Corporate Culture And Ethics

For some, culture is considered the glue that holds an organization together and for others, the compass that provides directions.

Introduction:
At its most basic, it's described as the personality of an organization, or simply as "how things are done around here." It guides how employees think, act, and feel. Corporate culture is a broad term used to define the unique personality or character of a particular company or organization, and includes such elements as core values and beliefs, corporate ethics, and rules of behavior. Because the organization's culture will affect us in many, many ways, such as hours worked per day and per week, availability of options such as flextime and telecommuting, how people interact with each other in the workplace, how people dress for work, benefits offered to employees, office space, training and professional development opportunities, perks -- just about everything related to your time at work. The values and behaviors that contribute to the unique social and psychological environment of an organization. Organizational culture includes an organization's expectations, experiences, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It is based on shared attitudes, beliefs, customs, and written and unwritten rules that have been developed over time and are considered valid.

Also called corporate culture, it's shown in :

The ways the organization conducts its business, treats its employees,

customers, and the wider community,

The extent to which freedom is allowed in decision making, developing new

ideas, and personal expression,

How power and information flow through its hierarchy, and How committed employees are towards collective objectives.

It affects the organization's productivity and performance, and provides guidelines on customercare and service, product quality and safety, attendance and punctuality, and concern for the environment. It also extends to productionmethods, marketing and advertising practices, and to new product creation. Organizational culture is unique for every organization and one of the hardest things to change.

Basic Features of Organizational Culture Your Business Needs to Analyze

In order for a business to be run successfully, it is necessary for the company to undergo a continual process of self-evaluation. This allows the business to make quality assessments about the progress of the company and to make plans for areas where change is required in order to facilitate growth. One of the first levels of this type of self-analysis is for the company to look at their organizational culture and the ways in which this culture is affected by organizational leadership. Such an analysis can be broken down in to three core categories which are further subdivided in three each to create nine key concepts which must be reviewed by a company in order to further growth.

Categories And Concepts: When looking at the companys organizational culture, there are three core categories that must be assessed, each of which is further broken down to create a list of key concepts which are critical to the process of reviewing your business. The three main categories to be reviewed are the elements of organizational culture, the relationship between the organizational culture and the companys ethics, and the process of group and team formation within the company. Broken down, these categories reveal nine different concepts to be reviewed throughout this article

Elements of organizational culture:

There are two different concepts that fall under the category of analyzing the elements of organizational culture. First, the company must look at the content of the organizational culture and then the company must look at any organizational subcultures that exist within the dominant culture of the company. The organizational culture of the company refers to the basic assumptions, values and beliefs that the company is supposed to be based on. Your businesss organizational culture is looked at in terms of what the business considers important and what the business considers unimportant. Defining that is a key starting point if you want to do a self-analysis on your business. Within every company, there is also subculture or a number of subcultures that exist in conjunction with (or sometimes opposition to) the organizational culture. We often think of subcultures as rebellious groups within an organization, groups that oppose the main organizational culture. That may be true but subcultures can also serve an important function in understanding the operations of the company and therefore can be an asset when you are studying your business. Analysis of the subcultures is a critical concept in understanding the company as a whole because it gives you insight into problem areas in the business. In general a companys organizational culture and underlying subcultures can be assessed by observing and understanding the artifacts associated with the company. These may be as small as company logos or as large as annual traditions within the company but are all linked towards creating a group identity within the company to which those members of the company are either bound or find themselves opposing. For example, a companys organizational culture may have an underlying belief that teamwork is essential to growth of the company. A weekly tradition of gathering together teams within the company for team-building exercises would reinforce this culture. Growth of the company would be focused

on strengthening the activities of the company that contribute to this organizational culture while working to eliminate any subculture opposition to growth in this area. Relationship of organizational culture to company ethics: Upon thorough examination of the organizational culture and subculture of the company, it is necessary to examine the relationship between that culture and the companys ethics. This results in three key concepts that must be explored in details: knowledge management, anchors of organizational behavior and workplace values. In assessing knowledge management, the company must look at the procedures by which such knowledge is obtained and passed along as well as the organizational memory of the company. In assessing the organizational behaviors of the company, it is important to look at the five anchors of organizational behavior and make determinations about the companys status with these. In relating this to the companys values, the assessment is focused on the importance of values in the workplace and the idea of corporate social responsibility in the greater world. Although this is a multi-step, multi-concept analysis, the basic purpose of this process is to take the understanding of the subculture and, using all of the available tools, examine the ways in which the culture supports (and detracts from) the companys stated ethics. For example, in the case of understanding that teamwork is vital to the companys organizational culture, it would be important to look at where that fit in to the companys ethics. If the companys stated beliefs are that individual work should be rewarded, the company will then have to find some way to reconcile the concepts of individuality and teamwork within the existing culture and subculture of the company. Process of group and team formation

Complete analysis of the company requires finally a look at the process of group and team formation within the company. This category results in the development of the four other concepts of leadership and culture that are of importance to the companys analysis: work teams effectiveness, cooperation among teams, teams in action and team building efforts. Each of these concepts relates to a different aspect of the development of the team within the company but they are all interlinked in the process of company analysis. In essence, the core function of all of these concepts is to generate greater understanding of the companys ability to make use of teams within the existing organizational culture with the purpose of increasing the positive relationship between the existing culture and the companys stated ethics. Summary: Analysis of a company can greatly improve efficiency in the workplace. There are nine key concepts as defined above which must be examined in order for this analysis to be complete. Broken down in to three categories, they provide the company with a simple process of self-analysis in which the organizational culture can be examined and steps can be taken through group development in order to further affect the companies goals. Going through this process will give you a better understanding of how your business is organized and how to work within that organization to improve the company.

