Popular Posts

Sunday, October 1, 2017

Managing organizational conflicts



            By Lea Ann B. Piano
           Divine Word College of Vigan, 2017


Abstract

This article discusses the conflicts that arise in every organization, its pros and cons, and how to manage them. There are several conditions leading to conflicts in an organization. However, there are also ways on how to deal with conflict situations, response styles and conflict resolution behavior. Managing conflict is a key management competency. All members of the organization especially managers should study and practice effective conflict management skills. This article presents previous discussions taken from various authors which enable us understand the reasons why conflict arise in organizations, and the effects of conflicts and ways of managing organizational conflicts.  

Keywords

Conflict, Conflict Management, Dispute, Complaint


Introduction

Conflict is inevitable in our daily life and may happen at any time for various reasons. Generally, conflict was defined as a competitive or opposing action of incompatibles, antagonistic state or action (as of divergent ideas, interests, or persons). One of the popular definitions of conflict, provided by Coser (1967) is that conflict is a struggle over values and claims to scarce status, power, and resources, in which the aims of the opponents are to neutralize, injure, or eliminate the rivals. In 1973, Deutsch asserts that a conflict exists whenever incompatible activities occur…one party is interfering, disrupting, obstructing, or in some other way making another party’s actions less effective. 

Conflict may occur internally or externally between individuals or groups. It may happen in school, in our own organization, in our society, within families and even in the middle of our most personal relationships. A relationship without conflict is boring, and so with an organization or a group without any conflicting ideas come up with a “not the best” output. Imagine a corporation with too much agreement among top management, wherein they view matters the same way.  They always agree to certain conditions without them wanting to do better.  In a study of business failures done by Argenti (1976), it was observed that absence of disagreement is often viewed by managers as a sign of good leadership, when in reality it is a leading indicator of being out of touch with significant changes in the marketplace.

While conflict may occur in different circumstances, this article focuses only on the conflicts that arise in every organization. It is essential to understand organizational conflicts to help is limit the negative aspects of conflicts while increasing the positive aspects of it. Conflict management skills in organizational setting are important for many reasons. As an employee, you can learn how to get along with fellow employees, your supervisors, and to the public. As supervisor, you can begin to see upcoming conflicts, learn productive responses, get more cooperation from employees, help employees resolve their disputes from one another, and keep interpersonal conflicts from spreading to another parts of the organization.

Why do we need to study conflict? Conflict is unavoidable. If we don’t pay attention to it, we are more likely to repeat the damaging patterns we see in our jobs. Examining the dynamics of conflict will allow us to unpack those dynamics and to be more productive in our job.
  
Conflict in Organizations

In discussing organizational conflicts, it is important to have a consistent definition of the term “organization”. For Katz and Kahn (1976), organization is defined as living system consisting units performing a task in a mutually dependent manner within a structure of scarce resources. Organization may be a company, firm, institution, corporation, agency, association, consortium or group.

Organizational conflict is a state of discord caused by the actual or perceived opposition of needs, values, and interests between people working together. There is inevitable clash between formal authority and power and those individuals and groups affected.  Conflict in the workplace is a clash of interest, values, actions, views or directions. These are disagreements that cause a negative reaction. People disagree because they see things differently, want different things, have thinking styles which encourage them to disagree, or are predisposed to disagree. It is a painful reality that leads to poor productivity and frustration.

Understanding Organizational Conflict

Conflict situations arise because of fear, force, fair or funds. Fear is an imaginary concern for future. Force of any kind initiates and concludes conflict. Fair is the sense of fairness, which determines the moral values of an individual. Tangible as well as intangible costs may provoke conflict, and also help towards its resolution. Interpersonal conflicts arise because of differences in personality, perceptions, status and ideological and philosophical outlooks. Other causes of conflict can be communication gaps; personality differences; substandard performance; disputes over approaches, responsibility and authority; lack of cooperation; or competition for limited sources.

According to Roloff (1987), organizational conflict occurs when members engage in activities that are incompatible with those of colleagues within their network, members of other collectivities, or unaffiliated individuals who utilize the service or products of the organization. To explain further, workplace conflicts happen between employee to employee, employee to supervisor, and customer to employee. Employee to employee conflicts arise when there is difference on perception over a subject matter, personality differences, lack of respect on other’s culture, and rivalry over a certain position or monetary reward. Bullying is also considered as one of the causes of employee conflicts. On the other hand, employees to supervisor conflicts happen when employees feel like they are mistreated. Discrimination, for example, can also be the cause of conflicts, wherein a minority employee in a team setting feels that he is consistently assigned the most menial tasks in the group and not being promoted for a very long time. This employee may begin to harbour resentment against team members and managers, eventually lashing out through decreased productivity or outright verbal conflict. Customer-employee conflicts occur when customers’ expectations are not met. It may be through the service that the employee has given or the product itself that the business is offering to the public. Complaint is an indication poor customer service. A customer may have a genuine cause for complaint, although some complaints may be made as a result of a misunderstanding or an unreasonable expectation of a product or service. How a customer complaint is handled will affect the overall level of customer satisfaction and may affect long-term customer loyalty. It is important to have clear procedures for dealing promptly and effectively with any customer complaints, to come up with a fair conclusion, and explain the reasons for what may be perceived by the customer as a negative response.

