Ethics and Social Responsibility

Ethics and social responsibility go hand in hand when developing a strategic plan. This can be established with a code of ethics or a set of parameters it expects its employees to operate under in various situations and outlines what the company expects its employees to behave when making decisions. Ethics is defined as the consensually accepted standards of behavior for an occupation, a trade, or a profession. (Hunger, 2010)

Solving ethical problems can be solved by asking three questions:

1. Does it optimize the satisfactions of all stakeholders?

2. Does it respect the rights of the individuals involved?

3. Is it consistent with the canons of justice? (Hunger, 2010)

If a company takes the time to consider the following questions when making decisions it should greatly reduce the chances of making unethical decisions for the good of the company. A company is only as strong as the people that are operating it. If a company hires unethical people then chances are the company will make unethical decisions at an individual level. The responsibilities of an organization don't end with making a profit, but instead end when a company makes the ethical decision. The organization is responsible for the health and wellbeing of the community and many times an organizations decisions effect much more than the organization itself. The decisions of an organization impact the environment, community, economy, and the world around it. There are many ways an organization can meet stakeholders needs while maintaining ethical principles. Ways in which an organization can prevent ethical violations and lead by example founded on ethical principles.

Organizations have many responsibilities that need to be in perfect balance in order for an organization to become successful. The responsibilities of an organization include: economical, legal, and social responsibilities. (Wheelen and Hunger. 2010) Economic responsibilities are the processes that an organization uses to produce goods and services in order to make a profit. Legal responsibilities are rules and regulations that have been established by governmental bodies that are mandatory to obey. Social responsibilities are a combination of discretionary and ethical responsibilities. Discretionary responsibilities are responsibilities that the organization voluntary fulfills in order to improve quality of life and provide incentives to increase productivity. Ethical responsibilities are responsibilities that are governed by a moral code of conduct and are composed of beliefs that are generally held by the majority of society.

Profit maximization without ethics and social responsibility can result in devastating consequences for both the organization and the community in general. In recent years organizations have been found guilty of ethical violations and have tried to use profit maximization as a justification. The most common ethical violations include: improper documentation, misleading clients, cross sexual boundaries, conflict of interest, and environmental violations. Documentation is important and it needs to be accurate in order for it to achieve its objectives. Recently in the real-estate industry brokers encouraged individual to misrepresent income in order to qualify for home financing. The result of improperly documenting customer's income resulted in many home foreclosures. Misleading clients can include: fraudulent billing, mishandling of funds, and exaggerating specifications. Cross sexual boundaries are actions that violate an individual's professional position. An example of cross sexual boundaries would be a sexual relationship between student and teacher. Conflict of interest is when a professional violates the clients trust. An example of conflict of interest is a defendant's lawyer that has a relationship with the prosecutions attorney. Environmental violations are ethical violations in which an organization harms the

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