Social Ethical Accounting And Auditing: Understanding Stakeholder Obligations

Ethical Issues of Stakeholders

Discuss about the Social Ethical Aaccounting and Auditing.

In 21^st century, ethics is no more an option or luxury; but has become one of the inevitable features in an organization. According to Bird et al. (2013), every organizational business should have legal or moral responsibility and should keep ethics as a primary priority. The organizations need to have ethics, rules, regulations and principles in their operations as it elevates their social status and reputation. The IT professionals and other related organizations should embrace ethics in their business culture. As suggested by Bredin et al. (2015), adoption of value based culture within organizations help in influencing the society positively. Ethics within organization not only leverage the cultural and social values; but also tends to maintain relationship among internal and external stakeholders. It plays an important role in governing an individual’s or organization’s activities as well as its decisions.

This research report will be discussing certain ethical issues of the stakeholders along with several reasons behind resolving IBM-GSA’s issues in an ethical way rather than legally. Moreover, this report also focuses on ethical obligations that stakeholders should have towards the general population as well as towards them. The guidance of ACS (Australian Computer Society) based on code of ethics is discussed pertaining to the case of IBM-GSA.

As opined by Costa and Menichini (2013), stakeholders are the individuals those are directly and indirectly linked with the organizational operations. The success of business lies solely on the satisfaction level and involvement of stakeholders. The business stakeholders should maintain an ethical and friendly relationship with one another apart from profit making and increasing productivity. The shareholders or stockholders should behave ethically in engaging their capital in an effective and efficient way. They should be careful of not exploiting the resources of the organizations that may severely hurt the reputation of companies. Dawkins (2014) commented that managers of the organizations should have to be ethical in their approach. They should make the maximum and positive utilization of organization’s resources for increasing productivity and performance; thereby maintaining organizational reputation. The managers also have an access to many of the key resources of the organizational operation; hence they should not disclose any of the organizational secrets to others. There are many organizations that make its employees sign NDSs (Non Disclosure Agreements) as one of their employment clauses. It, therefore, restricts employees from sharing information with their future employers.

Reasons behind resolving issues of IBM-GSA via ethical aspects rather than legal aspects

Moreover, Leavitt et al. (2015) also mentioned that employees should act ethically as they are the structural pillars of an organization. At the same time, organizations also should treat their employees well by giving them timely payments, incentives and appraisals based on their working capability, productivity and skills. Moreover, organizations should also embrace occupational laws and workplace safety laws for treating employees ethically and fairly. Along with this, Henriques and Richardson (2013) also commented that suppliers and distributors also should be paid fairly and in-time for their services to the organizations. Similarly, the suppliers also should be ethical in their approach through providing premium quality products at the agreed upon prices. Customers should be ethically treated and should be provided equal value for the amount they are spending for the products and services. It, therefore, helps in improving effectiveness as well as efficiency of the organization along with attract new and potential customers.

In 1999, IBM-GSA was one of the IT outsourcing groups that handled Health Insurance of the aged and other health related people. At the time of tender presentation, the company was asked to revise its final pricing. After that, the minister announced IMB-GSA to be the proud winner of the health tender. But, after 3 years the minister declared that the tender of IMB-GSA that cost around $350 million was cancelled (Kerzner, 2013). As per the minster, it was canceled due to Probity Auditor’s limited role in that tender as well as missing out of a separate issue. But, OASITO (Office of Asset Sales and Information Technology Outsourcing) said that the Probity Auditor was a part of the discussion and hence he was happy to deliver the messages for due course of action. This illegal activity from the Governance towards the organization was unacceptable (Foucault, 2013).

There are certain cases where issues need to be solved via ethical aspects rather than legal aspects. According to Weiss (2014), sometimes several situations arise at the workplace where the reputation of the organization is at stake. So, it is better to deal those situations in a planned and ethical way, rather than adopting legal ways that may harm the company’s reputation. One of the reasons behind adopting resolving issues in legal way is due to respecting autonomy. The stakeholders initially should take measures in solving the problem associated with the organization. It will definitely help in improving self-determination as well as self-reliance of the organization. Moreover, Williamson et al. (2012) also mentioned that another reason behind solving ethically is to have a conversation with the guilty stakeholders regarding their step towards adoption of unethical means within the organization. It is necessary to treat all the stakeholders fairly and equitable irrespective of any position they hold in an organization. If the stakeholders are found guilty, they should have the moral of carrying out their own responsibility rather than pointing on others.

Ethical obligations stakeholders should have towards one another and general population

Moreover, Taebi et al. (2014) commented that another reason of opting ethical way of solving problem is due to interpersonal relationship with the stakeholders. So, the other stakeholders for maintaining the relationship without hampering tends to solve problems with discussion. It will help in keeping the organizational secrets within the organization without destroying the brand image and reputation of the organization. In this kind of dilemma, it is necessary to maintain secrets and takes actions ethically so that it doesn’t affect the external stakeholders. Snape et al. (2014) stated that another reason behind solving problems ethically is gathering appropriate information and data related to this case. Without having proper evidences in-hand, one cannot question stakeholder’s honesty, integrity and moral values. So, before accusing any of the stakeholders, evidence and proof should be present. In case of IBM-GSA, the case of cancellation of tender came forward after the minister had left the position. So, to maintain the integrity and reliability of the Government, this case has been handled ethically rather than taking legal actions.