Organizational conflict has several causes. Katz (1964) identified three sources of conflict. These are: (1) structural conflict (conflict arising out of the need to manage the interdependence between different organizational sub-units); (2) role conflict  (conflict arising from sets of prescribed behaviour) ; and (3) resource conflict (conflict stemming from interests groups competing for organizational resources). For Robbins (1974), the three main factors which serves as sources of organizational conflict are: (1) communicational (conflicts arising from misunderstanding);  (2) structural (conflicts related to organizational roles; and (3) personal (conflicts stemming from individual differences). In different perspective, Jacob Bercovitch suggested in his citation published in Hong Kong Journal of Public Administration that conflicts may be described as (1) intrapersonal conflict, (2) interpersonal conflict, and (3) interdepartmental conflict.  Intrapersonal conflict is internal to the individual and is perhaps the most difficult form of conflict to analyze and manage. Interpersonal conflict emphasizes the interaction of human factors in an organization. While, interdepartmental conflict arises when two sub-units in an organizational system have differentiated goals and are functionally interdependent, conditions exist for conflict.

Conflict may be constructive or destructive. The view of conflict created by Deutsch (1969) states that negative or positive nature of conflict really is determined by people’s behaviours; it is not an inherent quality of conflict itself. Some behaviors produce dysfunctional, destructive and unproductive responses; other behaviors produce functional, constructive and productive responses.  Conflict can be destructive if parties involved forget the substantive issues and transform their purposes to getting even, retaliating or hurting the other person. On the other hand, conflict can be constructive if parties involved adapt to the situation, person and issues of the moment are functional  and constructive. Constructive conflicts appropriately balance the interests of both parties to maximize the opportunities for mutual gains.

Although managers are required to deal with different conflict situations almost routinely, there is little way of explicit guidelines to help them do their job ethically (Rahim,Garette & Butzman, 1992). In the study of moral development by Rahim (2001) showed that the three stages of moral development are associated with four styles of handling conflict: integrating, dominating, avoiding, and compromising. The highest stage is associated with the use of integrating style, the moderate stage is associated with the compromising style, and the lowest stage is associated with the dominating and avoiding styles.
  
The advantage and disadvantage of organizational conflict

We used to think conflict as a negative factor and mistakenly noted as always a disadvantage in the organization. This is not true in all situations. There are conflicts that can be constructive or advantageous and of course there are those destructive or disadvantageous. On the job, conflict is a stubborn fact of organizational life (Kolb and Putnam, 1992). Rather than seeing conflict as abnormal, Pondy  (1992) suggests we view organizations as arenas for staging conflicts, and managers as both fight promoters who organize bouts and as referees who regulate them.
  
Interpersonal conflict is an essential, ubiquitous part of organizational life. Organizations in which there is a little disagreement regarding important matters tends fail in a competitive environment. This is because without others speaking what they think is right, or by not hearing conflicting sides, people in the organization may not think more carefully about issues and eventually make poor decisions. Likewise, disagreements about a certain procedure on how to achieve organizational goal may come up with new and better procedure.

On the other hand, conflict can have adverse effects in an organization. It may be harmful to individuals, weaken or destroy an organization, increase tension between members of the group, creates climate of distress, disrupt normal channels of cooperation, or worse can lead to violence. Conflict can also lead to poor productivity caused by members of the organization who turned out of focus on their respective tasks or goals. High employee turnover can also be the effect of organizational conflict. When employees always feel dissatisfied and distressed on their job, they let go of their jobs and look for something better. High employee turnover is an indicator business failure especially when the organization is losing their best talent.

How to manage organizational conflict

Conflict management is the process of limiting the negative aspects of conflict while increasing the positive aspects of conflict. Te aim of conflict management is to enhance learning and group outcomes, including effectiveness or performance in organizational setting (Rahim, 2002).

Conflict is common to all organization.  The challenge to managers is how to manage them. When conflicts go unaddressed or poorly managed, they create negative impact on productivity and teamwork. Using conflict resolution strategies in the organization will help maintain a healthy work environment. Conflict resolution requires specific leadership skills, problem solving abilities and decision making skills.

Conflict resolution involves the reduction, elimination, or termination of all forms and types of conflict. Five styles for conflict management are identified by Thomas and Kilmann (2007). These are competing, compromising, collaborating, avoiding, and accommodating.

  1. Competing. Competition operates as a zero-sum game, in which one side wins and other loses. Highly assertive personalities often fall back on completion as a conflict management strategy. The competitive strategy works best in a limited number of conflicts, such as emergency situations. In general, business owners benefit from holding the competitive strategy in reserve for crisis situations and decisions that generate ill-will, such as pay cuts or layoffs. In a corporation, for example, it is a struggle for the CEO to decide whether to implement pay cuts or layoff just to survive.
  2. Compronising.  The compromising strategy typically calls for both sides of a conflict to give up elements of their position in order to establish an acceptable, if not agreeable solution.  This strategy prevails most often in conflicts where the parties hold approximately equivalent power. Business owners frequently employ compromise during contract negotiations with other businesses when each party stands to lose something valuable, such as a customer or necessary service.
  3. Collaborating. Collaboration works by integrating ideas set out by multiple people. The object is to find a creative solution acceptable to everyone. Collaboration, though useful, calls for a significant time commitment not appropriate to all conflicts. For example, a business owner should work collaboratively with the manager to establish policies, but collaborative decision-making regarding office supplies wastes time better spent on other activities.
  4. Avoiding. The avoidance strategy seeks to put off conflict indefinitely. By delaying or ignoring the conflict, the avoider hopes the problem resolves itself without confrontation. Those who actively avoid conflict frequently have low esteem or hold a position of low power. In some circumstances, avoiding can serve as a profitable conflict management strategy, such as after the dismissal of a popular but unproductive employee. The hiring of a more productive replacement for the position soothes much of the conflict.
  5. Accommodation. The accommodating strategy essentially entails giving the opposing side what it wants. The use of accommodation often occurs when one of the parties wishes to keep peace or perceives the issue as minor. For example, a business that requires formal dress may institute a “casual Friday” policy as a low-stakes means of keeping the peace with the rank and file. Employees who use accommodation as a primary conflict management strategy, however, may keep track and develop resentment.
Conclusion

