The ethical aspects of human
resource management
Topic
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The company morale and its declaration
Company culture
The moral responsibility of a company
Development of ethical culture
Advocacy and possible situations of conflict
– The owner and employee relationship .
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The company morale and its
declaration
- Company culture
• Company culture
– The flexibility, adaptability and communication skills within an
organization indicate and express the strength of a company
culture
– The organization should adapt to the changes of both the
external and internal environment. Should be receptive and
adaptive to the novelties.
– Should be flexible and have adequate technology and capacity
to solve the problems arising and fulfill the ever changing needs
of the clients.
~Flexibility is the name of the game~
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Goldmann: Iceberg model
Company culture
• The flexibility depends on the employees (their skills,
motivation, commitment).
• Flexibility should be a build in aptitudes of the
company.
• An innovative culture, that is capable to flexibly
adapt, emphasizes change, challenge and
reasonable risk-taking.
• Requires self-determination (autonomy) from
individuals and organization units. Ignores- often
exceeds - the organizational structure of the
bureaucratic hierarchy.
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Identification
• with the aims of the organization, awareness
and acceptance of its functions.
– Its influence depends on the measure the
community is capable to understand and accept
the goals of the organization, to identify
themselves with them and to contribute to, by
approximating with their own aims.
– The mission statement of a company is
contributing to the development and
strengthening of the identification.
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Mission statements
• Google’s mission is to organize the world’s
information and make it universally accessible
and useful. (http://www.google.com/about/)
• „ To bring inspiration and innovation to every
athlete in the world.” (http://help-enus.nike.com/app/answers/detail/a_id/113/~/nike
-mission-statement)
• http://www.coca-colacompany.com/ourcompany/mission-vision-values
• https://www.vodafone.com/content/index/about
/sustainability/our_vision.html
Mission statement
• Steve Jobs' original idea "To make a contribution
to the world by making tools for the mind that
advance humankind„
• Apple now: "Apple designs Macs, the best
personal computers in the world, along with OS
X, iLife, iWork and professional software. Apple
leads the digital music revolution with its iPods
and iTunes online store. Apple has reinvented the
mobile phone with its revolutionary iPhone and
App store, and is defining the future of mobile
media and computing devices with iPad.”
Mission statement
• Draws up
– What is the organization's reason for existence,
– What are the cornerstones of its aspirations
– whom, in what way and how wants to serve,
– what are the key social values that accepts and
incorporates in its vision and
– It identifies the characteristics that distinguish it from
others.
• The mission statement is mainly drawn up by each
organization for their own employees. These principles and
values must be adopted and enforced in their work and
lifestyles as well.
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A stakeholder modell
• The formulation and declaration of the mission is
not only for the employees, but at least as much
is targeting the social environment as well.
• This is a central element of the communication.
From where the environment can learn on the
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Values followed,
The inside behaviour,
The business style
The relation with the stakeholders
Behavioral characteristics.
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A stakeholder modell 2.
• The stakeholder model emphasises those
individuals and groups of people, who are
affected by the organization's activities Ezek:
– Employees, unions,
– clients – consumers, consumer advocacies
– Suppliers, competitors, banks, owners, politic
groups, governmenet.
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A stakeholder modell 3.
• The organization's interest is to develop
specific actions, behaviorial forms for each
group and control, affect the established
relationship with them.
• That is how a mission statement of an
organization (company) becomes an essential
element of image formation.
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The appearance of the moral
responsibility at a company
• The business environment and his interlocutors - suppliers,
collaborators, customers, users, financial institutions, social
organizations - experience the company's ethical behavior
through the links, interactions and connections with the
company.
• This is particularly the qualifying element of long-term
relationships of cooperation.
• The fact how the environment considers a company is
affected by many factors.
• The image of a company as a mosaic is formulated in a
process on the basis of individual transactions, appearances,
manifestations.
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The appearance of moral responsibility
at the company 2.
• The main constituents of the image are the moral
elements.
• However negative moral elements play a role as well.
