The Role of IT in a Supply Chain

Information is a key supply chain driver because it serves as the glue that allows
the other supply chain drivers to work together with the goal of creating an
integrated, coordinated supply chain. Information is crucial to supply chain
performance because it provides the foundation on which supply chain processes
execute transactions and managers make decisions. IT consists of the hardware,
software, and people throughout a supply chain that gather, analyze, and execute
upon information. IT serves as the eyes and ears (and sometimes a portion of the
brain) of management in a supply chain, capturing and analyzing the information
necessary to make a good decision.

The Supply Chain IT Framework

We develop a framework that managers can use to understand the role of IT
within the supply chain. At its core, IT provides access and reporting of supply
chain transaction data. More advanced IT systems then layer on a level of
analytics that uses transaction data to proactively improve supply chain
performance. For example, as a baseline, good IT systems will record and report
demand, inventory, and fulfillment information for Amazon. IT systems that
provide analytics then allow Amazon to decide whether to open new distribution
centers and how to stock them.

The Supply Chain Macro Processes

The emergence of supply chain management has broadened the scope across
which companies make decisions. This scope has expanded from trying to
optimize performance across the division, to the enterprise, and now to the entire
supply chain. From an enterprise’s perspective, all processes within its supply
chain can be categorized into three main areas: processes focused downstream,
processes focused internally, and processes focused upstream. We use this
classification to define the three macro supply chain processes.
Customer Relationship Management
The CRM macro process consists of processes that take place between an
enterprise and its customers downstream in the supply chain. The goal of the
CRM macro process is to generate customer demand and facilitate transmission
and tracking of orders. Weakness in this process results in demand being lost and
a poor customer experience because orders are not processed and executed
effectively. The key processes under CRM are as follows:
 Marketing.
Marketing processes involve decisions regarding which customers to target, how
to target customers, what products to offer, how to price products, and how to
manage the actual campaigns that target customers. Good IT systems in the
marketing area within CRM provide analytics that improve the marketing
decisions on pricing, product profitability, and customer profitability, among
other functions.
 Sell.
The sell process focuses on making an actual sale to a customer (compared to
marketing, in which processes are more focused on planning whom to sell to and
what to sell). The sell process includes providing the sales force with the
information it needs to make a sale and then execute the actual sale. Good IT
systems support sales force automation, configuration, and personalization to
improve the sell process.
  Order management.
The process of managing customer orders as they flow through an enterprise is
important for the customer to track an order and for the enterprise to plan and
execute order fulfillment. Good IT systems enable visibility of orders across the
various stages that an order flows through before reaching the customer.
 Call/service center.
A call/service center is often the primary point of contact between a company and
its customers. A call/service center helps customers place orders, suggests
products, solves problems, and provides information on order status. Good IT
systems have helped improve call/service center operations by facilitating and
reducing work done by customer service representatives and by routing
customers to representatives who are best suited to service their request.

Internal Supply Chain Management

ISCM, as we discussed earlier, is focused on operations internal to the enterprise.
ISCM includes all processes involved in planning for and fulfilling a customer
order. The various processes included in ISCM are as follows:
• Strategic planning.
This process focuses on the network design of the supply chain. Key decisions
include location and capacity planning of facilities.
• Demand planning.
Demand planning consists of forecasting demand and analyzing the impact on
demand of demand management tools such as pricing and promotions.
 Supply planning.
The supply planning process takes as an input the demand forecasts produced by
demand planning and the resources made available by strategic planning, and
then produces an optimal plan to meet this demand. Factory planning and
inventory planning capabilities are typically provided by supply planning software.
 Fulfillment.
Once a plan is in place to supply the demand, it must be executed. The fulfillment
process links each order to a specific supply source and means of transportation.
The software applications that typically fall into the fulfillment segment are
transportation and warehousing management applications.
 Field service.
Finally, after the product has been delivered to the customer, it eventually must
be serviced. Service processes focus on setting inventory levels for spare parts as
well as scheduling service calls. Some of the scheduling issues here are handled in
a similar manner to aggregate planning, and the inventory issues are the typical
inventory management problems.