5 ANCHORS OF ORGANIZATIONAL BEHAVIOR

1. Multidisciplinary anchor. Organizations should take their knowledge and cues from many other disciplines rather than just their own industry. 2. Systematic research anchor. Organizations should do detailed and systematic research, collecting data and information and relying on the scientific method. 3. Contingency Anchor. Awareness that the actions that an organization takes may result in different things depending upon the situations that the actions are taken in. Awareness within the organization that there is no one solution that always works in every single situation. 4. Multiple levels of anchor analysis. Looks at the organization from the perspective of the individual, the team and the company as a whole. 5. Open systems anchor. Organizations and their environments are

interconnected in an ongoing cycle, taking and receiving from each other. This view may look at external environmental factors such as investors as well as internal systems issues.

Ten Dimensions of an Organizational Culture

Your small business has its own culture. You may or may not have consciously built that culture, but it is there. If you begin to examine the dimensions of your organization's culture, you can start making decisions about the direction you want your company to go in. Examine the elements that go into forming a company's philosophy so that you can shape it.

Stakeholder-Value Orientation: Stakeholders are the people who have a stake in how well your company

does. This includes employees, customers, management, shareholders, vendors and the neighborhoods where your facilities are. If you establish a strong orientation toward building stakeholder value, your entire organization will reflect that. Entrepreneurial Orientation You no doubt started your business because you think like an entrepreneur. That does not mean your employees do. If you want a spirit of inventiveness and innovation in your company, you must make your wishes known. You can encourage innovation and taking responsibility for success by fostering an entrepreneurial attitude as part of your company culture. Social Responsibility If you want social responsibility to be part of your company culture, make your charitable efforts visible to employees. Encourage them to participate voluntarily in community betterment activities, and tell them your door is open if they have a pet project they want the company to consider becoming involved with. Transparent Governance

Maintaining accountability and openness in how you conduct your business can be a vital part of your company's culture. If you demonstrate that you are honest in your financial dealings, and that you attempt to be fair in managing employees, a culture of trust will develop. Team Spirit Your company is a collection of individuals who must work together toward common goals. This does not happen automatically. You must develop and encourage a sense of teamwork among your staff. You can do this by holding frequent company meetings, and rewarding teams (such as the production department, for example) instead of individuals. Customer Service You know the customer pays your bills, but it easy for your staff to lose sight of that fact in their day-to-day dealings. You must consciously promote an awareness of customer service as your primary marketing tool. Hold meetings and seminars to discuss customer service issues, and accept suggestions from employees on ways to improve the customer's experience with your company. This will empower the people you employee to take responsibility for forming a culture that values the customer. Adaptive Ability A growing company will encounter situations that are not in the business plan. You have to be able to change and adapt according to new information and unexpected events. If you have encouraged a culture of adaptability, your staff will be better prepared to adjust to new goals and objectives. Open Communication

A company that openly communicates internally and externally has a culture of openness. You should fight any sense of secrecy and behind-closeddoors decisions. If your company culture values open communication, you will find that loyalty and productivity remain high, and that lenders, vendors and consultants trust you. Problem-Solving If you promote a culture that values problem-solving, you will avoid a lot of meetings where you have to find ways to undo mistakes. Employees and managers who feel empowered to solve problems will actively help you move the company past hurdles. Supportive Environment A culture where every mistake is possible grounds for discipline can make employees stressful and mistake-prone. You can offer retraining instead of reprimands, and encouragement instead of disappointment. This will create a culture of support, where people feel like they have a chance to succeed.

Functions of organizational culture

Like all social mechanisms, an organization's culture performs certain social functions, some of them intended and some of them unintended. Like organizational structure, culture is difficult to observe, measure or map. In some cases, culture supports or reinforces structure, in others it conflicts with structure. In yet other situations, cultures acts as a functional alternative to reducing behavioral variability in organizations. These are the most commonly discussed functions of organizational culture Behavioral Control Most systems of social organization attempt to control the variability of member behavior. Whether it is a business organization, a club, community or nation, social systems need to limit certain behaviors and encourage others. At one level organizations setup rules, procedures and standards along with various consequences for compliance and non-compliance. This system of formalization is part of the organization's formal structure. However, we often find a high degree of behavioral regularity (cross individual behavioral consistency) in system without a strong formal systems of rules and regulations. In these cases, it is often the organizational or group culture that provides informal direction. Encourages stability Turnover and transitions exists in most all social systems. Despite changes in membership and leadership many organizations maintain certain characteristics, problems are handled essentially the same way, and behavior continues to be directed toward the same mission and goals. An organization's culture is often

passed on from "generation" to "generation" creating a relatively high level of stability over time. Provides source of identity Individuals continually search to define their social identities. Sometimes identities are defined by roles or professions and in other cases people define themselves through their organizational membership. When taking on an organization as a source of identity, people are taking on the values and accomplishments of that organization.

