In the case of Enron, unethical decision punished not only the business by its managers and shareholders as well. Merrill Publishing Company Fusaro, P. Mid-American Journal of Business, Vol. After such a scandal, it is difficult to revive the business again since customers have lost confidence in it as was the case with Enron when Dynegy tried to revive it.
Any rule that is not conform to the law, which is the constitution of a country, then it, means such rules are illegal and cannot be enforced on any individual. The stakeholder view of company objectives: It resolves moral conflicts between different cultures.
This implies that, apart from producing high quality goods and services, the reputation of the firm in the market is a selling point and a determinant of its success.
Through fraudulent accounting practices by Arthur Andersen firm, Enron fooled the market that it was making profit while in-deed the firm was on verge of collapse. While corporate managers have been bestowed with the responsibility of managing a business organization on behalf of other stakeholders, it is imperative they ensure application of ethical principles in the decision making process.
Strategies include stakeholder strategies and social, ethical and environmental leadership. The stock market is one of the economic indicators that used to test level of market confidence on any company Petrick and Scherer, Observing high ethical standards is sound business strategy -- resulting in customer loyalty, higher employee retention and a positive image in the industry and within the community.
Such decisions are likely to have negative impact not only on the business but also on the individuals as well. This refers to payments for services to which a company is not legally entitled. Regrettably the moral tone of an organization is often set by top management.
This is primarily designed to ensure that company acts within the letter of the law, and that violations are prevented, detected, and punished.
The ethical consideration involves recognizing that the company and its employees are members of the community and have a responsibility to be positive contributors to the well-being of the community and to protect the environment. For a number of years, Enron auditing firm had also covered the anomaly in the company with an aim of showing the shareholders that the company was on track which means all losses and debts were not exposed.
The ethics that are most appropriate in a given situation will depend on the conditions at that time. Rules are a collective idea of what is right and wrong for the good of a group of people the breach of which results into punishment.
This may happen due to the inability of the company enjoying the services for which it is legally entitled to have. Unethical decision making by its management led to plummet of its share prices and eventual bankruptcy since the market has lost confidence in the company and its product.
This means directors must have systems and values that take into account everyone who has a legitimate interest in the company, and respecting their rights and views. According to the ethical decision making framework, managers must clarify, evaluate, decide, implement, and monitor any decision they make to ensure that it produces most good to all people David, Ethics in Strategic Management: An Inquiry into Otherness of a Strategy Process Key words: Strategy, identity work, ethics, Paul Ricoeur, sensemaking.
Using ethical considerations in strategic decision making will result in the development of the most effective long term and short term strategies.
Specifically, ethical criteria must be included as part of the strategic process in before‐profit decisions rather than after‐profit decisions in order to maximize corporate profits and improve strategy development and implementation.
THE ROLE OF BUSINESS ETHICS IN STRATEGIC MANAGEMENT. The role of business ethics cannot be over – emphasized.
This is because, business ethics an important topic to the success of a business and gaining competitive advantage. Ethics, Strategic Management Essay Ethics and Strategic Management Paper Yelena Kruzhkova University of Phoenix MGT/, Strategic Management Sheilahmarie Buendia 05/18/ Strategic Management “ Strategic management is a set of managerial decisions and actions that determines the long-run performance of a corporation.
ETHICAL MANAGEMENT vs. STRATEGIC MANAGEMENT Strategy can be framed by due intelligence of a person, whereas ethics can be framed by fixing moral values and standards. Strategic management will not help in fixing the standards rather it helps in achieving the standards.
Ethics and Strategic Management Paper Yelena Kruzhkova University of Phoenix MGT/, Strategic Management Sheilahmarie Buendia 05/18/ Strategic Management “Strategic management is a set of managerial decisions and actions that determines the long-run performance of a corporation.
It includes environmental scanning (both external and.Download