– For example:
– breach of contract, in particular the deadlines not met;
– abuse due to the dominant position;
– Pricemanipulation, imposition of dumped price;
– Use of certain non-pure subsidies
– Use of discrimination;
– unfulfilled warranty obligation;
– Quality distruction, endangerement;
– misleading, deceptive advertising;
– the low level of working conditions; etc.
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The appearance of moral responsibility
at the company 3.
• The most complex priblem of the business
ethics is the re-emerging case of operation
conflict.
• The conflict manifests between the economic
(indicated by the incomes and the broadly
understood expenses and profits) and the
social achievements.
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The appearance of moral responsibility
at the company 4.
• While the economic achievement could be
objectively measured in short and long term,
the measurement of social one is way more
difficult.
• The difficulties arise not only from the complexities
of the impacts, but also from the time-need to assess
those impacts (long – term).
– Some aspects of social achievement are easy to
measure, others are just perceptible.
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The appearance of moral responsibility
at the company 5.
• Those commitments are measurable:
– The income possibilities of the employees, their
working conditions and its development,
– The consumer satisfaction
– The creditors and suppliers, distributors
satisfaction
– The environment protection,
– However in the case of a wider social circle, the
objective measurement posibilities are decreasing.
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Building an ethical culture
• The fact, how ethical corporate culture and internal
milieu and ethical norms develops a company depends
in big measure from management and the patterns of
ethical leadership (good example).
• It is the result of the leadership to build up a company
culture in which the ethical culture is a main constient
part of.
– (We discovered at many companies a Zen
philosophy enforcement in the management of the
companies examined. This means that seamlessly
focuses on the positive things, without a ban on
unwanted. This creates a favorable climate with
tangible effects.)
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Building an ethical culture 2.
• The best measure of ethical decisions is the
confrontation with the public within the
enterprise and outside the enterprise.
• The company’s business integrity is qualified by
its practicce.
– Violations of fair competition rules
– Non-compliance with the promised lenght of
usability, quality, interchangeability a
are questioning the declared business ethics of a company, that of the
business man not necessairly.
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Building an ethical culture 3.
• In a correct business behaviour the dominant
aspect is that of responsibility
– This is independent from the user (if it is famous or
no-name), who bears the conseqvences
• The ethical efect of the leader on his environment
is inversely proportional with the size of the
company .
– It is the strongest in the case of small size companies
where the owner –manager is standing in a glass
window.
– Their personal integrity and ethical example will be
key to the company's ethical performance and scale as
well.
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Building an ethical culture 4.
• In a small organisation the leader is the alpha
and omega of the process.
• She or he often performs one-man leadership,
which requires fast shifts among the manifold
tasks.
• The task are differentiating with the increasing
of the size of a company.
• The operative work-processes are replaced by
the art of the leadership.
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Building an ethical culture 5.
• The one man ethical leadership is replaces with
an emphasis of the ethical behaviour of the
collegues.
• In very large organizations special educational
functions are established and separated within
the organisation.
• In order to unify management principles, policies
and guidelines are developed and shared to help
business managers at all levels in harmonization
of their behavior.
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Ethical codex
• They ethical codes of conducts occupy a
prominent place among the ethical
institutions.
• Enterprises, institutions, professional groups,
advocacy groups formulate the accepted
moral norms of their habits, behavior and
conduct.
• This are usually mandatory, but in most cases,
at least they show the expected behavior.
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Ethical codex 2.
• For organizations that have no code of ethics,
the expected basic ethical standards emerge
from the rules of the organization.
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Ethical codex 3.
• The ethical codex is the mediator of the performance
expectations.
• Reflects thinking norms, it captures the mindset that
the organization and its leaders expect in a given
situation from those belonging to its community.
• This gives impetus to the development of a certain
mindset and thinking patterns, which is expected to
result in desirable behavior. The perceptions are
generally formulated in a positive way.
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Ethical codex 4.
• The ethical codex has a significant effect, if
– The norms clearly apply to everyone, both leaders
and subordinates;
– The moral standards include the moral premises
which the institution, company, organization staff
are dealing with in their daily operation;
– It does not call attention to compliance with the
law, but highlights the socially expected
commitments made by the institution or the
company;
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Ethical codex 5.
