Question

In: Operations Management

Discuss if ethically managed organisations are more profitable than other. Also, explain can an installation of...

Discuss if ethically managed organisations are more profitable than other. Also, explain can an installation of ethics officer and adoption of “compliance and ethics program” will improve the organisational efficiency and effectiveness.

Solutions

Expert Solution

Ethically managed organisations, which have a central policy of adherence to ethical conduct and well defined standard operating procedures to deal with situations of ethical ambiguity and dilemma which might result in potential violation of ethics  are known to have a greater social score than the ones which don't have such policies. The better opinion of customers, a good word of mouth and a respectaable position among the stakeholders often attract more customers to buy from such organisations, which affects the profitability and competitive position of these companies. They are also less likely to be involved in lawsuits and face penal actions for violation of ethics, likely to have  favourable government policies, and secure investment at more favourable terms. These factors contribute to profitability in general.

An ethics officer and an ethics program will definitely help the employees to know more about ethical policies of the company and participate and contribute to the compliance. However, such programs will be helpful in the introduction stage of the ethical policies in an organisation, helping the employees to gain a first hand introduction of subject matter. The further roadmap lies in making ethics an integral and essential part of all activities and transactions of the organisation. Ethics can't be forced upon, because there are many alternatives which are legal but unethical, and a choice is always subjective,  but a climate of ethical conduct, transparancy and inclusiveness needs to be nurtured and promoted by the top management to ensure that eveyone chooses the most ethical alternative.


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