This paper considers how organizational structure impacts the ethical conduct and moral judgment of people working in an organization. It has been established beyond reasonable doubt that there does exist, organizationally speaking, a nexus between organizational design, morally acceptable behavior, and the development of moral reasoning and in helping to cultivate and maintain highly ethical practices in society and particularly in the natural environment. (Business Ethics Managing Ethics in the Workplace and Social Responsibility. 2008).
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Factors impacting corporate ethical conduct and moral rectitude
However, there is yet another aspect that affects corporate values in terms of company policies, value systems, and cultural moorings, which could also play an important part in enhancing or lowering ethical conduct and the growth of moral reasoning among employees.
Empirical studies have proved that although a corporate has a formally imbued structure determining moral conduct, employees bring in a fair amount of ingrained values, discipline, moral rectitude, and competence. This informal structure matrix may play significant a role, if not a higher one, in determining the standards of moral behavior. Thus it could rightly be stated that organizational ethical performance is a blend of both formal and informal structuring. This is often also attributable to environmental factors that play upon the usage of the highest ethical standards and moral conduct in an organization.
Why capitalism could be justified in the modern business milieu?
It is said that a corporation’s fundamental objective is to augur profits for its stakeholders.
However, no corporate should be motivated by unethical profit-making, and this is more enforceable in a capitalistic society where it is necessary that ethical alternatives should take preference over economic ones. If capitalism is unhealthy for society, it would long have been consigned to history or severely controlled by a society that has promoted it.
“Capitalism is also externally stable, in that survival in a capitalistic system requires innovation and flexibility to keep up with the changes in supply and demand. Such a system is generally prepared to deal with the influx of competition from external sources.” (Robert 1995).
Therefore, capitalism is a necessary adjunct of meeting social as well as corporate objectives, although it must be devoid of price-fixing, kickbacks, insider trading, and other
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negative aspects of business conduct. Moreover, it is seen that such unethical behavior interferes with the delicate mechanism of demand-supply movements, which is unhealthy for societal progress and development and could jeopardize the very structure on which society is based.
Micro ethics and Macro-ethics
There are two aspects of ethics- micro ethics and macro ethics. While micro-ethics deals with individual managers and their requisite code of conduct, macro ethics deals with organizations in Toto, its professed and required standards of moral behavior and ethical conduct, from CEO downwards, to the lowest echelons of the organization.
In any organization, for moral rectitude to be enforceable, it is necessary to reward good moral behavior, punish immoral conduct, and correct amoral conduct. This could be seen in terms of providing useful products, services, and utilities to the public, operating with a reasonable margin of profits commensurating with the size and depth of its operations, and finally to maintain the economic health and dignity of its employees. A corporate that fulfills these criteria could be deemed to be morally safe and sound.
Moral ethical values could be imbued by having a fair mix of inside and outside directors on the Board, evolving a clear set of goals and objectives that need to be enforced at all levels. This is necessary because insider directors may not always serve the best interests of the stakeholders and the future progress of the company. This is because, “facing primarily social constraints, such as loyalty to the CEO and fear of retaliation, inside directors are more likely to consistently attribute poor performance to industry or environmental factors, as opposed to top management.” (Schaffer 2002).
While two aspects of efficient organizational systems – reliability and redundancy need to be enforced and implemented, it should also be believed that ethical conduct and moral behaviors should stem from within the people, and not from outside. No amount of inducements or threats could discipline morally wayward employees and ingrained moral discipline can be enforced by good employees, irrespective of organizationally induced influences and implications. (Howells).
Therefore, it is necessary that moral conduct and attitudes need to imbued into the organization structure and monitored from time to time, depending upon environmental and other factors that could influence it in the long run.
Business Ethics Managing Ethics in the Workplace and Social Responsibility. (2008). Free Management Library. Web.
Howells, Rodgers O. Organizational design and Business ethics- 2004-05. (Provided by the Customer).
Robert, M. (1995). Economics. Free: Advantages of Capitalism. Web.
SCHAFFER, Bryan S. (2002). Board Assessments of Managerial Performance: An Analysis of Attribution Processes. Emerald. Web.