Supplier Relationship Management

SRM includes those processes focused on the interaction between the enterprise
and suppliers that are upstream in the supply chain. There is a natural fit between
SRM processes and the ISCM processes, as integrating supplier constraints is
crucial when creating internal plans. The major SRM processes are as follows:
 Design collaboration.
This software aims to improve the design of products through collaboration
between manufacturers and suppliers. The software facilitates the joint selection
(with suppliers) of components that have positive supply chain characteristics
such as ease of manufacturability or commonality across several end products.
Other design collaboration activities include the sharing of engineering change
orders between a manufacturer and its suppliers.
 Source.
Sourcing software assists in the qualification of suppliers and helps in supplier
selection, contract management, and supplier evaluation. An important objective
is to analyze the amount that an enterprise spends with each supplier, often
revealing valuable trends or areas for improvement. Suppliers are evaluated along
several key criteria, including lead time, reliability, quality, and price.
 Negotiate.
Negotiations with suppliers involve many steps, starting with a request for quote
(RFQ). The negotiation process may also include the design and execution of
auctions. The goal of this process is to negotiate an effective contract that
specifies price and delivery parameters for a supplier in a way that best matches
the enterprise’s needs.
 Buy.
“Buy” software executes the actual procurement of material from suppliers. This
includes the creation, management, and approval of purchase orders. Successful
software in this area automates the procurement process and helps decrease
processing cost and time.
• Supply collaboration.
Once an agreement for supply is established between the enterprise and a
supplier, supply chain performance can be improved by collaborating on
forecasts, production plans, and inventory levels. The goal of collaboration is to
ensure a common plan across the supply chain

The Future of IT in the Supply Chain

At the highest level, we believe that the three SCM macro processes will continue
to drive the evolution of supply chain IT. Although there is still plenty of room to
improve the visibility and reporting of supply chain information, the relative focus
on improved analysis to support decision making will continue to grow. The
following important trends will affect IT in the supply chain:
1. The growth in cloud and software as a service (SaaS)
2. Increased availability of real-time data
3. Increased use of mobile technology
4. Increased use of social media
 SaaS is defined as software that is owned, delivered, and managed
remotely through the cloud. Salesforce.com is one of the best-known pure
SaaS supply chain software providers (in CRM). Traditional enterprise
software vendors, such as SAP, Oracle, and Microsoft, are increasing the
availability of their software using the SaaS model.
 The availability of real-time information has exploded in most supply
chains. Whereas current supply chain software is focused primarily on
improving strategy and planning decisions (often at the corporate level)
that are revisited infrequently, significant opportunity exists to devise
software that will use real-time information to help frontline supply chain
staff (such as that in transportation and warehousing) make smarter and
faster decisions that are revisited frequently.
 The increased use of mobile technology coupled with real-time information
offers some supply chains an opportunity to better match demand to
supply using differential pricing.
 Mobile technology, along with real-time information, has also allowed
improved use of existing supply chain assets, often at a person-to-person
level. The increased use of social media coupled with mobile technology
has the potential to alter supply chains, especially around the last mile.

Risk Management in IT

Several risks are associated with the use of IT in the supply chain, and the process
of adding new supply chain capabilities with IT can be fraught with danger. The
major areas of risk in IT can be divided into two broad categories. The first, and
potentially the greater, is the risk involved with installing new IT systems. During
the process of getting new IT systems running, a firm is forced to transition from
the old processes it used in its operations to the new processes in its IT system.
Here, trouble can be found in both business processes and in technical issues. The
amount of integration that must take place between disparate systems is often
overwhelming.
The second category of risk is that the more a firm relies on IT to make decisions
and execute processes, the higher is the risk that any sort of IT problem, ranging
from software glitches to power outages to viruses, can completely shut down a
firm’s operations. These are serious risks that a firm must plan to face.

Supply Chain IT in Practice

In addition to the sets of practical suggestions for each supply chain macro
process discussed earlier, managers need to keep in mind several general ideas
when they are making a decision regarding supply chain IT.
1. Select an IT system that addresses the company’s key success factors.
Every industry, and even companies within an industry, can have different key
success factors. By key success factors, we mean the two or three elements that
really determine whether a company is going to be successful. It is important to
select supply chain IT systems that are able to give a company an advantage in the
areas most crucial to its success.
2. Take incremental steps and measure value.
Some of the worst IT disasters result when companies try to implement IT
systems in a wide variety of processes at the same time and end up with their
projects being failures. The impact of these failures is amplified by the fact that
many of a company’s processes are tied up in the same debugging cycle all at
once, causing productivity to come to a standstill. One way to help ensure the
success of IT projects is to design them so they have incremental steps.
3. Align the level of sophistication with the need for sophistication.
Management must consider the depth to which an IT system deals with the firm’s
key success factors. There is a trade-off between the ease of implementing a
system and the system’s level of complexity. Therefore, it is important to consider
just how much sophistication a company needs to achieve its goals and then to
ensure that the system chosen matches that level.
4. Use IT systems to support decision making, not to make decisions.
Although the software available today can make many supply chain decisions for
management, this does not mean that IT applications can make all the decisions.
A mistake companies can make is installing a supply chain system and then
reducing the amount of managerial effort it spends on supply chain issues.
5. Think about the future.
Although it is more difficult to make a decision about an IT system with the future
rather than the present in mind, managers need to include the future state of the
business in the decision process. If trends in a company’s industry indicate that
insignificant characteristics will become crucial in the future, managers must
make sure that their IT choices take these trends into account. As IT systems often
last for many more years than originally planned, managers need to spend time
exploring how flexible the systems will be if—or rather, when—changes are
required in the future.

