Importance Of Ethics In Business Consulting – Research And Reflection Article

Research and Reflection Article on a Consulting Capability

Analysis

Discuss about the Research and Reflection Article on a Consulting Capability .

With rapid growth of globalization has exposed several fresh challenges to businesses in the modern age (Lacan 2013). Businesses need to now deal with more complex environment of poverty, changing climatic conditions, overfishing, peak oil and deprivation of natural resources. These dynamics stress the importance of businesses to follow more ethical procedures and guidelines from business consultants, in their organizations to minimize the negative impacts. Business consulting is a field which is growing in importance that stresses the role of the organization and guides them such that positive effects can be created on the society. Cannon Global Inc, is an American film production based company that follows business ethics (Yamaji 1997). The company’s business consultant provides that the business follow Kyosei which is a Japanese word that implies to live and work together for achieving a common good. A good business consultation can help the organization earn a very high value and brand name in the market conversely a negative consultation can result in creating negative impact on the business and loss in brand value.

Business consultation uses various business functions and attributes to develop and suggest methods that can be adopted. Business consultation should involve ethics, which is a system encompassing values and principles of those that are perceived right according to Raiborn and Payne (1990) (Singer 2011). For Cannon Global, their employees strive together in order to conduct their business ethically (Cannon Retrieved on 9th August 2016). Every employee within the organization tries to be a good corporate citizen and it is an important aspect to them. The company believes that if each of their employees is able to reflect on good corporate citizenship then they will be able reflect on values and ethics to their customers as well. This is a demonstration of good business consultation that helped create value for business of Cannon. Proper business consultation with appropriate business ethics plays an important role in customer satisfaction, a customer is more likely to be associated with an organization that follows business ethics compared to an organization that does not. As more research is done in the area of business consultation, relevant statistics are being reflected at the positive financial outcomes for organizations that applies ethical principles in their businesses. Stodder (1998) conducted a research on consumers, called a Walker Information Survey (1994) where he found a positive correlation between customer’s and company’s ethics. In the survey 40% customers reflected that they would prefer to purchase products from an ethical company (Lacan 2013). Therefore it is of utmost importance that business consultants adopt ethical procedures in their various suggestions to client businesses.

Relevance

There are some researchers who are critically opposed to the idea of ethics in businesses consultation, as Milton Friedman (1962) argues that the sole responsibility of businesses is to deliver financial profitability to its stakeholders (Noddings 2013). He proposed that any business entity has a moral obligation to discharge its financial liability to the shareholders who have invested in it. Though business consultant’s primary aim is to maximize profits yet ethical procedures need not be overrun for the same. However, this approach is no more acceptable as there is a growing concern of business participation in the society. Society is an integral part of every business hence businesses should participate in ethical responsible practices. Lehman Brother bankruptcy in the year 2008 following business consultation of Arther Anderson LLC, is a classic example where business consultation did not follow ethical conduct (Degree Retrieved on 15th August, 2016). Though Lehman Brother was a highly profitable business but following improper business consultation led them to initial profits but later to file for bankruptcy. Arther Anderson suggested that Lehman Brothers hide over US$50 billion as loan disguised in sales. The practical relevance of ethics is in the machiavellian approach of businesses, where there is an intention to do things rightly. Businesses do not need to be pressurized from external sources, agencies or government for conforming to ethical principles. Like Cannon Global applies ethical principles by themselves without any pressure from external source. In practical world complying to legal practices can prove deadly for the organization; as a cigarette company touting to smoke responsibly (Ferrell 2015). The myriad legalities of corporate existence can threaten the firm’s existence. Though legality arises from an action to do right or wrong, but legality alone cannot conform to a firm’s morality.

The various definitions and explanations of business ethics reflects the relevance of ethics in practical situations (Scholtens 2007). For an organization to be ethical it needs to abide by norms and regulations that are acceptable by the society. As for example an construction company that dumps huge amounts of wastes in local area or river and has no safety concerns for its workers is an unethical company and likely to lose the trust and faith of the local community members and employees. People are going to look down upon the company which in turn will create an overall negative effect on the company that can result in less sales. Addidas, China manufacturing unit was not following employee health, hygiene norms and not providing them adequate payout (Crane 2007). The reports created negative feedback about the company worldwide resulting in lowering of the company sales.

Reflection

I have learnt that ethics help divert the resources and capital within the organization to more effective outcomes such as to create positive results for the business. I have seen in my course that ethics of a business is related to its accounting, human resource practices, marketing, strategy formation and so on. Ethical principles have its applicability in everyday life and in every aspect of business (Christensen 2007). A consultant would apply ethical principles such that the overall outcomes in regards to ethics can be obtained. Hence ethics can be applied to relevant management areas such as;

Ethical principles in accounting relate to abiding by the standard rules and principles while forming various books of accounts. Every organization needs to disclose their books of accounts such that various stakeholders can have access to it and reflection of the business activity can to be formed (Clegg 2007). I would recommend an organization to use the codes of accounting as prescribed by the standard body as IFRS or any other.  

