Keep in mind that I had to present this information in a secular class, so I'll let you in on a little secret. In the sphere of labor, God is the one who provides the overarching standards of ethics and values for a company. Enjoy!
Business Ethics Provide the Foundation for Employee and Employer Relations
Peter Cooper once stated, “I have always recognized that the object of business is to make money in an honorable manner. I have endeavored to remember that the object of life is to do good” (1874). A common belief in our culture today is that profits may only be realized at the expense or abuse of another. While it is true that every company has fiduciary responsibility to its stakeholders to earn profits, Cooper would tell us to that these profits exist for the ultimate purpose of doing good. Therefore, profits and good are not anathema; rather, they are collaborative. However, recent corporate scandals and abuse during the past decade have contributed to a mindset that has pitted employee against employer (BBC, 2002). Inversely, we have seen a rise in demand in Corporate Social Responsibility for the treatment of employees by their employers. This has raised the question; to what extent is a company responsible for the welfare of its labor force when it eats into profit margins? Before one can analyze if a relationship exists between profit and CSR, we must define and understand both concepts. Once proper definitions are established, the ideal ethical social structure of a business may emerge. In order for a company to earn maximum profits through satisfied employees, both parties must be accountable to a higher authority of ethics. Furthermore, a proper mechanism to address violations of the mutually agreed ethical code of conduct must exist. It is only with this structure that we can find a harmonious relationship between employer and employee.
What is Profit?
Profit is the quantitative measurement of the success of a company in a given year. In Lapin’s words, “Profit is a way to measure how useful a business is” (2002). It is a recordable rule of thumb for the financial health of a company and sometimes an indication of future growth in the next fiscal year. The business community has a moral obligation to be profitable both by law and ethics because of the amount of usefulness it may contribute. Ultimately, one can describe profit as an aggregate indication of good (Lapin, 2002). This is aggregate good is due to the principle that no exchange of products or services can be made unless both parties believe it to be an equitable exchange. This is the invisible hand that Adam Smith refers to in his book The Wealth of Nations
(1776). Unless the company continually provides a product or service to the community over time, no profits may be earned. Furthermore, many companies fail because of their inability to meet the needs of its consumers to the point of unsustainable levels leading to the closure of the business. In addition, there are a small percentage of companies that perform illegal or unethical actions that lead to their closure, like Maddoff’s prosecution in 2009 for creating a Ponzi scheme in the financial market for example (LA Times).Employer and Employee Responsibilities
Corporations and employers have a moral obligation to be aware of the trust placed within them by employees to perform the best of their ability. This trust by employees should not be abused or taken advantage of. It is the responsibility of the employer to provide the highest quality of work experience in a combination of benefits that may include: higher wages than the market average, affordable healthcare, excellent training, discounts on company services or products, and empowering each worker to personal growth. According to The Great Place to Work Institute, companies that create this type of culture making their employees a priority will find increased retention rates, overall increases in productivity, and new opportunities leading to company innovation and growth (2007).
Employees, likewise, have ethical responsibilities to their employers that are necessary for a successful workplace environment. The first responsibility is hard work regardless of supervision and the second is mutual respect to coworkers. Furthermore, the employee has a responsibility to know intimately his talents, personality strengths, and the skill sets, so that he may choose a compatible job that he will be perform excellently in. The combination of knowledge and loyalty will allow the employee to create the best product or service in his industry. This will increase the success of his business, thus ensuring his own security in the process. Conversely, it is important for the worker to realize his employment is not an entitlement, but voluntary so as to promote appreciation within the individual.
The Sphere of Labor
The social sphere of labor (see Figure 1) is just one of many social systems in the world. The sphere of labor is composed of the employer, the employee and the business ethical standards they submit to (Tackett, 2009). This mutual agreement of ethics and values is essential in order for a positive relational environment to exist between employer and employees. If at any point either party ceases to recognize the standards that exist outside of self, the standard becomes relative to the individual party. That is to say, what may be right for the employee may not be right to the employer leading to conflict. For example, if an employer has sales figures prioritized first, whereas, the employee values service we can see the potential for dissension. Essentially this pits the employer against the employee because whenever a situation arises where the two values compete; the employer prefers that the employee sacrifice his service in exchange for additional sales. The employee may follow his request but then resents his boss for violating his ethical principles. If the worker refuses to make the sale, the employer begins to lose confidence in his labor force. Both parties are motivated by different standards resulting in the degradation of their relationship.
Figure 1. Labor Sphere
Leadership Accountability and Transparency
Great companies tend to rely on the input and feedback of its personnel on the front lines. Sam Walton used to visit his employees at his stores spontaneously and each employee that wrote a letter to him with a complaint or grievance received a personal letter signed by Walton (Gross
, 1996). This increased the trust between him and his employees because they were treated as valuable contributors to his company. To replicate his success, a mechanism needs to exist in which employees can communicate their grievances without fear of reprieve. Additionally, should these complaints be valid, it is the employer’s duty to fix them. All problems should be viewed as positive opportunities for relational reinforcement rather than trite dissatisfaction. To avoid conflict altogether is impossible; management of conflict to resolution is not.Part of the mechanism to hear violations of ethical operation includes a broad awareness of what is expected of each employee. The company’s values need to be communicated regularly to its staff in an engaging and pragmatic way. This may begin with a leader who is a vision caster in his company; meaning, this person has an ability to inspire others to follow him after the company’s goals. While these regular infusions of values are being presented, it should be mentioned that the success of the company ultimately rests upon the shoulders of the individual. This will result in an increase of initiative and personal responsibility as the leadership of the corporation passes authority down the corporate ladder to every individual worker.
Conclusion
Corporate Social Responsibility to the employee need not be complicated. As the employer services the employee’s needs, the workers will reciprocate benefits back to his company through loyalty, personal responsibility and creativity. This is the positive cycle of corporate collaboration that can only exist if extensive trust has been established through mutually agreed ethical standards of operation. In this environment the employee must seek the highest good for his employer and likewise, the employer has a responsibility to seek the highest good for his workers. This combination of mutual respect and service in the workplace environment has a tendency to produce the maximum profit and production in an industry. This model should be become the standard structure of every corporate business.
Posts