Conflict is normal and form part of our organizational life. It is just a matter of handling of conflict situations. It can be helpful in making necessary changes within our work or home or even in our society. However, unresolved conflict can result in feelings of dissatisfaction, unhappiness, hopelessness, depression, destruction of interpersonal relationships and creation of problems within organization. Since conflict is inevitable in our daily life, it is very important for us to understand the cause of every conflict we encounter in order to resolve it. Having a positive perspective over situation, proper grievance procedure, getting the cause of conflict, having equal voices in the organization and establishing resolution participation of all parties involved are the things that need to be done in order to resolve conflicts in our organization.

References:

Rahim, M.A. (2001). Managing Conflict in Organizations. Quorum Books
Rahim, M.A (2002). Toward A Theory of Managing Organizational Conflict. The International Journal of Conflict Management,2002, Vol.13, No.3
Bercovitch, J. (1983). Conflict and Conflict Management in Organizations:A Framework for Analysis. Hong Kong Journal of Public Administration, Volume 5, 1983
Zafar, F., et. al. (2014). Conflict Resolution in Organization through Strategic Management. Retrieved from http://gssrr.org/index.php?journal=JournalOfBasicandApplied
Penn,S. Advantages and Disadvantages of Conflict in Organizations. Retrieved form http://www.ehow.com
McCorkle, S. (2002). Conflict Management. Retrieved from http://www.cios.org
Rahul,R. (2012 June 15). Pros and Cons of Organizational Conflict. Retrieved from http://www.projectguru.in/publication
Dontingney, E. (2017). 5 Conflict Management Strategies. Retrieved from http://smallbusiness.chron.com
Ferguson, G. (2017). What Causes Conflict Between Employees in an Organization. Retrieved from http://smallbusiness.chron.com
Root, G. (2017). Causes of Organizational Conflict. Retrieved from http://smallbusiness.chron.com
Meehan, C.L. (2017). Difference Between Destructive & Constructive Conflict. Retrieved from http://smallbusiness.chron.com
Ingram, D. (2017). Examples of Conflicts & Resolutions in the Workplace. Retrieved from http://smallbusiness.chron.com





Wednesday, September 6, 2017

Bribery: A Moral Evaluation

By: Nemesio Daryl Boy G. Adora III
Abstract
This article talks about the moral issue concerning about bribery. This phenomenon is found in all countries. Bribery runs so rampant that it has become widespread most especially in developing world. It is an insidious plague that has a wide range of undesirable effects on societies. The question is, why is this happening? Is this accepted and justified?

Keywords
Ethics, corruption, bribery

Introduction
Bribery is a form of corruption. Corruption is defined as the abuse of entrusted power for private gain (Transparency International, 2009). It is the misuse of one’s office position for personal benefit. According to the Electronic Journal of Business Ethics and Organizational Studies (2006), corruption is an economic problem intertwined with politics. It describes a relationship between the state and private sector. It takes the form of violation of norms of duty and responsibility within civic order. Therefore, corruption is the deliberate intent of subordinating common interest to personal interest.
Bribery  is define as the giving or offering of a bribe, which means giving or paying someone with something of value in exchange for a specific favorable outcome. Bribery is an offer, promise, or giving of any undue pecuniary or other advantage, whether directly of through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage (OECD Convention on Combating Bribery of Foreign Public Official in International Business Transactions, 1997). Bribery is corrupt for two reasons: (1) it involves a public official using his office to gain advantages from citizens; and (2) it often distorts the underlying official action.
Bribery is typically illegal and dishonest under almost every country in the world and it’s considered a criminal offense. It may be a naive question to ask why this is happening. People bribe because of personal reasons and motivations – they want an unfair advantage over the others like paying lower taxes, to get an appointment or promotion, to avoid fine or penalty or to get something done quickly. Bribery can also be a result of systems that don’t work well and create bad incentives – lack of opportunities, lack of transparency, weak enforcement, bad incentive and attitudes or circumstances that make average people disregard the law such as poverty.
Many people accept bribery as inevitable and unavoidable. Others condone it, even going so far as to say that nothing should be done about it; that it’s a form of gift giving. Others say that it actually is useful, because at least you get what you pay for. People often say it is everywhere, it always existed, it is vague and culturally determined, eliminating bribery will require whole change in attitudes and values, and bribery is not harmful rather it is the grease that moves the economic engine.
According to Raghunandan (2014), people typically pay bribes for some specific reasons. (1) Need for speed. This results in payment of speed money to fast track applications. This in turn incentivizes offices to slow down procedures deliberately, so that they can collect fast tracking payments. (2) Convenience. Closely related to speed money. People pay because they are too busy to go to an office and find it convenient to outsource corruption to an agent for an overall service charge. This happens in cases where processes are convoluted, long drawn out and multi-step. (3) Fear, nervousness and relief. Many people have a dread of going to government offices and fear that they will be harmed if they do not pay bribes. In many cases, the fear is totally unjustified, but still sadly persists. People also pay bribes out of relief. Therefore, one time transactions in peoples' life, like buying a flat or getting a car, are more bribe prone than others. People consider bribing for registration as something like a tip paid out of happiness and relief at the completion of the transaction. (4) Ignorance and unwillingness to learn. People who are otherwise savvy, do not go to websites, or do their homework enough to understand a procedure beforehand. (5) Misinformation by middlemen and touts. Closely related to ignorance and unwillingness to learn. Ignorant people are vulnerable to being cheated by corrupt officials and their touts who mislead them by mystifying processes. (6) Persuasion by peers and elders. Closely related to ignorance and unwillingness to learn. Bribing behavior, and the notion that unless one pays a bribe nothing can be secured, is passed on from generation to generation and fortified through peer discussions. (7) Fear of justified, unjustified or excessive punishment. This covers payments such as bribes paid to the police to look the other way when there is a clear violation of the law. In the absence of the bribe, the bribe payer is vulnerable to punishment. (8) Faced with the denial of an essential service from a corrupt monopoly. For example, people are cornered and pay bribes for restoration of electricity and water connections, because if they do not pay, they are subject to high levels of inconvenience. With respect to the above reasons, one can expect that at least the bribe payers could be dissatisfied with the act of paying a bribe. (9) Mutual benefit. This typically happens in bribing to lower tax rates. For example, bribing to accept under-valued properties for registration or to reduce property tax rates. In such cases, both the bribe giver and the bribe taker benefit and the government suffers. Typically, for such cases, there are no complainants. (10) Avoiding business loss or getting unwarranted windfall profits. This is a strong justification for the supply side of private sector corruption. Businesses do not mind paying bribes because of two reasons. First, if they do not pay, they suffer business loss. Second, whatever they pay can be passed on to the consumer through an enhanced selling price.
Bribery pays certain costs and consequences. It adds to the cost of doing business without adding corresponding value. Instead of the full contract amount going towards the delivery of the product or service, only a portion is productively employed compromising quality.
When high profile leaders are involved in bribery and corruption, their image are damaged. The message is not only that unethical and illegal behavior is acceptable, but also that the pursuit of personal gain takes precedence over service delivery. This risks creating an unethical culture among employees (or citizens) where such “lowest common denominator” behavior predominates.
Bribery also puts a country’s reputation at risk. A poor ethical reputation brings with it many potential negative results, such as reduced foreign investment, decreased tourism and the loss of our top talent to other countries.
Understanding reasons why there is bribery and its consequences is important in finding cures for it subsequently.

