What Are Ethical Responsibilities in an Organization?
At the helm of a small business, the responsible owner appraises those who might have interests in the organization's activities. Customers, suppliers, employees, business partners, investors and fellow business leaders are potential stakeholders. The company's activities can affect them, convincing them of the company's value as a social organization. Therefore, a business owner must make ethical decisions, including hiring and contracting decisions, to demonstrate the company's social responsibility.
A business should administer employee behavior and HR decisions in a manner that fits the law and establishes social responsibility. By establishing policies and applying them fairly to all employees, a business owner creates a climate of fairness and equity. Alternatively, offering advantages to some employees, or playing favorites, exposes a business owner to scrutiny over his company's ethics. It is best to find a balance between profit-based employment decisions and morality-based employment decisions. Writing morality-based policies can make it easier to achieve the latter.
Inside the business, the owner must look at the obligations to customers. There are people who directly consume the goods or services that the business sells and people who buy them downstream in the after-market. All these people have consumer rights that must be satisfied to a reasonable degree by the company. Therefore, an entrepreneur can examine how to make a product hold value for the consumer in terms of price, quality, usefulness and safety. When a business owner becomes aware of problems with a product or the way that his company supports it, he will take steps to solve them, especially to protect his brand.
A business might belong to a supply chain. If the organization is a producer, it receives raw materials from suppliers and then uses them to make a product. The organization has relationships with distributors and retailers who offload the finished product to consumers. In this chain of relationships, a business owner has an ethical responsibility to act honestly in all transactions. For example, the owner should give a fair price to the supplier for materials, study his costs and then determine a price per unit to charge the distributor or retailer. At the end of the supply chain, the consumer will get a price, but will only pay a reasonable one. A business owner can influence the price by suggesting a retail price and also by determining which retailers will carry its product.
A business does not exist in a vacuum, but it maintains an open system of relationships with internal and external stakeholders. Because the organization is open, it is vulnerable to changes in the environment. The responsible business owner can make decisions to respond to those changes, such as adjusting terms of employment with workers or the terms of business transactions with suppliers and customers. A business must remain profitable in order to survive. An entrepreneur can consider the impact of business decisions on other aspects of society, such as environmental impact and social impact. He should do ethically responsible things, such as disposing of waste properly and considering the impact of job creation or deletion on local, regional and national economies.