Question:
1. Compare Normative and Descriptive Ethics, and illustrate with some examples of their applications in human resources management policy or practice.
2. As a new HR graduate, your line manager recently told you the following statement. It is easier to evaluate a middle-ranking manager’s better behaviour than her/his good behaviour. Discuss the above statement.
3. Discuss the relative significance of cultural, economic and political factors that influence the development of sustainability reporting.
4. Shir Pte Limited is a family-owned manufacturing company in Singapore. Its recent corporate strategy is to achieve corporate sustainability. Critically discuss some key issues faced by Shir in developing its sustainability programme.
5. Corporate governance has been developed with different approaches. Many people prefer the principles-based approach over the rules-based approach in developing a corporate governance system. Explain these two approaches and discuss their advantages and disadvantages.
6. In order to improve corporate governance many countries (including Singapore) have recommended businesses to establish committees (e.g., audit committees, remuneration committees) under the board of directors and delegate specific tasks to these committees as a suitable mechanism. Critically evaluate the effectiveness of these specialist board committees.
Introduction
Corporate Social Responsibility is a concept of management where the organizations integrate the environmental and social concerns in their business. It is a self regulatory corporate body that is integrated within every business model of the organization. The CSR has its own policies that the business monitors and ensures that it is bounded within laws, international norms and ethics (Cannon, 2012). The issues that are included within the CSR are the engagement of the stakeholders, standards of the labors, employment rules, human rights, social equity and anti corruptive measures. Adoption of CSR within the organizations gives the organization an added advantage in the competitive market (Eabrasu, 2012).This assignment will be dealing with normative and descriptive ethics in the management policy of the human resource department along with importance of economy, politics and culture for sustainability. In addition to this, the principle based approach along with rules- based approach will also be discussed.
The normative ethics takes into account the principles, theories and rules that help to guide the judgment and action of an individual. According to Lähdesmäki (2012) it is a study of behaving ethically and helps in determining what is right and what is wrong. On the other hand, descriptive ethics which is also known as comparative ethics is a study that depends on the belief of the people on the basis of morality. Otubanjo (2012) had a view that the normative ethics takes into account the creation and evaluation of the moral standards. So, we can say that it can be an effort to evaluate and analyze the doings of the people and whether the present moral behavior is answerable for that. In contrast to this, Trong Tuan (2012) commented on the descriptive ethics that it simply describes how the individuals are behaving and the moral standards they are following.
In addition to this, normative ethics are those ethics which an individual follows because it enhances well being and limits the suffering. On the other hand, Cumming and Chakrabarti (2014) had a view that the descriptive ethics helps the individuals in making decisions that brings pleasure and happiness and avoid pain to a great extent. According to Glavas (2012) the normative ethics includes the moral philosophy and the descriptive ethics integrate researches from the fields of psychology, anthropology, sociology and history.
In the HR department, both these normative ethics as well as descriptive ethics are followed in their policies. This is because; the business ethics have both normative and descriptive ethics incorporated within the organization for a better workplace Chan and Cheung (2011). The HR department of the organization includes the recruitment, selection, performance appraisal, health and safety issues, industrial relations and training and development. In every domain of these activities, both the descriptive and normative ethics are present and are closely knitted to another to make the HR policies fair enough to the employees. In addition to this, the discrimination and gender biasness also needs to be minimized as possible (Devereaux et al. 2012). The HR department needs to in keep in mind the morals and ethics before conducting any action since a wrong step can change the life of an individual or a group as well as the working culture within the organization.
The “better” behavior of the middle ranking manager means that the manager will be helping the employees in understanding he laws and policies of the company and work profile of the employees along with helping and assisting the employees for achieving it. On the other hand, the “good” behavior depicts the manager’s in saying out the rules and regulations of the company and the job profile (dela Rama, 2011). The line manager through the commented statement made it easy for the employee to understand that the better behavior of the middle lie employees is always better than the good behavior. This is because if the line manager will be pleased to see the work of the employees, he/ she will try to assist the employee in better understanding the job role.
Cultural Factor- One of the most important factors that help in influencing the sustainability of the organization is the cultural and social factor. Lee (2012) had a view that the culture within the organization is essential in generating value from sustainability. It is essential for a company to include suitable culture within the organization to make the workplace suitable and employee friendly. If it is seen within the organization, the employees, managers and higher official are maintaining the codes of ethics in their business, then that organization reaches a higher level of success and sustainability (Perkins, 2012). This is because, the employees as well as the customers are happy with the company and its products and services. Moreover a good organizational culture increases the productivity and reduces conflicts which is an ultimate gain to the organization and helps it to stay sustainable in the competitive market.
