Enterprise Management Essay Sample
This essay is about introducing code of behavioral conduct in an organization and introducing trust as an important tool to enhance relationships within and outside the organization. This shows what changes are needed in an organization, how the codes would be implemented and what would be the effects of implementing such a code of behavioral conduct.
Organizations today have realized the importance of ethical practices. Today ethical practices and codes of behavioral conduct form an eminent part or an organization’s strategy. It is important to have defined ways of behavioral conduct in a firm as it gains the confidence and loyalty of employees and other stakeholders which can help lessen financial, legal and reputation risks and at the same time improves the performance of the firm.
To integrate trust into the culture, the organization has to make the employees aware of the behavioral practices by strengthening and redefining their cultural strategies. Trust, however, is based upon individuals in relationships and as each individual is different. Thus, trust varies in relationships and those representing an organization will demonstrate variation in trustworthiness.
Trust is an important element in a business and its needs in an organization increases as the business begins to expand with a larger organizational infrastructure. Trust forms the fundamental base of every business and behind the success of every business, there is a large team who trust each other and get things moving in their favor. As Geoffrey Richards states,
“In order to effectively serve clients in a foreign market, there has to be a level of knowledge and trust in your firm among the business people within the country you are working,” says Steven Podolsky, chairman of Westchester, Ill.-based Podolsky Northstar Realty Partners LLC. The foundation on which this trust is built must be a firm understanding of how business is done in these countries” (Richards, 1998).
In other to have a successful management team, trust is a vital ingredient for success. Michael J. Landa states,
“Fredrick F. Reichheld and Thomas A. Teal in “Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value (Harvard Business School Press, 1996)” demonstrate that there is enormous potential for improving a company’s performance by increasing customer loyalty, investor loyalty, and employee loyalty. Conventional wisdom maintains that increasing customer; investor and employee loyalties are three separate and distinct business objectives.
It is our view that these three objectives are achievable through the implementation of a single common business strategy. A review of leading-edge literature on these issues strongly suggests that customer loyalty, the outcome of superior customer service, and investor loyalty, the outcome of protected and enhanced shareholder value, are each dependent upon the business gaining the commitment and loyalty of its employees” (Landa, 1999).
For a contracting firm, it is essential to have a strong relationship within the organization as well as with the suppliers, customers, clients etc as the business is all about relationships. It dwells and strengthens with ethical behavior. Without trust, getting future business could be next to impossible. If the clients, customers and suppliers don’t trust us, there are meager chances that they would want to work with us again. Once the reputation of the business goes below the expectations, getting new business offers will be difficult to obtain.
In order to improve the reputation of the firm, we have to work towards building trust which can be achieved by defining a code of behavioral conduct and making it an integral part of our business strategy (Dent, 2002). Bruce Lyons and Judith Mehta state the importance of trust in facilitating efficient exchange relations where agents are vulnerable to opportunistic behavior. Furthermore, they also discuss on self-interested trust and socially-oriented trust (self-oriented trust being forward-looking and socially-oriented trust being having roots in the past). In exchange relations, we come across such trust-exchange matters as well (Lyons & Mehta, 1997).
DEVELOPMENT OF THE CODES OF BEHAVIORAL ETHICS:
The first task that is to be outlined in this process is to analyze our risk factors throughout the organization. Like any other organization, we have our own unique risk factors. However, we have to do a thorough investigation and analysis which involves gathering data and input from our employees, project managers, suppliers etc and examine the processes and procedures that are currently prevailing in the organization. We need to have an in-depth understanding of the processes that are involved including the culture of the organization and how the dealings take place with the suppliers and clients and how the employees behave with them.
Once the risk factors are identified and the procedures and processes tracked, the organization has to formulate guidelines for employees to follow and ethical pattern of dealing and interacting within and outside the organization. The codes of conduct have to be the same for all the employees so that the level of commitment and honesty remains the same throughout the organization.
Before formulating a framework, it is important to have an input from the stakeholder regularly so that they may give their input to improve upon the ethical practices by voicing their concerns. Also, if any client or customer reports a matter, it should be resolved. This is important because the employees should know that they can’t get away if they cross the line of the codes of behavioral ethics.