History of Bribery
Corruption has been a part of human societies since the oldest of times. Corruption, fraud, embezzlement, theft, bribes, and kickbacks are all forms in which people try to increase their income at the cost of others. Beginning in the latter half of the 1990s, an increased recognition of these costs led to many international and nongovernmental organizations demanding that political and business leaders demonstrate high standards of honesty, ethics, and social responsibility. This in turn led to a concerted fight against corruption, money laundering, and black markets around the world as well as to the recognition of the importance of governance (International Encyclopaedia of the Social Sciences, 2008).
Two thousand years ago, Kantilla, the prime minister of an Indian king, had already written a book, Arthashastra, discussing bribery. Seven centuries ago, Dante placed bribers in the deepest part of hell, reflecting the medieval distaste for corrupt behavior. Shakespeare gave corruption a prominent role in some of his plays; and the American Constitution made bribery one of the two explicitly-mentioned crimes currently paid to corruption is unprecedented and nothing short of extraordinary. Corruption and bribery are not new phenomenon.

Ethical Consideration
Bribery is an ethical issue. Let us consider the different views of Kant and Bentham regarding bribery.
Immanuel Kant, a 19th century German philosopher, believed in the theory of deontology. It basically says that consequences doesn’t matter, what really matter is the intention. He came up with the law of Categorical Imperative which are the steps that can be used when making a decision. The principal of universality, which basically says that if an action is right for others, then it is right for us. Is bribery then morally right or morally wrong? Many people think that it is right and others believe it is wrong. Categorical imperative have this other principle about treating humanity as an end, never as a mean. Humanity are rational beings, and never as a thing. This principle basically says that if you treat someone as a mean or thing you are disrespecting him and it is morally wrong. Generally when someone bribes you, you don’t have any option but to accept the bribe, you are a human being capable of making your own decisions, but because someone is threating or bribing you aren’t able to make your own independent decision (Woodin, 2013). According to Kant, doing that is morally wrong, so bribery isn’t acceptable. The third and last principle of the categorical imperative is autonomy. Autonomy is self-governing yourself. One can be autonomous if threatened or bribed because Kant might argue that doing that is false dichotomy. Most of the times when people bribe, they make it look as if you only had one option so you are forced to accept it.
Jeremy Bentham, on the other hand, holds that pleasure is the standard of value - everything that leads to pleasure is good and everything that leads to pain is bad. This is the theory of ethical hedonism. Pleasure is the standard because human nature is such that everyone (by nature) already pursues pleasure and seeks to avoid pain. Bentham would say, it is better to seek the pleasure of others, indeed, the greatest pleasure of the greatest number. Hence, the "greatest happiness" principle of utilitarianism. Bentham, on a personal basis, probably would be opposed to bribery, but the theory of utilitarianism does not offer a clear-cut opposition to it. Indeed, the greatest happiness of the greatest number is to be determined by consulting the hedonic calculus or, today, by conducting a cost/benefit study.

