Analysis of Personal and Organizational Ethics and Values
Both for-profit and not-for-profit companies face similar challenges of management when it comes to dealing with ethical issues and problems of an organization. In this paper, focus is on Kiwanis International and Pepsi Company to analyze how they deal with issues in their organizations. Throughout the paper, the main aim is to assess the way organizations deal with the problems and critique the ethical perspectives of the problems. The nature of problems that the two organizations face and ethical assessment of the decisions that the actions of the management will be analyzed in this paper and discuss how best to deal with such ethical issues.
Kiwanis Organization Profile and Ethical Dilemma
Kiwanis International is a not-for-profit organization that has presence in 80 nations around the world. The area of interest of the company is helping communities grow through focus on children and education. The organization acts through clubs that enable people to come together and develop. Members participate in social events through the projects helping people to connect with one another and get help from other members of the clubs. Founded in 1915 in Detroit, Michigan, the organization focused on business networking in early years and later started focusing on service delivery to communities and members. The organization gets funding from well-wishers and members who support the initiatives and projects of the organization. Kiwanis is founded on six main objects that were approved by delegates in 1924. The first value is to give primacy to the human and spiritual rather than to the material values of life. Second is to encourage the daily living of the golden rule in all human relationships. Kiwanis is also to promote the adoption and application of higher social, professional, and business standards. Also, the organization’s objective is to develop, precept and example a more intelligent, aggressive and serviceable citizenship. Kiwanis clubs aim at providing practical means to forming enduring friendship to render altruistic service and form better communities. Lastly, the organization has an objective of cooperating in creating and maintaining sound public opinion and high idealism which make possible the increase of righteousness, justice, patriotism, and goodwill. The values of the organization are vital in making the organization achieve its objectives and mission. The organization has branches around the world and employees help manage the various projects. Since the organization is a not-for-profit, it is exempt from paying taxes (Kiwanis, 2015).
Ethical dilemmas face not-for-profit organizations from many sides since management has to come up with financing and managerial strategies that should help the organization achieve its mandate. One of the ethical dilemmas that face Kiwanis International s the conflict of interests between the strategies taken by various managers managing the projects of the organization and the personal interests. Each individual in an organization has personal interests to grow and rise in career while still holding the goals of the organization together. As Abbot, White, & Charles notes, organizational commitment is essential for the achievement of goals and objectives of an organization (Abbot, White, & Charles (2010). Adoption of prosocial values such as vision, self direction and humanity organizational commitment values is paramount in dealing with conflict of interests. However, the management of Kiwanis is still faced with the problem of conflict of interests between organizational objectives and goals of personal individual managers (Ambrose, Arnaud, & Schminke, 2008).
The second ethical dilemma that the management faces is on how to raise funds without going against the rules that govern not-for-profit organizations in the country. It is critical to note that the main source of funds for the organization is the contributions by well-wishers. Such contributions sometimes come with expectations by the contributing institutions and individuals for a reward of contracts and for consideration when strategies for projects of the company are made. In order to control the achievement of goals and objectives of the organization, some managers of Kiwanis International sometimes engage in ethical malpractices where they connive with other institutions for financial backing in return of favors when it comes to organizational decision making. In such circumstances, the managers make decisions for projects that will be beneficial to such organizations. Not-for-profit organizations usually face challenges when it comes to financial management and getting funding from major corporate (Barney, 2013).
Response to the Ethical Dilemma
Dealing with ethical dilemmas in a not-for profit organizations require the management to make decisions without influence of the external forces. The managerial problems of the organization were dealt with by employment of managers for projects in far locations away from their homes. In such a decision, the management is of the view that the externalities that may affect self-focused decisions when it comes to projects may be minimized. This response to the conflict of interest of managers’ ethical dilemma aimed at enabling the managers of projects to be independent and not to be influenced by the need to make decisions that serve their personal interests (Elci & Alpkan, 2008).
Secondly, the management had to deal with the financial contribution and distribution problem where managers focus on projects that may help the fund-providers of the organization. This issue is major in many other not-for-profit organizations and requires that the management is keen on audit of the decision-making process. In addition to this, the management dealt with the dilemma through creation of various fund drives that does not enable managers of projects to be the seekers of funds to fund the projects. To this end, it is obvious that the management will be the main managers of funds and the main individuals to give light to projects. Lack of financial honesty by managers is also dealt with through investigative mechanisms involving external auditors of projects of the organization. To this end, the management of not-for-profit organizations is able to create a culture where employees are honest and fair in distribution of funds and projects in areas where the services of the organization are required (Barney, 2013).
