Human Resource Management

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Organizational Ethics: Sustainability, and Social Responsibility;
International HRM

Module 010 Organizational

Ethics, Sustainability, and
Social Responsibility;
International HRM

At the end of this module, you are expected to:

1. Understand Ethics, including the Elements of an Ethical Organization;
2. Differentiate the levels of Corporate Social Responsibility;
3. Determine the role of Human Resource Management in the
Organizational Sustainability

Understanding Ethics

Ethics has been defined in many books and articles. Philosophers and religious scholars
from various disciplines have entered the field, created several approaches to understand ethics
thoroughly.

The term ethics often describes the investigation and analysis of moral principles and
dilemmas.

When you are faced with a tough decision, how do you figure out what's the best
thing to do? What guidelines or examples do you use to make up your mind, and what
happens when none of the choices can be a good way to act? How do you choose the lesser
evil?
Some choices we have to make in our life are so hard that they seem impossible to make.
Oftentimes we try to sleep over them and hope that tomorrow we wake up in a totally new
world. Well, we're specifically talking about moral dilemmas and life-changing decisions
here when both options just seem so unfair or undesirable, but something's got to be done.
Don't worry if you have no answer at this time. Philosophers have been debating these
issues for thousands of years.

Ethics reflects morality; that is, a reflection on what constitutes right or wrong behavior.

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 Is anything or anyone wrong anymore? Does it depend on whom you ask? Are moral
standards now in the eye of the beholder?
In this era of "fake news", easy willingness to mix lies and truth, and where people get too
smart to twist the truth with their lies, I realize that we may find it increasingly difficult to
distinguish one from the other. However, I strongly believe in the need to accept the
principles of right and wrong, which resonate within us.
Something has gone terribly wrong, and we have seriously lost our way. It's like we are in
the middle of the woods, and we've got no compass. Much has changed, of course. Please
let's not concede. Right and wrong still do exist and are not just matters for debate.

Ethics is a set of moral principles or values concerned with the righteousness or wrongness of
human behavior and guides your conduct in relation to others.

Ethics are the set of moral principles that guide a person’s behavior based on his
personal integrity and trust in the character and behavior of others,
Integrity means being true at all times. If you are not honest, it will just be so easy for you
to cheat and steal from others.
One person’s moral compass may not point in the same direction as another’s, as far as just
and unjust conduct and belief are concerned.

Elements of an Ethical Organization

Does it pay to be ethical? Definitely!
It may be challenging and difficult at times, but it has its rewards-it makes us feel better. Honest
people have lesser instances of mental health and physical complaints and better social
interactions.
➢ Respect:
Human beings are to be treated with respect regardless of their moral conviction by
respecting their autonomy, rights, and choices. Never use human beings as mere resources,
instead treat them as persons.
In building a business, you must respect yourself and be surrounded by people whom you
can trust and have respect for you.
Never do business with people with trust issues. They usually do not know how to respect
and are difficult to handle. They are likely to start trouble at work.
The moment that the existing relationship weakens, take action. Do your best to rebuild
mutual respect, but let the person go if it can no longer be rebuilt.

➢ Honor:
You owe the success of your company to your employees. If not of their efforts and
loyalty, you would not have succeeded.
Design a program that will honor their efforts and reward their perseverance. Show
appreciation to strong performers and people who exemplify the spirit of your
organization. Give rewards and recognition to motivate them the more.
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Organizational Ethics: Sustainability, and Social Responsibility;
International HRM

➢ Integrity:
Being a person with integrity makes you true to yourself and would do nothing that will
demean or dishonor you.
Integrity in the workplace is manifested when your employees require minimal
supervision because they adhere to company policies and procedures. You are certain that
they work when they are supposed to and postpone until break time- the socializing,
snacking, searching the Internet, and personal phone calls.

➢ Customer focus
The most important member of your organization is your customer. Your company is
still up because your customer trusts that you will provide what they need. Your focus and
commitment to serve them well, reinforces the responsibility you have to the market. The
guaranteed good service that you promised to these people is part of your ethical
responsibility. Selling your customers short not only risks compromising your ethics but
also risks achieving your company's long-term goal.

➢ Results-oriented:
A manager who gives his employees the freedom to discover how to make their work as
easier as possible is well-loved.
When the employees are given complete autonomy over their work with the freedom to
choose when and how they will meet their goals, they control their work schedule. Less
time off is needed because they can work around family obligations, appointments, and
illnesses, resulting in increased job satisfaction leading to reduced turnover, reduced
hiring, and boarding costs.
This principle is called The Results Only Work Environment (ROWE).

➢ Risk-taking:
Organizations that plan to make it big are not scared to take risks. They are willing to go
out of their way, innovate, think "outside the box," and re-invent themselves. Companies
like this attract employees who are willing to take a risk, and they get rewarded them for
taking a calculated risk.

