Organizations of all sizes and status understand the real effects and results driving organizational change. Although it is a top priority to maintain a competitive advantage with profits and competence it is as important to remember it is their responsibility to monitor, track, and enforce their ethical practices. Society today holds companies accountable for injustices and will not tolerate corporate recklessness, dishonesty, negligence, or corruption.
Organizations with the right leadership benefits from proactively implementing a transparent organization whose ethics are built into the core of their culture, and social responsibility is an important priority starting from top management down to the core staff. Ethics are a set of principles that guides the organization, its initiatives, decisions and policies for the good of the business. (Kelchner, L (2013) This process begins early on with organization’s initial planning phase that contains ethics and social responsibility which continues to be intergraded into the organizational culture as the planning process progresses to the end.
Not all organizations have the proper tools to gauge their progress as the development of the business program which includes ethical and social responsibility develops. (Robin & Reidenbach, 1998) Stakeholders are group that has an interest or concern in an organization someone who contributes to the success and benefits from steering the organization to success. Stakeholders have different expertise and each stakeholder opinion adds value to the needs of the organization.
The President CEO of an organization answers directly to the stakeholder group who annually evaluates the President CEO on their performance of running the organization. Organizations are responsible to identify, understand the stakeholder needs and be able to effectively communicate and provide specific answer to the stakeholders as needed. This may require presenting facts and figures in order to justify why certain decisions were made and show how these decisions fit into the organizations needs and agendas.
Ford Motor’s Overstepping Ethical Boundaries In 1968 the Ford Motor Company, rolled out a subcompact car which was produced domestically. The company was anxious to gain a large share of the market and the Ford Pinto designed and developed on a fast track and was rolled out in 1972. The Pinto did very well the first few years but by May 1972 an accident involving the Pinto proved to be tragic. The results of the accident caused a court case to be filed and Ford ended up in Court and fined Millions of dollars.
Not long after the first tragic accident another controversial case involving the Pinto occurred and the automobile’s fuel system design was at the center of the controversy. As the Pinto was involved in more tragic accidents it became apparent that this was a case of the “deep pocket” a company lack of concern for safety because there were after the almighty dollar. The public eventually found out about the defective fuel tank design in 1977 the fuel tank was located behind the rear axle; instead of above it this gave the Pinto more trunk space.
Instead of fixing the fuel tank problem Ford made a decision to use the Risk/Benefit Analysis which highlighted the human and emotional circumstances behind the numbers which are not factored in the risk/benefit/analysis. Ford decided not to make a production change to the Pinto, which would have been $11 per vehicle to fix but Ford felt that the overall cost of $137 million was too much verses human lives, Ford chose the bottom line dollar over safety and human life. Conclusion
Understanding that ethical and social responsibility standards may need to be developed and established in an organization as the guideline that sets the standard. It is important that these standards be developed and tied into the strategic plan that also fits into the stakeholder’s needs and agendas. Without these strategies it would be impossible for a company to become successful, it would not have a gage for progress and could be at risk of scandal that could destroy a company’s name, and if the situation is not
handled properly it could destroy the company to where it would not be able to recover. Many years have gone by since the Ford Motor Pinto case, in society to there is much more transparency and consumer laws and Corporations are now held accountable and face much stiffer fines for knowingly producing defective products. But more than that Leaders of Corporations want to be remembered for something good, and not just about how much money they can make. . References Carpenter, M. A. , & Sanders, W. G. (2009).
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