There should be an analysis and regular review of the codes of conduct and needed changes should be incorporated. The codes should be in line with the environmental changes. This makes the implication and sustenance of the codes more effective and assists in resolving issues promptly and enables the firm to have a data base for improving the processes, policies, procedures and the structure of the organization. Consistent refining ensures compliance and reduces fraud and abuse thereby enhancing the value and effectiveness of the organization.
If any process identified has loopholes or that could possibly risk the reputation of the firm, then the processes should be modified or redefined altogether. These processes should be in line with the code of conduct that the firm decides to have. This can be at a lower or upper managerial level but the processes have to have similar codes of ethics so that there is a uniformity of behavioral conduct within the organization (Hosmer, 1995).
Standards should be set for ethical behavior in the organization. These standards should be set to alleviate the risk factors and minimize them. This should also enable the firm to be proactive in building ethics and compliance program to lower the intensity of the risk. Better results are obtained if it is given the possibility to avoid it altogether. Establishing standards would give the employees a benchmark to refer to and they would be less likely to deviate from the core values of the firm. If an employee is not practicing ethical behavior, he can be assessed and measured based on the standards that have been set.
To develop a code of conduct, it is important to take into consideration the workforce diversity. The codes should consider that employees, suppliers and clients may have different languages, culture and locations and the code of behavioral ethics has to be tailored keeping that into consideration.
Before developing the codes communication within the organization, the organization has to be improved and enhanced so that the feedback is accurate and complete. This will really assist in identifying any problem areas and the ethical codes can be formulated more in line with the needs.
PRINCIPLES OF CODES OF ETHICS:
To build and sustain a culture of ethics, we need a comprehensive framework that entails communication of the behavior that we expect from our employees. This means that the employees have a set of behavioral rules that they are required to comply with. For example, they have to conduct all their dealings justly and honestly even if the firm is suffering at a loss due to this. They have to know how important ethical behavior is for the firm and how much of priority we give it.
The training of the employees on ethics and the compliance of the rules that the company composes is very important. If the codes are not taught to the employees, it will be difficult for them to practice it while on the course of work. We also have to ensure that they comply with the conducts defined to them and that they should incorporate them in their daily dealings.
The codes of behavioral conduct should have clear values of the firm. This is important because the values of every firm differ and we need to define ours and make it known to our employees. Once this is established, it will engender a high level of trust in the organization. People are born with their individual value system. They can’t be taught that. Thus, it is important to hire those people whose value system matches with that of the firm. They have to work in conjunction. The most important thing, however, is the work environment. It has to be congenial and such that employees can easily practice their values.
The codes should be in line with the strategies, goals and objectives of the firm. This will enable the employees to work towards the objectives of the firm in the most ethical way. The codes should facilitate the working of the employees in order to minimize risks.
The codes should also be in compliance with the external laws and regulations. They should be changed if there are changes in the environment so that the employees can work within the parameters of the prevailing laws and regulations. Also, these codes should be in line with the policies and procedures of the firm. If they are not then this could make things difficult for the employees.
The codes should be such that it should safeguard the interest of the society before the organization. If some action benefits the firm but affects the society negatively it should not be a part of the firm’s practice.
CODES BEHAVIORAL CONDUCT:
The organization should have measurable performance targets. This initiates an environment of unbiased means of assessing the contributions made by individual employees or teams. When this system is fool-proof, employees trust the organization more and work with more passion and dedication. For a contracting firm like ours, it always helps to invigorate competition between suppliers or project staff. This boosts a healthy competition and they tend to perform their best.
Our organization should take up responsibility and be accountable for all that they do.
If, for example, there is a mistake made on the part of the organization, it will be best to own it and take up the responsibility. If an individual or a team member has erred at any point, it is best to ring it to the customer’s notice instead of hiding it. The customer would appreciate the honesty of the team and this would only strengthen a relationship rather than marring it. As Walter K. Lindenmann states,
“James E. Grunig of the University of Maryland and Yi-Hui Huang of the National Chengchi University in Taiwan contend, based on research that they have done, that some of the most important attributes of good relationships include trust, understanding, credibility, behavior, mutuality of control or conflict avoidance, and, ultimately, maintenance of the relationship that exists between an organization and key constituents.