DRIVERS OF SUPPLY CHAIN PERFORMANCE

To understand how a company can improve supply chain performance in terms of
responsiveness and efficiency, we must examine the logistical and cross-
functional drivers of supply chain performance: facilities, inventory,
transportation, information, sourcing and pricing. These drivers interact with each
other to determine the supply chain’s performance in terms of responsiveness
and efficiency.
As a result, the structure of these drivers determines if and how strategic fit is
achieved across the supply chain.
1. Production *
The performance of the supply chain is very much dependent on a production
like, what is produced, how it is produced (the manufacturing process used), and
when it has to be produced.
2. Inventory *
All raw material, work in progress and finished goods within a supply chain are
referred to as inventory. Any change in inventory policies can greatly affect the
efficiency and responsiveness of the supply chain.
Decision such as how much to store and where to store (in the firm’s premises or
warehouses or at the retailer’s premises).
Types of inventory based on reasons for keeping them:
Cycle inventory: These results due to producing or buying larger lots to minimize
acquisition costs related to processing each purchase order or production order.
Safety Inventory: It is held to counter against uncertainty or variability of
demand.
Seasonal Inventory: It is inventory maintained to satisfy higher demands in a
period compared to production capacity. It arises due to the decision to service
predicted variability in demand through extra production during slack period or
low demand periods.
Increasing inventory gives higher responsiveness but results in higher inventory
carrying cost.
3. Transportation *
Inventory has been moved from point to point in the supply chain using
transportation facilities taking the form of many combinations of modes
(multimodal) and routes, each having its own performance characteristics.
The responsiveness and efficiency of the supply chain is significantly affected by
the choice of transportation modes and routes (affecting the speed and cost of
transportation).
 TRUCK:
Trucking industry is divided into two parts i.e.
TL: Truck Load and LTL: Less than Truck load.
  TL: TL pricing display the economics of scale with respect the distance
travel. TL shipping suited for transportation between manufacturing
facilities and warehouses.
 LTL: LTL operations are priced to encourage shipments in small lots, usually
less than half a TL. LTL shipping is suites for shipments that are large to be
mailed as small packages.

 AIR:
Air freighting is commonly used by companies who work with short lead times, or
advanced service levels. Air transportation is best suited for small, high- value
items or time sensitive emergency shipments that have to travel a long distance.
Air carriers normally move shipments that have high value but light weight.
 PACKAGE CARRIERS:
Package carriers are transportation companies which carry small packages.
Examples: FedEx, UPS, DHL. Etc. Package carrier use air, truck and rail to transport
the goods. Package’s carriers also provide other value-added services that allow
shippers to inventory flow and track order status, shipper can proactively inform
the customer about their packages. Package carrier is suited for e- business.
 RAIL TRANSPORT:
Rail transport uses freight trains for the delivery of merchandise. Freight trains
are usually powered by diesel, electricity and steam. Rail is suited for bulk
shipment of products like fertilizer, cement, food grains and coal etc. from the
production plant to the warehouses.
 WATER TRANSPORT:
Water transport uses ships and large commercial vessels that carry billions of tons
of cargo. water transport is used primarily for the movement of large bulk
commodity shipments and it is the cheapest mode for carrying such load. Water
transport is particularly effective for significantly large quantities of goods that are
non-perishable in nature and for cities or states that have water access.
 PIPELINE:
Pipeline is used primarily for the transport of crude petroleum, refined petroleum
products and natural gas. It includes a significant initial fixed cost in setting up the
pipeline and related infrastructure. Pipelines are not flexible and this scope is
limited with respect to commodities. Unable to transport a variety of materials.
Route and Network Selection
Network is a set of facilities or destinations which can be used for transportation
of goods. Route is a specific selection of facilities or destinations through which
goods move.
4. Facilities *
Facilities are the actual physical locations in the supply chain network where
product is stored, assembled, or fabricated. The major types of facilities are
production sites and storages sites. Decision regarding the role, location, capacity,
and flexibility or facilities have a significant impact on the supply chain’s
performance.
5. Information *
Information consists of data and analysis concerning facilities, inventory,
transportation, costs, prices, and customers throughout the supply chain.
Information is potentially the biggest driver of performance in the supply chain
because it directly affects each of the other drivers. Information presents
management with the opportunity to make supply chains more responsive and
more efficient.
6. Sourcing
Sourcing is the choice of who will perform a particular supply chain activity such
as a production, storage, transportation, or the management of information. At
the strategic level, these decisions determine what functions a firm performs and
what functions the firm outsources. Sourcing decisions affect both the
responsiveness and efficiency of a supply chain.
7. Pricing
Pricing determines how much a firm will charge for goods and services that it
makes available in the supply chain. Pricing affects the behavior of the buyer of
the good or service, thus affecting supply chain performance.
Our definition of these drivers attempts to delineate logistics and
supply chain management. Supply chain management includes the use of
logistical and cross-functional drivers to increase the supply chain surplus.
Cross-functional drivers have become increasingly important in raising the supply
chain surplus in recent years. While logistics remains a major part, supply chain
management is increasingly becoming focused on the three cross-functional
drivers.

