WEEK 2

The Role of Business in Social and

Economic Development
In the modern business world we frequently hear core values, mission and vision
statements, guiding principles among other terms. But what does it mean to have a
company core principles? Why is it important in a business?

Whether you work for a small business or a big major corporation, following ethical
principles matters.

Although businesses have to meet profitable opportunity and expectations, they also have
ethical responsibilities to look up to. Every person within the business, from the bottom
employee to the top of the organizational chart, must be cautious to meet these
responsibilities.
Core Principles Underlying Fairness,
Accountability, Transparency in Business
Operations and Stewardship
A business guided by ethical principles; behaving in an ethical manner can
create a positive atmosphere and may build a promising business
results. A business environment that promotes and upholds valued principles is
usually more productive.

Any business that values the core principles; fairness, accountability,

responsibility and transparency in business operation and
stewardship, usually performs exceedingly and has the capacity to attract
more investors, whose support can help to finance further growth.
 [fair-nis]
noun
the state, condition, or quality of being fair, or free
from bias or injustice; even handedness:

FAIRNESS http://www.dictionary.com/browse/fairness

Fairness refers to equal treatment, for businesses and companies for

instance, there should be fairness in shareholders, more so in the treatment of
all stakeholders including employees, communities and public officials. The
fairer the entity appears to stakeholders, the more likely it is that it can
survive the pressure of interested parties.
• How would it feel to experience the sting of injustice? To be blamed for something
you did not do or felt the horror of discrimination because someone simply did not like
you? Would anyone be justifiably deserve an unfairness regardless of the circumstance?

• In most businesses where there is a workplace, despite rules and policies and guiding
principles, an employed personnel regardless of its position, may tend to experience
injustices. Normally when money, competition, position, and pride are at stake, both
petty and serious unfairness's are inevitable. for instance, taking claim for another’s
work, shifting blames, unequal distribution of work load, promotions of the less
competent employee for biased reasons, and even double standards. Any businesses has
strict rules, but most often, when there is unfairness, grievance follows.
• As it happens, what is or is not fair is much more complicated and unclear than
it seems from the vantage point of the person who feels being short-changed.
Even though the underlying concepts of fairness and justice are simple, almost
intuitive and discerning, applying it in real life and in workplaces has been
proven to be somewhat difficult.

• But sometimes, distinguishing real injustice from self-serving justifications is

complicated. Observing workplace issues for instance, an employee who has
been denied of something, like a job, a promotion, a contract, a serious file of
protest follows.
Fairness is concerned with actions, processes, and consequences, that are
ethically correct, principled, and unbiased. In essence, the
virtue of fairness establishes moral standards for decisions that affect may
others. Fair decisions are made in an appropriate manner based on suitable
criteria.

We tend to think and speak in terms of fairness when we are dealing with
the behavior of individuals and everyday interpersonal
relationships. We talk about justice and equity in the context of
broader social issues and institutional obligations to individuals. All these
apply to any situation where we want to judge whether an action contributes
to a good, rational, caring society.
The moral obligations arising from the core ethical value of fairness
are almost always associated with the exercise of power to
render judgments that grant benefits or impose burdens. Almost
everyone has the power to give or withhold benefits such as
showing approval, giving praise, honor, and
support, or to impose burdens such as disapproval on reports and
proposals, giving negative criticism, blame, and worse is
condemnation that makes significant affect in our lives.
The moral duty to be fair places constraints on our judgments and actions. There
are two aspects of fairness: a) fair results which is substantive fairness and b) fair
procedures which is procedural fairness.