Finance : I have learnt through cases that, organizations needs to follow proper finance practices such as to avoid any type of discrepancies (Sims 2006). Ethics in regards to financial practices reflects clarity of information for the firm and will attract more investors towards the company.

Operations : A firm needs to follow ethical practices in regards to its various operations like manufacturing, packaging, transporting and ensure that minimum amount of wastes is created through its various processes. The Japanese lean manufacturing techniques adopts seven basic criteria for reducing waste and conforming to ethical principles in production (Crane 2007).

Marketing : The marketing department of a company commences various activities in regards to advertisement and promotion of the company’s product. I would suggest that these activities need to be ethical in nature as it is used in communicating company products and objectives and to build its brand name (Rossouw 2013).

The human resource department of the company formulates rules and practices for employee conduct. Ethics in human resources can be reflected in organizations recruitment, selection, and performance management and in appraisals. An employee in an ethical organization is more likely to feel empowered and have greater loyalty towards the organizational goals. In case an employee’s personal principles of ethics matches with that of the organization they are more likely to be focused. I feel human capital is important, as if managed properly it can provide immense passion, joy, spirituality and empathy. According to me a satisfied workforce is important for organizations as it will help promote healthy environment within the organization (Baumgartner 2010). 

Ethical principles are extremely important for an organization contribution to the environment (McCabe 2006). Environment is an important part of every organization as it takes necessary natural resources from the environment for its production and releases wastes to the environment. This capital is very important it includes sinks where companies discharges wastes, recycles or neutralizes their wastes. The organization I will work for can have some degree of impact on environment, in regards to the energy that they consume or waste they create (Giacalone 2006). If I am able to provide proper knowledge regarding restorative eco-systems, recycling and waste reduction by lean manufacturing to stakeholders of the organization, it will help to considerably reduce overall waste and increase company profitability.

Conclusion 

Ethics form an important aspect of everyday life and of business, organizations that are able to apply ethical principles are able to sustain their businesses over the long run. Ethics principles and activities render value to business and organizations are able to establish a relationship with the society and community to which they serve. Knowledge regarding ethics is essential in order to maintain business viability and its attractiveness to various stakeholders. Corporations can in discussion with their various stakeholders agree and form relevant code of ethics in order to create future sustainability for its business. Hence there are codes of ethics formed known as the corporate social responsibilities which can benefit the organization highly in providing them an adequate path to follow ethics and hence discharge its social responsibilities.

References

Cannon Retrieved on 9th August 2016, ‘https://www.canon.co.za/about_us/about_canon/philosophy’.

Christensen, L.J., Peirce, E., Hartman, L.P., Hoffman, W.M. and Carrier, J., 2007. Ethics, CSR, and sustainability education in the Financial Times top 50 global business schools: Baseline data and future research directions.Journal of Business Ethics, 73(4), pp.347-368.

Crane, A. and Matten, D., 2007. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, USA.

Clegg, S., Kornberger, M. and Rhodes, C., 2007. Business ethics as practice. British Journal of Management, 18(2), pp.107-122.

Degree, A Retrieved on 14th August, 2016, ‘Lehman Brother Bankcrupcy’, https://www.accounting-degree.org/scandals/.

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Giacalone, R.A. and Thompson, K.R., 2006. Business ethics and social responsibility education: Shifting the worldview. Academy of Management Learning & Education, 5(3), pp.266-277.

Lacan, J. and Miller, J.A., 2013. The Ethics of Psychoanalysis 1959-1960: The Seminar of Jacques Lacan. Routledge.

McCabe, A.C., Ingram, R. and Dato-On, M.C., 2006. The business of ethics and gender. Journal of Business Ethics, 64(2), pp.101-116.Noddings, N., 2013. Caring: A relational approach to ethics and moral education. Univ of California Press.

Rossouw, D. and Van Vuuren, L., 2013. Business ethics. Oxford University Press.

Scholtens, B. and Dam, L., 2007. Cultural values and international differences in business ethics. Journal of Business Ethics, 75(3), pp.273-284

Singer, P., 2011. Practical ethics. Cambridge university press.

Sims, R.R. and Felton Jr, E.L., 2006. Designing and delivering business ethics teaching and learning. Journal of Business Ethics, 63(3), pp.297-312.

Yamaji, K., 1997. A global perspective of ethics in business. Business Ethics Quarterly, 7(03), pp.55-70.