COMPETITIVE AND SUPPLY CHAIN STRATEGIES

A company's competitive strategy defines the set of customer needs that it seeks
to satisfy through its products and services. The supply chain design or supply
chain strategy must be in alignment with competitive strategy. A supply chain
design can be taken up only after the competitive strategy is finalized and a
supply chain needs to be redesigned or modified whenever there is a change in
competitive strategy.

A product development strategy specifies the portfolio of new products that a

company will try to develop. It also dictates whether the development effort will
be made internally or outsourced. A marketing and sales strategy specifies how
the market will be segmented and how the product will be positioned, priced, and
promoted. A supply chain strategy determines the nature of procurement of raw
materials, transportation of materials to and from the company, manufacture of
the product or operation to provide the service, and distribution of the product to
the customer, along with any follow-up service. From a value chain perspective,
supply chain strategy specifies what operations, distribution, and service will try
to do particularly well. Additionally, in each company, strategies will also be
devised for finance, accounting, information technology, and human resources.

ACHIEVING STRATEGIC FIT

the idea that for any company to be successful, its supply chain strategy and
competitive strategy must fit together. Strategic fit means that both the
competitive and supply chain strategies have the same goal. It refers to
consistency between the customer priorities that the competitive strategy hopes
to satisfy and the supply chain capabilities that the supply chain strategy aims to
build.
All functions that are part of a company's value chain contribute to its success or
failure. A company's success or failure is thus closely linked to the following keys:
1. The competitive strategy and all functional strategies must fit together to form
a coordinated overall strategy. Each functional strategy must support other
functional strategies and help a firm reach its competitive strategy goal.
2. The different functions in a company must appropriately structure their
processes and resources to be able to execute these strategies successfully.
A company may fail either because of a lack of strategic fit or because its
processes and resources do not provide the capabilities to support the desired
strategic fit.

How Is Strategic Fit Achieved?

The Process of Achieving Strategic Fit:

A company needs to take some steps to achieve a strategic fit between the supply
chain and competitive strategies. These strategies may be implicated or
explicated or one or more customer segments. So that the company can satisfy
these segments. At first, a company should ensure its supply chain capabilities to
satisfy the needs of the targeted customer segments.
Now, we are going to learn three major steps to achieving strategic fit. Have a
look.

1. Understanding the customer and supply chain uncertainty

Primarily, a company must understand the customer needs for each targeted
segment. After understanding this, the company also tries to understand the
uncertainty of these needs of the supply chain. However, these needs help to
understand the desired cost and service requirement for these. Besides, we also
see that uncertainty identifies the extent of the unpredictability of demand and
supply. This helps the company to prepare for the desired supply chain.
Before selecting a segment, a company needs to understand the customer needs.
For example, if your customers are very price sensitive, you can’t charge higher
for them. On the other hand, if your customers are ready to pay for higher quality
then you have to fulfill them.
In general, customer demands are varying from different segments along with
several attributes. Such as –
 Quantity of the product needed in each lot
It means that customers want a one-stop solution in which they can purchase
everything.
 Response time that customers are willing to tolerate
It is the main factor. Because customers are more sensitive at the response time.
It is more obvious in the restaurant. Some customers prefer quick delivery and
others may not.
 Variety of products needed
A growing number of customers present here, their need, want and demand is
not the same at all. All of them want different types of goods to fulfill their desire.

 Service level required

The restaurant is the best example of it. In an emergency order, they need to
respond to fast otherwise they will lose consumers as well as reputation.
 Price of the product
Usually, a high-quality product has a higher price than fewer quality goods.
Besides, an emergency order can charge more than construction order.
 The desired rate of innovation in the product
In a departmental store, customers want different types of innovative products
and new designs in their store.
Each customer in particular segment has similar needs and in a different segment
has different needs. However, our key goal is to identify the main measure that
can satisfy their different needs. Through this way, a company is able to achieve a
strategic fit.

