Explain the role of ethics and social responsibility in developing a strategic plan, considering stakeholder needs. Society expects businesses to be responsible both socially and ethically. “Businesses are supposed to respect the environment, pursue fairness in dealing with internal and external customers, and strive to improve their communities” (Romani, 1998). Ignoring the ethical standards will have an adverse impact on businesses as well as the consumers.
Although some unethical practices are exercised by some businesses, many businesses recognize the importance of ethics in their operations and enforce the ethical standards. Operations managers are expected to act ethically when making business decisions. Strategic plans help businesses to maximize stakeholder’s wealth and move business forward. The managers make decisions based on these strategic plans and strategies. Environment, internal and external customers, and the communities in which they operate must be taken into consideration when developing strategic plans.
What do we do, for whom do we do it, and how do we excel are the questions businesses must answer to be ethical and develop strategic plans for their success (Wikipedia). Ethics and social responsibility must be made part of developing a strategic plan. Financial objective A firms financial goal is to maximize shareholder wealth as is reflected in the market price of the stock. “The goal is in conformity with the best long-run interests of stakeholders and society in the long run” (Blackwellpublishing, 2009).
Any financing or investment decision that improves the value of stakeholder’s stake in the business is acceptable. However, the managers must operate in the best interests of stockholders, not themselves, and do not attempt to expropriate wealth from lenders to benefit stockholders. “The managers are also expected to act in a socially responsible manner and do not create unreasonable costs to society in pursuit of stockholder wealth maximization” (tutor2u, 2009).
Wealth maximization is achieved by maximization of the cash flows of the organization (Blackwellpublishing, 2009). Various objections against the profit maximization are: 1) Vague: Since there are multiple meanings of Profit it cannot be ultimate goal. For example profit after tax, retained earnings. 2) Uncertain: “Profit cannot be ascertained well in advance to express the probability of return as future is uncertain, hence the timing of the profit can’t be estimated” (freemba). 3) Profits ignore the time value of money; hence cash flow is a better measure. ) Narrow outlook: “The goal to maximize profits is considered to be a narrow outlook because when profit maximization becomes the basis of financial decisions, it ignores the interests of the community on one hand and that of the government, workers and other concerned persons in the enterprise on the other hand. ” (freemba). Ethics and Societal responsibility “Stakeholder can be a person, group, organization, or system who affects or can be affected by an organization’s actions” (Wikipedia).
This means that the firms should satisfy the objectives of customers, suppliers, government agencies, families of employees, special interest groups. Tutor2u, 2009). This will also help the firms in achieving the success in the long run. Organizations should also consider non financial objectives to satisfy the other stakeholders of the organization. An organization should stress the importance of culture of ethical and societal responsibility. The organization should make commitment to a strong work ethic, integrity, honesty and quality, personal relations based on trust and mutual respect besides fostering a nurturing sense of quality and long-term achievement in the daily work beyond fashion and shortsighted gain. Adapted from the website of Nestle) Explain how ethical perspective has evolved throughout the program. Internet service providers have to take care of the privacy, security, content and other ethical related matters. Following are the salient points: 1) Ensure that the content is as per the ethical and moral guidelines 2) They have to take care of the services provided they are used in a proper manner.
For instance, if a Web hosting company carries a site providing information on bomb making or suicide assistance, they cannot claim to have no responsibility if that information is used. This is not a matter of legal liability but of moral responsibility. (Rogerdarlington, 2009) 3) Consumers should be made aware about the ethical and moral code of conduct. 4) ISP should frame an ethical and environmental policy. 5) ISP should take proactive steps for the user security and privacy.