Zadek et al. (2013) stated that stakeholders of an organization should have ethical obligations towards society, general civilians and for one another. The obligations help in long term and sustainable growth and development of the organization. Moreover, it also contributes in developing and maintaining a healthy relationship with other stakeholders, civilians and society.  The mangers being one of the important stakeholders aim towards bringing into self-confidence, behavioral as well as personality traits within the employees. So, if the managers are unethical in their approach, then it is obvious that their followers will do the same. It will, therefore result in hampering of organizational image as well as status. As stated by Pérez and Del Bosque (2013), every stakeholder is bound to follow organization’s rules, regulations and objectives. Moreover, each f the stakeholders are well-connected with one another. So, any kind of unethical conduct may impact on the other stakeholders adversely. The entire chain f business operation will be disrupted affecting on organizational productivity, social position and revenue collection.

According to Costa and Menichini (2013), as per ethical obligations, the stakeholders must work together for fulfilling their professional goals rather than personal goals. If any of the stakeholders is working to fulfill their personal goals, it may create conflict among stakeholders. Each of the stakeholders tends to emphasis on fulfilling their personal objectives and hence it will totally destroy and ruin the organization both monetarily as well as image value. Bredin et al. (2015) commented that the stakeholders should have ethical considerations towards other organizations where child labor is still practiced. They tend to boycott such organizations as it may impact negatively on the organizational reputations. Moreover, to operate ethically, certain CSR (Corporate Social Responsibility) activities have been included within the organization. The contribution of the stakeholders towards social responsibility therefore, sets an example to the other organizations and stakeholders to operate ethically.

According to Levenseller et al. (2014), the members of ACS should hold dignity, honor and effectiveness in their professionalism and approach. It aims towards making its members ethical in their approach, a good citizen and conduct their activities adhering to rules and principles. The codes of Conduct those laid down by ACS states that organizations should be focus primarily on public interest, should enhance the quality of life and should embrace competence, honesty, competence, professional development and professionalism. These principles are strictly applicable to all the ACS members irrespective of their role and expertise in the ICT (Information and Communications Technology) industry. Pahl-Wostl et al. (2013) stated that ACS makes sure to encourage positive business activities and discourage all sorts of negativity from the organizations. Even more, in cases of ethical dilemmas, ACS plays an important role in solving it. It expects its members to respect people’s privacy and also refrain themselves from unfair treatment of employees.

As opined by Nijboer et al. (2013), while adhering to public interest, the organization should primarily identify the areas those largely impacts the business operation along with their interests. It should also look into any conflicts that arise between is member’s personal and professional interest and hence take effective steps in eradicating it. It also aims towards respecting intellectual property as well as endeavor in preserving privacy as well as confidentiality of the information. Molster et al. (2013) commented that while enhancing the quality of life, ACS aims towards protecting and promoting safety and health issues at workplace. It also attempts to increase the level of personal satisfaction and pleasure in working ethically. Along with this, ACS also involves in interrogating the affected areas and find possible solutions to it. Moreover, it aims towards its members of not-breaching the public trust or any of the stakeholder’s trust in business. The members are bound to reject any offers of bribery and should work on enhancing their reputation at their expense rather than taking credit from others (Shafer, 2015).

Pérez and Del Bosque (2013) opined that competence is anther platform the ACS members should adopt for accepting the responsibility of their conduct. It also says that it shouldn’t misinterpret their skills and knowledge. Rather, they should take care of the products and services for matching it with the stakeholder’s needs. The members should be abided by professional development and professionalism. It, therefore, helps the members in encouraging their colleagues and employees to work better. Moreover, it also takes appropriate actions against people those are engaged in illegal and unethical activities within and outside the organization (Shapiro and Stefkovich, 2016).

Conclusion

This report highlights the immoral case of IBM-GSA where its tender was cancelled by the minister unethically. Though the organization adopted NDA signing of its employees, still due to unethical approach of a group of individuals or individual, the entire tender was cancelled. He legal documents that showed the company’s final pricing for the health insurance was leaked to its competitors. It may involve governance and other stakeholder’s involvement behind this cancellation. The report also extended its discussion towards explaining reasons regarding adopting ethical aspects rather than legal aspects to solve this problem. It was seen that due to prevent loss of faith of common civilians on faith on government. It may also highlight name of certain organizational stakeholder’s that will ultimately reduce the reputation of the organization. The ACS also involved in providing several codes of ethics and conducts that the stakeholders of different organizations should be abided with. Moreover, this report also explains the ethical obligations that stakeholders should have for one another is also discussed n this context.

References

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