2. Understanding the supply chain capabilities

Here, many types of supply chains are designed for performing different tasks
quickly. That’s why a company needs to understand its supply chain design well.
However, there is a big question that how the firm best meets customer’s
demand in the uncertain situation. Now, we are going to see different
characteristics of the supply chain that influence their responsiveness and
efficiency.
At first, we will learn the supply chain ability that means responsiveness. Let’s see
 Respond to wide ranges of quantities demanded
 Meet short lead times
 Handle a large variety of products
 Build a highly innovative level
 Handle supply uncertainty
These are similar characteristics among several firms to maintain demand and
supply.
3. Achieve a strategic fit
If any mismatch exists between supply chain and consumer needs, then the
company needs to restructure its supply chain or select an alternative course of
action to change its competitive strategy.
After understanding the uncertainty level, the final step is to ensure supply chain
responsiveness. It ensures supply chain responsiveness is consistent with the
implied uncertainty. However, its main goal is to maintain high responsiveness for
a supply chain. Besides, it tries to identify whether there is any mismatch or not.

Obstacles to achieving strategic fit:

Achieving strategic fit is a company’s ability to find a balance between
responsiveness and efficiency that matches the needs of its target customers.
 Increasing variety of products: demanding ever more customized products.
 Decreasing product life cycles: Today there are products whose life cycles
can be measured in months, compared to the old standard of years.
 Increasingly demanding customers: Customers are constantly demanding
improvements in delivery lead times, cost and product performance.
 Fragmentation of supply chain ownership: Most firms have become less
vertically integrated. as companies have shed noncore functions, they have
been able to take advantage of suppliers & customer competencies that
they themselves did not have.
 Globalization: Adds stress to the chain, because facilities within the chain
are farther apart, making coordination much more difficult.
 Difficulty in executing new strategies: Once the good strategy is
formulated, the execution of the strategy can be more difficult.
To conclude…
Overcoming these obstacles offers a tremendous opportunity in terms of
untapped improvement with in supply chain. the increasing impact of obstacles
has led to supply chain management becoming a major factor in the success or
failure of firms.
“When obstacles arise, you change your direction to reach your goal; you do not
change your decision to get there.”
 Business Ethics:
ETHICAL THEORIES
Ethical theories provide part of the decision-making foundation for Decision
Making When Ethics Are in Play because these theories represent the viewpoints
from which individuals seek guidance as they make decisions. Each theory
emphasizes different points – a different decision-making style or a decision rule
—such as predicting the outcome and following one’s duties to others in order to
reach what the individual considers an ethically correct decision.
For individuals, the ethical theory they employ for decision making guidance
emphasizes aspects of an ethical dilemma important to them and leads them to
the most ethically correct resolution according to the guidelines within the ethical
theory itself. Four broad categories of ethical theory include deontology,
utilitarianism, rights, and virtues.

Utilitarianism
Utilitarian ethical theories are based on one’s ability to predict the consequences
of an action. To a utilitarian, the choice that yields the greatest benefit to the
most people is the one that is ethically correct. It focuses on human lives and says
that those actions that make people happy are good.
The theory asserts that there are two types of utilitarian ethics practiced in the
business world, "rule" utilitarianism and "act" utilitarianism.
Act utilitarianism subscribes precisely to the definition of utilitarianism—a person
performs the acts that benefit the most people, regardless of personal feelings or
the societal constraints such as laws.
Rule utilitarianism takes into account the law and is concerned with fairness. A
rule utilitarian seeks to benefit the most people but through the fairest and most
just means available. Therefore, added benefits of rule utilitarianism are that it
values justice and includes beneficence at the same time.
Example:
When individuals are deciding what to do for themselves alone, they consider
only their own utility. For example, if you are choosing ice cream for yourself, the
utilitarian view is that you should choose the flavor that will give you the most
pleasure.
Customers who fly in first or business class pay a much higher rate than those in
economy seats, but they also get more amenities. However, the higher prices paid
for business or first-class seats help to ease the airline's financial burden created
by making room for economy class seats.
By studying the Utilitarian principle, the significant assumptions include:
• The fact that we believe in the first place that satisfaction is suitable for an
individual.
• A desire within the society to pursue what would be considered to be the
creation of the reaction.
• The desire to reduce suffering because all the community people are working
together to create a mutually happy world.
Utilitarianism applies three major fundamental principles in the creation of an
ethical structure for society. Those principles include:
1. The only good thing in society is its happiness.
2. Actions are only correct or right if they can maximize the pleasure for almost
everyone.
3. Steps are only suitable for the community if their consequences maximize
their good or “Bad” goals.
When studying this theory, there are significant advantages and disadvantages
that arise. Some of those includes:
Advantages:
1. We get to base our primary focus on the satisfaction of society.
2. The theory teaches us that it’s wrong to harm other people.
3. Utilitarianism is a secular system that is mainly centered on humanity.
Disadvantages:
1. This theory does not consider any other element besides happiness.
 2. The theory lacks a similar clarity of contentment that will apply to all; thus,
it relies on several reports.
3. The theory relies on consistent decisions by the people.