Concept Of Personal Values And Business Ethics

PERSONAL VALUES A personal value is absolute or relative and ethical value, the assumption of which can be the basis for ethical action. A value system is a set of consistent values and measures. A principle value is a foundation upon which other values and measures of integrity are based. Those values which are not physiologically determined and normally considered objective, such as a desire to avoid physical pain, seek pleasure, etc., are considered subjective, vary across individuals and cultures and are in many ways aligned with belief and belief systems. Types of values include ethical/moral value, doctrinal/ideological (religious, political) values, social values, and aesthetic values. It is debated whether some values which are not clearly physiologically determined are intrinsic such as altruism and whether some such as acquisitiveness should be valued as vices or virtues. Values have typically been studied in sociology, anthropology, social psychology, moral philosophy, and business ethics. Values can be defined as broad preferences concerning appropriate courses of action or outcomes. As such, values reflect a persons sense of right and wrong or what ought to be. Equal rights for all, "Excellence deserves admiration", and People should be treated with respect and dignity are representative of

values. Values tend to influence attitudes and behavior. For example, if you value equal rights for all and you go to work for an organization that treats its managers much better than it does its workers, you may form the attitude that the company is an unfair place to work; consequently, you may not produce well or may perhaps leave the company. It is likely that if the company had a more egalitarian policy, your attitude and behaviors would have been more positive. According to Morris Massey, Values are formed during three significant periods: 1. Imprint period from birth to 7 years. 2. Modelling period from 8 13 years. 3. Socialization period from 13 21 years. Personal Values provide an internal reference for what is good, beneficial, important, useful, beautiful, desirable, constructive, etc. Values generate behavior and help solve common human problems for survival by comparative rankings of value, the results of which provide answers to questions of why people do what they do and in what order they choose to do them. Over time the public expression of personal values, that groups of people find important in their day-to-day lives, lay the foundations of law, custom and tradition. Personal Values in this way exist in relation to cultural values, either in agreement with or divergent from prevailing norms. A culture is a social system that shares a set of common values, in which such values permit social expectations and collective understandings of the good, beautiful, constructive, etc. Without normative personal values, there would be no cultural reference against

which to measure the virtue of individual values and so culture identity would disintegrate. Wyatt Woodsmall points out that, Criteria are used to refer to 'the standards on which an evaluation is based. Values relate then to what one wants and in what order one wants them, criteria can only refer to the evidences for achieving values and act as a comparative standard that one applies in order to evaluate whether goals have been met / values satisfied. Values are obtained in many different ways. The most important place for building values is a person's family. The family is responsible for teaching children what is right and wrong long before there are other influences. As it is said that a child is a reflection of the parents. As a child starts school, school helps some to shape the values of children. Then there is religion that the family introduces to a child that plays a role in teaching the right and wrong behaviors.

Ethics Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Business ethics has both normative and descriptive dimensions. As a corporate practice and a career specialization, the field is primarily normative. Academics attempting to understand business behavior employ descriptive methods. The range and quantity of business ethical issues reflects the interaction of profit-maximizing

behavior with non-economic concerns. Interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporations promote their commitment to non-economic values under headings such as ethics codes and social responsibility charters. Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. Governments use laws and regulations to point business behavior in what they perceive to be beneficial directions. Ethics implicitly regulates areas and details of behavior that lie beyond governmental control. The emergence of large corporations with limited relationships and sensitivity to the communities in which they operate accelerated the development of formal ethics regimes.
FEATURES OF BUSINESS ETHICS

1. Ethical Values: Business ethics is concerned with morality in business in todays business world, community firms is large part of society and its action is bond to have a direct impact on the wellbeing and welfare of the society. Business affects society in terms of what products it supplies. Therefore, it is necessary that business community conduct its activities with self control, self check, and self scarifies .i.e. acting with less concern for yourself than for the success of the joint activity. And keeping always in mind the interest of community at large signifies ethical values. 2. Relative term:

Ethics is a relative term in the concept of morality and immorality. It differs from one individual to another or from society to society. What is moral to one may be immoral to another. 3. Interest of society: Business ethics implies that business should first do good to the society and then to itself. Business is an important institution and has a social responsibility to protect the interest of all those groups who are directly or indirectly related to the organization like employees, shareholders and consumers etc. to contribute to the success of business. 4. Business social relationship: Business ethics set the terms and standards to understand the societal relationship of business. It indicates what society expects from business and what it thinks about the business. 5. Provides the framework: Like an individual, business is also bound by social rules and regulations. Business is expected to restrict its activities within the limits of social, legal, cultural, and economic environment. 6. Facilitates protection of social groups: Business ethics gives protection to consumers and other social groups such as shareholders, employees and the society at large. Business should give priority to social interest or social good. Such ethical approach creates good name, add status to business and helps in its growth and expansion.

7. Not against profit making: Business ethics is not against fair profit making. However, it is against making profit by cheating and exploiting consumers, employees or investors. It supports expansion of business activities but by fair means and not through illegal activities or corrupt practices. 8. Needs willing acceptance: Business ethics cannot be imposed by law or by force. It must be accepted as self-discipline by businessmen. It should come from within. Businessmen should go for ethical trade practices on their own and not by force of law.