4. defines the responsabilities
– Towards the users, the buyers, the service users,
those in contact with the organisation, the
society broadly
– Towards the employees of the organisation,
– Towards the founders, owners.
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Possible conflicting situation of the
interest alerations
• A variety of interests appear in a business.
• Differentiated income intention of the actors
is involved in the process.
• Although the power is determinant in the
interest structure, but in most cases
confrontation is posible to be avoided.
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Possible conflicting situation of the
interest alerations 2.
• The presence of a strong community culture in general
contributes to the creation of mutual compromises and
resolution of the conflicts.
• If in case of a conflict stituation one of the stakeholders is in a
vulnerable situation, emphaty should be strictly enforced
which does not happen in most of the cases.
• The common sense aims to create consistency
between short and long-term interests, which
is one of the most difficult tasks and often the
case of disagreement with the owner.
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Possible conflicting situation of the
interest alerations 3.
• The critical component of strategic issues is
the recognition of the risks and their proper
evaluation and the decison taken on the based
of the risk-bearing capacity of the company.
• The ethical behavior of the management can
be assesed considering in what way and to
what extent were decisions taking into
consideration the long-term interests of the
collective.
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1. The relationship between owner and
manager
• During the development of a business the
ownership and managerial functions are
spliting over time.
• The sizes, the complexity of the task require
the diversified expertise of the manager.
• The manager in charge of leading a business
demonstrates its knowledge and aptitude
through the efficiency of the operations over
time.
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The relationship between owner and
manager
• Some examples of the causes of conflicts at
companies investigated from experience :
– The shortcomings of the leadership skills of managers.
– The owner has a trading, the manager a technical way
of thinking.
– In addition to the long-term approach there is an
absence in evidence to the short term results
– The owner is defensive, seeking safety, caution, the
manager is risk-taking remaining still in the context of
a security zone.
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The relationship between owner and
manager
– The managers choses its employees badly, so it is
predictable the leadership's inability to act and the
formation of a critical situations.
– The manager has a bad relationship with the collective.
– The owner is taking into responsability the manager
because of the decisions that were grounded, still they led
to unexpected results because of the market-condition
changes. Thus considers just its dismissal and hires a new
manager with someone close to its interest-circles.
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2. The owner and employees community
connection
• This conflict is often there, but the owner can
solve it with ethical compliance in most cases.
• The situation is worst, when the owner is not
linked with any emotial thread to the
collective.
• The conflict of interest are often when
ownership is changed.
– Such case happedned at an electornic company, when the new owner did not
want to continue the previous professional activity. Thus the competencies of
the employees become useless. Just the service capacities remained. The
qvalified work-force could choose to live or to opt for an activity not coherent
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with its competencies.
3. The manager and employees
community connection
• The manager seeks to improve management efficiency and
enhance the earning capacity.
• The decisions taken for this purpose impose often quick acting
of the employees under the threat of to the compliance or
non-compliance.
• Often the causes of a conflict beween the manager and the
collective are the bad working protection and –contitions.
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4. The manager and individual connection
• This is a most critical point, because here the
conseqvences of a decision are not general,
inderectly, but affecting a concrete person
(and its family).
– Example: use of protecting helmets.
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5. Competitors
• You might see it in the prices, market
fragmentation, advertising, obtaining unique
rights (eg. Use of patents by gaining
representation etc). Certain forms of conduct
are prohibited by law.
– (The unfair and restrictive market practices
prohibition of agreements that are causing unfair
market competition, trade secrets, data protection
and data security, government procurement, etc).
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Competitors
• There are unwritten rules, the compliance or
non-compliance with them, are testifying the
management’s ethical business virtues.
– Some examples:
• attracting key professionals,
• Gathering informations through informal networks,
• together with other companies make impossible one’s
business,
• Copy of successful development results (technical and
design parameters) ,
• Copy and use of computer programs without permission.
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6. Possible conflict situations between the company
and the local or national authorities
– Taxes, fees, contributions are not paid on time for
businesses,
– unlicensed construction, respectively continuation
of activities,
– use of public space for business purposes without
permission,
– employ undeclared workers,
– pollution (land, air and water pollution, noise).
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