Solution
Since bribery is not moral, according to Abun (2013) preventing it is better than curing the bribery because if the practice becomes part of the culture of the organization, it will be difficult to solve or eradicate it. Be it in the government or private sector, bribery occupies a dominant position.
The UK’s Ministry of Justice enumerated some steps to ensure bribery is prevented based on a common sense application of the following six principles. (1) Proportionality – if the risk of bribery is small only modest procedures may be needed; (2) Top-level commitment – senior managers need to make it clear throughout the business that bribery will not be tolerated, and they should be personally involved in making sure that proportionate steps are taken to prevent bribery and that adequate procedures are in place; (3) Risk assessment – businesses should check the markets you operate in and the people they deal with to assess the likelihood of bribery, particularly for new projects. For example, in smaller organisations, existing controls over company expenditure, accounting and commercial or agent contracts may be a sufficient procedure, perhaps supplemented by oral reminders to staff. However, what will be crucial, irrespective of the size of the organisation, will be for it to be in a position to demonstrate that a proper assessment has been carried out of the risk of bribery and the adequacy of the procedures which are, or will be put, in place; (4) Due diligence – it will be important to ask a few questions and carry out a few checks before engaging people to represent you; (5) Communication – it is essential that staff know what procedures are in place. Training or awareness raising may be needed; and (6) Monitoring and review – check your procedures remain appropriate.
The World Bank established six complementary approaches to solve bribery as well as corruption. (1) Paying civil servants well. Whether civil servants are appropriately compensated or grossly underpaid will clearly affect motivation and incentives. If public sector wages are too low, employees may find themselves under pressure to supplement their incomes in “unofficial” ways. Van Rijckeghem and Weder (2001) did some empirical work showing that in a sample of less developed countries, there is an inverse relationship between the level of public sector wages and the incidence of corruption; (2) Creating transparency and openness in government spending. Subsidies, tax exemptions, public procurement of goods and services, soft credits, extra-budgetary funds under the control of politicians—all are elements of the various ways in which governments manage public resources. Governments collect taxes, tap the capital markets to raise money, receive foreign aid and develop mechanisms to allocate these resources to satisfy a multiplicity of needs. Some countries do this in ways that are relatively transparent and make efforts to ensure that resources will be used in the public interest. The more open and transparent the process, the less opportunity it will provide for malfeasance and abuse. Collier (2007) provides persuasive evidence on the negative impact of ineffective systems of budget control. Countries where citizens are able to scrutinize government activities and debate the merits of various public policies also makes a difference. In this respect, press freedoms and levels of literacy will, likewise, shape in important ways the context for reforms. Whether the country has an active civil society, with a culture of participation could be an important ingredient supporting various strategies aimed at reducing corruption; (3) Cutting red tape. The high correlation between the incidence of corruption and the extent of bureaucratic red tape as captured, for instance, by the Doing Business indicators suggests the desirability of eliminating as many needless regulations while safeguarding the essential regulatory functions of the state. The sorts of regulations that are on the books of many countries—to open up a new business, to register property, to engage in international trade, and a plethora of other certifications and licenses—are sometimes not only extremely burdensome but governments have often not paused to examine whether the purpose for which they were introduced is at all relevant to the needs of the present. Rose-Ackerman (1998) suggests that “the most obvious approach is simply to eliminate laws and programs that breed corruption.”; (4) Replacing regressive and distorting subsidies with targeted cash transfers. Subsidies are another example of how government policy can distort incentives and create opportunities for corruption. According to an IMF study (2013), consumer subsidies for energy products amount to some $1.9 trillion per year, equivalent to about 2.5 percent of global GDP or 8 percent of government revenues. These subsidies are very regressively distributed, with over 60 percent of total benefits accruing to the richest 20 percent of households, in the case of gasoline. Removing them could result in a significant reduction in CO2 emissions and generate other positive spill over effects. Subsidies often lead to smuggling, to shortages, and to the emergence of black markets. Putting aside the issue of the opportunity costs (how many schools could be built with the cost of one year’s energy subsidy?), and the environmental implications associated with artificially low prices, subsidies can often put the government at the centre of corruption-generating schemes. Much better to replace expensive, regressive subsidies with targeted cash transfers; (5)  Establishing international conventions Because in a globalized economy corruption increasingly has a cross-border dimension, the international legal framework for corruption control is a key element among the options open to governments. This framework has improved significantly over the past decade. In addition to the OECD’s Anti-Bribery Convention, in 2005 the UN Convention Against Corruption (UNCAC) entered into force, and by late 2013 had been ratified by the vast majority of its 140 signatories. The UNCAC is a promising instrument because it creates a global framework involving developed and developing nations and covers a broad range of subjects, including domestic and foreign corruption, extortion, preventive measures, anti-money laundering provisions, conflict of interest laws, means to recover illicit funds deposited by officials in offshore banks, among others. Since the UN has no enforcement powers, the effectiveness of the Convention as a tool to deter corruption will very much depend on the establishment of adequate national monitoring mechanisms to assess government compliance.