IMPORTANCE OF BUSINESS AND VALUES

Have you ever given a thought as to why societies function? Why is it that since ages, human beings are able to live with each other peacefully? Yes, there have been certain incidences such as crimes and wars which do disturb the delicate fabric of the society once in a while, but still, on a whole, people have co-existed and survived for so many years. The main reason why humanity has survived for so long is due to certain rules, values, mores and ethics, which all of us abide by. Just imagine, what would happen if suddenly we were left without any sense of morality or values. In such a scenario, no doubt, chaos will prevail everywhere. Thus, ethics and values are the very foundations on which this society is standing. Same is the case in business. Organizations which follow certain business ethics have better chances of survival, compared to the ones whose only goal is to make profits, even if they have to compromise on a lot of things for that. So what is the importance of business ethics? How does it benefit the business? Let's find out 1. Profit Maximization The importance of ethics in business can be understood by the fact that ethical businesses tend to make much more profits than the others. The reason for this is that customers of businesses which follow ethics are loyal and satisfied with the services and product offerings of such businesses. Let us take an example. Suppose, there is an organization named XYZ which manufactures cosmetics.

XYZ greatly believes in the importance of ethics in business. When XYZ advertises its cosmetics in the market, being an ethical organization, it will be very truthful and honest in its communication with the probable customers. It will tell correctly about the kind of ingredients it has used while manufacturing the cosmetics. It will not lie or exaggerate about the benefits or uses of its products either. So the customers who buy its cosmetics, know precisely what they are buying and how useful that product is going to be for them. This way, the product will meet their expectations and thus, satisfy the customers. When customers are satisfied, they will become loyal to the company and come back again for repurchasing. This will surely increase the profits of the organization. Thus, the importance of business ethics is that it creates loyalty in customers and maximizes the profits. 2. Efficient Utilization of Business Resources In an organization, people working at the junior levels often emulate the ones working at the top. The same applies with ethics too. If the management or seniors of an organization follow ethical business practices, i.e, they do not bribe to get their way or they do not cheat the customers, investors, suppliers, etc., the employees will follow suit. The employees too will refrain from using the office property or resources for personal benefits. This will result in better and efficient utilization of the business resources. 3. Creates Goodwill in the Market An organization, which is well-known for its ethical practices, creates a goodwill for itself in the market. Investors or venture capitalists are more willing to put their money in the businesses which they can trust. Shareholders too, remain satisfied with the practices of an ethical businesses. Thus, ethics creates goodwill

and builds long-term relationships, and that cannot be denied. Also, an ethical business puts greater value on its employees and thus, employees remain loyal to such an organization too. The chief goal of any organization is to maximize its profits. The importance of business ethics can be understood from the fact that it helps the businesses in achieving its goal of profit-making by creating goodwill for the business in the market, increasing its loyalty among the customers, by aiding in employee retention and by maximum utilization of its resources. 4. Satisfying Basic Human Needs Being fair, honest and ethical is one the basic human needs. Every employee desires to be such himself and to work for an organization that is fair and ethical in its practices. 5. Creating Credibility: An organization that is believed to be driven by moral values is respected in the society even by those who may have no information about the working and the businesses or an organization. Infosys, for example is perceived as an organization for good corporate governance and social responsibility initiatives. This perception is held far and wide even by those who do not even know what business the organization is into. 6. Uniting People and Leadership: An organization driven by values is revered by its employees also. They are the common thread that brings the employees and the decision makers on a

common platform. This goes a long way in aligning behaviors within the organization towards achievement of one common goal or mission.

7. Improving Decision Making: A mans destiny is the sum total of all the decisions that he/she takes in course of his life. The same holds true for organizations. Decisions are driven by values. For example an organization that does not value competition will be fierce in its operations aiming to wipe out its competitors and establish a monopoly in the market. 8. Long Term Gains: Organizations guided by ethics and values are profitable in the long run, though in the short run they may seem to lose money. Tata group, one of the largest business conglomerates in India was seen on the verge of decline at the beginning of 1990s, which soon turned out to be otherwise. The same companys Tata NANO car was predicted as a failure, and failed to do well but the same is picking up fast now. 9. Securing the Society: Often ethics succeeds law in safeguarding the society. The law machinery is often found acting as a mute spectator, unable to save the society and the environment. Technology, for example is growing at such a fast pace that the by the time law comes up with a regulation we have a newer technology with new threats replacing the older one. Lawyers and public interest litigations may not help a great deal but ethics can.

Impact Of Values And Ethics On Corporate Strategy

The COSO defines Internal Control as a process, effected by an entitys board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations; reliability of financial reporting; and compliance with applicable laws and regulations. It further defines Control Environment as The control environment is an organizations culture, beliefs, and values. It includes the integrity, ethical beliefs, and competencies of its people, which are visible in managements operating style, how management assigns authority and responsibility, and how management organizes and develops its employees. Another indication of the control environment is the degree of involvement from its board of directors. In other words, Organization Culture is the sum total of the psychology and attitudes which are communicated by the leadership team to the employees and the ethics, values and beliefs which are incorporated for execution of work and obtaining business objectives. Now that connections between internal control, control environment and organization culture are clear; the next question is what is the impact of organization culture on internal controls?