Deontology
The deontological class of ethical theories states that people should adhere to
their obligations and duties when engaged in decision making when ethics are in
play. This means that a person will follow his or her obligations to another
individual or society because upholding one’s duty is what is considered ethically
correct. Deontology is an ethical theory that uses rules to distinguish right from
wrong. Deontology is often associated with philosopher Immanuel Kant. Kant
believed that ethical actions follow universal moral laws, such as “Don’t lie. Don’t
steal. Don’t cheat.”

For example, suppose you’re a software engineer and learn that a nuclear missile
is about to launch that might start a war. You can hack the network and cancel
the launch, but it’s against your professional code of ethics to break into any
software system without permission. And, it’s a form of lying and cheating.
Deontology advises not to violate this rule. However, in letting the missile launch,
thousands of people will die.
What's the main problem with deontological ethical theories?
The main problem is that different societies have their own ethical standard and
set of distinct laws; but the problem exists that if in fact there is a universal law,
why different societies not have the same set of ethical and moral standards. The
problem lies with that each society may not agree with others; therefore, conflict
exists.
Advantages:
 Deontological ethics create higher levels of personal responsibility.
 Deontological ethics emphasize the value of every person.
 Deontological ethics create moral absolutes.
Disadvantages:
  Deontological ethics become useful as supernatural excuses.
 Deontological ethics are based on the actions that we take.
 Deontological ethics suggest that you should always do the right thing, no
matter what.

Virtue
The virtue ethical theory judges a person by his/her character rather than by an
action that may deviate from his/her normal behavior. It takes the person’s
morals, reputation, and motivation into account when rating an unusual and
irregular behavior that is considered unethical. Virtues are habits. That is, once
they are acquired, they become characteristic of a person. For example, a person
who has developed the virtue of generosity is often referred to as a generous
person because he or she tends to be generous in all circumstances

Example:
"Virtues" are attitudes, dispositions, or character traits that enable us to be and to
act in ways that develop this potential. They enable us to pursue the ideals we
have adopted. Honesty, courage, compassion, generosity, fidelity, integrity,
fairness, self-control, and prudence are all examples of virtues.
Problem:
The alleged problem with virtue ethics is that it fails to appreciate the
perspectival, theory leadenness, and intractability of dispute, for it is commonly
assumed that in virtue ethics a virtuous agent is both the determinant of right
action and the repository of sound reasoning about which actions are right.
Advantages:
 Focuses on the development of habits that promote human excellence &
happiness;
 Recognizes how rational behavior requires being sensitive to the social &
personal dimensions of life;
 Rational” actions are not based on abstract principles but on moderation;
  provides moral motivation rooted in disposition of excellence that
strengthens resolve & enriches the attitude to do a moral action in a
healthy direction;
 Virtues are character traits that are “good” for people to have; the virtuous
person will flourish in life.
Disadvantages:
 Lacks clarity in resolving moral conflicts;
 Self-centeredness because its primary concern is the agent’s own
character;
 Well-being is the master value & all things are valuable only to the extent
that they can contribute to it (self-interest?);
 Imprecise: It fails to give us any practical step-by-step help of how should
we behave;
 Leave us hostage to luck: some will attain moral maturity & others will not;
 It is weak in the area of what to do in right-action approach since it is
focused on character-formation

Rights
In ethical theories based on rights, the rights established by a society are
protected and given the highest priority. Rights are considered to be ethically
correct and valid since a large population endorses them. Individuals may also
bestow rights upon others if they have the ability and resources to do so.
For example, a person may say that her friend may borrow her laptop for the
afternoon. The friend who was given the ability to borrow the laptop now has a
right to the laptop in the afternoon.
A major complication of this theory on a larger scale is that one must decipher
what the characteristics of a right are in a society. The society has to determine
what rights it wants to uphold and give to its citizens. In order for a society to
determine what rights it wants to enact; it must decide what the society’s goals
and ethical priorities are. Therefore, in order for the rights theory to be useful, it
must be used in conjunction with another ethical theory that will consistently
explain the goals of the society. For example, in America people have the right to
choose their religion because this right is upheld in the Constitution. One of the
goals of the Founding Fathers of America was to uphold this right to freedom of
religion.

