Page 71 - MARKETING & PUBLIC RELATIONS EBOOK IC88

1. Organisations are managed for effectiveness, viz., obtaining planned objectives without wasting
resources. Is there a conflict between ethics and effectiveness? Several prosecutions of
industrial houses have been for violations and improprieties in law, which may be seen as
improper even without the provisions of law. Some questions which arise are

(a) Is good business the determinant of good ethics?
(b) Is it necessary that a corporate body should be a moral (ethical) person?
(c) Should organisations set standards of ethical behaviour for others in society?

2. The tendency is to answer the first question in the negative. For example, it is argued that the
Manville Corporation should have actively taken care of the sickness of the workers suffering
from asbestosis and prevented further incidence. The news of such sicknesses may have hurt
the sale of asbestos (as has happened now), or may have enhanced the reputation of the
company and helped its business. It is also possible that some method may have been found to
contain the problem. It is hypothesised that

 Ethics begets ethics from employees (loyalty) and suppliers (commitment)
 Lack of ethics begets penalties and loss of customers

3. Good business decisions in terms of profit earnings may often be short term, but ethical
standards compel long term focus, which could mean sometimes painful choices.

4. If the first question is answered in the negative, the second question automatically gets a
positive answer. An ethical organisation supports and encourages ethical behaviour from its
constituents. Malfeasance may be an individual offence, as much as the result of an
organisational value. An organisation's moral standards are determined by identifying and
examining its values.

5. Some organisations align themselves to Government policy by, for example, building cheap
housing for the weaker sections despite more profitable opportunities being available. The pay-
off has been in terms of

 public support in times of difficulty,
 smoothening out of the ups and downs of market fluctuations or
 wholesome respect among all constituents like Government, financial institutions, etc.

6. Tata Steel is an example of an organisation, behaving very responsively on issues of social
impact, long before the emerging laws. The pay off was in terms of stronger worker and public
support to an extent that the Government, in the late 1970s, had to give up a proposal to
nationalise the company, in the face of popular opposition.

7. The ethical significance of organisational activities can be determined by asking three other
questions.
 Do the activities maximise social benefits and minimise social costs (utility)
 Do they respect human rights (rights)
 Are they fair and just in distributing benefits and burden (justice)

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