Political Factor- The political factor is another important factor that helps in influencing the sustainability of the company. The political factors includes the regulatory tax rates, fair trading, maintaining global standards of business and getting the right prices. According to Walters and Anagnostopoulos (2012) maintaining all these factors gives the organization a level of sustainability in this highly complicated and competitive market place. In addition to this a stable political situation prevailing within the organization increases the productivity to a considerable rate and decreases the political conflicts with as well as outside the organization (Cressy et al. 2012). This helps the organization in attaining a competitive advantage over other companies.
Economic Factor- Another important factor that helps the organization in reaching sustainability is the economic condition of the organization. The organization initially needs to make a budget regarding the working capital, assets and liabilities of the company (Fairbrass and Zueva-Owens, 2011). This also includes the manufacturing and production costs, advertising costs, promotional costs and after sales maintenance cost. In addition to this, the economic factors also include the rate of inflation of the country, GDP, import and export taxes. Jo and Harjoto (2011) commented on the fact that analyzing the above mentioned factors helps in understanding the present economic condition of the organization and its future condition on the basis of sustainability. It is essential for every company to have a strong financial backbone o compete with its rivalries and competitors but in the most ethical way. This increases the brand value of the company in the eyes of the customers and employees.
Shir Pte Limited is a family based manufacturing company in Singapore having its corporate strategy is achieving corporate sustainability. The key issues faced by Shir Pte Limited in developing and achieving sustainability program are discussed below-
Environmental issue- Since, Shir Pte limited is a manufacturing company; it should have some responsibility towards the environment. Initially, the company never used to treat the waste products before disposing them which lead to the problem in achieving sustainability. According to Saka and Oshika (2014) since it is a manufacturing company, while manufacturing and producing products the waste materials are produced. These need to be treated properly before disposing them. This process helps in reducing the emission of carbon monoxide and other harmful gases into the environment. Schneider and Meins (2011) commented on the fact that this baby step leads to the decrease in global warming to a small extent. This will help the company in attaining and achieving the corporate sustainability to an extent.
Cultural issue – Initially within the company, the employees and workers faced a huge problem regarding the workplace culture. The HR department used to stay biased towards some employees and workers which resulted in small spats between the employees, workers and higher officials. Kolstad (2012) had a view that in order to achieve a good culture within the company, the HR department and other higher officials need to unbiased and treat every employee and worker equally. Lecomte and Ooi (2012) commented on the fact that the employees and workers compensation plans, performance appraisals and incentives need to be totally based on the performance of the employees and workers. This will result in higher productivity and satisfaction among the employees and workers. Through this, a good and a healthy culture will be prevailing within the company thereby helping the company to achieve its sustainability program successfully.
Economic issue – The Company has to know about the economic condition of the company and fix a budget on the basis of it. According to Chan and Cheung (2011) this is essential because, budgeting includes the assets, liabilities, other working capitals manufacturing cost and distribution costs. The costs that will be incurred for these processes needs to be fixed and budgeted to see the position of the company. In addition to this, Glavas (2012) commented that this will even consider the profits earned by the company from the customers. This will help in analyzing the position of the company and its economic situation which will help in attaining corporate sustainability.
Health issue – According to Kolstad (2012) the health issue needs to be concerned and taken care of as one of the fundamental duty of the organization. This is because, a company can reach its sustainability if it is seen that the employees and works working within the company are in good health. Lee (2012) also commented on the fact that the work place has to be hygienic and the machines need to checked and maintained regularly in order to maintain the safety within the organization. This is because; a safe organization will attract the employee and workers to work effectively and efficiently leading to increase in productivity. This will earn a good profit to the organization and will also make the company reach a level of prestige among the employees and workers.
The principles can be raised at any time and have no least regularity of practice. In Principle-based approach in Corporate Governance, the principles are set in order to influence a huge community (Perkins, 2012). It is so made that the company sticks to the spirit of the code of conduct rather than sticking to letter of code of conduct.
The advantages of principle based approach are discussed below-
The disadvantages of principle based approach are discussed below-
This kind of approach mainly focuses on the written codes of conducts of the company rather than focusing on the spirit of the codes of conduct (Cumming and Chakrabarti, 2014). This approach is not so flexible and cannot be changed or modified according to the will of the directors and higher officials.
The advantages of the rule based approach are given below-
The disadvantages of the rule based approach are given below-
Now days, the audit committee is believed to have became an important part in Corporate governance and therefore has received publicity gobally. According to Saka and Oshika (2014) the Audit Committee is so set up to help the board of directors in reviewing the effectiveness of internal control, risk management system and financial reporting system.
The Audit committee is responsible for reporting the conduct and performance of the management system to the board of directors and can make certain recommendations for improvement of the performance of the organization. In addition to this Lähdesmäki (2012) had commented on the fact that the audit committee is dependent on the information given by the internal audit, external audit and management. This helps in a vivid discussion with the important parties that include matters of the financial statements, risk management system and financial reporting.