STYLES Of Decision Making

Ethical decision-making refers to the process of evaluating and choosing among
alternatives in a manner consistent with ethical principles. In making ethical
decisions, it is necessary to perceive and eliminate unethical options and select
the best ethical alternative.
Directive:
Group leader solves the problem, using the information he possesses. He/she
does not consult with anyone else nor seek information in any form. This style
assumes that the leader has sufficient information to make an effective decision.
Analytical:
The leader doesn’t possess sufficient information, to make effective decisions.
He/she need to obtain information from others. They may not tell them what the
problem is, simply evaluates the information and make the decision.
Conceptual:
The leader explains the situation to the group, and together they generate and
evaluate many possible solutions. This style tends to be, A long term perspective,
Will be more creative and expansive, Entailing a higher level of risk for the long-
term benefit of organization.
Behavioral:
People with this style work well, although they like to hold meetings, but they
have tendency to avoid conflicts and are concerned about others. Here they make
decision based on what feels right, and what will motivate the team members.,
 Myths About Ethics Which Will Hurt Your Business

New entrepreneurs tend to focus only on getting the product right, and assume
that the right culture and ethics will come later simply by hiring good people. In
fact, they need an early focus on developing their moral compass, as well as
setting the right ethical tone. Building an ethical business is more than just
compliance and meeting legal requirements, and it has big paybacks. One of the
keys to setting the right ethical tone is understanding and avoiding the myths and
pitfalls of others.
1. It’s easy to be ethical. This myth ignores the complexity surrounding ethical
decision making, particularly within business organizations. Ethical
decisions are seldom simple. For example, people often do not
automatically know that they are facing an ethical choice. Any given
individual may not recognize the moral scope of the issues involved.

2. Business ethics are more about religion than management or leadership.

Behind this myth lies the confused belief that ethics are a means of altering
people’s values. The reality is different. An ethical culture deals with
managing values between the individual and the company, to best handle
the inevitable conflicts that crop up in every business.

3. Hire only ethical people, so further time on business ethics is not needed.
This is usually an excuse for not developing ethical policies and practices.
These can be as simple as how to handle customer over-payments, or more
complex in how to handle the choices every employee may face between
conflicting customer and company interests.
 4. Business ethics are best left to philosophers and academics. Deal with this
myth by sharing with colleagues some of the highly practical tools for
making sense of the issue – such as ethics audits, behavior codes, risk
strategies, targeted training and leadership guidance. Business ethics is a
discipline that must be practiced every day by everyone.

5. Ethics can’t be managed. While codes of behavior do not guarantee an

ethical culture, they do clarify desired behavior and articulate for
employees what is expected of them. Every business has complex and
diverse dilemmas which are not specifically covered in documented
procedures, so employees need clear values leadership for guidance.

6. We’ve never broken the law so we must be ethical. Many perfectly legal
actions can still be deeply unethical. As an example, companies often
realize that faulty products are slipping out, but they delay a recall, sighting
that strictly legal requirements are being met. Unethical behavior can even
with something low key which initially goes unnoticed.

7. Unethical behavior in business is just due to a few ‘bad apples.’ In reality,

most unethical behavior in business happens because the environment
tolerates it, usually through benign neglect. When it comes to ethics, even
good people tend to be followers, and if told to do something, they will do
it, without considering the ethical implications.

8 Ways to Develop More Effective Ethics Training for Employees

Ethics training programs refer to the programs which are designed by a firm to
promote ethical behavior. An ethics training program provides employees with
instructions on how to deal with ethical dilemmas when they occur and improve
their overall ethical conduct.
Ethics training programs are designed to help everyone understand where the
line is drawn between acceptable and unacceptable workplace behavior.”
1. Protects Your Company’s Bottom Line
Unethical behavior impacts profits when multi-million-dollar fines are levied on
unethical corporations.
This same behavior can cost the company in terms of lower stock prices, fewer
customers, and inability to do business with those who don’t trust you.

2. Makes Your Company A Great Place to Work

On the other hand, employee ethics training makes a company a great place to
work. Consider Patagonia [1], with their mission statement: “Build the best
product, cause no unnecessary harm, use business to inspire and implement
solutions to the environmental crisis.”
Patagonia was ranked as one of 2018’s best places to work for new dads and is
consistently cited as a company that cares about its employees [2], their actions,
and their impact on the world. Turnover is, as Fortune puts it, “freakishly low”,
and a lot of that has to do with the ethical culture of the company.
Steps Involved in Developing an Ethics Training Program for Employees
Ethics training keeps your company profitable and helps employees make
consistently good decisions in service to their colleagues, their customers, and
themselves. However, not just any ethics training course will do. Developing an
ethics training program for employees incorporates the following eight steps.