Others (Heinemann and Heimann (2006)) have argued that a more workable approach in the fight against corruption may consist of more robust implementation of the anticorruption laws in the 40 states that have signed the OECD’s AntiBribery Convention. Governments will need to be more pro-active in cracking down on OECD companies that continue to bribe foreign officials. In their efforts to protect the commercial interests of national companies, governments have at times been tempted to shield companies from the need to comply with anticorruption laws, in a misguided attempt not to undermine their position vis-à-vis competitors in other countries. Trade promotion should not be seen to trump corruption control. Governments continue to be afflicted by double standards, criminalizing bribery at home but often looking the other way when bribery involves foreign officials in non-OECD countries; and (6) Deploying smart technology. Just as government-induced distortions provide many opportunities for corruption, it is also the case that frequent, direct contact between government officials and citizens can open the way for illicit transactions. One way to address this problem is to use readily available technologies to encourage more of an arms-length relationship between officials and civil society; in this respect the Internet has been proved to be an effective tool to reduce corruption (Andersen et al., 2011). In some countries the use of online platforms to facilitate the government’s interactions with civil society and the business community has been particularly successful in the areas of tax collection, public procurement, and red tape. Perhaps one of the most fertile sources of corruption in the world is associated with the purchasing activities of the state. Purchases of goods and services by the state can be sizable, in most countries somewhere between 5-10 percent of GDP. Because the awarding of contracts can involve a measure of bureaucratic discretion, and because most countries have long histories of graft, kickbacks, and collusion in public procurement, more and more countries have opted for procedures that guarantee adequate levels of openness, competition, a level playing field for suppliers, fairly clear bidding procedures, and so on.
Chile is one country that has used the latest technologies to create one of the world’s most transparent public procurement systems in the world. ChileCompra was launched in 2003, and is a public electronic system for purchasing and hiring, based on an Internet platform. It has earned a worldwide reputation for excellence, transparency and efficiency. It serves companies, public organizations as well as individual citizens, and is by far the largest business-to-business site in the country, involving 850 purchasing organizations. In 2012 users completed 2.1 million purchases issuing invoices totalling US$9.1 billion. It has also been a catalyst for the use of the Internet throughout the country (http://blogs.worldbank.org/futuredevelopment/six-strategies-fight-corruption).
In the Philippines as stipulated in RA 3019 also known as the Anti-Graft and Corrupt Practices Act, it is the policy of the Philippine Government, in line with the principle that a public office is a public trust, to repress certain acts of public officers and private persons alike which constitute graft or corrupt practices or which may lead thereto. There is a corresponding sanctions to those who are doing bribery. Any public officer or private person committing any of the unlawful acts shall be punished with imprisonment for not less than one year nor more than ten years, perpetual disqualification from public office, and confiscation or forfeiture in favour of the Government of any prohibited interest and unexplained wealth manifestly out of proportion to his salary and other lawful income. He or she shall be punished by a fine of not less than one hundred pesos nor more than one thousand pesos, or by imprisonment not exceeding one year, or by both such fine and imprisonment, at the discretion of the Court.
No public officer shall be allowed to resign or retire pending an investigation, criminal or administrative, or pending a prosecution against him, for any offense under this Act or under the provisions of the Revised Penal Code on bribery. Any public officer against whom any criminal prosecution under a valid information under this Act or under the provisions of the Revised Penal Code on bribery is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him (http://www.chanrobles.com/republicactno3019.htm#.V0KlepFcSko).

Conclusion
It is not difficult to judge bribery as immoral (Abun, 2014). It is wrong because it is dishonesty. It is exercising undue influence over a person to act in favour of the one who is giving the bribe. It violates the categorical imperative. Consequences are irrelevant in determining the morality or immorality of an action; dishonesty is dishonesty and bribery is bribery. One's duty is always to tell the truth, that is, to be honest.

References
__________. The Real Cost of Bribery   http://www.forbes.com/sites/hbsworkingknowledge/2013/11/05/the-real-cost-of-bribery/2/#5632a43860ae . Retrieved, April 11, 2016

Abun, D. (2014). Moral Evaluation of Bribery and Preventing Bribery: Asis’s Struggles. dameanusabun.blogspot.com/2014/03/moral-evaluation-of-bribery-and.htm. . Retrieved, April 11, 2016

Bangkok, Pundit. 2012. Transparency International: Thailand ranked 88th out of 176 in corruption index. http://asiancorrespondent.com/93078/transparency-international-thailand-placed-88th-out-of-176-countries-in-corruption-index/ . Retrieved, April 11, 2016

Gerald N. Hill and Kathleen T. Hill. 2005. Bribery. http://legal dictionary.thefreedictionary.com/Bribery. . Retrieved, April 11, 2016


International Bank for Reconstruction and Development; World bank, Washington, D.C, U.S.A.
Thomas R. Fox, 2012. Ethics Matters. http://corruptionbribery.com/2012/03/15/ethics-matters/. Retrieved . Retrieved, April 11, 2016



REPUBLIC ACT NO. 3019ANTI-GRAFT AND CORRUPT PRACTICES ACT. http://www.chanrobles.com/republicactno3019.htm#.V0KlepFcSko. Retrieved, April 11, 2016

Raghunandan,T.R. 2014. Ten reasons why people pay bribe, and more . http://bangalore.citizenmatters.in/articles/ten-reasons-why-people-pay-bribe-and-more. Retrieved, April 11, 2016

Schoeman, C. (    ). Cost and Cosequences of Bribery and Corruption http://www.ethicsmonitor.co.za/Costs-and-consequences-of-bribery-and-corruption.aspx

. Retrieved, April 11, 2016

Shahabuddin, Syed. (    ). The Causes and Consequences of Bribery in International Business. https://www.questia.com/library/journal/1P3-923308881/the-causes-and-consequences-of-bribery-in-international . Retrieved, April 11, 2016

Thomas, R. Fox. 2012. Ethics Matter. http://corruptionbribery.com/2012/02/29/rooting-out-bribery-in-business/. Retrived, . Retrieved, April 11, 2016

Vinay Bhargava, Country Director, Philippines, The World Ban. Combating Corruption in the Philippinehttp://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan019123.pdf,retrieved, . Retrieved, April 11, 2016