Outcomes of Actions of Response to Ethical Dilemma
Several outcomes emerge from the decisions that Kiwanis International takes in dealing with financial and conflict of interests’ ethical dilemmas. One of the social outcomes is that the communities where the organizations have projects become more aware of how projects are awarded and thus have more confidence in the organization. In realization of the confidence levels where members of the communities become the main financing agents, the management focuses on how the organization facilitates a clear consultation with the communities. Consultation with the main beneficiaries of projects ensure that the organization function in a clear and open way that may stimulate and encourage people in the community to honestly contribute to the organization. Economically, the outcomes of actions to deal with ethical dilemmas are two-fold. On one hand, the large corporate that uses managers of funds and projects to facilitate adoption of projects to make decisions that may be beneficial to them have limited their support to the organization. On the other hand, communities have increased their support for the organization because of its openness and clear consultation drives. This has ensured that the organization is able to continue with its operations and promote its public relations. Positive public image is necessary for any organization that aims at making the public its financier and to promote support of its projects. Lastly, the actions of the management to deal with conflict of interests ethical dilemma has resulted into increased internal conflicts with managers of projects.
Pepsi Company Profile and Ethical Dilemma
Pepsi Company was established in the early 1990s through the merger of two companies that operated as beverages companies Pepsi-Cola and Frito-Lay. The company was established to boost ability of creation of strong brands for snacks and beverages. As a global brand, Pepsi has established a firm presence in many countries around the world. The company has its headquarters in New York, United States housed by the Purchase building. Its major brands include Dew, Lay’s Chips, Calbee, Izze, among others. Pepsi Company has its major interests in snacks and beverages with its source of funds being the business enterprise’s profits. As a public limited company listed in New York Stocks Exchange, Pepsi has a well formulated values and mission statement that make it follow the path of ensuring it serves its customers well and achieve benefits for shareholders. The mission of the company is to provide consumers with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. The company aims to work with a purpose. With its subsidiaries distributed in more than 200 countries, the net worth of the company is more than $43.3 billion in sales as of 2014. The main competitor is Coca-Cola Company which is the leader in the world’s beverages industry. Pepsi has an extensive number of employees ranging to 271,000 by the end of 2013 (Pepsico, 2015).
Ethical dilemmas usually face the management of profit-making organizations since the actions and strategies that they take may be aimed at only making profits in disregard of welfare of the society. One of the ethical dilemmas of Pepsi in the recent times comes from the communication strategies when faced with a product problem. For instance, a consumer raised a public concern after allegedly finding a needle in the Pepsi drinking beverage. In such a situation, many profit-making organizations adopt strategies of communication that may safeguard their reputation regardless of the honesty of the consumer. The second dilemma is in the management of employees and encouragement to work harder in order to achieve goals and objectives of the organization. In the context of the problems facing the organization, management have a strategy of promoting the best-performing employees and giving rewards for good achievements. However, some human resource managers sometimes conspire with rogue employees who ensure that they get rewards and promotions. Lastly, the organization has an ethical dilemma when it comes to relationship with various governments for tax concerns. When it comes to taxation, many profit-making organizations relax their ethical attitudes and perform tax filings in the best interest of the organization. The ethical issue comes about when some managers in some departments increase expenses in order to fleece the company (Ambrose, Arnaud, & Schminke, 2008).
Response to the Ethical Dilemma
In order to deal with ethical dilemma of how to communicate to the public openly and still retain the public image of the company, Pepsi have a strategy of communicating directly to aggrieved parties and rewarding them in order to reduce unnecessary damage to the company. The aim of communicating to the complainant is usually aimed at giving them financial compensations for inconveniences and problems they raise. However, such a move is not ethically right since it reduces openness of how the organization operates and deals with problems. Secondly, the problems that come about from the products of the company should always be investigated and dealt with in order to ensure that the products get to the consumers when in good conditions. In order to deal with the problem of inaccurate employees performance measurements, the management employs the external auditors and employees appraisal organizations. These consultants’ help in determination of the best strategies and how to deal with employees better to motivate them achieve better results. For instance, management usually adopts the outcome of assessment of employees’ achievement and creates the best way to reward them and have created the best appraisal techniques and minimize internal conflicts of interests (Elci & Alpkan, 2008).
