The Personnel Policy

Listen to this postMost of the medium and large organizations has a written personnel policy. The size and effectiveness of such policy depend on the organization size and culture. The bigger the organization the more detailed is its policy. The policy start small and simple but grow up and get more complicated with time. New procedures or rules are written frequently to cover the organizational needs. Expansions and new ventures require new rules and regulations; however, most of the new procedures are written to regulate or organize new situations that led to or going to lead to a problem. This fact explain why most of the personnel polices are complexed and confusing. The personnel policy was written in a reactive (or firefighting) mode. Some of the rules in policy are not applicable now or could cause more damage that it can regular and prevent. Some internet sites offer a ready-made “cookie cutter” policy that the starting companies can use with some customization. I doubt that a policy written for specific culture in a specific industry would be useful for anther culture and industry, but unfortunately, sometimes this happens! The best way to write a personnel policy is to have a specialist in Organizational Behavior to study the organizations culture and nature of work then write the full policy. The policy would be updated as needed but the specialist or consultant should be called whenever the organization anticipate change at work. The policy would need periodic revisions to rewrite or drop some of the old rules and regulations.

Should We Outsource Pharmaceutical Products?

Listen to this postOutsourcing became almost a must for most of the organizations. The electronics producers are a good example for outsourcing where most of the parts are outsourced or sometimes the products is completely manufactured by a different company. If you flip you iPhone and check the writing on the bottom of the phone you will notice “Designed by Apple in California, Assembled in China”!! Outsourcing eelectronic is more acceptable than other products like pharmaceutical products. The risk in outsourcing pharmaceutical products is very high because of the products nature. Melamine-laced mile products were responsible for the death of six babies and  poison contaminants in cough syrup were responsible for the death of more than 100 people in Panama. About 80% of the prescription drugs sold in the U.S are made outside the U.S. (“Outsourcing safety,” 2009). Risk management is very important to overcome the risk in pharmaceutical products (Fiscus, 2009). Product liability lawsuit could wipe out the cost saving from outsourcing the product and have a permanent scare in the firm’s brand (Fiscus, 2009).

References:

Fiscus, P. W. (2009). Global risks for drug manufacturers. Risk Management (00355593), 56(4), 50-54.

Outsourcing safety. (2009). Editorial, Nature Medicine, pp. 221-222. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=36818298&site=ehost-live

Preparing a Code of Ethics

Listen to this postTseng, Duan, Tung, and Kung (2010) analyzed 85,000 cited references of 3,059 articles from three business ethics related journals. The researchers found three concentration of interest in the cited references. The concentration was around the following:

  • Ethical and unethical decision-making
  • corporate governance and firm performance
  • Ethical principles and code of conduct

Comparable study was conducted by Forster, Loughran, and McDonald (2009) on a sample of firms listed on the Standard & Poor’s 500 showed similar sentences in their code of ethics. The repeated phrases are covering law obedience, acting with integrity, commitment to integrity,  commitments to treating others with fairness, exercising citizenship rights and remaining committed to the organization’s values. Messikomer and Cirka (2010) stated  honesty, respect, integrity, quality, neutrality and responsibility as the code of ethics principles for the organization (Messikomer & Cirka, 2010).

The list of important rules and principles above are a good guideline to write most of the organizational code of conduct. The process can start with identifying the organizational values and learn for the past experiences when the organizations had ethical problems or when employees violated the organizational values. The employees should be involved in writing the code of conduct, however representatives from each departments or sections would be enough when the organization has many employees that could not be assembled in one locations to discuss such intangible issue. The key stakeholders comments would be valuable for writing the code of ethics because the stakeholders are directly affected by the organizational ethics. The code of ethics history shows that the code writing was reactive to the international ethical violations (Messikomer & Cirka, 2010). Foreign Corrupt Practices Act (FCPA) of 1977 was set to control the supply side corruption by imposing anti-bribery provisions and accounting provision. The act had limited success in the anti-bribery practices according to Darrough (2010), but the ethical users relatively subsided after issuing the act (Messikomer & Cirka, 2010).

Read also in this blog: Ethical Management and  Starting New Business Ethically

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References:

Darrough, M. (2010). The FCPA and the OECD convention: Some lessons from the U.S. experience. Journal of Business Ethics, 93(2), 255-276. doi: 10.1007/s10551-009-0219-5

Forster, M., Loughran, T., & McDonald, B. (2009). Commonality in codes of ethics. Journal of Business Ethics, 90, 129-139. doi: 10.1007/s10551-010-0380-x

Messikomer, C., & Cirka, C. (2010). Constructing a code of ethics: An experiential case of a national professional organization. Journal of Business Ethics, 95(1), 55-71. doi: 10.1007/s10551-009-0347-y

Tseng, H.-C., Duan, C.-H., Tung, H.-L., & Kung, H.-J. (2010). Modern business ethics research: Concepts, theories, and relationships. Journal of Business Ethics, 91(4), 587-597. doi: 10.1007/s10551-009-0133-x

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The Foreign Corrupt Practices Act