Constituents of organization culture and drive the impact on internal controls:

Leadership: Organization culture is defined by the leadership of the organization. The CEO is the torch-bearer of organization culture. The mission, vision and strategy communicated by the senior management is the glue which holds the organization together and moves everybody in the same direction. Lack of clear direction, frequent and abrupt changes and arbitrary decisions in mission, vision and strategy contribute to the negativity in the organization culture. This also results in various departments having different work cultures and working in a counter-productive manner. This directly impacts the efficiency and effectiveness of business operations. Depending on the level and clarity of leadership communication, the

organization at a macro level may be in high, medium or low risk as depicted in the adjoining chart.

Ethics: Business ethics show in all aspects of business conduct, from the board room strategies to the front desk personnel. It goes beyond legal requirements, and shows whether business is conducted on values of integrity, honesty and fairness. It shows whether employees at all levels are able to walk the talk. A clearly defined and implemented code of conduct improves the organization culture. However, an organization which has not implemented a code of conduct may have a negative organization culture. In such a case, decisions are taken arbitrarily, organization lacks transparency and may disregard laws and regulations to achieve profitability. Commitment to follow the business ethics, reflect whether organization has high, medium or low compliance risk. High compliance risk raises questions on reliability and authenticity of financial statements.

Attitudes & Beliefs: The psychology and behavior shown throughout the organization by the employees for doing day-to-day operations reflect the organization culture. Organizations show healthy attitudes where employees are rewarded on performance, there is lack of discrimination due to age, race, color and gender and there is minimal harassment and workplace aggression. Organizations having aggressive work cultures, which are number driven and lack humanity impact the control environment negatively. In such cases, for the sake of efficiency, legal requirements are compromised. Carried to an excessive stage, the organization may become unsafe for work and/or shareholder investments. The control environment is such cases maybe seriously impacted, as there is strong alignment towards unhealthy and corrupt business practices. The above mentioned three aspects clearly indicate that organization culture has a significant impact on control environment of the organization. An internal control auditor would benefit from understanding and assessing the organization culture. An organization risk appetite, philosophy, and exposures can be determined while analyzing the organization culture. A risk dashboard and/ or internal audit program should be developed keeping the organization culture in

mind. An internal audit report must mention the impact of organization culture on internal control environment and the risks the organization is exposed to, due to negative or unhealthy organization culture. Recommendations should be given to improve and build a healthy organization culture. Corporate Ethics Strategy Since the 1990s, corporate ethics has been recognized as a primary function of organizations. Corporate ethics is divided into business ethics (BE) and corporate social responsibility (CSR). The two concepts are not synonymous but complement and support each other. Business ethics refers to the company's organizational behavior in an ethical and legal fashion. Corporate social responsibility is the behavior and action by a company in relation to society. In other words, an organization has to function ethically and maintain, develop social welfare activities. Approaches

The rationale of a corporate ethics strategy depends on the reason a company has to believe and follow BE and CSR. A corporate entity must realize that ethical actions and behavior will reduce and cut through red tape and other administrative legal hassles in the long run. Similarly, a company must acknowledge that it does not exist alone. It functions in a society with the help of society members. It employs people, uses society resources and time. So it must give back to society by organizing and participating in welfare activities. A realization of the meaning and importance of BE and CSR will result in increased efficiency, performance and goodwill. These three factors are critical to the daily function of every organization.

Be and CSR need to be proactive in nature. This means that corporate ethics has to form an integral part of organizational business strategy. Usually, a company adopts a short-term reactive approach to BE and a long-term approach to CSR. But BE and CSR have similar aims and so need to be fused together to have one approach. Both functions need to be addressed proactively.

Departmental Roles

BE and CSR involve departments of human resources, public relations and finance. The two functions focus on doing business the legal manner to benefit the organization. The strategy involves developing a company website to constantly reach out to the public to make them aware of their public welfare activities. These include breast cancer walks, fundraising campaigns, career fairs for the needy and educational funding for children with special needs. The public relations department has to employ a proactive approach and monitor and update the company website, newsletters and electronic messaging systems. The strategy also refers to a smooth communication flow within the organization, including information and process transparency among the consumers, stakeholders, employees and the management. The finance department has to sanction adequate funding to ensure the development and placement of the strategy. It is imperative that funds for the corporate strategy be set aside during the first top-management meeting at the beginning of the fiscal year.

Federal Regulations

In 1991, the Federal Sentencing Guidelines for Organizations (FSGO) ruled that all organizations should have an ethics program in place. This includes a staff manual outlining code of conduct, organizational business expectations of non-discrimination practices and employee working conditions and leave. The Sarbanes-Oxley Act in 1992 further tightened the BE strategy by introducing policies of accounting reform and financial reporting regulations.