Outcomes of Actions of Response to Ethical Dilemma
One of the outcomes of involving external auditors in assessment of employees is that the human resource managers feel as their input is not appreciated. In order to create an ethically considerable organization, the management should aim at making every individual accountable for personal mistakes and personal decisions. In this context, the social outcome of employees feeling they are not trusted enough will be lower input in their duties. Secondly, the governments may audit the company in order to analyze how the management reduces their tax payments using unscrupulous financial managers to doctor the accounts. Any ethical action that may face organizations such as Pepsi has an impact on the political aspects and social aspect of the society in which it operates (Ambrose, Arnaud, & Schminke, 2008).
Personal Reflections and Critique to the Ethical Actions in Relation to the Problem
Kiwanis International responded to the issues of financial management by project managers and conflict of interests in an effective but ethically questionable way. Transfer of the managers to areas away from where they live may not fully solve the problem of conflict of interests. Creation of an ethical culture in Kiwanis International may be a great attempt to solve the issues instead of creation of structural changes. Employees and managers should be given training on how best to deal with issues such and external influence or favoritism in management of the projects. Such a move would ensure that the managers are aware of the culture of the organization and do their best to deal with the issues. Independence and social caring attitude is required in management of not-for profit organizations. Giving the managers independence in determination of the projects to be taken and how they will be executed is the major source of problems for the organization. However, with proper ethics training and exploration of importance of ethical practices in an organization may help in minimization or elimination of misuse of the independence. Not-for-profit organizations exist for the sake of helping the society and solving issues in the society. In this regard, managers should be taught and selected on the basis of their social caring attitudes (Akaah & Lund, 2004).
The problem of lack of funds was created by large institutions that want to have control on the organization. If the management is keen on having the support of the societies where the projects are needed and contributions by many people, there are need to involve them in decisions of the organization. Trust and goodwill to help societies will go a long way in ensuring that people have confidence that the funds will not be misused. In addition, the management should ensure that the large institutions do not hold the organization by making sure that the projects handled by the organization help societies and not individual institutions. Contravening the laws and policies that govern an institution is paramount to making sure that the employees work within set culture and values (Hemingway, 2015).
Pepsi deals with the problem of defective products and complaints by consumers in a way that is only beneficial to the organization. The egoistic ethical response to a problem that faces the organization shows that the management is ken at protecting its interests in the society and market. In the perspective of the actions taken in response to the problems the organization faces, I believe that the management does not care much about the effects of the products on consumers but on its own profits and business interests. In this perspective, management should make sure that the information and products provided to consumers in the market meet standards in order to retain its reputation while still being ethically right. Virtue ethics should always guide the management when coming up with decisions (Judge & Bretz, 2010). For instance, the lack of proper management and employees relations should be dealt with through ethical training of all employees in order to make them appreciate the role ethics in making the institution viable and outstanding (Agarwal & Malloy, 2009).
Organizations should make decisions that serve the majority of people in a society in the right way. In this perspective, it is essential that both Pepsi and Kiwanis International evaluate decisions before taking actions in order to take the alternatives that serve the society the best. Utilitarianism ethics suggest that people focus on the results in order to make their ethical evaluations. Decisions that will result to the highest benefits to the largest number of people should be taken. In this context, Kiwanis International should do everything possible to make sure that the projects help people and not some part of the society controlled by donors. On the other hand, Pepsi should have assessed the cause of the defective products before rushing to compensate the complainant. Safeguarding personal interests in an organization is an act that is based on egoistic ethics. Moral relativism will imply that the individuals’ acts in ways that most people would approve when faced with similar problems (Abbott, White, & Charles, 2010).
Analysis of the two organizations and how they deal with the ethical problems in their organizations is essential in helping shape the ethics at workplaces. There are various issues with the way the organizations deal with their problems without focusing on ethical implications of their decisions. In this perspective, the highlighted information in the paper helps suggest some of the best ethical approaches to problems facing the institutions. Utilitarianism, moral relativism, egoism, and virtue ethics theories should form the basis of analysis of the problems and getting solutions.
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