Windows on Corporate Ethics: The Organisation and Change

Windows on Corporate Ethics: The Organisation and Change

Christian L. van Tonder (Curtin Business School, Australia & University of Johannesburg, South Africa)
Copyright: © 2015 |Pages: 31
DOI: 10.4018/978-1-4666-7419-6.ch003
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Abstract

Corporate disasters arising from ethical failures have irreversibly eroded the public's trust in organisations. Predictably, executives' public commitments to ethical practices are now routinely viewed with scepticism. Although this obscures the identification of organisations' authentic ethical orientation, organisational change practices can reveal this ethical orientation i.e. function as ‘windows' on corporate ethics. Extending earlier work by Van Tonder, it is argued that organisational change practices have an implicit propensity for risk and harm, substantially ‘fit' with ethical frameworks and are consequently amenable to analysis on a range of ethical parameters. Employing ethics heuristics adapted for organisational change, Quaker Oats' acquisition of Snapple is analysed to reveal how change practices function as ‘windows' on corporate ethics. The implications for management are briefly considered.
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Introduction

The success of business initiatives across cultural and national boundaries invariably hinge on shared understandings and expectations of trade and business partners’ bona fides when agreeing to collaborate. The management capability of the relevant organisations is a firm consideration for the market generally and those assessing the credibility of a prospective partner or of a company delivering on its publicly stated business undertakings. The assessment of ‘management capability’ is pivotal at the time of committing to a decision to collaborate, invest or donate and a prominent consideration in gauging listed companies’ future growth and development prospects. Increasingly management capability or strength is assessed in terms of compliance and fair (and therefore ethical) business and labour practices.

Notwithstanding public commitments to socially responsible and ‘just’ business practices, the integrity and ethical orientation of corporates and their management teams are areas that are difficult to gauge. The necessity to do so is suggested by the wreckage of formerly admired corporates and highly regarded management teams that litter the corporate landscape and bear testimony to the betrayed trust of, and significant long-term harm to depositors and investors (cf. Byrne, 2002). Many notable examples of high profile corporate entities with significant initial credibility, that eventually betrayed the trust of willing ‘partners’ and clients, can be found. This ‘challenge’ is tangibly evident, for example, in executives earning excessive pay packages while the share value of their companies had dropped profoundly and vast numbers of employees had lost their jobs (Grant 2003, p. 930). The global financial crisis (‘credit crisis’) triggered in 2008 and the recession following in its wake are similarly a case in point… executives contractually extorted exceptionally large compensation pay-outs (“bonuses”) while their companies collapsed in spectacular fashion around them. These cases significantly eroded the public’s trust (and confidence) in the nature of institutions, the meaning of institutional success and, in particular, the very nature and quality of institutional management. It is often only after intense retrospective scrutiny that the public commitments of office bearers tend to show up self-interest as the essential motivation driving intent and proclaimed ethical stance, rather than a fundamental belief in, and a commitment to “doing the right thing” (Calabrese, 2003; Harrison, 2001). In practice, the commitment to ethical conduct in these instances was revealed to be substantively lacking.

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