Thursday, August 31, 2017

Moral justification of making profits

Sheryll May P. Briones


For every study claiming that ethical behavior pays, there will always be another claiming that it does not. The reality is nuanced. There are companies that have made money through moral indifference and companies concerned with social responsibility that have not made much money at all. Other firms have lost billions as a result of ethical miscalculations, just as some can attribute a proportion of profits to their moral character, or exist solely for it. The issues of profit, its moral meaning, justification and role, need careful examination. Mistakes to be avoided in making moral sense of profit include the assumption that profitability establishes company’s moral rectitude (Camenisch, 1987)
A business is any undertaking whose goal or was established to make a profit. Profits on the other hand is the excess of inflows over the outflows or simply the difference between the benefits obtained during the period over the sacrifices you’ve made. Simply speaking, business exists because of profit. Miksen (2015) said that a company’s ultimate goal is to gain and increase profits. Many companies grow profits ethically, while others maximize profits unethically via marketing frauds, slashing employee expenses, lowering product quality or impacting the environment negatively.
Questions involving moral justification for profits requires us to look into the definition of what values, morals and ethics are in relation to a business organization. How are values, morals and ethics different from each other? How do they relate to business and what has profit got to do with it. According to Mcnamera (2012), values are things that have an intrinsic worth in usefulness or importance to the possessor or principles, standards or qualities considered worthwhile or desirable. Values are driven by culture, religion, habit, circumstance or environment. From the definition of it, we may say that values are something good, but the definition of what is good or not is relative. Mujtaba (2005) further states that, values are core beliefs or desires that guide or motivate our attitude and actions. Moral values, on the other hand, are relative values that protect life and are respectful of the dual life value of self and others (Mcnamera, 2012). Morals are judgements, standards and rules of good conduct in the society. They guide people toward permissible behaviour with regard to basic values. Mjutaba (2005) defines ethics the branch of philosophy that theoretically, logically and rationally determines right from wrong, good from bad, moral from immoral and just from unjust actions, conducts and behaviour. Some people define ethics simply as doing what you say you will do or walking the talk. A person who knows the difference between right and wrong and chooses right is moral. A person, whose morality is reflected in his willingness to do the right thing, even if it is hard or dangerous, is ethical. Ethics are moral values in actions. Simply stated, values are professed statement of one’s beliefs, ethics is delivering on one’s professes values and morals are actions of good conduct as judged by the society that enhance the welfare of human beings.
A business with an understanding of values, morals and ethics, the management could then develop a framework for effective decision-making with formalized strategies.
In the perfect world, all business would be ethical (Ong, 2014). A business has an underlying objective to create wealth by meeting human demands at a profit. The survival of a business through the fulfilment of this objective is thus dependent on its ability to secure monetary gain. Ethical businesses recognizes the power of conducting business in a socially responsible ways and they realize that doing so leads to increases in profits and customer satisfaction and at the same time decreasing employee turnovers. However, among the key performance indicators of the best performing companies in the world, is financial rather than altruistic. These measures may lead to companies doing unacceptable means to achieve it such as slashing employee benefits, fake advertising and sacrificing quality. It shall also be noted that instilling ethical policies in the company involves or entails cost which would most likely lessen our gain.
Business ethics is concerned with applying a moral framework to the way organizations do business, from dealing with human resources issues to sales and marketing policies.  Ethics defines the good as being that which corresponds to the nature and the bad that which does not correspond (d’ Estaing, 2001). We may then conclude, ethically speaking, that there is a good and a bad profit. However, keep in mind that profit, in itself, is neither good nor bad for it is only the result of an activity you been involved to. The question on what is good or bad shall not be directed on profits but in the processes a company has undertaken to obtain it. Profits are just results.
Incorporating ethical frameworks into business has to be done with a great amount of respect and appreciation for others’ views. We shall give importance to respect. Stakeholders, consumers and employers, come from various social and economic backgrounds; therefore any attempt to institutionalize an ethical principle must be balanced with a sense of respect from other that you serve. Business ethics can thus be a fruitful venture for small business owners who are willing to take the time to incorporate ethical principles with care and patience.
Most ethical companies reinforce that ethics should take precedence over profits. They consciously think decisions through and are focused on the long term benefits. Unethical companies are typically focused on short term gains. They are typically followers. They are lacking innovation (White, 2014). Many of the ethical issues in profit maximization center on customers. Profit maximization dictates that you attract customers and create sales. However, ethics demands honesty and sometimes being honest in the short-run could make you miss sales.
There is a long list of potential intangible benefits available to firms that act ethically-including better commitment, ease of business improvements resulting from increased levels of trusts between businesses and stakeholders, avoidance of opportunistic behavior between owners and managers, employees’ moral satisfaction leading them to reduce their salary demands and strong moral identity attracting higher quality recruits.
Companies behaving unethically often lead to bad publicity and would fail to appeal to potentially high level customers at the same time higher quality staff. This will ultimately increase costs the company incurs.
According to Stolyarov II (2006), the goals of a life properly lived have two folds: survival and flourishing. Survival is the goal of sustaining one’s biological existence and prevents one’s downward slide toward poverty, ruination and death.Flourishing on the other hand is the extension of one’s control over external reality which is the ability to harness ever more elements in the service of one’s life. Simply stated, flourishing is your desire for growth and improvement while survival is existence.
In the process of living, every man will gain benefits from the external reality at the same time will be incurring certain expenses. If he breaks-even, then he has accomplished the goal of survival. Surviving results to no gain or a loss, but how long are we going to sustain this? As time goes by, without improving, the resources you have will gradually deplete. He is no worse than yesterday but at the same time he is no better off. In order to accomplish the goal of flourishing, he must have gains or profit. He must be able to utilize what he have in such a way that he would be better off tomorrow than yesterday and today. Flourishing is improving and we all seek improvement.
It shall be kept in mind that making profits is the only way to flourish. We could just not live to merely survive. We could not simply live, just for the sake of being alive. In life profits could come in different forms, they could be intellectual, physiological, technical, material social and monetary. Monetary profits has always been an issue in ethics. It has always raised moral dilemmas and conflicts. In the context of business, profits are said to be unethical if it is excessive or are obtained via unjustifiable means. When we say excessive, we are referring to profiteering, which involves making profits in times of scarcity.
Companies which ignore profit, or which do not pay attention to it, collapses (d’ Estaing, 2001). Businesses are establish with the purpose to earn it. It shall be emphasized that flourishing is one of the two goals in life, and businesses are no different from it. You cannot just establish a business just for the sake of existing. Consumer’s needs are always changing and a business needs to be better tomorrow than today to cope with it. Failure to do so may lead to a company’s collapse.
The problems with profits is not the profit itself. The problems is whether the outcomes justify the means. How were you able to obtain it? It is the process that should be questioned or the means that shall be criticized and not the profit itself. To have profit and to strive to flourish are inherent in all humans. The drive to be better than yesterday is innate. Harper (2001) said that what is ethical and unethical often depends on what part of the world you came from and your cultural or religious backgrounds, rather than universal.
The most sustainable companies seem to have a strong set of core values and an entrenched clearly defined purpose beyond profit. They understand why they exist, which takes precedence over how theyexist and drives what they sell to exists. They understand the importance of long-term thinking and the benefit of taking a broader view of what holds value to their business (Landolt, 2006). In other words, they are not blinded by short-term gains. They tend to think things through and plan every move in order for them to achieve it. Long term sustainability is not possible without being ethical. There may be short term gains for being unethical but sooner or later, the market will catch up. Build a long term relationship where customers know and feel that they are being taken cared of and that profit is not your only goal. With these, you would paradoxically be making profit.
In the biblical system of ethics, profit is godly if it is obtained in God’s way, and this means that not making profit may also be a in against God, one’s neighbor and oneself (Naselli, 2011). Profit maximization is a must for any business to survive and flourish in a competitive market. The problem lies with what you do to ensure profit. The way you do it shall be the one questioned for ethics.
Adam Smith established by rational valuation that profit making was an inherent part of human conduct as it worked itself out in the social environment of human culture. If human flourishing is moral, if improvement of individuals is moral, then so is the pursuit of profit. Profit, by definition, cannot be destructive in one’s life. Under laissez-faire capitalism everyman has sovereignty to decide the value he will assign to each type of profit. The ways he will pursue it and the exchanges he will make with other consenting individuals in order to flourish.
Ultimately, business always have the responsibility of profiting. Before we can expect businesses to be ethical, we need to accept the profiteering agenda underpinning all businesses and understand that ethical businesses can be a profit making strategy on its own terms (Ong, 2014). Thus if becoming ethical were so strategically beneficial, all businesses would have practiced it. So the strategic case for ethical business alone is insufficient. We need to have the right mix of strategy and morality.
In my opinion, Profit in itself is NEVER unethical nor is beyond the bounds of morality. All businesses are established to seek it. There cannot be a business whose ultimate goal is not profit. We all seek profit, we all need to flourish, to grow, to improve. The question on morality shall not be on profit and profit alone. What shall be questioned as to fairness and ethics, shall be the means, process the ways we have undertaken to earn it. 

