Organisation's purpose shaped by vision, leadership and ethics

Organisation's purpose shaped by vision, leadership and ethics

Introduction

The corporate strategy is only a means to the purpose of the organisation. It is impossible to develop strategy if the purpose remains unclear and purpose remains unique to each organisation. The definition of purpose is complex and multifaceted; Michael Porter simplified the term purpose as ‘profit maximisation’ while Professor Oliver Williamson defined purpose as ‘survival’.

Shaping of the purpose of the organisation

The complexity of developing purpose is overcome by shaping the purpose of the organisation which is a process by identifying and concentrating on essentials on the organisation. The shaping of the purpose of the organisation involves examination of strategic vision, roles of leadership and ethical considerations.

Purpose shaped by ethical considerations

The ethical considerations are standards and conduct that the organisation sets itself in its dealing within the organisation and outside with its environment.

Ethical issues:  4 prime considerations in the ethical conduct of organisations

The ethical issues are to identify what is morally correct behaviour for the organisation. There are 4 main reasons for considering the ethical conduct of organisations.

1)    In every society, such considerations are sometimes inescapable. For example, legal limits on conduct.

2)    They may be important to conduct in that society. For example, respect for ‘green issues’ in the environment that go beyond legal limits.

3)    A consideration of ethics is part of the professionalism of business. For example, the treatment of workers and ethics groups.

4)    The self-interest of organisations is often best served by developing attitudes to ethical issues before they come acute. For example, bad publicity as a result of accusations of incorrect behaviour.

Types of issues in developing business ethics

They are 3 basic areas that need to be explored in the context of purpose and strategy development which are:

1)    The extent of ethical considerations

It states the extent of organisation to consider the ethical issues that could arise in its conduct of business beyond legal minimum. It may involve in every area or lay down some basic principles and the leave parts or individuals to conduct themselves appropriately.

2)    The cost of such considerations

Some actions will have a cost to the organisation and many of the real conflicts arise here because if they were without cost then they would be easily undertaken. There are no abstract rules but each organisation will need to consider this area.

3)    The recipient of responsibility

It concerns the organisation’s responsibility to the state, local community or individual. For example, McDonalds’ continuous efforts in children welfare through raising funds.

Ethical issues that might impact on purpose

1)    Espionage

The sources that company acquire from to find out about competition and the reasonable enquiry finish and aggressive search for additional data.

2)    Tyrannical regimes

The ethical issues arise whether companies selling products a country that is run by tyrannical regimes is justified.  

3)    Bribery and corruption

The line is undefined whether organisations should engage in such activity in every circumstance so that jobs may be saved and contracts won for only limited sums to all number of people.

4)    Telling half-truths and operating misleading negotiation tactics.

The truth is not presented fully and might mislead into negotiating tactics. For example, unethical financial planners may hide some hidden clauses of the particular financial product which will affect their closing of customers, customers sees it lucrative and decides to buy.

 

Ethical considerations and corporate strategy

Ethical considerations may influence corporate strategy at a number of levels. The values of the organisation will need to be reflected in its purpose and mission statements. Such matters may reflect the role that the organisation sees itself playing in society and the responsibilities.

1)    The national and international level

The role of the organisation in society and the country.

Political, economic and social issues will impact.

Laissez faire vs. Dirigiste.

The role and power of trade blocks and closer economic union.

The organisation is entitled to have a view on these matters and seek to influence society.

2)    The corporate level

Ethical and corporate issues over which the organisation has some direct control. Such matters as the preservation of the environment, contributions to political parties, and representations to the country’s legislative parliament are all examples of direct corporate activities that need to be resolved.

3)    The individual manager and employee level

The standards of behaviour which the organisations wish to set for individual managers and workers. Some of these matters may not be strategic in nature in the sense that they are unlikely to affect the future direction of the organisation overall but rather the future of individuals. However, there may be some general policies on, for example, religion, ethnic and equality issues that involve both the individual and fundamental matters relating to the direction of the organisation. These general matters of policy deserve to be treated at the highest possible level and therefore come within ambit of corporate strategy.