Ethics in Management
It is sometimes challenging to decide between personal morals and directives that conflict those morals (Trevino, & Nelson, 2011). This creates a conflict and a potential for management problems. However, it is a common expectation and rule that subordinates should respect and obey the directives of those in leadership. In organizations that have culture and values, this is not expected to be a problem. Every employee understands and appreciates morals standards set out by the organization. Therefore, if the management’s moral directives contradict the culture and values of an organization, then subordinates have a right to disregard their boss.
Organizational culture provides a mechanism through which ethics are regulated. Organizations often provide formal training to employees as regards its expectations for ethics. However, this should occur in other platforms, as well. For instance, Leaders are expected to communicate ethics in both formal and informal avenues. The bottom line is communication that enhances expectations and awareness for behavioral expectations.Ethics in leadership is bolstered by a culture based on integration of goals, rewards, and discipline. Culture recognizes diversity, role models and management ethics. This requires formal and informal systems supportive of ethics and values. Formal processes that support ethics include ethics communication, codes, and polities.
Some of the conventional organizational practices involve disregarding ethics, a conduct that is seen as a norm due to its widespread presence in the system. In relation to the example of approval of unqualified loans, I would be hesitant to comply despite being a widespread practice. I would follow the moral values and ethics, which are the foundations of organizational culture. Culture is a reference point for professional practice, and a source of defense during conflicts that involve ethics.
Banks and other financial institutions have the expectations for corporate social responsibility. This involves insuring or compensating the community for the potential consequences of the organizations activities. Approving credit for employees with a history predictive of inability to pay for loans is unethical. Organizations should grow with rather than at the expense of the community. If clients realize such malpractice, they will depart the organization and perhaps, seek legal redress.
In a world defined by uncertainty, clients require appropriate counsel in the form of accurate determination of the qualification for bank credit. If a client is unable to repay a loan, the bank should hold itself responsible. Freezing and collecting assets from the client in this manner amounts to fraud and a disregard to the social responsibility of business.
Trevino, L. & Nelson, K. (2011). “Managing Business Ethics (5th ed.)”. Hoboken, NJ: John Wiley & Sons.