Two marketing professors, Robert M. Morgan of the University of Alabama and Shelby D. Hunt of Texas Tech University, in an article in the July, 1994 issue of the Journal of Marketing, claimed that research they had carried out showed that successful relationships require “relationship commitment and trust.” They contended that these two variables are extremely important to measure if one is ever to assess whether or not a relationship is likely to persist over the long haul” (Lindenmann, 1998).
It is extremely vital that our organization abides by the commitments it makes in its codes. Our commitment shows our dedication to work and every time the organization fulfills its commitment, clients and suppliers etc respect and trust us more thereby securing current clients and bringing in new ones (Michael, 1998).
The teams and its members should do their very best to keep their promises and commitments in order to establish a perfect relationship. If this is not achieved, the clients will not trust us again or would hesitate to do any business with us which would in turn hurt the company’s reputation and business. There should be a willingness to trust and in order to achieve this status; the organization of the company should work harder to achieve the definition of trust first. As Hedley J. Smyth in his book, “The Management of Projects: A relationship approach” states,
“Trust is very important and that means open communication… The final analogy posited trust as an asset and liability. The liability is incurred in order to build up the asset, providing that there is a return on the trust expenditure. In other words, to trust the individuals and to trust the organization as represented by the individuals involves being prepared to be vulnerable” (Smyth & Pryke, 2006).
We have to chalk out a clear set of values and be ethical in our practice. We have to be open and transparent in operations at all levels of our business. There should be no loopholes and grey areas. Systems should be easy to understand by all (Childers, 2007).
The communication system of our organization should be sound and essential information should be easy to access. We should also have a good management system and eliminate over monitoring and over control to show that we trust our employees. This would build trust not only internally within the organization but also with suppliers and clients as we can’t expect them to trust our employees if we don’t trust them ourselves. Lastly, the pay scale should be just and fair. No one should be over or under paid. This will be motivational for all employees.
When dealing with negative issues, there should be openness so that the trust factor remains intact. At all times there should be honesty in all the work done and there should be consistency and predictability. All these attributes would develop trust between the team members and the clients or suppliers that they are dealing with and thus enhance relationships (Childers, 2005).
Every employee should have the right to voice their opinions so that they know they are respected. Irrespective of the position of the employee his opinions should be valued and should be given equal importance. When changes in the organization occur, employees should be included and involved.
It is extremely important that the contributions made by the employees are recognized. Their performance should be measured and rewarded if they do well. This will encourage them to perform better and they will eventually be satisfying our clients (Childers, 2005).
There should be a team environment created by the team leaders. The project leaders should have a positive attitude towards work demonstrating confidence in their team. They should encourage every member to give their opinions and suggestions and appreciate the contributions made by every individual.
Everyone should be treated with respect and they should be listened regarding any issue they discuss. The project leaders should always be easily accessible and open to suggestions. Every member should be trustworthy and honest and be willing to develop a one-to-one relationship with their team members. This will enable them to develop concern for one another and trust each other (Marshall, 2000).
All the deals with the clients and suppliers etc has to be documented. Rules and regulations have to be set and every contract has to be thoroughly understood and be in line with the ethical code of the firm. No one will be allowed to breach the contract or would have to face repercussions.
No bidder should be allowed to offer gifts directly or indirectly in any form. Also, the selection of suppliers should be unbiased and in accordance with the firms laws. No personal favors would be allowed and every employee is required to seek the interest of the firm rather than self interest. No employee can promise future employment or contract to any firm or person.
Employees cannot disclose important company information. This is highly unethical and could result in the termination of the employee. Facts and data of clients shouldn’t be revealed without their approval. Unlawful practices should be avoided and no interaction should be made with firms believed to have been involved in illegal action. At no time shall any employee try to damage the reputation of the firm or any other employee to benefit oneself.
The codes will integrate ethics into the system of the employees. This will enhance relationships between the employees and with suppliers and the clients. The employees will have a more congenial workplace and everyone will look for the firm’s interest. They will have one goal and therefore would honestly prevail in spreading goodwill thereby leading to good relations. There will be better communication and the relationship with seniors would be better as employees would have the right to voice their problems (Wood, 2007).