How to Manage Corporate Business Ethics Corporate business ethics has been a hot topic in business and finance in the twenty first century, and this crucial field of management is likely to gain increasing importance in the years ahead. While much has been said about the importance and benefits of implementing a company-wide ethics program, business owners must understand how to manage corporate business ethics on a daily basis in order to take full advantage of an ethics program. Instructions Involving employees Involve employees in establishing a code of ethics. Allowing employees at all levels of your company to voice their opinions in forming a corporate ethics program can help them to identify with and champion the program. Creating an ethics program in an open environment can also reduce the chance that specific groups will feel marginalized or overlooked by the program.

Implement ongoing ethics training for all employees. The training need not be extensive, but should be administered regularly; at least once every two years. Keep your ethics training curriculums up to date by addressing current issues in the field of workplace ethics and current concerns in your organization.

Establish a way to measure the outcome of ethics training. According to managementhelp.org, managers may find it challenging to quantifiably measure the results of ethics training initiatives, since the desired outcome does not necessarily yield any tangible results. Define what you wish to accomplish by your ethics

program in exact terms. Examples of measurable yet subjective goals include dealing honestly with suppliers and customers, exceeding regulatory mandates for environmental responsibility, increasing positive employee satisfaction surveys, and ensuring that ethical hiring practices are consistently used. Tie incentives and compensation to ethical performance. Some companies give out bonuses based on performance levels that cannot reasonably be achieved by ethical means. This kind of incentive program can encourage an unethical culture. Make incentive and promotion decisions based on employees' ethical dealings with clients, customers, and co-workers in addition to profit- and productivity-based considerations. Allow your company's ethical values to influence all of your business decisions. Draft all of your company policies and procedures in accordance with your ethical guidelines. Before making any business-related decision, ask yourself if the outcome will be fair to all parties, fiscally and environmentally responsible, and legal. Remember the old adage: "If you wouldn't want it to be on the front page of tomorrow's newspaper, don't do it." Train executives to lead by example. Executive behavior can greatly influence corporate culture and the behavior of employees. Executives set the bar when it comes to the type of behavior that is considered acceptable in an organization, and can find themselves in a conundrum if they are required to discipline employees for breaking the rules that they themselves break. Your executives should go beyond the company's code of conduct in their ethical decision making, and their ethical acts should be visible to employees in some way.

Steps To Resolve Conflicts Conflict in the workplace is but a natural and normal part of every working individuals life. People get into conflict due to pursuance of personal goals and satisfaction of needs. Conflicts are truly unavoidable but it is not necessarily a bad thing. In fact, effectively resolved conflicts can promote personal and professional development. Not a lot of us may know that conflict resolution takes skills. The positive or negative results are defined by proper conflict resolution skills. With an effectively resolved conflict, not just one issue is solved but differences in attitudes and values. Moreover, it offers some advantages that individuals do not really expect to gain. Unknowingly, a discussion of the issue increases awareness of the situation. It allows the individuals to think of ways to achieve their own goals without having to mess up those of others. Group cohesion is also developed, teaching the members the value of respect and cooperation. Effective conflict resolution enhances an individuals self-knowledge and effectiveness. It creates a sharper mind and helps a person understand what is important to him. On the other hand, if there is no proper conflict resolution, the results can be negative and may affect the individuals on a personal level. Definitely, teamwork will be lost and work performance is affected as people are no longer motivated to carry out their functions well. No company would probably want this kind of situation in the workplace. It is not rocket science to learn the techniques in effectively resolving conflicts. Analyzing and understanding the conflict, determining a strategy, and negotiating or compromising before, during, and after the conflict are the basic steps an organization may employ to resolve a conflict.

Analyze the conflict In managing conflict, both parties have to study the nature and type of conflict by asking questions to gather enough information about the issue or cause of the disagreement. In a common office debate, understanding the cause of the heated discussion first is very helpful in dealing with the process. Determine Strategy or Styles After understanding the nature of the conflict, the parties involved must utilize identify their strategies or style in resolving it. There are five types of conflict management strategies based on a research about conflict. These are collaboration, compromise, competition, accommodation, and avoidance. Collaboration results in a win-win situation where the interests of both parties are highly considered. Using this strategy builds teamwork and commitment to work together. The ultimate goal of collaboration is arriving at a consensus. Compromise ends in a win some-lose some situation because both parties agree to settle for a temporary solution especially if time constraint is involved. It minimizes occurrence of power struggle but may cause a cynical circumstance in the long run. Competition is a win-lose condition and can be risky for an increased level of argument since it attempts to persuade the other party with that of your own. Accommodation is more of giving in for the benefit of other peoples interests. An opposite of competition, this strategy results in a lose-win situation. This is best applied when one party realizes their mistakes and thus delivers a goodwill gesture instead.

Avoidance is best employed when the issue is insignificant or when a high risk of damage will occur when the confrontation gets out of hand. Because both parties have a low concern for each others interest, the situation becomes loselose. Negotiate Before, During, and After This is quite a long process because this step is where the meat of the conflict is discussed. Pre-negotiation starts with deciding who approaches who first, where and when to set the conflict, and setting the ground rules. During the negotiation process, different factors should be taken into consideration. Interests must be openly discussed. Options should be laid on the table to address the individual interests. Then, both parties can start evaluating on what will work and mutually satisfy their goals. Upon reaching a consensus, a commitment to carry out the agreed solution must be responsibly honored by each group or individual. The last step is to negotiate after the conflict. If it needs implementation, then collaboration will effectively support the desired goals. An organization that effectively follows a process in resolving workplace conflicts will find it easy to handle any similar situation that the members may encounter.