Substantive Fairness
Different contexts and political ideologies yield different and often incompatible
criteria for substantive fairness. A fair result is one in which people receive
what they are due and what they deserve. Unfortunately, there
are no agreed to criteria to determine what a person really ought to have.
Some argue that true fairness is equality (each person
receives an equal share of benefits and burdens). Others believe
the better criterion is merit (those who are most competent and
who produce the most deserve the most). Still others believe
that benefits should be allocated based on need and burdens on
the ability to carry them. Other theories of “distributive justice”
include resource allocation based on effort,
social contribution, seniority, and legal rights.
• The wide variety of approaches to fairness means that for every decision there will
be people who claim it is unfair. And they’re right —according to their personal
criteria. Thus, in making difficult decisions that affect several stakeholders who have
conflicting interests, it is impossible to come to a single, indisputably fair result.
Nor is it possible to satisfy everyone. Generally, those who consider
themselves winners in the decision will consider the result just, and those who see
themselves as losers consider it unjust. This observation suggests three important
rules about the fairness of decisions;

• First, since disagreement, differences and criticism are unavoidable we must satisfy
ourselves with doing our very best to reach a fair judgment based on
our conscience and ethically justifiable standards of fairness.
• Secondly, we should be clear in our own minds about the criteria of fairness
we are using and let others know, ahead of time if possible, what those
standards are. For example, in hiring applicants, we evaluate based on
qualifications and make comparisons. It is helpful to everyone
if we know and disclose what we think is relevant and irrelevant to the
decision and, if we can, how we rank other factors.

• The third rule in making decisions is that the procedures we use in decision
making must be and should appear to be fair. In many cases, a judgment is
defended primarily in terms of the process used to reach it. In effect, one can
argue that a fair process always yields an ethically
justifiable result.
Procedural Fairness

Fairness requires that the procedure of making decisions may reveals a conscious
concern with reaching a fair, just, and equitable result. Decisions should be made,
and should appear to be made, cautiously, truthfully, and objectively,
with the knowledge that even a process of the greatest integrity does not always
produce certainty.

Two major types of decisions in terms of fairness:

a) Comparative selections
- for instance, whom to hire or fire; who should be cut from the team and;
b) Factual determinations
- This type of decision is often accusatory in nature; for instance, did a person
lie, cheat, or steal.
How to deal with workplace issues:

Fair Notice

Determine whether the person accused had fair notice that the conduct was wrong. Simply cases
such as lying, cheating, and stealing, may not be much of a problem but more technical violations,
such as when you are a public servant and receiving improper gifts or using company assets,
requires more investigation.

If you determine that the person knew or should have known about the proper standards of conduct,
further action on your part is fair. If, however, you decide that the person did not know and
reasonably could not be expected to know of a rule, fairness may dictate nothing stronger than a
warning.
Impartiality
One should be sure of fair and impartial judge. This means you are willing to
suspend judgment until all the information has been laid in, setting aside conclusions
you may have made and clear your mind of prejudice or prejudging about the person or
issues involved.

Gather Facts
Make reasonable efforts to gather facts. Thoroughness without being
irrational is important in making sound judgments. What do you actually know? Are
there uncertainties in the facts that needs to be clarified? If you are making
comparisons do you have sufficient information on each candidate concerning the
factors you think are most important? If you are adjudicating facts, is there any way of
confirming your suspicions or the accuser's claim of innocence without unduly
embarrassing that person.
Fair Hearing
Anyone being accused of sometime should be allowed to tell his/her side of the
story. The “right of confrontation” is a fundamental prerequisite of
fairness in personal and business relationships. Anyone should be given the
opportunity to explain, clarify, and ask questions, and you must listen with a
truly open mind.

Evaluation
Carefully weigh and evaluate all the information by separating facts from
opinions and opinions from speculation. Don’t be afraid to draw reasonable
inferences but know when you have done so and the premises on which
you base your conclusion.
Principles of Fairness

• Treat everyone fairly based on their merits and abilities and handle all essentially
similar situations similarly and with regularity.
• Make all decisions on appropriate criteria, without favoritism or discrimination.
• Never blame or punish anyone for what they did not do, and appropriately sanction
those who violate moral obligations or laws.
• Promptly and voluntarily correct personal and institutional mistakes and indecency.
• Not take unfair advantage of anyone's mistakes more so, ignorance.
• Fully consider the rights, interests, and perspectives of all
stakeholders, approach judgments with open-minded impartiality, conscientiously
gather and verify facts, provide critical stakeholders with an opportunity to explain
or clarify, and carefully evaluate the information.
• Accountability
ac·count·a·bil·i·ty əˌkoun(t)əˈbilədē/
noun
1. - the fact or condition of being accountable;
2. responsibility.

