Discussion and responses

Explain the relationship between ethics and social responsibility. Discuss specific examples of ethical leadership and its impact on organizations and society. Discuss specific examples of unethical leadership and its impact on organizations and society.

(Do not attempt to address all of these points in your first post. Challenge yourself to develop your understanding and interaction with the course concepts as the discussion progresses.)

Discussion posts should reflect scholarly analysis and interpretation of the topic as well as supporting research. Follow APA formatting guidelines (current edition) to integrate your research and cite your sources. Each post (the initial post as well as the response posts) should be between 300-500 words in length.

Holley W Discussion

What comes to mind when thinking about unethical leadership is Enron. From 1998 through 2000 Enron went from a 31-billion-dollar company to a 100-Billion-dollar company (Ferrell, Fraedrich & Ferrell, 2013). On December 2, 2001 Enron claimed Chapter 11 bankruptcy (Wasted Energy, 2001). “Enron’s culture encouraged flouting the rules in pursuit of profit” (Ferrell, Fraedrich & Ferrell, pg. 396, 2013). Jeff Skilling, the CEO of Enron, was convicted of fraud, conspiracy, misrepresentation and insider trading (Ferrell, Fraedrich & Ferrell, 2013). According to Premeaux, Skillings and Lay brought down Enron through their unethical behavior (2009). Likewise, they destroyed the financial security of the employees (Premeaux, 2009).

“Since managers are the link among labor, shareholders, suppliers, and customers, their ethical or unethical actions are critically important (Premeaux, 2009). The ethical direction and health of an organization are directly linked to the behavior of the manager (Hyman et al., 1990). These leaders showed a great deal of unethical behavior and have since been convicted for their crimes and wrong doing (Ferrell, Fraedrich & Ferrell, 2013). Through the unethical behavior of Enron, a new policing body was created to ensure it is more difficult for the wrong doing to transpire. In 2002 Congress created Sarbanes-Oxley Act to legislate the ethical behavior of publicly traded companies and their audit firms (Rockness & Rockneess, 2005). Because of Enron all publicly traded companies must comply with the multitude of rules that make up the Sarbanes-Oxley Act (The Laws That Govern the Securities Industry, 2013).

Reference:

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business Ethics: Ethical Decision Making and Cases. (9th ed.). Mason, OH:South-Western Cengage Learning. (ISBN—13: 978-1-111-82516-4, ISBN—10: 1-111-82516-5)

Hyman, M. R., R. Skipper and R. Tansey: 1990, ‘Ethical Codes are not Enough’, Business Horizons 33(2), 15–22

The Laws That Govern the Securities Industry. (2013, October 01). Retrieved February 17, 2018, from https://www.sec.gov/answers/about-lawsshtml.html#sox2002

Premeaux, S. (2009). The link between management behavior and ethical philosophy in the wake of the enron convictions. Journal of Business Ethics, 85(1), 13-25. http://dx.doi.org.saintleo.idm.oclc.org/10.1007/s10551-008-9745-9

Rockness, H., & Rockness, J. (2005). Legislated Ethics: From Enron to Sarbanes-Oxley, the Impact on Corporate America. Journal of Business Ethics,57(1), 31-54. doi:10.1007/s10551-004-3819-0

Wasted energy. (2001, December 08). Retrieved February 17, 2018, from http://www.economist.com/node/895651

Melvin P discussion 7 

The concept of social responsibility is established by a system of ethics, in which decisions and actions must be ethically validated before proceeding. If the action or decision causes harm to society or the environment then it would be considered to be socially irresponsible. The concept of social responsibility and ethics can also applies to both individual and group capacities. It should be incorporated into daily actions/decisions, particularly ones that will have an effect on other persons and/or the environment. In the larger, group capacity, a code of social responsibility and ethics is applied within said group as well as during interactions with another group or an individual. Businesses have developed a system of social responsibility that is tailored to their company environment. If social responsibility is maintained within a company than the employees and the environment are held equal to the company’s economics (Klawuhn, 2011). Maintaining social responsibility within a company ensures the integrity of society and the environment are protected.

     Large organizations and publicly held companies often use corporate governance to promote business ethics and social responsibility. This governance creates the framework of policies, procedures, and guidelines for all individuals financially invested in a company. Outside stakeholders who do not have an investment can also benefit from corporate governance (Murphy, 2013). Large organizations and publicly held companies typically face more scrutiny pertaining to business ethics since they command large portions of a region or nation’s economic resources. These companies must try to provide benefits to local communities and increase the living standards of as many people as possible, and they must be careful not pollute the surrounding environment. While business ethics certainly play an important role in the business environment, it is possible for governments and individuals to demand too much social responsibility from companies. While companies should not abuse or misuse natural and economic resources, companies cannot pay for all the needs or wants of individuals (Murphy, 2013). Some governments, individuals, or special interest groups can try to force companies into paying more money to improve society than the company can afford. This can result in lower business profits and the inability to pay for future, more reasonable and responsible social items.

     Improper conduct in leadership levels usually has a direct impact on the attitudes and performance of employees. Employees who do behave ethically, for example, will begin to feel like following the rules won’t get them ahead within the company. This causes the motivation and performance of otherwise model employees to erode over time. On the flip side, some employees may see unethical behavior and assume it’s ok to adopt it themselves. If a restaurant manager is seen stealing money from the cash register at the end of the day, the bartenders and servers will start to think they should be doing the same thing. This type of behavior can have repetitive results that will eventually erode the very foundation that a good company’s reputation was built on.

References:

Klawuhn, Jack (2011). Social Responsibility and Ethics. Pachamama Alliance. Retrieved from 

https://www.pachamama.org/social-justice/social-responsibility-and-ethics

Murphy, Patrick (2013). The relationship between ethics and corporate social responsibility. Elgar Online. Retrieved from 

https://www.elgaronline.com/view/9781781003787.00009.xml