Social Responsibility Of Business Business and Society are interdependent. Society depends on business for meeting its needs and welfare, whereas, Business depends on society for its existence and growth. Corporate Social Responsibility is an ethical or ideological theory; a doctrine, how an entity whether it is a government, corporation, organization or individuals has a responsibility to society and can be defined as, the obligation of business to pursue those policies, to make those decisions or to follow those lines of actions which are desirable in terms of the objectives and values of your society. As rightly said, It is better to be proactive towards a problem rather than reactive to a problem. One part of Social Responsibility is being responsible to people, for the actions of people and for actions that affect people, hence it means obligation of business towards different social group, i.e. the consumers, employees, shareholders, society, government, media and so on. As Abraham Lincoln once said that public sentiments is everything. With public sentiments nothing can fail, without it, nothing can succeed. Thus, every business must have a code of conduct as a guideline which directs human behavior and helps to them differentiate between good and bad, right and wrong, fair and unfair, professional and unprofessional as well as determining universal rules and laws of a behavior. It can be seen within the company in various departments like Human Resource Management (recruitment, selection, induction, training, promotion, payroll, retention and motivation); Marketing Management (sales, distribution, advertising, promotion, public relation, publicity); Finance (auditing, risk management, taxation, cost analysis);

Production(logistics, warehousing, supply chain, quality control), thus it is an inseparable management activity/function.
Social Responsibility Towards Various Groups

The areas and scope of social responsibility towards various groups are briefly explained as follows : 1. Responsibility Towards Employees : Employees provide human resources to the organization. They are very important to the company. Therefore, the responsibilities of a business organization towards the employees should be fulfilled in proper manner because this will give a greater productivity to the organization. We have explained the responsibilities of a business organization towards employees in brief as follows (a) Meaningful Work and Job Satisfaction: In a country like India, the job opportunities are limited with a serious problem of unemployment. Therefore, to provide a good work, proper working conditions and job security are the social responsibilities of commercial organizations.

(b) Fair Returns:

Workers should be paid sufficient wages and salaries, other incentives like bonus, medical allowance, traveling allowances, etc. Prompt payment to the workers, results in higher motivation to the work force.

(c) Best Physical and Mental Atmosphere: Fresh and decent working conditions, proper sanitary facilities, cool and fresh drinking water and etc. items are the essentials of employees. Therefore, by taking in to consideration these requirements, proper attention should be given to the facilities.

(d) Participation in the Management: The workers must be encouraged to take part in management by forming workers committee, suggestion scheme, profit sharing, co-partnership, etc. It is an important responsibility of commercial organization.

(e) Training, Promotion and Welfare Schemes: Modern business demands efficient and trained staff. Therefore, proper training should be provided to the employees. Welfare facilities like scholarship, transport facility, refreshment facility, games, etc. should also be provided to the employees so that they can complete the work in efficient manner.

(f) Recognition of Unions: Organizations should recognize workers right of forming union. It will help in maintaining industrial peace. (g) Proper Personnel Policies: There must be proper personnel policies in respect of transfers, promotions, recruitment, training, etc. There should be no partiality in promotion, transfer or any other activity for the employees.

(h) Health and Safety Measures: The commercial organization should take adequate measures to protect health of the employees. They should be provided with proper canteen, medical and other facilities.

(i) Grievance Procedure: There should be proper grievance procedure to handle employee complaints. These are the social responsibilities of a business organization towards employees.

2. Responsibilty Towards Shareholders :

Business organization has certain responsibilities towards the society at a large. They are as under.
(a) Protection of Environment:

Pollution is a major problem of present times, which is due to commercial organizations. Air pollution and water pollution are due to the industries, chemical plants, cement plants, etc. The business organization should take all possible measures to minimize pollution.

(b) Reasonable use of Resources: The business organization should make proper use of available resources in the large interest of the society. The resources like fuel, water, land, etc. must be used economically.

(c) Reservation for Weaker Section: The commercial organization are expected to provide the jobs and employment opportunities for lifting up economically weaker section of the society.

(d) No Participation in Anti-Social Activities:

The organization should not participate in such activities which will adversely affect the society in general. No financial help should be provided to such anti-social activities. (e) Development of Backward Regions: The society requires that the business organization should be started in backward areas. This will create employment opportunities and increase purchasing power among the rural population of India.

(f) Financial Assistance: The society expects donations and financial assistance for various social causes, such as eradication of poverty, illiteracy, etc. They expect company to take part in anti-drug campaigns, anti-noise campaigns, and so on.

(g) Prevent Congestion in Cities: The companies should also work to avoid congestion in cities spreading their industries in different places or locations.

(h) Employment Generation: Business firms should make all possible efforts to generate employment. Such effort will help to solve problems caused due to unemployment in the society. 3. Responsibilty Towards Customers :

A business cannot work without consumer. The survival and growth of business depends on consumer satisfaction, service and support. The commercial organization should win the confidence of the customers. This is possible by following a positive attitude towards customers and fulfilling following social responsibilities towards them:

(a) Quality: The company should produce quality goods. The company should try to improve its quality because at not time quality can be 100%. There is always room for improvement of quality.

