Manfold Toy Essay free essay sample

The debate regarding the role of business in society has persisted over decades. Given the increase in corporate scandals and anti-globalization movements, business corporations are being increasingly pressured to engage in activities or conditions that relate to the company’s core operations. The Increasing institutional pressures to behave as good citizens coupled with the relentless pressure from financial markets to perform, poses a challenge for managerial decision making. In this essay, I will provide my definition of   good business ethics, describe the specific challenges that management faces when engaging in international business, express how Manfold Toy’s corporate governance failed to take part in ethical business behavior and provide recommendations to strengthen these governance features to ensure future ethical business practices. b. Discussion of your main ideas (Weight: 40%): about 1. 5 page Definition of good business ethics Good business ethics are the application of a moral code of conduct that guide the way a business behaves. Ethical business practices include assuring that the highest legal and moral standards are applied and observed through actions, decisions and relationships within the business community. This definition runs hand-in-hand with socially accepted ethical principles; business actions must be judged in the context of society’s standards of what is ethically right and wrong. Businesses have a social responsibility to use this ethical behavior while making decisions and taking actions in order to enhance societal well-being. Management accountability to stakeholders for profit making A stakeholder is an individual who has interest in company performance, hence is an employee of that company. They also have legal decision-making rights and may control project scheduling and budgetary issues. Given the responsibilities of stakeholders, management should provide full and timely disclosure of relevant information to shareholders and engage in transparent business practices. Socially responsible business behavior Socially responsible behavior: discretionary decisions and actions taken by individuals in organizations to enhance societal well-being. In taking decisions and actions that enhance societal welfare, these individuals are putting their virtues in the service of the common good. This requires, however, the capacity to take into consideration the situational constraints, the interdependencies, and the multiple, often conflicting demands of various stakeholders. In the long term we believe that shareholders will benefit when stakeholders needs and concerns are more integrated in strategic decision making. This recognizes the complexity and interdependence of the organization and its stakeholders, including shareholders, and is in line with the importance of quality connections with the larger community Balance theory of wisdom proposes that people are wise to the extent they apply their intelligence, creativity, and wisdom toward a common good by balancing their own interests, the interests of others and the interests of organization; over the long and short terms; through the infusion of values, to adapt, to shape and select environments. CSR: the integration of social and environmental concerns in the daily operations and in the interactions with stakeholders on a voluntary basis. Specific challenges for managing business that arise from doing business in other countries Although legal restrictions present difficulties for international managers, the most challenging adjustments for management are the different political structures, economic conditions, culture-driven codes of ethics and localized customs that have been established in the country they decide to do business. Before proceeding with the idea of doing business in another country, it needs to assess the economic condition that exists in the market. It is imperative to have prior knowledge about the return for your investment in the country you are considering. More importantly, international companies are confronted with a variety of decisions that create ethical dilemmas for decision makers; committing an act that is unacceptable in the home country might be expected and necessary in the host country. For example, in a country where political structures put limitations on certain business transactions, bribes will be offered to government officials to speed up the approval process. When your company makes such payments, it is encouraging a local system of corruption through unethical behavior, which is not always considered illegal. Smaller gifts, of a size that would not normally influence a major decision, are considered ethical in some societies and may be legal under local and U. S. laws. c. Examples and details from case (Weight: 40%): about 1. 5 page 3 examples of unethical behavior 1. Delaying manufacturing equipment to reduce costs (built reputation from using latest equipment and top-grade raw materials) (Jiaxong’s plan) (denied that there was risk) 2. Extending long-term credit and signing secret agreements with distributors to buy-back anything not sold within 12 months (daniel’s plan) (denied that there was risk) 3. Rating that Manfold Toy’s stock had outperformed (bribe by Daniel to Francis in Thailand) 4. Joseph and Ken’s relationship (Joseph sold Ken’s son vintage car at huge discount†¦Ken gave year end audit 5. Fred How does it violate my definition of good business ethics Weaknesses of corporate governance mechanisms Contributes to unethical behaviors described above Recommendations to strengthen governance features Keep the unique ethical climate of each market in mind when crafting your code of ethics to ensure that it is relevant to the international arena. Make adherence to the code a priority among executives and management to set an example for the rest of the organization. Post the code of ethics in high-traffic areas at the home office, branch offices and foreign subsidiaries. Ask managers to justify their ethical decisions in foreign markets according to the code of ethics to ensure that managers take it seriously. According to business-ethics. org, it is important to include international employees in the process of creating your ethics program. This will help to make your ethics programs as relevant as possible in foreign markets. Step 2 Follow local customs and traditions at your discretion. Decide on a case-by-case basis which local customs to follow and which to avoid when it comes to victimless issues. Use your code of ethics when dealing with humanitarian and environmental issues, such as child labor or deforestation, and use your discretion in issues such as bribery or wage considerations. You may, for example, decide to offer cash gifts to government officials in a country where there is no other reasonable way to gain a foothold in the market, but you may decide not to enter a country if raw materials must be gained through suppliers who use indentured labor. Related Reading: How to Measure Employee Ethical Standards Step 3 Apply your standards equally in all markets, and among all subsidiaries. Stick to your standards, whatever they are. If you have a policy of following your home countrys ethical standards around the world, be prepared to turn down opportunities in markets with unfavorable ethical climates. Respond courteously and respectfully if you do have to turn down an opportunity. Do not act superior or derisive when turning down unethical opportunities; simply explain that your companys code of ethics forbids you to engage in that type of behavior, and that you would like to keep the business relationship intact for future opportunities. If your policy is to take local customs into consideration when making ethical decisions, do not shun a country immediately because of differences from your home country. Make sure that all managers and decision-makers understand your commitment to ethical standards. Step 4 Make company-wide ethics training a regular activity, in addition to administering comprehensive ethics training programs for new hires. Use training sessions to highlight actual areas of concern in your organization, citing specific examples as often as possible. How will they correct these unethical behaviors and practice ethical business management in the future?