Ethics Reflection Paper
A company is in business to make a profit. Strategic managers must consider the ethical, economic, legal, and discretionary social responsibilities of the business in the planning process. Recognizing the legitimate rights of stockholders, employees, and stakeholders is crucial when defining the company mission and strategic plan. The challenge facing any company is coordinating the demands of stakeholder groups with the principle set of the company’s operating philosophy to optimize economic success. The role of ethics and social responsibility in strategic planning and the evolution of my ethical perspectives in the master’s of business administration (MBA) program is the basis of this paper.
Role of Ethics and Social Responsibility in Strategic Planning
A company’s mission, vision, and philosophy statements distinguish the ethical stance of the company. Ethical responsibilities reflect the company’s notion of right and proper business behavior and are obligations that transcend legal requirements (Pearce & Robinson, 2011, p. 50).
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Leadership must communicate to employees the direction, purpose, and understanding of a company’s expectation to ensure everyone makes good ethical decisions and confirm everyone will strictly adhere to the company’s beliefs and values. The ability for a company to link an individual’s natural moral judgment, arrive at a general principle to form an ethical decision, and adhere to the social responsibilities are unequivocal actions of a company. When the claims of stakeholder’s conflict, such as between government and the public, a company’s mission statement must resolve the contradicting claims. Resolving conflict requires a company’s objectives and strategies to be internally consistent, precisely focused and display a single-minded approach. Central to the belief that companies should operate in a socially responsive way for the benefit of all stakeholders is the basis that managers behave in an ethical manner. Unfortunately, the spate of corporate scandals resulting in criminal actions and the loss of stakeholder investments and employee jobs has tarnished the public’s perception of the ethics of corporate executives in America (Pearson, 2011, p. 74).
Corporate social responsibility (CSR) is the idea that a company has a duty to serve society in general as well as the financial interest for stockholders. A company has both economic and legal responsibilities to shareholders and internal and external stakeholders. The dynamics between CSR and profit is complex because of management issues and as companies increasingly transcend national borders. The creation of the Sarbanes-Oxley Act of 2002 stems from the wrongdoings of corporate executives from 2000 to 2002. Because of the corporate scandals and criminal violations of Enron, Arthur Anderson, Worldcom, and others, the Act mandates that Chief Executive Officers (CEO) and Chief Financial Officers (CFO) submit a report to the SEC certifying the company’s financial statements are a fair representation of the financial condition without false statements or omissions and is to report fraudulent information to auditors (Pearson, 2011, p. 58).
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Creating a company mission statement that defines the legitimate claims of the external stakeholders is essential in strategic planning. Managers must identify all stakeholder groups and weigh their relative rights and abilities, and take a proactive approach to CSR by adopting socially responsible behaviors at all times and measure the company’s social performance against the objectives it has set for itself.
Evolution of Ethical Perspectives
The MBA program places a strong emphasis on ethical behavior. The Ethics Awareness Inventory and the Ethical Choices in the Workplace Assessments identify that ethics is an essential factor in one’s personal life and professional experience. The learning team experience in each class was complex. Each team had a leader who correlates to the role of a strategic manager. The atmosphere was a test of one’s beliefs, expectations, commitment, patience, ethics, and a responsibility to each other to complete a perfectly collaborative project. Open communication, the opportunity to decide among alternatives, acquiring the skills necessary to justify a decision, and the sense of cohesion prevented unethical behavior. The evolution of my ethical perspectives allows me a deeper understanding of the relationship between corporate values and a company’s ability to make sound, moral judgments.
Strategic managers must consider the ethical, economic, legal, and discretionary social responsibilities of the business in the planning process. A company’s mission and strategic plan must support stockholders, employees, and stakeholders legitimate rights. The role of ethics and social responsibility in strategic planning are the standards that build a strong, prosperous company. The MBA program was instrumental in developing my ethical perspectives.