Being accountable simply means being responsible for decisions

made, actions taken, and assignments completed.
In any business organization, accountability is a management's way to
control the process in which responses are given for a person's actions.
These responses may be resulted to a positive or negative effect. Depending on
the response, the person might need to correct his or her error.

Accountability refers to individual responsibility for the work he/she has

performed and answering to peers and superiors for their performances.
Accountability is often used synonymously with responsibility,
blameworthiness, and liability.
In leadership roles, accountability is the acknowledgment and assumption of
responsibility for actions, products, decisions, and policies
including the administration, governance, and implementation within the scope of the role
or employee position. Accountability also include the duty to report, explain, and answer
for resulting consequences.

Leadership Accountability
In any organization, leaders normally take the blame in any case of
failure. To change this behavior and create an environment where all levels can
flourish and work as a team, view failure as a learning opportunity and make it a core
principle of your culture—not a chance to place the blame.
What does accountability look like?

According to Michael Hyatt, a New York Times best-selling author:

"accountability means that you accept responsibility for the outcomes expected
of you—both good and bad. You don’t blame others. And you don’t blame the
external environment. There are always things you could have done—or still can
do—to change the outcome. Until you take responsibility, you are a victim. And
being a victim is the exact opposite of being a leader. Victims are passive. They
are acted upon. Leaders are active. They take initiative to influence
the outcome."
Viewing failure as a learning opportunity, not an option to blame it on others,
will encourage them as part of an organization to take on new responsibilities without
fear or apprehensions. One way to achieve this is to take up the continuous development
process as an accepted model among your leadership team. The process is an ongoing and
joint team effort that organizations use to ultimately improve products, services and
internal processes for breakthrough performance. Your team will know what action to
take when a process succeeds or fails, all without placing the blame on anyone else.

Lead by example to motivate employees to achieve goals

It is important for leaders to foster an environment that may lead to empowers employees
through their failures and success; you can help your team members see outcomes as
useful insights, not as mistakes. Use positive experiences as a way to formulate new
processes, and use failure as insight into what went wrong and how you can avoid it in
the future.
In accountable organizations, everyone can work as a team to
identify and analyze such insights to positively influence the culture,
process and improve a working environment for the company.

Accountability in Companies
Accountability also has a connection to expectations. Employees who
do not meet the expectations of their supervisor are held accountable
for their actions and must answer for their inability to do so.
Accountability is crucial to ensuring high performance within an
organization. However, managers must clearly communicate their expectations
to the person who is responsible for the specified action or task. Clear
communication of expectations and well defined goals is a very effective tool to
enhancing performance at every level of organization.

Without defined goals, employees lack a frame of reference for how they are
performing in the workplace. They are unable to rely on guidelines or a structure
that helps them achieve their performance goals. In many organizations, the
management team and board of directors create goals for themselves and the general
manager, while the general manager creates goals for department managers. This
process is replicated throughout the organization, down to the department managers
who create goals for entry-level employees.
 Transparency

The quality of being done in an open way without secrets:

http://dictionary.cambridge.org/dictionary/english/transparency

PEOPLE TRUST BUSSINESS WHO

ARE TRANSPARENT
Transparency yields trust. Who can trust a company or anyone for that
matter who does not disclose information and who does not share anything to
employees and clients or customers? There are very few ways to build trust. It is
something that cannot be built over night, but can be accomplished when there is
transparency.

The opposite of transparency is secrecy and confidentiality,

which normally wears away trust especially to your employees. A business
organizations exist for the sole purpose of encouraging transparency because a culture
that is more transparent can build trust. Trust is the defense against corruption.
As people become more transparent with one another, their relationships
grows and deepen. And who is responsible for leading that move towards
transparency? It’s the leadership of the business. Transparency has to start at
the top management.