➢ Passion:

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 Successful organizations are infested with excited, driven, and passionate employees
who work for the thrill and challenge, not much for the paycheck but more of the belief that
their work and efforts can make a difference.

➢ Persistence:
Passion is married to persistence. We cannot stop a passionate worker in his
persistence to continue for what they are doing and a belief that this group of people, this
company, has the best chance of "making it" of any company they could join. Satisfaction
will never come until they achieve the goals and results that are expected.

Creating an Ethical Organizational Culture

There are various definitions, guidelines, and principles about what ethics
really is, and is interpreted in multiple gray shades. Some of which are legal but not
"fair", justifiable but not necessarily "correct".
Ethics refers to well-based standards of right and wrong that prescribe what
humans ought to do, usually in terms of rights, obligations, benefits to society,
fairness, or specific virtues. But who should set the standards?
I think it is wise to associate ethical behavior with behaving with integrity. C.S.
Lewis believes that "Integrity is doing the right thing, even when no one is
watching." Not everyone can behave with integrity all the time. Surely, business isn't
any different.
Ethical organization refers to the code of conduct that decides the way individuals
working in a particular organization should behave. Surely, it takes more than
reactive rules and regulations. To make a difference, we need to start the changes
within us.

➢ Be a role model and be visible.

Subordinates always look at top management's best behavior and
make them a model of what's acceptable behavior in the workplace. Senior
management, which constantly displays to be taking the ethical high road,
sends a positive message for all employees.

➢ Communicate ethical expectations.

The Human Resource Department's job is to see to it that all
employees are aligned with what the company values and believe in. To
break ethical ambiguities, employees should be oriented with the
organizational code of ethics that employees are expected to abide by.

➢ Offer ethics training.

It pays to get reminded every now and then. Although we know by
heart what is right and what is ethical, we need to be calibrated with the
organization's standards of conduct. Seminars, workshops, and similar
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Organizational Ethics: Sustainability, and Social Responsibility;
International HRM

ethical training programs are set up to clarify what practices are and are not
permissible and address possible ethical dilemmas.

➢ Visibly reward ethical acts and punish unethical ones.

Employee performance is not the only basis of the performance
appraisals of the manager. The point-by-point evaluation of how his or her
decisions measure up against the organization's code of ethics is also
evaluated. Employees who act ethically should be well appreciated and
visibly rewarded for their behavior. Just as importantly, unethical acts should
be discouraged and punished.'

➢ Provide protective mechanisms.

The organization needs to dedicate a certain department and create
ethical counselors, ombudsmen, or ethical officers who will always be
available for employee counseling and monitoring. Design formal
mechanisms that will provide an avenue for employees to discuss ethical
dilemmas and report unethical behavior without fear of reprimand.

General Guides to Ethical Decision Making

There would be instances when you will be doubtful of your decision. Even
when you are equipped with the ethical compass, you will still be lost if you are not
sure where the "north" is.
Below are examples of where to find your "north".

o The Golden Rule.

Treat others as you treat yourself. The golden rule will keep you in the
right and ethical way. It will be a wonderful world to live in if no one wishes
harmful things to happen to other people.

o The Rotary's Four-Way Test

o Is it the truth?
o Is it fair to all concerned?
o Will it build goodwill and better friendship
o Will it be beneficial to all concerned?
When you have a hard time making the biggest decision of your life, run
all the questions in your head; if you get a “yes” in all of them, then go for
it.
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 o Stakeholder’s Approach to Ethics
Stakeholder's approach teaches us that, like them, we always have a
conflicting interest. You need to present win-win results for all affected by
the decision.
If you are comfortable telling people about your decision and how they will
be affected by it, then your decision is probably ethical.

o Discernment and Advice

There are instances where you will doubt your decisions; you take your time
to weigh things out. You may talk to your boss, higher-level managers, and other
people with high ethical standards and seek for advice.
If there is reluctance in asking others for advice on an ethical decision in fear
that you will not favor them, your decision may be unethical.

Contributing Factors to Unethical Behavior

The majority of the people are able to distinguish right from wrong behavior, but
still, more and more people fail to make the correct decisions and behave
unethically.

o Personality Traits and Attitudes

Some people are believed to have a higher level of ethics than others. The
culture of dishonesty has infected humanity that lying becomes a habit to some.

o Moral Development
The person’s ability to make ethical choices is related to their level of moral
development.
o Preconventional level- The ability of the person to choose right and
wrong behavior based on self-interest and behavior.
o Conventional – The ability of the person to base his decision on peer
pressure.
o Postconventional level- The ability of the person to make an effort to
define his moral principles-devoid of any influence from leaders and
groups belief.