The employee client relationship would be greatly improved as dealings would be transparent and the employees would be honest. There will be no room for dishonesty as the employee would be monitored. The clients will have personal relations with the employees and trust them and in turn the organization. With clear rules of contracts, the employees will have very little room for disagreements with clients and suppliers thus instilling better relations.
Moreover, clients will become more loyal as they will have more confidence in the employees and the firms. With transparent workings and the establishment of ethics, there would be better relations between the two. This will mean an inflow of clients and the suppliers would give us competitive rates as they would want to deal with an honest firm like ours more frequently (Liteman, 2000).
The changes required in our organization can only be adopted if they are implemented at every level of the organization. This means there will be culture change in our organization and to do that we have to incorporate the above mentioned desired changes in our strategic goals and modify other strategies to enable these changes.
To implement these changes we have to train the employees at all levels. They need to incorporate these changes in their day to day dealings and work every day with these behavioral codes. One way to implement such a change in our organization is to use “coordinated coaching for culture change” or the C4 approach. In this, instead of training programs etc, leaders of teams at all levels are coached to incorporate these changes in their work style.
As they experience this individual change, they will affect their team members and the whole organization will experience this change. The C4 will help our organization develop, encourage and reinforce responsibility, accountability and flexibility among the employees. The changes will be embedded in the functional life of the organization (Marshall, 2000).
INTRODUCTION AND MONITORING OF THE SYSTEM:
To introduce and monitor the success of the implementation of the changes, this will be culture audit which would analyze the current and desired changes. Then we should develop goals for the kind of culture that we need in our organization. Then we need to identify those things that are inconsistent with these goals in the current culture. We can then implement the C4 by coaching the leaders all the behaviors and characteristics needed for the required culture change; reinforcing these behaviors via public leadership accountability and more importantly investing enough time in the coaching process so that it is effective.
As multiple leaders are coached the same cultural change, there is a consistency in the outcome throughout the organization. And changes occur simultaneously. The coaches’ meet regularly to ensure consistency with the desired outcome and monitor changes at all levels over time and gradual changes at all levels can be recorded and noticed. Wherever they see a need, the required changes are reinforced.
This is one of the better ways of introducing culture change as the organization doesn’t push a change on to the employees instead they are pulled to follow it as they observe their leader practice these culture changes (Marshall, 2000). As stated in the article entitled, “Trust In Construction: Achieving cultural change,”
“Any cultural change within a construction team needs to be at all levels, especially the middle managers, supervisors and foreman, who serve as a conduit for policy and it’s implementation at the “coalface””(Swan, McDermott, Wood & Thomas, 2002).
CONTRIBUTION OF THE CODE:
Such a cultural change of instilling trust within the organization will boost the confidence of the employees. They will be working with more confidence and will be more honest in their dealings. Changing culture via instilling and refining trust is a proactive measure for making long-term improvements in the business and is much beneficial than making just improvements.
The process will obviously require more time. However, there will be a change at every level of the organization. It will ensure that every employee is aligned with the mission, values and core commitments of the organization which will give more credibility and effectiveness in the stakeholders’ eyes.
The individuals will understand their organization better and the culture changes will be at the heart of every process of the organization. It will work towards improving the relationship of the organization with our clients and suppliers and instill a better coordinated team effort bringing their productivity to the maximum.
It’s a chain reaction-the employees are satisfied and dedicated, meeting the goals of the organization, thus satisfying the customers building relationships with them. This will increase the trust of the clients and suppliers in our organization and they will become our loyal customers growing our business with strengthened business relation (Podsakoff, 1996).
Every firm has to bring about changes within the changing environment. As Hedley Smyth in his article, “Trust in the Design Team” states,
“The importance of trust has been identified in management by conceiving it as competency to be proactively developed and managed. Trust can be identified as a ‘tool’ within conceptual competencies…” (Smyth, 2005).
Our business is based on relationship building and to be able to do that we have to nurture trust in our firm and with our clients. To do that, we have to make changes at all levels within the organization and instill by introducing code of conduct so that there may be ethical practices in the firm. This will build our image in the market and eventually bring more business. The process will take time no doubt but once done it will be beneficial in the long run as we will have consistent business with better business relations and a better reputation in the market.
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