WHAT DOES TRANSPARENCY MEAN

In order for a business to be transparent, its people need to be transparent. A
culture of transparency takes shape when leaders intentionally
manifest their own personal transparency, and encourage it
in the attitudes and behaviors of their team members. Transparency always
starts with people. When an organization’s people are transparent, then the
organization is ready to follow.
For instance, in a selling business, It is important to be transparent about
the price. There’s seldom a need to hide the pricing of a product. Explain upfront
what it costs, what they’ll get, and how they’ll get it. There's no need to hide these
information at it promotes doubt to customers.

For instance, transparency about unsatisfied customers. If people are not

happy with the services or even the business products, it will not do any good to
hide it. These should be dealt with it openly and honestly.

It is very important to be transparent about change. Be upfront about how you’re

changing your business model, the prices of products or services and even about
leadership The fact that you’re declaring the changes openly is just as significant as
the change itself.
Transparency is one of those subtle things that can make a dramatic impact on a business.
This will help everyone do business better; the owner, customers
and clients, and employees as team members.

A principle of good governance in any business is that stakeholders should be informed

about the company’s activities, what it plans to do in the future and any risks involved in its
business strategies.

Transparency means openness, a willingness to provide clear information

to shareholders and stakeholders as well. For example, transparency refers to
the openness and willingness to disclose financial performance figures which are truthful
and accurate. Unless a business is hiding something illegal and law breaking.
• Disclosure of material matters concerning the organization's performance and
activities should be timely and accurate to ensure that all investors have access
to clear, factual information which accurately reflects the financial, social and
environmental position of the organization. Organizations should clarify and
make publicly known the roles and responsibilities of the board
and management to provide shareholders with a level of accountability.

• Transparency ensures that stakeholders can have confidence in the decision-

making and management processes of a company.
 Stewardship
Definition of STEWARDSHIP
1: the office, duties, and obligations of a steward
2: the conducting, supervising, or managing of something; especially:
the careful and responsible management of something entrusted to
one's care stewardship of natural resource

https://www.merriam-webster.com/dictionary/stewardship

What Is Stewardship in Business?

Stewardship refers to the responsibility that companies have to understand and
manage their impacts on the environment in any number of ways. Practicing
stewardship can help a business find sustainable practices, improve its status
and reputation among clients and consumers and even save funds.

Stewardship in Practice
Not all businesses engage in active stewardship. Some perform activities that
have a minimal impact on the environment, while others focus on different
areas of corporate responsibility. When a business does engage in stewardship
it must generally state its commitment to bear responsibility for
the effects its operations have on the environment. Many businesses work with
environmental agencies to improve their practices.
Elements
Stewardship can include one or more of a long list of specific practices and
elements. For businesses engaged in manufacturing this includes sourcing raw materials
that are renewable and using chemicals and processes that are safe for the environment. For all
types of businesses, using email and mobile devices to reduce paper consumption as it is
called, paperless, is a form of stewardship.

Costs
Engaging in active environmental stewardship comes at a higher price. For instance,
employing renewable energy alternatives, such as hybrid vehicles or a solar-powered factory,
are on the cutting edge of stewardship but also require large initial investments which is the
reasons for some company to act differently as a steward. Tax credits can help offset these
costs, as can the savings that come from a reduced reliance on environmentally harmful energy
sources with rising prices, such as petroleum. Managing stewardship as part of a budget is a
big challenge for every businesses that seeks help improve its environmental status.
Outcome
Stewardship in business has a several possible benefits. Collectively it
reduces energy usage, protects natural resources and improves public health. For
individual businesses that commit themselves to stewardship, the decision may have a
positive impact for the business. Some companies earn certifications from
environmental agencies that serve a marketing function, making their actions known to
consumers and customers. This gives them a good imagery and is favorable in their
marketing campaigns.

Let us take for instance, computer manufacturer Apple, holds a Gold rating from the
Electronic Product Environmental Assessment Tool in 2011. For environmentally
conscious clients, such certifications play a role in their buying decisions.
THANK YOU!