory: ?Macro change drivers like global competition, information and
technology innovations, and demographic shifts have required
organizations to rethink their structures and processes. In
particular, the flattening and downsizing of organizations has led to
the empowerment of teams in an attempt to increase flexibility,
adaptability, customer responsiveness, and productiveness. While
transition to teams has been a widely adopted strategy, there are many
examples of team failures that eventually undermine empowerment. It is
argued in this article that the formation of teams requires the
presence of certain external and internal conditions. The external
requisites include support and direction, such as congruence with
strategy, top management support, clear goals and parameters, and
effective selection of employees. The internal requisites include an
emphasis on preparation and training of employees through initial team
building and ongoing team development, and encouragement of a
continual reflective learning cycle. Without the internal processes
for team learning, even an initially successful team may defeat itself
and become unproductive, thereby discouraging further support for team
empowerment initiatives.?
?Requisite Conditions for Team Empowerment?
http://www.css.edu/users/dswenson/web/439ARTIC/REQTEAM.HTM
?Recently, many companies have turned their service delivery into a
self-managed team effort. This article examines the antecedents (i.e.,
employee perceptions) and consequences (i.e., customer perceptions) of
team commitment to service quality in self-managed service groups. We
begin by demonstrating that team commitment to service quality in
self-managed service groups is critical to customer perceptions of
service quality. Because of the hierarchically nested data-structure
(i.e., groups and individuals), we investigate the antecedents of team
commitment to service quality in service groups using a multi-level
approach. Our results revealed significant effects of both individual-
and group-level factors on our key variable, indicating the efficacy
of multi-level techniques in modeling team-employee relationships.?
?Team Commitment to Service Quality in Self-managed Service Groups: An
Empirical Assessment of the Employee and Customer Perspective?
http://www-edocs.unimaas.nl/files/rm01029.pdf
?Empowerment involves delegation. There are two ways to delegate, the
gofer way, and the stewardship way. Either gets the employee involved,
just at different levels. The gofer way is when the manager tells the
employee a specific way to do the task and each step must be followed.
On the other hand, stewardship delegation is telling the employee what
outcome is needed and then letting the employee to make a choice on
how to solve the problem. The employee may even be asked to use some
of his/her own creativity. I will discuss stewardship delegation in
further detail (Covey, Stephen R. 1989.)?
?EMPLOYEE EMPOWERMENT. WHAT DOES IT REALLY MEAN??
http://www.emporia.edu/ibed/jour/jour23ot/kiml.htm
?When companies recognize teamwork with tangible rewards, they become
more productive and better at retaining employees. Besides boosting
profits, a stable staff cuts the costs of recruiting and training.?
?"The traits these companies have in common are that they put people
on teams and they pay teams real money," Jennings says. "They do not
encourage lone wolf or star performance, even for the CEO." And
another common thread: The companies do not lay off workers when times
turn hard. They find ways to pull together to cope and compete. They
share a managerial mindset that sees employees as assets rather than
as costs.?
?Reward your employees for teamwork in 2003?
http://www.bcentral.com/articles/krotz/164.asp
Example: Saturn Corporation
?The 37 Saturn maintenance teams, each consisting of six to 15 skilled
trades members, are spread across a wide variety of production
processes. These teams cover support for robotics, assembly, paint
processing, metal stamping, polymer injection, gear machines, foundry
and heat treatment, etc. Each is responsible for running its
operations support activities as a business, including planning,
absenteeism, continuous improvement, controlling part and tool
inventory, performing to budget, etc. Because Saturn has a unique
union agreement that allows for partnership at all leadership levels,
it was decided that all 37 teams would be assessed, instead of
assessment at some higher level in the business structure.?
?The purpose of the assessment process is to train the maintenance
team members as to what world class practices are and help them
develop continuous improvement plans as may be appropriate to correct
any shortfall the team decides is important. See the accompanying
section ?Assessment Process?Guidelines.? The process requires that the
maintenance team members being assessed develop a team manual with
supporting evidence for each of the 67 assessment questions.?
?Team Empowerment and Benchamarking at Saturn Corp.?
http://www.mt-online.com/articles/11-98mm.cfm?pf=1
3. Teamwork through Pervasive Testing
Background: ?When testing pervades a project, the test tasks start on
the first day of the project. Test team members are involved in
project planning and requirements definition. In parallel with these
activities, testers organize a quality risk analysis for all key
stakeholders, as discussed earlier in this series. Based on the
decisions made in that analysis of what features and functions of the
system require the most testing, the test manager prepares an estimate
and a plan for the test effort. Once the plan and estimate are
approved, testers proceed to configure the test environment and create
the test cases, data, and tools at the same time that programmers are
creating the system.?
?With teamwork, each project team plays a specific part, and team
members know their individual roles and responsibilities. People
stretch to help their teammates, true, but each person focuses on
doing their part. Sales, marketing, and business analysts define the
expected uses. Customer support and help desk staff explain the key
problems that exist in the current product. Programmers write and
review code. Database administrators define schemas. Configuration
management engineers maintain the code repository and create software
releases. System administrators support development and test
environments. Testers evaluate system quality and deliver useful,
unbiased information in a timely, accurate, credible fashion. The
handoffs between each team happen on time, as planned and committed.
Throughout it all, managers provide resources and guidance,
proactively course-correct to prevent crises, and promote teamwork
within and across their teams.?
?Maximum ROI through Pervasive Testing?
http://www.stickyminds.com/sitewide.asp?ObjectId=3594&Function=DETAILBROWSE&ObjectType=ART
Search strategy used:
Ethics ?ethical systems? benefits contributions effects ROI profits revenues
?Team empowerment? business spirit rallying employees workplace motivation
I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.
Thanks for visiting us!
Regards,
Easterangel-ga
Google Answers Researcher |