The remuneration committee plays a significant role in improvement of the corporate governance. According to Walters and Anagnostopoulos (2012) it ensures an objective approach towards the management and acts under the entrusted authority for giving an independent authority on the executive pay. In addition to this, the remuneration committee presents the remuneration framework and takes into account the overall cost to the board. Moreover dela Rama (2011) had commented that they are also responsible for setting the remuneration level and structure within the remit for every executive. It also is responsible in defining the company policy on the retirement schemes and also oversees the operation of any kind of long term incentive schemes.
Conclusion
This assignment deals with a vivid illustration about the normative ethics and descriptive ethics and their applications in the human resource departments for making policies. In addition to this discussion on the influence of cultural, economic and political factors for developing the sustainability is done. A case study regarding the Shir Pte Limited in attaining the corporate sustainability is also discussed vividly. The factors such as economic, health issues, cultural and environmental issues are discussed that will help the company in attaining corporate sustainability. Moreover, the principle based approach and rule based approach in developing a corporate governance system is also discussed along with the advantages and disadvantages. The effectiveness and activities of the remuneration committee and audit committee is also discussed for the improvement of corporate governance.
Reference List
Books
Cressy, R., Cumming, D. and Mallin, C. (2012) Entrepreneurship, governance and ethics, Dordrecht: Springer
Cannon, T. (2012) Corporate responsibility, New York, NY: Pearson
Journals
Chan, A. and Cheung, H. (2011) “Cultural Dimensions, Ethical Sensitivity, and Corporate Governance”, Journal of Business Ethics, 110(1), pp.45-59
dela Rama, M. (2011) “Corporate Governance and Corruption: Ethical Dilemmas of Asian Business Groups”, Journal of Business Ethics, 109(4), pp.501-519
Devereaux, J., Loch, R., Ferguson, B. and Yarett, I. (2012) “Sense & Sustainability: How the Corporate Narrative Has Evolved”, Sustainability: The Journal of Record, 5(1), pp.30-33
Eabrasu, M. (2012) “A Moral Pluralist Perspective on Corporate Social Responsibility: From Good to Controversial Practices”, Journal of Business Ethics, 110(4), pp.429-439
Fairbrass, J. and Zueva-Owens, A. (2011) “Conceptualising Corporate Social Responsibility: ‘Relational Governance’ Assessed, Augmented, and Adapted”, Journal of Business Ethics, 105(3), pp.321-335
Glavas, A. (2012) “Employee Engagement and Sustainability: A Model for Implementing Meaningfulness at and in Work”, Journal of Corporate Citizenship, 2012(46), pp.13-29
Jo, H. and Harjoto, M. (2011) “The Causal Effect of Corporate Governance on Corporate Social Responsibility”, Journal of Business Ethics, 106(1), pp.53-72
Kolstad, I. (2012) “Human rights and positive corporate duties: the importance of corporate-state interaction”, Business Ethics: A European Review, 21(3), pp.276-285
Lee, K. (2012) “Linking stakeholders and corporate reputation towards corporate sustainability”, International Journal of Innovation and Sustainable Development, 6(2), p.219
Lähdesmäki, M. (2012) “Construction of owner-manager identity in corporate social responsibility discourse”, Business Ethics: A European Review, 21(2), pp.168-182
Otubanjo, O. (2012) “Theorising the Interconnectivity between Corporate Social Responsibility (CSR) and Corporate Identity”, Journal of Management and Sustainability, 3(1), pp. 45-62
Perkins, K. (2012) “Sustainability and Innovation: Creating Change that Engages the Workforce”, Journal of Corporate Citizenship, 2012(46), pp.175-187
Saka, C. and Oshika, T. (2014) “Disclosure effects, carbon emissions and corporate value”, Sustainability, 5(1), pp.22-45
Schneider, A. and Meins, E. (2011) “Two Dimensions of Corporate Sustainability Assessment: Towards a Comprehensive Framework”, Bus. Strat. Env., 21(4), pp.211-222
Trong Tuan, L. (2012) “Corporate social responsibility, ethics, and corporate governance”, Social Responsibility Journal, 8(4), pp.547-560
Walters, G. and Anagnostopoulos, C. (2012) “Implementing corporate social responsibility through social partnerships”, Business Ethics: A European Review, 21(4), pp.417-433
Cumming, D. and Chakrabarti, R. (2014) “Global Perspectives on Entrepreneurship: Public and Corporate Governance”, Corporate Governance: An International Review, 22(2), pp.73-76
Lecomte, P. and Ooi, J. (2012) “Corporate Governance and Performance of Externally Managed Singapore Reits”, The Journal of Real Estate Finance and Economics, 46(4), pp.664-684
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