Unable to resist temptation: How self-control depletion promotes unethical

behavior
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Organizational Ethics: Sustainability, and Social Responsibility;
International HRM

Individuals who were presented with situations that affect their innermost
desires may succumb to temptations and become impulsively cheat" than
individuals whose self-regulatory resources were intact.
Here are some examples where a character can be tested:

➢ Incentives
An Incentive is always associated with cash, valuable items, or travel perks.
When there is a handsome incentive at stake, your tendency to behave ethically or
unethically will be tested. The wicked may be tempted to manipulate the result for
his personal gain to avoid getting into trouble, and some people don't believe the
rules apply to them.

➢ The Situation
When it is tempting to be unethical, there are some situations, especially
when you are in the middle of highly competitive negotiation. Usually, there is no
formal ethics policy or a code of ethics set. People tend not to take ethical behavior
seriously, especially when displaying unethical behavior has never been punished in
the past.

➢ Justification of unethical Behavior

Human beings are created, especially because of the free will or the ability to
choose right from wrong. If one makes a bad decision, it does not mean he is a bad
person. It just so happens that everyone has the capacity to be dishonest.

What is Corporate Social Responsibility?

Corporate social responsibility (CSR) is closely related to ethics as both have

a responsibility to society.
The buying public is smarter now; they have shifted their attention from products
and services to the companies behind those products and services. Many prioritize
corporate social responsibility (CSR) and make corporations accountable for
influencing social change with their business beliefs, practices, and profits. In fact,
some will consider turning their back on their favorite companies if they realize that
they're not taking a stand for societal and environmental issues.

Responding to one's social responsibility should not be in conflict with maximizing

shareholder value. Here are some suggestions on how these seemingly
contradictory objectives can be reconciled:

Levels of Corporate Social Responsibility

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 In today’s society, where everyone is active at social media, most business is
expected to be socially responsible as the consumers show partiality over this. The
question remains that if the business considers assuming social responsibility, at
what level of BSR should the business operate? Managers can choose to operate the
business at one of three levels of CSR.

➢ As the term denotes, legal CSR is particularly focused on strictly following the
laws and, at the same time, getting maximum profit and returns to
stockholders by cutting costs and increasing sales.
➢ Ethical CSR focuses on profitability and doing what is right, just, and fair.
It practices proper treatment to its employees, paying them fair wages and
providing safe and fresh produce.
➢ Benevolent CSR focuses on profitability and doing philanthropic activities.
This highest level of CSR is also known as “good corporate citizenship”.
Benevolent firms are giving money, gifts and resources to charitable cost.
Employees are benefited with rewards for being active volunteers in the
community.

Sustainability

Sustainability is now a basic business term that involves meeting the

needs of the current generation without compromising future generations'
ability to meet their needs.
Managers must encourage everyone to see to it that the resources are to be
used wisely and responsibly. Protect the environment, recycle, and reuse
goods.

To maintain sustainability, organizations must replenish used up resources

in the course of their operations; otherwise, it will be gone forever. We
cannot afford to waste resources that are irreplaceable or difficult to replace.

At first glance, one may think that sustainability may reduce a company's
profitability, but then they can simultaneously increase the multiple by which
the earnings are valued. The possibility of enhancing the company's
reputation, reducing its perceived risk, and broadening its stock
marketability to potential investors, who increasingly are viewing social
responsibility as an investment prerequisite or as a separate asset class, is
actually great.

HR and Organizational Sustainability

When sustainability hit the business world, the Human Resources

Management plays a pivotal role in implementing sustainable practices,
though that greatly affected many HR-related matters.

➢ Sustainability Affects Morale

Green companies are often viewed more favorably by the public. With the
current worldwide environmental problems, “going green” greatly affected
the way that employees feel about themselves working for a company that
helps conserve the environment.
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Organizational Ethics: Sustainability, and Social Responsibility;
International HRM

Having sustainability as a part of the company’s core value may also help to
attract top talent. Many of the best and brightest personalities across every
industry are interested in working for companies that put ethics over profit
and work to create a greener world.

➢ HR Is Poised to Integrate Sustainability

As Human Resource Management is in charge of recruitment, onboarding,
and training, they are the first point of contact with the newly –hire
employees. It will be very easy for HR professionals to make sure that
sustainability is ingrained into new employees’ view of the company from the
start. They can be talking about reducing waste throughout onboarding and
training; it will help set the foundations for more sustainable practices.

➢ HR Practices Have an Impact

Going paperless can save a lot of money and resources that will surely
have a big impact on a company's sustainability. By recording employee
information electronically, supplies and space can be saved. By using a
smaller space and, in turn, use of less energy as a result of the space savings
may further progress sustainability goals.