References:
D’Estaing, O. (2001). The Ethics of Profit. Retrieved from: http://bahai-library.com/destaing_ethics_profit
Feloni, R. (2016). Is there such thing as “too much” Profit? Retrieved from: https://amp.businessinsider.com/there-is-such-thing-as-too-much-profit-heres-why-2016
Frank, R. H. (2004) What Price the Moral High Ground? Ethical Dilemmas in Competitive Environments. Princeton University Press
Harper, J. (2001). Business Ethics-A Contradiction of Terms?. The World of English. Retrieved from: www.woe.edu.plcontract/business-ethics-contradiction-terms
Joyner, B. E. & Payne, D. (2002) Evolution and Implementation: A Study of Values, Business Ethics and Corporate Social Responsibility. Journal of Business Ethics
Kokemuller, N. (n.d.) Ethical Issues in Maximizing Profit. Retrieved from: www.yourbusiness.azcentral.com/ethical-issues-maximizing-profit-25711.html
Miksen, C. (n.d.) Ethical Issues in Maximizing Profit. Retrieved from: www.smallbusiness.chron.com/ethical-issues-maximizing-profit-34328.html
Mujtaba, B. (2005). Understanding Ethics and Morality in Business. Smart Business. Retrieved from: www.sbionline.com/article/understanding-ethics-and-morality-in-business-there-are-distinct-differences-between-ethics-and-morality
Naselli, A. (2011). Are Profits Moral. Retrieved from: http://andynaselli.com/author/any-naselli
Salahi, A. (2006). Definition of Excessive Profit. Arab News. Retrieved from: www.arabnews.com/node/282026
Stolyarov II, G. (2006). Profit is Moral. Retrieved from; www.quebecoislibre.org/06/060813-2.htm
Weiss, A. (2013). The Purpose of Business. Retrieved from: www.contrarianconsulting.com/the-purpose-of-a-business



Building a fair Hiring process: Overcoming political challenges

  BLESSIE JANE PAZ B. ANTONIO JANICE D. RASAY Divine Word College of Laoag, Ilocos Norte, Philippines Abstract The hiring process and pr...