1. Stand for Something (Or Watch Employees Fall for Anything)

If you are a new company or are new to the idea of articulating your company’s
ethics, it can be valuable to have a company-wide conversation that gets to the
heart of your company culture. It’s hard to offer ethics training for employees
when you are not clear what your company stands for.
Start your employee ethics training by either developing a code of conduct for
your company or making sure employees are clear on the one that already exists.
Do not assume that even your most senior employees know what it is.
2. Identify the Different Types of Ethical Training You Can Include
All quality training begins with a training needs analysis. In the case of ethics
training for employees, you might consider focusing on one or more of the
following areas:

 Ethical conduct, both in and out of the office

 Customer privacy and data protection
 Company code of ethics
 Common ethical dilemmas
 Company culture
 Customer relations
 Regulatory and compliance training
 Diversity training
Keep in mind, too, that ethics training is not a “one and done” solution to a single
concrete issue. The goal of different types of ethics training is to teach employees
to make good decisions that are consistent with your company’s culture. This may
need to be reinforced in a variety of situations over time as your industry
changes.

3. Train Employees Where They Are

You know what your employees need, and it’s not a monthly lecture on how to be
a good person. You hired them. Chances are good that your employees are
already quality humans. So, train those humans in the way they want to be
trained.
While it’s sometimes good to have a round-table discussion about what ethical
behavior is and to role-play tricky situations, sometimes employees just need a
quick reminder on a regulation update or changes to laws on compliance.
Consider microlearning options to deliver this type of information, just in time
and where they need it.
For more extended conversations, both eLearning and instructor-led trainings
have their advantages. While eLearning allows employees to complete activities
and trainings on their own schedule, supplementing online activities with juicy, in-
person conversations provides variety and interactions to clarify often difficult
material.
4. Get Your Leadership Involved
Let’s be honest. If your leadership isn’t 100% behind ethics trainings for
employees, they may be sending the message that ethics are not very important.
Ethical leaders are committed to working with ethical employees. Chances are
good they have some ideas about what they’d like to focus on. Get leadership
involved and committed from the very beginning.

5. Consider Incentives
New research suggests that incentives for employee’s work. Consider offering gift
cards, afternoons off, or other small bonuses for employees who go above and
beyond and put their training into action.
6. Create Common Goals and Identity
Part of articulating your ethical company culture and getting leadership involved
is the journey to creating common goals and a unified company identity. Get
really clear about who your company is and what it stands for. It worked for
Patagonia, and on the surface, they are just selling clothes.
Make your mission statement the driving force behind everything you do and
every decision you make. It can be as simple as being the company that always
does the right thing, or the one that won’t rest until the customer is satisfied.

7. Make It Fun
We get it. Employee trainings of any kind can be a bit of a slog, and employee
pushback can be intense. There are ways to make things more fun, though, even
when it comes to serious discussions.
Even though ethics are a serious business, gamification and role-playing can help
lighten the mood a bit, or at least get employees thinking in a different way.
8. But, Take It Seriously
Sure, it’s easy to make fun of ethics training for employees – seems like everyone
has a ready joke at hand.
However, if your goal is for employees to represent your company with respect
and consideration, functioning as a team where everyone is appreciated,
supported, and heard, you need to take this type of training seriously. Give it the
time, space, and resources it needs to be done well.
Whether you need a nudge in the right direction or a complete overhaul of your
current ethics training, get started developing your ethics training program today!

How to Create a Stakeholder Management Plan

A Stakeholder Management Plan is a document that outlines appropriate
management strategies to effectively engage stakeholders throughout the
lifecycle of the project, based on the analysis of their needs, interests and
potential impact on project success.
Be strategic and clear about whom you are engaging with and why, before
jumping in, not only helps save time and money, but also helps manage
expectations and gain trust.
Questions to be asked before developing the plan:
 What are the strategic reasons for consulting with stakeholders at this
stage?
 Who needs to be consulted?
 What are the priority issues (for them and for you)?
 What will be the most effective methods of communicating with
stakeholders?
 Who within the company is responsible for what activities?
 Are there any other engagement activities that will occur in the proposed
timeframe (perhaps with other sections of your organization)? Are there
opportunities to collaborate to ensure key project messages are consistent
and avoid consultation fatigue?
 How will the results be captured, tracked, reported and disseminated?