The foreign corrupt practices act (FCPA) is as an anti-bribery regulation. The act is prohibiting direct and indirect valuables (monetary or physical) offering to foreign officials to influence their decisions in favor of the giver. The act has consist of two parts to control the international corruption, the first would be an anti-bribery provision and the second is books and records internal controls that enforce a good accounting provisions (Darrough, 2010). International corruption prevention is difficult and a single act like FCPA would only result in limited success if not fully embraced by the international organizations and the countries these organizations work in. the bookkeeping, disclosure and maintenance of internal controls systems are effective measures to prevent unlawful acts by the multinational organizations according to Darrough (2010), but the so-called “facilitating payments” are allowed by the act and these payments can be considered as another form of bribery. U. S. Companies would be would be disadvantaged by this act if they chose to implement it without any deviations. Bribes and “facilitating payments” were common before the act and were practiced by the U. S. companies and other international companies. The U. S. Companies should act ethically (before acting legally) and withhold these payments, but foreign officials would most probably be influenced by the bribes they received from non U. S. companies (or U. S. companies that chose to pay facilitating payments).

Darrough, M. (2010). The FCPA and the OECD convention: Some lessons from the U.S. experience. [Article]. Journal of Business Ethics, 93(2), 255-276. doi: 10.1007/s10551-009-0219-5

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Starting New Business Ethically

Listen to this postSome of us would like to start a new business or expand their business to new geographical location. The new business owner would think of most of the business related issues but forget the soft and intangible issues like ethics and culture. Three thousand managers and employees were surveyed in the U. S., stated that ethics compliance did not change as expected after implementing ethics compliance programs (Gebler, 2006). Organizational culture had more influence on ethics programs success than any other factors (Gebler, 2006). Managers who aim for ethical culture change and target long-lasting Corporate Social Responsibility (CSR) are facing difficulty in showing the benefits of such programs to the shareholders (Grossman, 2005). The shareholders would like to see immediate results to prove the managers spending (Grossman, 2005).

The basic components for ethical decision-making are moral issues, recognition, making moral judgment and engaging in moral behavior (Ingram, Skinner, & Taylor, 2005). These components would help in setting up an ethical international operation that  account for cultural, religious, national, gender, and racial differences. We need to study the local culture and religion and how it will be affected by the new business. If the business is established in the international market then we need to assess the effect of the existing business form the environmental, religious  and cultural aspects and make sure their compliance to the findings. Deviating from the ethical standard would lead to social and economical conflict with the locals. The result would be assessed for risk before taking the action to avoid legal actions. Deviations are allowed when the deviations benefits can outweigh the losses from the ethical operation.


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References:

Gebler, D. (2006). Creating an ethical culture. Strategic Finance, 87(11), 28-34.

Grossman, H. A. (2005). Refining the role of the corporation: the impact of corporate social responsibility on shareholder primacy theory. [Article]. Deakin Law Review, 10(2), 572-596.

Ingram, R., Skinner, S., & Taylor, V. (2005). ‘Consumers’ evaluation of unethical marketing behaviors: The role of customer commitment’. [Article]. Journal of Business Ethics, 62(3), 237-252. doi: 10.1007/s10551-005-1899-0

When Do We Blow the Whistle?

Listen to this postWhen we notice something that we think is unlawful or unethical at work we have to investigate its integrity. We should also investigate why the employer would do unlawful or unethical act. Whistle-blowers sometimes blow their whistles too early and get themselves in trouble. Whistle blowing is ” the disclosure by organization members (former or current) of  illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action” (Peeples, Stokes, & Wingfield, 2009, p. 468).

Miceli and Near (2002) stated that the wrongdoing would be terminated when it is less serious or deeply rooted. Whistle blowing can be more effective if the whistle –blower have power and can communicate to the right people (Miceli & Near, 2002). A single incident like overhearing a supervisor or noticing a violation by the organization might not be worth reporting, although we are obligated ethically to report it. Understanding the reason for the unlawful or wrongdoing would help the whistle-blower to find alternative solutions or means to do the same job without violations.

Good reasons for whistle-blowing would be increasing safety, stopping wrongdoing, receiving monetary rewards, and eliminating perceived injustice (Peeples, et al., 2009). The whistle-blowing is an act of loyalty to the employer because it will benefit the employer in correcting the wrongdoing or improve the workplace safety and general condition. But, the whistle-blower should do that after exhausting all means to correct the wrongdoing by using internal means. The whistle-blower should balance his decision by weighing the severity of the act, the motive of the wrongdoer and the degrees of control assigned to the wrongdoer (Peeples, et al., 2009). The US Department of Labor estimated that only15% of the whistle-blowing cases have value,  and 85% of the whistle-blowers incurred high costs for their decision to blow the whistle (Peeples, et al., 2009).
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References:

Miceli, M. P., & Near, J. P. (2002). What makes whistle-blowers effective? Three field studies. [Article]. Human Relations, 55(4), 455.

Peeples, D. K., Stokes, P., & Wingfield, S. S. (2009). When the whistle is blown: Legal defenses and practical guidelines for managing reports of organizational misconduct. [Article]. Business & Society, 48(4), 467-488.

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