Codes of Ethics

Codes of Ethics are the ethical benchmark for investment professionals

around the globe. It is our guide to live and to act responsibly,

➢ Values
It is important that you define your personal values. Your values are
the things that you believe are important in your way of life. When you
feel comfortable, really good, and really confident that you were making
good choices, and then you most probably are.

➢ Principles
Principles are the basic application of our values. An ethical principle
will demonstrate dignity at work and personal integrity.

➢ Management Support
To reinforce the campaign for integrity and ethical behavior,
management should set an example. No one should be above the law. If
the employees see that the top management respects the rule, it will
strengthen the law's gravity. You are indirectly telling them that you
really mean it and offenders will be penalized.

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 ➢ Personal Responsibility
The rule applies to everyone in the organization. Your responsibility is
the same as everyone else, including top management. You are
responsible for your own actions. Any violation should merit
consequences depending on the gravity of the act.

➢ Compliance
Rules are not there for nothing. Everyone should comply. Some other
laws and regulations must be incorporated in the company codes of
ethics-these too are for strong compliance.

Common Ethical Issues that Managers face in business

➢ Bribery
Payment is given to another in exchange for a favor asked. The
gesture is in favor of the person who gives the bribe.
Let us say that you desperately need to have the client sign a contract
with you to meet your monthly quota. When you realize that the client is
still undecided and is still open to entertain offers from other companies,
you offer a monetary gift to the secretary to iron out your presentation.

➢ Corrupt Payments
These are offered in your request to skip inspection and others to skip
scrutiny in the government agencies. Some termed it as an "under-the-
table" transactions.

➢ Employment and personal issues

These discriminatory labor practices created the danger of making
unethical decisions like child labor and forced labor, among others.

➢ Marketing Practices
Products under false advertisement, deceitful, defective, unsafe and
substandard are being sold at a very low price.

➢ Impact on the economy and environment

It speaks of some business man's unethical activity that may create a
great impact on our environment. It may be a rising of endangered
species.

➢ Employee customer privacy

This speaks of the financial institutions engaging in unethical
activities, selling out the client's information, like credit card information
for unauthorized purposes.

GLOSSARY:

Authority Persons having the legal power to make and enforce the law; government
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Organizational Ethics: Sustainability, and Social Responsibility;
International HRM

Codes of Ethics. Knowledge of the profession's code of ethics and state laws inform you of what is
considered appropriate versus potentially harmful.
Corporate social responsibility is a self-regulating business model that helps a company be
socially accountable — to itself, its stakeholders, and the public.
Ethics refers to well-based standards of right and wrong that prescribe what humans ought to do,
usually in terms of rights, obligations, benefits to society, fairness, or specific virtues.
Principle and accepted or professed rule of action or conduct: a person of good moral principles.
Responsibility. The state or fact of being responsible, answerable, or accountable for something
within one's power, control, or management.
Sustainability. Environmental Science. the quality of not being harmful to the environment or
depleting natural resources, and thereby supporting long-term ecological balance
Values. Doing what is important in life.

References and Supplementary Materials

Books and Journals
1. Lussier, R. N. (2016). Human Resource Management Functions, Applications, & Skill
Development (Second Edition ed.). Sage, Singapore: Springfield College University of
Arkansas at Little Rock

Online Supplementary Reading Materials

1. Nguyen, S. (2017, April 06). Creating an Ethical Organizational Culture. Retrieved
from https://workplacepsychology.net/2011/02/14/creating-an-ethical-
organizational-culture/ Retrieved Oct 5, 2018
2. Ethical Reflections: Ethics & Logic. (n.d.). Retrieved from
https://www.truthortradition.com/articles/ethical-reflections-ethics-logic
Retrieved Oct 5,2018
3. Eight Elements of an Ethical Organization. (n.d.). Retrieved from
https://www.entrepreneurship.org/articles/2002/12/eight-elements-of-an-
ethical-organization Retrieved Oct 5,2018
4. What Is Sustainability and Why Is It Important? (n.d.). Retrieved from
https://www.environmentalscience.org/sustainability Retrieved Oct 6,2018
5. Sustainability and Corporate Social Responsibility (CSR) | Deloitte CIS | risk. (n.d.).
Retrieved from
https://www2.deloitte.com/ru/en/pages/risk/solutions/sustainability-and-
csr.html Retrieved Oct 6,2018

Online Instructional Videos

Course Module
1. Ethics
This movie clip on ethics offers you some simple advice on what to do when you're faced
with tough choices about right and wrong or good and bad.
https://www.youtube.com/watch?v=zPsoFhUDLuU Retrieved Oct 5,2018
2. The video clip is full of moral dilemmas, and the way you solve them can speak volumes
about your personality.
Would You Rather: 6 Hardest Moral Dilemmas Ever
https://www.youtube.com/watch?v=dzmNoFnxu68 Retrieved Oct 5, 2018