(b) Fair Prices: The customers should not be cheated by charging high prices. It is not possible to fool the customer at all the time. Thus, fair price convert a customer into permanent customer.

(c) Honest Advertising: The customers want to know the facts, features, advantages, side-effects, etc, of the product. The advertisement conveys this information. Thus, the company must see that the advertisement is not being misleading and it must be done by providing the true and actual information.

(d) After Sales Service:

The company is expected to provide after sale service for maintenance of goods during the period of warranty. Efficient and effective after sale service helps to establish good relation between the customers and the company. (e) Research and Development: The consumers require that the business organization must conduct research and development for the purpose of improving the quality and reducing the cost of production. That is, it must provide ISI or AGMARK products to the customers. (f) Consumer's Safety: The business must ensure that the product supplied will not adversely affect on the life and health of the customers. Unsafe product must not be marketed by the company.

(g) Regular Supply: Consumer should be supplied with the goods regularly as and when required by them. The commercial organization should not create artificial shortage of goods.

(h) Attend Complaints:

The consumer complaints must be attended immediately.

(i) Avoid Monopolistic Competition: The commercial organization should avoid monopolistic competition in the interest of consumers.

(j) Training: The commercial organization should arrange to train the customers either free or for a fee. It must be in case of computers, etc.

4.

Responsibility Towards Society: Business organization has certain responsibilities towards the society at a

large. They are as under.

(a) Protection of Environment: Pollution is a major problem of present times, which is due to commercial organizations. Air pollution and water pollution are due to the industries, chemical plants, cement plants, etc. The business organization should take all possible measures to minimize pollution.

(b) Reasonable use of Resources: The business organization should make proper use of available resources in the large interest of the society. The resources like fuel, water, land, etc. must be used economically. (c) Reservation for Weaker Section: The commercial organization are expected to provide the jobs and employment opportunities for lifting up economically weaker section of the society. (d) No Participation in Anti-Social Activities: The organization should not participate in such activities which will adversely affect the society in general. No financial help should be provided to such antisocial activities.

(e) Development of Backward Regions:

The society requires that the business organization should be started in backward areas. This will create employment opportunities and increase purchasing power among the rural population of India.

(f) Financial Assistance: The society expects donations and financial assistance for various social causes, such as eradication of poverty, illiteracy, etc. They expect company to take part in anti-drug campaigns, anti-noise campaigns, and so on.

(g) Prevent Congestion in Cities: The companies should also work to avoid congestion in cities spreading their industries in different places or locations.

(h) Employment Generation: Business firms should make all possible efforts to generate employment. Such effort will help to solve problems caused due to unemployment in the society.

5. Responsibility Towards Government :

The social responsibilities of a business organization towards government can be explained with the help of the following points:-

(a) Observation of Rules and Regulation: The organization are required to follow the rules and regulations laid by the government in proper manner.

(b) Payment of Taxes: The business organizations must pay taxes and duties regularly to the government such as sales tax, income tax, octroi duty, custom duty, VAT, etc. Non payment of taxes is an offense, because it would be difficult for the government to undertake development programs.

(c) Assistance in Implementing Socio-Economic Policies: The government expects co-operation and help from the business sector to help in implementing programs and policies relating to social and economic development. (d) Earning Foreign Exchange: The government also expects from business organization that it will earn foreign currency by exporting goods in the foreign market. The government requires this foreign currency for importing valuable and important products. (e) Advising the Government:

The business organization has to provide timely advice to the government in respect of framing important policies such as Industrial policy, Import & Export policy, Licensing policy, etc.

(f) No Favors: The commercial organization should not take any type of favor from government officials by bribing or influencing them.

(g) Contributing to Government Treasury: The commercial organization must contribute the funds to government during the emergencies and natural calamities like floods, earthquakes, etc. (h) Political Stability: The commercial organizations should work towards the political stability of the country. The stable government often brings more return and peace in a democratic country.

6.

Responsibility Towards Suppliers :

The social responsibilities of a business organization towards supplier can be explained with the help of the following points: (a) The company should maintain good relations with the suppliers. (b) Payment of credit amount must be done on time. (c) The company should not force the suppliers to work on unreasonable terms. (d) The companies should work for their growth and survival. (e) The companies should not disclose any secret information about its suppliers to other. These are some of the important responsibilities of a business organization towards suppliers.

7. Responsibility Towards Financial Institution :

The social responsibilities of a business organization towards financial institutions can be explained with the help of the following points:(a) The payment of loan and interest installments must be made on time. (b) They should not bribe bank officials in sanctioning loans. (c) They should provide with regular reports to the financial institutions. (d) Business organization should not convert bank loans into bad debts. (e) There should be use of proper funds provided by financial institutions. These were the major social responsibilities of a business organization towards financial institutions.

8. Responsibility Towards Competitors : The social responsibilities of a business organization towards competitors can be explained with the help of the following points:(a) The company should avoid unfair practices, such as duplicating the products of the competitors. (b) Respect the competitors and treat them as challengers and not enemies. (c) They should ensure free entry, and not block entry of competitors.